Tuesday, 19 July 2016

Target S$500,000 Asset Portfolio

I had a busy weekend that left my wife and I quite exhausted when we went in to work on Mon. We had a wine-tasting & dinner event at our friend's apartment on Fri night, dropped by another friend's apartment after dinner together for a Sat movie night before having an extended family dinner on Sun night.

It was great fun but we felt like having a rest after running around over the weekend. Nothing like going in to the office on Mon and sitting/working at your desk to make you feel like you aren't going to be moving much for the day. Not a bad way to recharge when you think about it.

Anyway, this is going to be more of a financial update since it's mid July. I usually do the end of month financial updates in more detail with all the net worth, asset portfolio and passive income figures updated. But I sometimes do mid month financial updates with less detail when I'm in the mood just to see how we are tracking.
Asset Portfolio

Other than the manual purchase of ETFs on Day 1 and Day 2 of Brexit in end June and the automatic POSB Invest-Saver purchase of the Nikko AM STI ETF in mid July, we haven't done anything else. There has been quite a run-up in the equity markets and we see no reason to invest any more of our cash funds.

Even though I still think we are holding too much cash compared to the rest of our asset portfolio, we are happy to let the funds build in times like these. We will probably have to invest a bigger chunk of the cash than we usually do when the opportunity arises again but won't use it unnecessarily.

Besides, things are getting dicey in the banking industry and there has been a few rounds of retrenchments at my wife's bank. She has survived them so far but it's a wait and see approach at the moment. No point making a move when the rest of the banks are cutting even more people.

The accounting industry gets impacted next with reduced revenue from client compliance and advisory work. We try not to cut headcount but usually implement salary and promotion freezes while reducing graduate hires.

It's not a good time for anyone because this just means an increased workload at the same pay. In any case, we will continue to save a portion of our monthly salary as long as we have jobs. This means our retirement funds (CPF) are increasing as well from the employer and employee contributions.

As much as I would like us to be less dependant on our jobs and have more sources of income, I can't deny that our jobs have been the main driver of the growth in our asset portfolio. Which is why I still think focusing on getting yourself into jobs that have decent pay while spending less, using the spare time to invest, developing side hustles/business for other sources of income is a good approach to financial independence.

This is especially so in Singapore with its low personal income tax rates and current availability of such jobs in our industries (for now). Things can change really quickly and the approach might no longer work in a few years time. It's important to take advantage of the characteristics of your local environment to build your wealth while you still can.

S$500,000 Target

We have given ourselves a target for the asset portfolio to reach S$500,000 by the end of the year. Based on how it has been growing for the past 6 months, we seem on track to hit the target in the absence of any significant events other than the high level of spending we expect to incur during our trip to Italy in October.

This target is important also because we will have more flexibility in planning our future after hitting it. When we returned to Singapore in 2014, we weren't sure how long we will be staying to work and live here. We renewed our Australia PR until 2020 and will have to be back there by then for the next renewal.

We have managed to build a life here in Singapore despite us having to adjust to working longer hours and living in close proximity to our parents. We also have a social circle that we enjoy hanging out with and this was fortunate for us despite being away from Singapore for a number of years.

When we left Australia, our finances were in decent shape but we have to admit that we have achieved much more financially over the 2.5 years of working here in Singapore compared to the 4 years of working there. If we stay in Singapore, chances are we might reach financial independence earlier than if we move back to Australia.

But we are getting restless with our jobs and way of life in Singapore. Returning to Australia seems to be taking a step backwards rather than forwards. Starting over in another country sounds exciting but scary as we get older.

The S$500,000 target was always going to be a milestone for us. Reaching it will mean we are in the financial position to decide the next phase of our lives. Should we call Singapore or Australia our home and raise a family or should we go off for another adventure to a different country?

6 comments:

  1. All the best with hitting that target!

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  2. Times are indeed quite uncertain now, so having that buffer of $500k is indeed going to be assuring for you and your wife. :)

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    1. Yeah, it has not been an easy time especially for my wife in the banking industry. Would be good to have the buffer!

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  3. Hi TFS,

    Wah I am so envious... half a million dollars! Good luck and I am sure you have an answer in your heart whether you want to stay or leave Singapore.

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    1. Hi Jes,

      Haha, that's the target and I will need to count every single dollar of all our assets to make it by year end. Yup, I hope we will figure it out with time!

      Cheers,
      TFS

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