FY2023 Financial Review

JC Project Freedom

updated 24th December 23

This is not good in terms of stock performance. I know the S&P 500 YTD return including dividends is 25.85%, and VT YTD return is 21.24%. If you have closed your eyes and buy any of these two indexes, you will have done well despite all the volatility. My backside is always itchy and I like to buy things that the big boys and most investors despise. I have bought REITs and more Chinese companies. The REITs are back and they are in green. Hope they stay that way. I am the naysayer that interest rates may not go down fast enough and REITs need to refinance at high interest which will affect their performance. The Chinese companies I own did not run like Ping Duo Duo (PDD) and to make things worse, they are competitors to PDD. PDD is up 70% whereas Alibaba (9988.HK) and JD.com (9618.HK) are hammered to the ground. Red. Period.

Net worth is not your self-worth

With the stock portfolio not performing well, the total net worth is slightly flat. We paid close to S$20k in terms of commission for selling HDB, recognized this year. We paid around S$3k for furniture and white goods for the condo which was rented out early this year. We paid $8k in terms of commission for renting out the unit. We spent a total of $9k in terms of legal fees. There are a lot of outflows due to buying 2nd property. The stamp duties amount to S$52.1k. Including other miscellaneous costs like valuation reports and property insurance, it will be close to S$100k of outflow. The good news is there is a paper gain (~S$167k, please stay that way) on the 1st condo unit, I don’t recognize that in net worth, only take book value based on the purchase price. You can only realize property gain when you sell. If you do not sell, you are just making yourself happy. Lastly, there was a write-off on the S$100k loan.

Dividend vs Option Income

Again I am just estimating a dividend income for FY2024 to make myself high, there is a saying, “Don’t count your eggs before they hatch”. I am forecasting that FY2024 will hit a high of S$104k. This year pure household expenses excluding property expenses stand at around S$100k. If looking at a pure dividend perspective, it is exceeding household expenses. The target is to achieve 20% contingency and aim for S$120k dividend income by FY2025. I think it is challenging as I still need to clear a margin loan of ~S$155k-160k. There are other challenges as well, companies may suffer in terms of earnings during a recession. Dividends may be reduced. I think the 2nd property may be the black swan to the plan. Pray hard that I can rent that out. HDB rules are relaxed to increase the number of unrelated household members staying in the unit to drive down the rental cost. The mortgage is going to cost me ~S$6,100/month. GG.

What should we do next? I don’t know. Since I graduated in 2007, I have been searching for this answer. What should I do with my life? One key reason if I reach my financial independence goal, I may still be lost because I don’t know what I want out of my life. I am very simple. I used to like watches when I was in my 20s and early 30s. After realizing how expensive it is to maintain them, I decided to sell them all. I am a road hazard. I got into car accidents twice. I decided the public would be safer if I took Grab (aka ride-hailing). I am frugal (I like to think I am not stingy). I ate mixed vegetable rice to squirrel away into savings when I was single and stayed with my parents then. I took only 3xGrab this year with my family to attend a family event and travel. I have sidetracked. I won’t want to retire as I like the challenges at work. I want to stay active and work on other projects that interest me. I want to teach. I used to be a great tutor. From F9 to A1 is my track record, as a nurturer, and a motivator.

Recently, I have been thinking of where should I stay for the next phase in life. I toy with the idea to bring the entire family to Perth and work there. My friends who stay in Perth sold me the idea that Perth is great for family and children’s education. SG produces kids great at mathematics but many cannot think out of the box. The education scene is evolving and the government is trying to shift things from academic focus to more creative thinking. AI is going to replace your roles, that’s the reason we need to change the education system. If we move to Perth, my wife may call it a day and our household income will drop by half! Tax is high and we will lose our support in SG from having a helper and family support from parents. I think KL will be a better location. It is more central to the region which makes traveling to other countries easier. Also now the MM2H is making it easier to retire in Malaysia. In a couple of years, I would like to retire in Malaysia.

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