Comments after attending a free talk about financial independence

I attended a free talk by Chris (http://treeofprosperity.blogspot.sg/) today and have some thoughts that I would like to share on this blog. The talk was pretty well done with a great response. These are some of the takeaways that I have obtained from this.

a) Personality test
In order to know myself better, I have taken this test online and I have found myself to be ISTJ (Introvert, Sensing, Thinking, Judging). This is pretty true. I am quite the introvert and find comfort in smaller groups rather than bigger ones. It turns out that this is the Carl Jung test rather than the MBTI, but the questions asked in the link below do tell me more about myself.

You can find the link here: http://www.humanmetrics.com/cgi-win/jtypes2.asp

b) Comparing leverage with a dividend yield strategy
There was some talk about this and personally, I have experience with having leverage as I do own a property which I am renting out. One of the things about leverage is that its a double edged sword. Once you have a mortgage, your interest rates are more or less determined by the bank and the economy. In addition to that, there is also the thing about getting the right tenant and ensuring that he or she will take care of your place while renting it from you. Its also a bigger purchase in nature, compared to that of buying equities.

In the case of a dividend yield strategy, one can buy 100 leveraged properties at a smaller price in the stock market. I feel that this strategy gives a better peace of mind. I do not need to worry about getting tenants for my properties, I just need to monitor the company news to ensure that all is in order.

c) Cutting expenses and improving income
The strategy to gaining financial independence is really to cut expenses and improve your income flows. If you can have a great salary and live like a undergraduate/student, you are really on your way to financial independence. Coupled with a great investment strategy, the dream to retire by 40 makes it a lot more realistic and not just building castles in the air.

You can find the link to the presentation slides here: http://invictus666.github.io/blk71_talk/#1

Book Review: A Gift to My Children by Jim Rogers

I was wandering around Kinokuniya after having lunch with my friend at Orchard today and stumbled across the book shown below. I picked up the book and read the whole book there and then. I enjoyed the book quite a bit, but I had aching legs after that (old age). See below for some pointers that I have picked up from this book.

a) Jim Rogers retired at the age of 37

Its pretty impressive for someone to retire before the age of 40. He retired in the age of 37! My target is actually to retire by 39, he did it 2 years earlier! 

b) Buy low and sell high

When it comes to investment, this mantra is always repeated and emphasized again and again. It is a simple concept but it is pretty hard to do. You basically have to go against the flow to do this successfully.

c) Form your own opinions

To be able to be a successful contrarian, one must be able to form his own opinions in the area of investments. To do this, one must perform his own research and look into every single detail to ensure that nothing is missed out.

d) Travel 

Travel extensively to see the world and understand how different cultures work. Find things out for yourself and experience it. This was how he decided to invest in China after being there and couldn't help noticing the high savings rates which the Chinese people have. Do not be afraid to come out of your comfort zone.

e) History

Know your history! Frankly I hate history because it reminds me of the times in school where I had to memorize facts and figures from the textbook. But he does have a point. History does help one to know the future better.

Overall, its a pretty good read and its not a very thick book like the intelligent investor. I like the way he wrote this book like leaving some of his life lessons to his 2 daughters. It makes it very personable and left a very good impression on me. If I have children of my own in the future, I would definitely make sure to buy this book for them as a birthday present and encourage them to read it! It has valuable life lessons in it and who better to learn from than someone who retired at the tender age of 37!

Expense Tracking

In my opinion, one of the most fundamental things to do in the area of finance is MYOB (Minding your own business). In order to do this, one would definitely have to do expense tracking. This is needed so that one can know how much is spent every month and how much is saved every month.

I have been doing this religiously every day and it helps a lot when I know where my money goes. Armed with this knowledge, I can then act to reduce or increase the amount spent/earned based on the categories that I have defined. You can do this tracking for free by using google documents, openoffice or downloading a free app into your hand-phone. I prefer doing this via google documents, so that I can access it as long as I have an internet connection.

Some of the columns that I have been using are as follows: (You can customize this to your own liking)

• Year
• Month
• Day
• Type (Example: Meals, Transport, Income)
• Category (Example: Lunch, MRT Top Up, Salary)
• Description (Example: Chicken Rice)
• Amount

How do you do your expense tracking?

Tune your wealth file today!

I was reading up on this book in the bookshop today by T. Harv Eker, Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth. His theory is pretty simple. Change your attitudes and mindsets about wealth and wealth will manifest in your life. Some key points from his book are shown below.

1. Rich people believe "I create my life." Poor people believe "Life happens to me."
2. Rich people play the money game to win. Poor people play the money game to not lose.
3. Rich people are committed to being rich. Poor people want to be rich.
4. Rich people think big. Poor people think small.
5. Rich people focus on opportunities. Poor people focus on obstacles.
6. Rich people admire other rich and successful people. Poor people resent rich and successful people.
7. Rich people associate with positive, successful people. Poor people associate with negative or unsuccessful people.
8. Rich people are willing to promote themselves and their value. Poor people think negatively about selling and promotion.
9. Rich people are bigger than their problems. Poor people are smaller than their problems.
10. Rich people are excellent receivers. Poor people are poor receivers.
11. Rich people choose to get paid based on results. Poor people choose to get paid based on time.
12. Rich people think "both". Poor people think "either/or".
13. Rich people focus on their net worth. Poor people focus on their working income.
14. Rich people manage their money well. Poor people mismanage their money well.
15. Rich people have their money work hard for them. Poor people work hard for their money.
16. Rich people act in spite of fear. Poor people let fear stop them.
17. Rich people constantly learn and grow. Poor people think they already know.” 

Reference: http://www.goodreads.com/work/quotes/771090-secrets-of-the-millionaire-mind-mastering-the-inner-game-of-wealth

Habits of the wealthiest people

Keen to find out more? Check out the link below!
http://www.business-management-degree.net/features/wealthiest-people/

They seem like very good habits to have!

They Have a Routine:

• Maintain a to-do list
• Wake up 3 hours before work
• Listen to audio books during commute
• Network 5 hours or more each month
• Read 30 minutes or more each day for education or career reasons
• Love to read

They are Healthy:

• Exercise aerobically 4 days a week
• Eat less than 300 junk food calories per day

Raising Their Children:

• Teach good daily success habits to their children
• Make their children volunteer 10 hours or more a month
• Make their children read 2 or more non-fiction books a month

Television Habits:

• Watch 1 hour or less of TV everyday

They Set Goals:

• Write down their goals
• Focused on accomplishing some single goal
• Believe in lifelong educational self-improvement
• Believe good habits create opportunity luck
• Believe bad habits create detrimental luck

OUE Hospitality Trust - DPU 1.68 cents from 1 Jan to 31 Mar 2014

OUE Hospitality Trust delivered a distribution rate of 1.68 cents for the period of 1 Jan to 31 Mar 2014. This exceeded expectations by 4.3% based on the forecast of 1.61 cents. Based on this rate and on the current share price is $0.88, this works out to a yield of about 7.63%, which seems to be fairly decent.

But one must note that they only have 2 centrally located properties in their portfolio and they are situated next to one another. If the hotel occupancy rates fall, it is natural for the adjoining Mandarin Gallery to fall as well. However, having said that, I do like their numbers this quarter and one can see that they trying hard to improve their property portfolio by doing AEI on hotel rooms to improve their profits.

The following are the summarized points of the press release.

• Ongoing AEI to renovate 430 guest rooms to be completed in phases in 2014 and 2015.
• Out of these 430 rooms, 64 rooms have completed renovation.
• Gross revenue for 1Q2014 was 1.4% higher than the forecast for the same period
• RevPar at $248 was lower than forecast of $257 due to Indonesia elections
• NPI was $25.6 mil, 2.7% higher than the forecast.
• Created more options for financing through the establishment of a US$1 billion Euro Medium Term Note (EMTN) programme

OUE H Reit's portfolio is the 1,077-room Mandarin Orchard Singapore and the adjoining Mandarin Gallery, which has a portfolio value of S$1.76 billion as at 31 December 2013. You can view their press release here.

OCBC 360 Account

With inflation eating our deposits in the bank, we should always find ways to grow our money which exceeds that of the inflation rate. One of the banks has introduced the OCBC 360 account which will help grow your money by 3.05% if you fulfill their following criterias:

a) Credit your salary every month (1%)
b) Pay 3 unique bills using the OCBC bank tool (1%) [You can GIRO your taxes and they count!]
c) Spend $400 within a month using the OCBC credit card (1%)

The 0.05 percent is for account balances up to 200k. It must be noted that this account should only apply to that of your emergency funds and not to their entire nest egg as this percentage is only for the first 50k in the account. I have opened my account and am looking to see if I have missed out on any fine prints of this particular product.

Link to find out more: