JC Fund Deleveraging

JC Project Freedom

We started the year with a margin of around ~SGD 150k from the brokerage. Recently we have reduced that now to SGD 120k. We took a short-term fund transfer loan of SGD 45k from a credit card at a 1.38% processing fee. We use around SGD 20k from that to reduce the margin loan. Due to the high-interest rate environment, the margin loan from the brokerage for HKD is ~8% per annum. The difference in interest rate justified borrowing from a credit card to pay down another loan.

The completion of 2nd property took place on 23rd January 2024. There are lots of cash outflows which include an additional $4278.06 for property tax and $366.85 for management and sinking funds. All in all, the cash level is at an all-time low after the completion. Furthermore, our maid is leaving as she has achieved financial independence. She is the 2nd maid who has achieved her financial goals. The only common personality traits are thrifty and invest money to buy assets. In her context, her assets are a house, farm animals, and a pond for fish farming. To bring a new helper, cost S$5,530. This includes 6 months of salary in advance which is the maid’s loan to her local agent.

In addition, I need to cater monthly repayment for the credit card loan. Mrs has good news, she got promoted and her annual package is higher than mine. Mrs will have a bonus of S$69,400. The net amount of S$55,520 after less CPF can help to reduce the margin loan down to S$70k. It will be quite manageable to reduce this further with the inflow of dividends.

The target for this year is to pay down the margin loan from the brokerage – S$120k

Latest update on 9th Feb 2024

We have utilized Mrs’ bonus and salary from income to pay down the margin loan in brokerage. To date, the margin loan has been reduced from S$120k to S$50k. The cash level is dangerously low.

The 2nd target for this year is to acquire more ETF shares – S$ 200k which will create an additional S$8k of dividend based on a 4% yield. That should bring the total dividend to S$112k/ annum. Fingers crossed.

Let’s work towards our targets! Onwards!

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