How I managed to save $100k before hitting my 28th birthday

Now this calls for a celebration. After scrimping and saving and working hard saving everything I could afford, I have finally achieved my target of $100k before the age of 30, with 2 more years left to spare. I shall make full use of these 2 extra years to continue to build my savings and wachest to the next target, which is to achieve $200k in savings and investments before my 32nd birthday.

Why 32nd birthday?

Well, some readers may ask this question, so I might as well answer it first. Well, its more like an extrapolation of my saving abilities. When I started working after graduation at age 25, I took 3 years to achieve 100k in savings and investments, so I had simply added 3 years + additional 1 year buffer for unforeseen circumstances. So voila, the number 32 comes to my mind. Furthermore, I had a headstart after graduation as I had already saved around the region of $20k before starting to work full time.

How I did it

I am going to spoil the surprise by saying there is no magic involved. All it takes is sheer hard work and discipline. I cannot emphasize it any more, discipline in delaying instant gratification goes a long way to achieving your goals before you even know it.

In fact, I didn't even realise I achieved my target until I recently checked on my investments and saving accounts. I had multiple saving accounts which makes it harder to keep track of the total amount I had saved.

My income 

I am not going to reveal my income, but I have to say my gross income is definitely less than the median income of the employed people we see in Singapore. Yes, even though I have been working for 3 years, I have not experienced a phenomenal increase in salary to even assist in my saving goals. So this shows that, increasing incomes do matter, but even without it, it is still possible to achieve it if we have the perseverance and focus, we can achieve it.

Investment returns

Next, people may point to my investment growth. Well, my returns coming from my investments are almost similar to the returns we get from the STI. It is simply because my portfolio had been weighted heavily to the local banks and telcos. However, due to the weak telco sector, my returns have been staying even below the performance of the STI, so that also means I didn't make more than say from a regular investor who had invested in the STI ETF at similar times I had entered the market. Thus, it is clear that there was no stellar returns to assist in boosting the growth of my savings towards the $100k level faster than anticipated.

My advice

What I am trying to drive here is, simply sheer perseverance and discipline goes a long way to achieve the savings goal we all have always dreamed of. We always see in sensational facebook feeds of making tons of money from the stock market, and this person relaxing at the beach as a result without lifting a finger. This is definitely a scene which this advertisers would like you to believe to buy their product, be it their hugely expensive courses or products they are looking to sell to you to make that commission. Don't fall for it to make another person reach their savings goals a lot faster!

So I am going to give a simple reminder. Stay focused on your goals. Make it a game, a game you would want to unlock the achievement. The achievement of financial independence, the dream of all financial bloggers out there. It is a lot closer than you think, as you let the power of compounding do its work, while you work hard to save more from your income.

Now you just need some motivation, and I hope this can motivate others seeking for some affirmation of their belief or simply looking for a way to grow their wealth. Stay the course and may we have a good weather ahead!

Portfolio Update - April 2017

*As of 30 April 2017

Counter	Average Price	Yield on cost(%)	Weightage
Singtel	3.7000	4.74	15.73%
Fraser Logistics & Industrial Trust	0.9317	7.50	8.91%
Starhub	3.4700	4.60	8.30%
SIA	9.8600	2.00	7.86%
First REIT	1.2532	6.38	6.09%
ParkwayLife REIT	2.4000	5.10	5.74%
M1	2.3600	5.00	5.64%
UOB Bank	18.2150	4.00	4.84%
Capitaland Mall Trust	1.9050	5.80	4.56%
CDL Hospitality Trust	1.3050	6.80	3.12%
AimsAmp Cap REIT	1.3300	8.40	7.07%
Ascott Residence Trust	0.9700	7.50	5.67%
Keppel DC REIT	1.0822	6.17	2.30%
Capitaland Commercial	1.3523	6.15	1.80%
SPHREIT	0.9293	5.80	1.73%
Ascendas Hospitality	0.6991	8.03	0.93%
Mapletree Logistics	0.9800	7.40	0.78%
STI ETF	2.8058	3.50	8.95%
Total		5.40	100.00%

Legend

CDP

SCB

Total Invested Capital = $37,637.27

Total Expected Dividends/month = $169.37

Average Dividend Yield = 5.40%

The month of April had been an eventful one. Mostly a rebalancing of my portfolio by liquidation of oil & gas counters and increasing on certain counters.

1) Ascott REIT Rights Issue

First off, we start on the results of the Ascott REIT rights issue which I had taken part in March. I was allotted 2200 shares from the issue from both the provisional and oversubscription of the rights issue. I am still holding on to the units as the prices have not really recovered strongly, as it still continues to be resisted at the price level which I had previously sold the mother shares. I am looking at the TP of at least higher than $1.15 before I offload the positions. Given the huge resistance at $1.10, it is going to be some time before the price will hit my TP. Nevertheless, at the price issues and taking into account the loss I made when I exited the mother shares, my average price of the REIT is in the region of $0.97, at a comfortable level to get around 6-7% yield and having some exposure to the hospitality sector which is seeing some signs of recovery.

2) Exited position on Keppel Corp

I had exited my position of Keppel Corp at the price of $6.58 a piece. This was after it had announced results which I felt was disappointing. The profits it announced were manly from one-off gains which once taken out of the equation, puts Keppel Corp results to be on the weaker side this time round. Current price hovers at around PB of exactly 1, though the price I exited was far below the $7 plus highs it made during the strong rebound, I felt that the strength in the stock was unsustainable. For the strength in the rally to be sustainable, the results of the company should keep up. In the short term, the poor results could cause some short term weaknesses in the share price, which should it go back down to test the $5 mark, I would be interested to get back into the stock again. Nevertheless, at a 22% profit gained in the last 8 months holding this stock, I felt that it was time to take some profits off the table first. The stock may re-bounce off the oversold position it is in right now, but overall it was a good trading play.

3) Exited position on Sembcorp Industries

In addition, I had exited my position on Sembcorp Industries, after the poor results announced by Sembcorp Marine. Given the lacklustre activities in the rig business, we should expect a long winter ahead for the offshore segment for Sembcorp Industries. As for the utilities segment, which was deemed as the the most defensive business segment of Sembcorp. In this segment, the local power business remained heavily competitive, which adds to the worry that investors should continue to monitor for the results to come on Wednesday. The most promising part of Sembcorp has to be the aggressive inking of deals in the power market in developing markets such as India and Myanmar. Should the investments in these markets start to take off, then we might see some upside in the share price. However, the weaker positions it has in the rig and local power market may continue to cause a drag to its results, though many think that the worst which happened in 2016 was over. In other words, it cannot get any more worse than it is right now. So why the rationale for selling? I still believe that the results will still continue to lag the improvement in fundamentals in the rig and shipbuilding, repair services of Sembcorp Marine. We are beginning to see some uptick in interest in niche areas such as clean energy (e.g, LNG vessels) which may improve business activities for Sembcorp. However, in the bigger picture, the outlook remains bleak as the core business in rigs remains oversupplied. As such, I decided to bite the bullet and take profits first. Should prices correct to my original buy price, then I may assess again to enter again. Nevertheless, at around 25% gain in the 7 months of holding this stock, it was the most rewarding position I have taken so far.

4) Increased position on Singtel

I have increased another tranche of Singtel at $3.73 a piece as the prices started to correct heavily, perhaps due to the spotlight on the high prices paid in the spectrum rights bidding exercise. This brings the overall average price to $3.70 at 15% of my portfolio. This is rather a heavy position, I know, but should Singtel return to $4 then it would prove to be a good trading play. Therefore, I am tipping this to be 50% investment and 50% trading play. Sales proceeds from the oil and gas counters were used to fund this play, and I may continue to add on further weaknesses. On Saturday, I have seen the news that a substantial stakeholder has decided to dispose its stake in Singtel, citing the highly competitive market it is in right now. This news is likely to cause weakness in the share price come Tuesday when the markets open, and the next level to look out for after the $3.70 level breaks would be $3.66 and thereafter $3.60. Should it go lower, I would be waiting below to scoop more shares.

That is pretty much it. As we can see, I have reduced many of my stocks positions recently. Excluding the telcos and SIA, now my entire portfolio is made up of REITs. Not really a diversified portfolio anymore, I know. I may start to reduce some positions on the REITs as valuations now seem on the high side, given that Yellen is likely to continue in her hiking of interest rates, which is likely to cause REITs to fall once again. We have to anticipate this beforehand, and when it does, we can be ready to deploy our funds back in again.

My portfolio has remained the same size as compared to last month, as sale proceeds were used to pay for the new positions added to the portfolio. I would very much want to keep the portfolio in the same size as much as possible, which keeps my investment allocation at 30-40% of my investable funds. The maximum I can tolerate would be 50%, so that I can continue to have ample cash to deploy should opportunities/black swan events arise over the horizon.

Well, now lets welcome May, and May the Force be with you.