updated on 21st May 2024
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. The margin loan has been reduced from S$120k to S$50k. The cash level is dangerously low.
Latest update on 9th March 2024
We have reduced the margin loan to S$31k and the credit card short-term fund transfer loan to S$33k. We aim to reduce both debts to NIL by June 2024. The household CFO is balancing the household accounts to the best I could. We need to pay bills, taxes, mortgages, and miscellaneous expenses. The margin loan is not critical if we don’t pay it down, it incurs high interest but not as high as the credit card short-term fund transfer beyond the 6th month.
Update on 8th April 2024
Towards the end of March, we paid another S$11k to reduce the margin loan to S$20k and reduce the credit card short-term fund transfer loan to S$20k. You can read this article here that we sold one of the largest positions in the JC Fund. With this, we cleared the margin loan to NIL. We will clear the credit card short-term fund transfer loan by the end of May 2024. The cost of a fund transfer loan is becoming more expensive going forward, it is becoming close to 2% for a 6-month loan.
Update on 21st May 2024
Today we cleared the credit card short-term fund transfer loan. In terms of margin loans and credit card fund transfers, we are debt-free.
Target for FY2024
The 2nd target for this year is to acquire more ETF shares – S$ 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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