Investment Moats

Wharf REIC (1997) – a Storm coming for Dividend Yielder

by 2 Comments

Wharf Real Estate Investment Company’s (REIC) interim results was not too bad.

Wharf REIC Interim Income Statement

I first wrote about Wharf REIC here. If you are not familiar with it, you might want to get a short overview of it through that article.

Operating profit showed an improvement over last year. The profit attributable to shareholders was lower due to a reduction in fair value increase of the investment properties.

That portion should be OK. We should look upon the recurrent earnings or cash flow aspect of the business.

The majority of the revenue for Wharf REIC (1997) is from its retail and commercial office rental income. In the past, since the cash flow is so recurring, we would annualized the earnings or cash flow. We could then assume a no growth scenario and see the relative valuation of Wharf REIC versus its peers in the same industry.

If we take the operating profit ($6.7 bil) – Income Tax ($1 bil) – Non-Controlling Interests ($0.08) – Financing cost of ($0.460) we arrive at a recurring net income of $5.16 bil. Annualized we get $10.32 bil.

Wharf REIC currently has 3 bil outstanding shares, thus the recurring EPS is $3.44. Wharf REIC current trades at a price of HK$45.20.

This gives Wharf REIC an earnings yield of 7.6%. Wharf REIC have a dividend policy of paying out 65% of its earnings income. This brings its dividend yield closer to 4.9%.

How should we look at the valuation?

Wharf REIC is results is driven by 2 retail malls, Harbour City and Times Square. To give you an extend of the influence of these 2 malls, together, they account for 10% of Hong Kong’s retail sales including wet market, motor vehicles but exclude F&B. Harbour City is 4 times one of our biggest mall VivoCity.

Wharf REIC’s net debt to asset is 13%. This means the leverage factor is low.

Unlike a REIT, Wharf REIC pays taxes. Name me a few retail mall REITs of this quality that trades at a recurring earnings yield of 7.6%.

I doubt you can find many.

And how many gives a historical dividend yield of 4.9%, backed by high quality assets on 65% recurring payout?

Wharf REIC

Harbour City (HC) and Times Square’s (TS) occupancy cost is rather manageable. We know it is higher versus Capitaland Mall and Frasers Centerpoint Trusts.

Wharf REIC’s dividend per share have observed to be consistently growing. It’s occupancy since 2009 have been consistently high. The revenue trend have also been consistent.

When a company do not pay out all their free cash flow as dividends, and they have a good recurring business model, they can show a rising dividend per share trend.

Certain tenants of Capitaland Mall, a Retail REIT in Singapore is on a percentage of turnover rental revenue model. This means that part of the rent is determined by how well the sales is. It gives the mall operator an incentive to do their best to make sure they also deliver in bringing greater footfalls to the tenant.

Upscale malls like Harbour City and Times Square should take a certain part of their rental revenue from percentage of sales. That would explain the good revenue trend.

Here are the average passing rent per square foot per month:

  1. Harbour City: $508
  2. Times Square: $290
  3. Plaza Hollywood: $102

The disparity is huge.

Here are the respective retail sales for the past 6 months:

  1. Harbour City: $18.5 bil
  2. Times Square: $4.4 bil
  3. Plaza Hollywood: $1.2 bil

We are investors who are seeking to make money. Whatever happen in the future is what we are concerned about. To find out whether the cash flow is growing and recurring, we look at the past to find results.

And since the intrinsic value of a stock is based upon the aggregate of future cash flow discounted to present value, what if all these riots and protests fundamentally alters Hong Kong?

Wharf REIC highlighted how the 3 mall revenue changes during the recent 2 downturn. In 2008, we observe a -19% shift in rental revenue.

The webcast or the webcast transcripts were not out yet, but in an article on the South China Morning Post (SCMP), Stephen Ng, the chairman & managing director of Wharf REIC and Doreen Lee, vice-chariman and executive director of Wharf REIC have these to say:

  1. “This time, it is like a perfect storm. External factors and internal factors are all erupting at the same time,”
  2. “In July and August, Hong Kong’s overall retail sales are not [expected to be] very optimistic. We will be affected,”
  3. “Overall, tenants’ businesses [have become] more difficult.”
  4. “We all know Hong Kong’s retail and catering industries are [facing difficulties], particularly in shopping areas [such as] Tsim Sha Tsui and Causeway Bay,”
  5. “The second quarter was worse than the first quarter. But it is not a significant plunge. It is worsening gradually. The hotels [sector] is not optimistic, nor is retail.
  6. “Will it be worse than [the 2008 financial crisis]? It is possible but … I do not have a crystal ball. I hope there will not be such a big wave.”
  7. “Demand is weakening. In the short term, we think the outlook is not very optimistic,”
  8. “Currency is a very important factor … As the Hong Kong dollar strengthens, it has a very big impact on Hong Kong’s overall consumption and demand,” “Yesterday, the yuan broke the 7 [yuan to a US dollar] threshold. This is an even bigger warning.”
  9. “In these few months, all tenants suffered from a certain degree of impact,”
  10. “We have to pray for the best, and hope the situation improves,”
  11. “How long will it take? It is difficult to determine.” A drop in office rents in the second half, if any, will be in single digits,

When you put out information to the media and shareholders, you will wish to control the narrative. Some of my peers will say there is no value in attending AGMs or results brief.

I will say attending these briefs gives me some insights on the narrative of things the management cannot provide in data. You have to view these subjective data in the context of what they have been saying in all these briefs. If a certain management have always been positive, positive, positive and suddenly become…. withdrawn in their outlook, it may be significant enough to take note.

Management usually tries to give a balanced narrative. Some companies with less substance will talk up their company. So these tend to paint a rather positive picture.

But man, Doreen and Stephen were asked some tough questions and they are not hiding much. From what they say, in the short term, you will expect the second half results to be not as good. Just to what extend it is not good.

Recall that we annualized the earnings and say the earnings yield is 7.6%. Going forward, at least in the short term, the earnings yield might not be as high as 7.6%. As a longer term investor, what we are more concern of is not these short term earnings yield BUT the longer term ones.

This might be murky because… has Hong Kong permanently been altered? Would the international retail scene changed in a permanent manner? How fast is this change? How secular is this change?

The above questions are the more pertinent ones than all the pictures of the riots and mayhem.

Some short term changes remained short term. Those are noises. Some… become secular. Those are the ones that may make a gem like Wharf REIC become a value trap.

The history shows us evidence of quality or absence of quality. True quality is a moat. Short term it gets disturbed. The stock price may be mispriced. However, when the quality really disintegrates, then it becomes a real value trap.

If you run a concentrated portfolio, you make educated bets. If quality retains, your portfolio will flourish as a result. However if quality disintegrates, your portfolio will take a big hit.

This is what makes individual investing tough. There is value in good critical thinking. But that is not enough, you also need to go at least deeper into understanding something more than crowd. You also need more info about the business more than the crowd.

There will be those that say this is a secular shift bet on it. There will be those that say this is not a secular shift and bet on it.

I write more about my thoughts on active investing below.

Do Like Me on Facebook. I share some tidbits that is not on the blog post there often. You can also choose to subscribe to my content via email below.

Here are My Topical Resources on:

  1. Building Your Wealth Foundation – If you know and apply these simple financial concepts, your long term wealth should be pretty well managed. Find out what they are
  2. Active Investing – For the active stock investors. My deeper thoughts from my stock investing experience
  3. Learning about REITs – My Free “Course” on REIT Investing for Beginners and Seasoned Investors
  4. Dividend Stock Tracker – Track all the common 4-10% yielding dividend stocks in SG
  5. Free Stock Portfolio Tracking Google Sheets that many love
  6. Retirement Planning, Financial Independence and Spending down money – My deep dive into how much you need to achieve these, and the different ways you can be financially free
  7. Providend – Where I work doing research. Fee-Only Advisory. No Commissions. Financial Independence Advisers and Retirement Specialists. No charge for first meeting to understand how it works

Market Volatility is Up. What I am Thinking about Now. Might help you a little.

by 1 Comment

Trump said something. Then China did something.

So what we have is the DOW, S&P 500 and Nasdaq down 3%. But they been falling for a few days.

It gets even worse for me considering a large part of my equity holdings is in Hong Kong. And you know what is going on there.

This article is taking a look at what goes on in my brain. You might have some takeaway from this.

An Eye on the 10 Year US Treasury

Honestly, I can be rather myopic on things. Since Manulife US REIT is a rather large holding, I do keep an eye once in a while on some things relating to it.

The US 10 year Treasury Rate for Jul and Aug MTD

They are likely to refinance their Figueroa loan (quite sizable based on their loan portfolio) in July. We just do not know when.

There was even a spike up above 2.10%.

So they are rather unlucky in that, if it is a refinance in August, they could refinance, for 5 years at a much better rate! A 30 basis point fall is not very small here.

But you got to practice some gratitude because 1 year ago people are worried about the DPU when they are refinancing at 3.10%.

So it is a matter of perspective.

Anyway, this is the monkey brain. Focus so much on something, that I totally missed my Hong Kong holdings.

Now I am getting a spanking there.

You can look upon it as a Curse or an Opportunity

When there is an uptick of volatility, it tends to send your heart beating faster.

For some wealth builders, this is an opportunity to collect the financial assets such as stocks, unit trust that they been interested in but could not bear to buy at “expensive prices”.

For others, they just made their purchases not too long ago. Some have even invested in a lump sum, made a specific individual stock purchases and are cursing their luck.

Either way, it is how you frame things. Some see this as an opportunity, some see it as a curse.

But it is more than that.

In a behavioral manner, you are affected by how much currently your net wealth is subjected to this “crazy downside”. And this might make it difficult for you to think.

Think about Your System of Building Wealth

Quietly ask yourself if you still remember what kind of game you are playing here:

  1. Are you a low cost, passive portfolio investor? What is the system you are playing at here? What is the appropriate thing to do in this system at this trigger moment?
  2. Are you a medium term speculator? What is the system you are playing at here? What is the appropriate thing to do in this system at this trigger moment ?
  3. Are you a dividend investor? What is the system you are playing at here? What is the appropriate thing to do in this system at this trigger moment ?
  4. Are you the so-call value investor? What is the system you are playing at here? What is the appropriate thing to do in this system at this trigger moment ?

If you have no idea what you should do at this trigger moment, then you are the game here. Regardless of which wealth building system you choose, there are a few appropriate things to do and not to do.

I tend to run through my head what the hell I am trying to do. Why it should give a good positive risk adjusted return. These days I tend to do that less. This is because I am pretty clear about things.

I have 2 systems mainly

  1. Core Equity Holdings: Identifying financial assets that gives a positive expected return in the long run
    1. These are financial assets that I am comfortable in holding
    2. I purchase at fair value and below if the asset is higher quality
    3. I purchase at below fair value if the asset is lower quality
    4. They give a sustainable dividend
    5. Sell when you realize they are not resilient, or sit on them if there is a good story / momentum to it and watch them closely
    6. Sell when there is something that is even more core than this asset
  2. Speculative Holdings: Identifying financial assets that gives a positive expected return in the short run
    1. They are special situation. You think there is a catalyst soon. For example, a fundamental sound company that have some insider buying or based on the news, some things might be on the move
    2. Stupidly cheap companies that has no quality. You do not wish to hold them for long. This is because at certain point you can see it turning in the opposite direction. Convert to longer term hold if you realize you made an error in your prospecting
    3. Earnings and market sentiments

Run this through in your head.

Think about your Net Wealth Allocation

Ultimately, you are putting your wealth in risky assets because for the market risk, you wish to be compensated with higher positive expected return.

This is so that you can build wealth.

Building wealth to achieve certain financial goal.

Be it saving for

  1. Financial security
  2. Financial independence
  3. Your children’s education fund
  4. Traditional retirement
  5. Sabbatical in 5 years time

Be aware of that.

In financial planning we call this knowing your time horizon and knowing the amount you need.

How far away from these there are appropriate things to do. For some, just plonk in 100% of all the pay check if you can. For others, you should be de-risking and selling. You may not have taken care of these well.

Some articles to help:

If you have not thought about this, do consider it.

Many folks just look at what I do and think I am incredibly bearish. They failed to put on the financial planning hat and think about why my allocation is this way. (Those seasoned readers would know where I show my portfolio. I will not comment much)

And this is my gripe with the individual stock investor. They tend to think they are know-it-all.

But in truth, they only see the forest most of the time. You cannot blame the individual stock investor. You need a lot of time to get good so that you can have sustainable compounded growth.

However, most of the time, you tend to not take care of the portfolio allocation, or even the financial planning section.

I am almost a near retiree.

And if you understand what a retiree needs at different phase of retirement, you should have an understanding why the portfolio leans closer to the way it is.

I practically wrote a whole section here on what a person planning for retirement should consider. So the answer is deep in there somewhere.

Have that goal in mind. And what are fundamentally sound strategies to reach there. If you have no idea, man I think you need a good financial planner that is competent, have integrity and watch out for your interest

  1. Low net wealth: MoneyOwl
  2. High net wealth: Providend (disclosure: I work for Providend)
  3. Somewhere in between: Wilfred Ling (disclosure: affiliate link)

Think about Past Mistakes

I tend to review in my head some of the things I think I did poorly in the past. I ran through why I did it.

Do I have a fundamentally sound solution to it? If I do not have, that is a grave problem. If I have, think about what I tell myself last time. Is it still valid?

The idea is to have positive expected return over the long run, make more good decisions than poor decisions.

It also means make more fundamentally sound decisions than unsound ones.

One of my past mistake is immobility. This is behavioral.

The solution is to feel the pain. Feel the uncomfortable nature. Be very sure what you are doing is fundamentally sound. Then just keep doing it.

Think about the Lock Step of Investing

This is in the context of individual stock investing.

How much to systematically invest in core equity positions
How much to systematically invest in core equity positions

Morgan Housel used to provide this table during his Motley Fool days. It shows an investor how much to invest based on the frequency of market draw downs.

Some frequency of draw down is very long. Some folks spend forever waiting for them. Keep this in mind.

Tend to the Garden

This is in the context of individual stock investing.

Look less upon the gains and the losses.

Frame it as how I can position your portfolio in the best way going forward.

Prevent sunk cost fallacy from setting in.

If my portfolio fall from $1 mil to $700,000, don’t think about the $300,000 realized or unrealized losses.

I only have $700,000. The $300,000 is gone.

But if you don’t position the $700,000 in a way that going forward, it give you a positive risk adjusted expected return, that is even worse.

If based on your wealth building method, these are just volatility, your financial assets is really diversified, then this is nothing.

So I do look at what I wish to be Core and what are Special Situations. What looks more attractive. Then I just sell and buy them. It is hard but try to look less of the losses. It means nothing (unless to evaluate your performance). Just think in terms of tending to the garden, sniping away the weeds, watering the plants.

Review Opportunities

The job of identifying the fundamentals of businesses has to take place before the opportunity arises.

During this period is to find out which is the ones you deploy to and how much. Perhaps also to review if going forward, the fundamentals are intact.

But we are always prospecting, so just keep prospecting, be it good times or bad times.

Look at Beautiful Charts

I tend to have an interest now to see what are the instruments that really do well when there is a draw down.

So it is good to indulge in a little side hobby.

So here are some charts.

S&P 500 in US: Not the first day of fall….
NASDAQ ETF: Very correlated!
Emerging Markets ETF: Very correlated!
The REIT ETF: Whoever told me REITs are bond like! Very correlated!
The 20 year Treasury ETF: This is less correlated as with tradition
The Gold backed ETF: This time round it is less correlated
The Gold Miners ETF: This is looking good. Uncorrelation!
USD ETF: Traditionally this is suppose to be a safe haven. Not sure why its falling when USD is strengthening!
The Japanese Yen ETF: Another traditional safe haven. This is working out pretty well!
The leverage VIX ETF: Spiking!
Crypto: Still doing OK but in truth they seem to be very uncorrelated with the main markets
Some of the Telegram group is looking at a leveraged strategy with ETF. This is a look at the components.
And this is with that strategy as well.

Ok. Time for work. You can ask questions. I will not comment on my portfolio holdings. Better to ask about portfolio management and financial planning.

Do Like Me on Facebook. I share some tidbits that is not on the blog post there often. You can also choose to subscribe to my content via email below.

Here are My Topical Resources on:

  1. Building Your Wealth Foundation – If you know and apply these simple financial concepts, your long term wealth should be pretty well managed. Find out what they are
  2. Active Investing – For the active stock investors. My deeper thoughts from my stock investing experience
  3. Learning about REITs – My Free “Course” on REIT Investing for Beginners and Seasoned Investors
  4. Dividend Stock Tracker – Track all the common 4-10% yielding dividend stocks in SG
  5. Free Stock Portfolio Tracking Google Sheets that many love
  6. Retirement Planning, Financial Independence and Spending down money – My deep dive into how much you need to achieve these, and the different ways you can be financially free
  7. Providend – Where I work doing research. Fee-Only Advisory. No Commissions. Financial Independence Advisers and Retirement Specialists. No charge for first meeting to understand how it works

Dealing with the Uncertainties in Financial Independence Pursuit

by 9 Comments

Few things ran through my head currently but I will keep this post on some of the struggles and what I think about these struggles.

In the short span of three months, I have had friends dealing with grief and great struggles.

B wrote about the sudden turned of events when his dad suddenly came down with ischemic stroke while his dad is overseas. Due to that, he would have to shift his plans for financial independence. You can read about it here and here.

My friend Chris also shared a little more about his dad who has to be in and out of hospital recently. We discussed more about his dad situation, twice. Ironically these discussion was during two different funerals for a friend of ours. He had to organize 2 funerals in a short span of time.

I thank both Chris and B for their sharing and we wish both dad a speedy recovery. Their courageous sharing to me is frank. If you have read about their investing, and life experiences, you would be thinking we all got all these money & life stuff figured out.

These experiences just shows that everyone of us is trying our best to figure out the best path going forward.

In the financial independence community, we face a lot of naysayers. We were told a lot of times we didn’t factor in this, we didn’t factor in that.

In short, we either didn’t considered something that may happen or that we consistently underestimate certain things we already know.

This looks like a victory for them in a way.

I tend to think not. And I can provide some perspectives.

If you choose not to pursue Financial Independence, it does not mean you can handle Sudden Uncertainties better

Firstly, it is not that the pursuit of financial independence, will increase the chances of these events from happening. These events are likely to occur to most of us regardless whether we pursue this odd and niche lifestyle goal.

Someone could be still slogging in the corporate world, have a wife and two kids, with aging parents. While on holiday with the extended family, a similar situation befall them.

Secondly, what gets to critics is that there are so many known unknowns that could occur in you. If you do not plan for it, and you retire fully, then it is not going to work out for you.

It is the fully stopping work, and not earning anything but still got passive income coming in that gets people really riled up. In a way, we are going to live the life they wish they could live. A life that they think, they cannot have.

So the best way to solve this is by throwing known unknowns at us.

Financial Independence is a journey. Here is the typical process:

  1. Try to earn more
  2. Know what makes you happy in life. Spend enough to get you that
  3. For the rest, mercilessly cut down on the expenses that means less to you
  4. With the usually high savings rate, build wealth well with them
  5. Check in once in a while to see if you are there

This looks like a more intentional, escalated and advance version of personal finance.

And I do struggle to say whether it is wrong to pursue this.

What is the alternative?

  1. Try to earn more
  2. Spend on things that make you happy
  3. Spend on things that don’t make you happy
  4. Spend on other people that, deep down inside, is not really close to you
  5. Have a normal savings rate of 10% or less
  6. Don’t build wealth wisely. Don’t know any other alternative method to build wealth. So you put down a down payment on a 99 year old leasehold condo and continue to service the mortgage

A catastrophic situation occurs that would require you to come up with $20,000 to $120,000.

What do you do?

  1. Can you liquidate enough assets to have that amount of money that you need immediately?
  2. Some medical condition requires a recurring monthly treatment cost
  3. Could you be so flexible to shift your expenses to accommodate these recurring treatment costs? Bear in mind that at this point, you are of the frame of mind that all your expenses are necessary

There are certain things about the pursuit of financial independence that gets lost in the noise:

  1. These folks who are on the path tend to be good performers or aspiring to be one. If you want to earn more, you are likely to want to learn from others, try to get better. You tend to be more employable
  2. When you try to get better, you tend to be someone that people like to have around. Your professional network tend to be better as well. If you have started some side businesses, it is seldom likely that you have a good business but a poor network
  3. If you are #1 and #2, there is little chance that at 40-50 years old, you are happy with an existence that you do not work at all. Most likely you will do some kind of work, be it volunteer or not. Often you will earn some form of compensation
  4. Those who pursue, tends to develop competency in various sub life disciplines. Some even developed mastery in some of these sub life disciplines
  5. As they are often trying to find the best framework to do things, trying to balance pros and cons, they also tend to be more open about possibilities
  6. They tend to know the levers that they can pull when it comes to their life. They lived a more nimble life.
  7. Financial Independent does not mean you quit

In a way, those who decide to be on this path, tends to be those who are trying to scale the social ladder.

Whether they managed to reach financial independence, that matters less.

The essential tools to reach financial independence includes a lot of things that would put you in a better position then if you are not on the path.

There are lots to think about…. When it comes to Uncertainties

How do we address these uncertainties that the detractors talked about in financial independence?

In financial planning, this can be solved by baking in more cash flow requirement. On a present value basis, baked in 30-40% more to what you think you need.

This is a rule of thumb.

If not, you can plan for the worse case scenario that needs the most money.

One good example can be when one of the parents got dementia, need to stay in a home. The monthly cost is $4,000 a month. On an annual basis that will be $48,000 a year. Let us estimate that the parent need to be there for 15 years.

On a discount rate/inflation rate of 4%, the present value is $533,682. Realistically, if you can be closer to financial independence 10 years from now, what you need may be, $789,980.

For every uncertainty you can come up with, we can compute a cost for it.

Then you can save towards it, with your standard savings rate.

If you feel your current retirement is hard to save towards, note that you have to factor in these uncertainties as well, so that is either $500,000 to $800,000 on top of your retirement sum.

The naysayer wishes for the perfect plan. In the absence of that, they conclude retirement is impossible.

If you are trap in a well paying job with an overbearing boss, and you have not accumulate enough for retirement or financial independence, should you stay in the job?

The naysayer would stay in the job and be unhappy. The naysayer would probably move to another place. As luck would have it, the naysayer would feel the world is against him or her.

Those who are on this path would:

  1. Re-look the numbers
  2. How realistic is his or her plan to fully be financially independent
  3. If it is not, what are the risks he or she is exposed to, if he or she takes the leap
  4. What are the alternative lifestyle schemes to consider?

B and Chris took the plunge I think, because the job just suck too much out of them.

Too much bullshit. Too much time away from self and the family.

If we want a full proof plan before pulling the plug, then this is what they call FAT FIRE. It means you decide to retire but with a cash flow that can sustain your current lifestyle that is not bare-bones.

FAT FIRE is very comfortable. With a lot of buffers.

You can aim for that. Hope you have a nice salary because most often you would need it.

We should have done better to think about some of these uncertainties.

To make such a niche and incredulous concept looked realistic to the masses, the message must be easier to digest. When the message is more simple, a lot of deeper stuff is not discussed. These became some of the uncertainty.

Whether you can take the plunge or not depends on how risk seeking or risk adverse the person is. To address the anxiety of the risk adverse, we got to discuss this better.

There will always be Chink in One’s Armor

What I do observe is that no one has everything plan out so well.

We have folks we chat with in Telegram chats that seem to have every shit nailed down so well. And then he or she goes on to share some befuddling financial boo boo.

In the span of 3 months we are presented with a few different healthcare situations.

The insurance advisers will be using these case studies to prey on the availability bias and tell you to get this insurance, that insurance.

One common similarity with these 3 of my friends as well as myself is that the chink in the armor is the parents.

In all three cases, you realize, the kids cannot run away from this. This eventually becomes wholly your problem, or partly your problem.

Protecting parents can be hard. For some, they have enough pre-existing conditions that the insurance cost is high, or it renders them not insurable.

The cases I been through with, I have not heard many that gets a big critical illness payout. With a critical illness payout, it goes some way into help alleviate some new cancer treatments.

These new cancer treatments, most often, are not subsidized and are not cheap. To pay a 6 month out of pocket cost might set you back $100,000 to $200,000.

My stance for this has not changed:

  1. Insurance covers those low probability but high cost impact situations. Do your best to get them cover within your own abilities
  2. Keep your insurance cost in control
  3. You do not wish to fall into these medical shit, so a lot of it comes from trying your best to live a life that reduces your changes of getting them. You cannot avoid them but you could try not to escalate it
  4. Keep nimble and flexible. A rich and fixed life would give you a bigger issue when these stuff hits

Chris probably balance things up with his reflection of the medical care his dad is getting.

Conclusion

I guess the overall idea is that, you can failed in your pursuit of financial independence.

However, if you have truly learned enough on this path, it puts you in a better position.

Some of my readers did not reach there. They got some stuff thrown at them along the way. I do find that they are less lost. They would ask questions like they thought about doing this and that. They lean towards a certain path but just wanna hear what I think.

I believe that pursuit have made them fit mentally. They are also nimble because they have paid down, or could pay down their debt. Being unencumbered is a great position to be in.

However, we should absolutely discuss the things that could go wrong and considered them.

Do Like Me on Facebook. I share some tidbits that is not on the blog post there often. You can also choose to subscribe to my content via email below.

Here are My Topical Resources on:

  1. Building Your Wealth Foundation – If you know and apply these simple financial concepts, your long term wealth should be pretty well managed. Find out what they are
  2. Active Investing – For the active stock investors. My deeper thoughts from my stock investing experience
  3. Learning about REITs – My Free “Course” on REIT Investing for Beginners and Seasoned Investors
  4. Dividend Stock Tracker – Track all the common 4-10% yielding dividend stocks in SG
  5. Free Stock Portfolio Tracking Google Sheets that many love
  6. Retirement Planning, Financial Independence and Spending down money – My deep dive into how much you need to achieve these, and the different ways you can be financially free
  7. Providend – Where I work doing research. Fee-Only Advisory. No Commissions. Financial Independence Advisers and Retirement Specialists. No charge for first meeting to understand how it works

Singapore Savings Bonds SSB September 2019 Issue Yields 1.95% for 10 Year and 1.65% for 1 Year

by Leave a Comment

Here is a higher yielding, safe way to save your money that you have no idea when you will need to use it, or your emergency fund.

The September 2019’s SSB bonds yield an interest rate of 1.95%/yr for the next 10 years. You can apply through ATM or Internet Banking via the three banks (UOB,OCBC, DBS)

However, if you only hold the SSB bonds for 1 year, with 2 semi-annual payments, your interest rate is 1.65%/yr.

$10,000 will grow to $11,962 in 10 years.

This bond is backed by the Singapore Government and its available to Singaporeans.

A single person can own not more than SG$200,000 worth of Singapore Savings Bonds. You can also use your Supplementary Retirement Scheme (SRS) account to purchase.

You can find out more information about the SSB here.

Note that every month, there will be a new issue you can subscribe to via ATM. The 1 to 10 year yield you will get will differ from this month’s ladder as shown above.

Last month’s bond yields 2.01%/yr for 10 years and 1.68%/yr for 1 year.

Here is the current historical SSB 10 Year Yield Curve with the 1 Year Yield Curve since Oct 2015 when SSB was started (Click on the chart, move over the line to see the actual yield for that month):

What is this Singapore Savings Bonds? Read my past write ups:

  1. This Singapore Savings Bonds: Liquidity, Higher Returns and Government Backing. Dream?
  2. More details of the Singapore Savings Bond. Looks like my Emergency Funds now
  3. Singapore Savings Bonds Max Holding Limit is $200,000 for now. Apply via DBS, OCBC, UOB ATM
  4. Singapore Savings Bonds’ Inflation Protection Abilities
  5. Some instructions how to apply for the Singapore Savings Bonds

Past Issues of SSB and their Rates:

Do Like Me on Facebook. I share some tidbits that is not on the blog post there often. You can also choose to subscribe to my content via email below.

Here are My Topical Resources on:

  1. Building Your Wealth Foundation – If you know and apply these simple financial concepts, your long term wealth should be pretty well managed. Find out what they are
  2. Active Investing – For the active stock investors. My deeper thoughts from my stock investing experience
  3. Learning about REITs – My Free “Course” on REIT Investing for Beginners and Seasoned Investors
  4. Dividend Stock Tracker – Track all the common 4-10% yielding dividend stocks in SG
  5. Free Stock Portfolio Tracking Google Sheets that many love
  6. Retirement Planning, Financial Independence and Spending down money – My deep dive into how much you need to achieve these, and the different ways you can be financially free
  7. Providend – Where I work doing research. Fee-Only Advisory. No Commissions. Financial Independence Advisers and Retirement Specialists. No charge for first meeting to understand how it works