Showing posts from March, 2020

What Happens If You Are Almost 100% Vested? - Part 3 (Updated)

I have receive lots of comments on InvestingNote on my previous post . It made me realise that I have taken too little risk. I have also complicate matters by my formula. So I have made changes and revamped the plan. This should help everyone to understand my plan better. 1. I will borrow 3Y for 6 months for the initial balance transfer. 2. I will pay A for 5 months to reduce the outstanding. Note that Y=5A (It should not be 6A because you run the risk of not paying in the last month). 3. Roll over 2Y for another 6 months for the subsequent balance transfer. 4. Continue to pay A to reduce the subsequent balance transfer. 5. Place Y into SSB to offset some of the processing fee in both the balance transfer.  Thus, it is important to ensure that Y should be below your monthly gross pay. A should be about 15% of your gross pay. Do note that the main risk of this plan is losing your job. Therefore, if your job is unstable now, please DO NOT ENGAGE IN THI

What Happens If You Are Almost 100% Vested? - Part 3

To update all readers, the plan has already been carried out. I continued to have friends, whom advised me against carrying out the plan, as well as some others whom have carried out their own leverage plan. Just to emphasize I will not be going ahead with margin or leverage lending. I prefer to borrow a fixed sum with a discipline way of repayment. This will allow me to plan better. Basically I did a fund transfer with Standard Chartered Promotion of 1% of processing fee for 6 months without any other cost. And this is the plan of repayment: 1. I have "X" amount for investment. 2. I will place "X" into Singapore Saving Bonds. 3. I will borrow through Fund Transfer 1 for the amount of "X+Y" for 6 months. 4. The portion "Y" will be repaid via monthly injection of cash amount "A" over 6 months. 5. In the event the market recovers in 6 months, I will take out "X" from Singapore Saving Bonds and repaid the o

What Happens If You Are Almost 100% Vested? - Part 2

After my last post, I have many friends that told me to not proceed with the plan. I also have friends asking me about rates and from which bank I am getting the loan from. I will need to be upfront with all the readers, as I told one of them: "I agree that if there is no need to leverage, then better not to leverage. In fact I don't encourage this as well. In almost all my courses, I already stated at the start of each course that we should only invest with disposable cash, so no irrational thoughts will occur." However, due to the recent downturn, I also have thoughts that if I have the ability (in terms of future cashflow) and already the cash to pay off the amount I leverage, then I should be fine. To be honest, this is similar to taking up a property loan. Just that a bit on the short term. So what I found out and I intend to do? After researching, I will be doing fund transfer as I found some banks offering 0% to 3% EIR/processing fee. Eventually, I w

What Happens If You Are Almost 100% Vested?

Yes. I am almost 100% vested todate and it is frustrating. You will have thought that the vast amount of experience I gain over the years will be able to carry me through this downtrend. But no, at this point in time, the little cash I have left with make me doubt myself at times. This is especially so, when you know US market will fall more after New York declared a state of emergency. So what did I do? I wrote down all on companies I have on a piece of paper and stay away from all share price information. Then I decide which company in my portfolio I will want to add, hold or sell/reduce. I realize I tend to remember the most important points of each company during this exercise. This point will eventually be the main reason why I bought in the first place and my subsequent action. Next, I determine the cash I have if all selling actions are completed. After that, I filter out those companies that will recover the fastest or had declared dividends that will eventually

Recap: Steps To Take During Market Correction

As an investor, we should strive to be better than ourselves. This Coronavirus situation gave me an opportunity to relook at steps to take during market correction. I had written 2 evergreen post in 2018 ( post 1 , post 2 ) where wrote about the situations and the possible actions to take during market correction.  Nevertheless, the current situation allowed me to take a closer look at the steps.  Basically, I have further broken down into a 4 step process: SELL, FOCUS, CONCENTRATE, PHASES . This 4 steps basically meant that: We should SELL our weak companies to increase our cash holdings. Then we should only FOCUS on companies in our portfolio and not our watchlist, unless those are more attractive (meaning margin of safety exceeded those companies on your portfolio) . The idea is to reduce the number of holdings in your portfolio and increase your cash pile in order to CONCENTRATE on purchasing those companies in your portfolio that will recover the fastes