Happy Year of the 🐷

To all readers who celebrate Chinese New Year, here's wishing you and your loved ones a healthy, prosperous and wonderful year of the 🐷.

This IPO blog was started on 7 July 2007 and that was the year of the Fire Pig. 2019 is the year of the Earth Pig. The blog has came to a full zodiac cycle of 12 years. (Amazing to think that I have been blogging for that long...)

As I looked back from 2007 till 2019, what can I share with you? If you are below 40, these may be a few principles to stick with. 

• Save and save more - when you are young, cultivate the habit of saving. I don't earn much when I am younger but I save a lot. There is no short cut, you need to save! 

• Buy your first property - A roof over your head has two key benefits, it acts as an inflation hedge and it provides shelter to you and your family. You can worry about the investment property later. 

• Aspire to do well in your chosen career - Your "job" be likely be the main source of funding for your retirement. Your first few roles and the firms that you work for will be important. It will determine your career path and earnings trajectory over the next 30 years. Choose your path wisely! 

• Start investing when young - you will inevitably pay school fees to Mr. Market. I am still paying them even at my age. If you start young, you pay less fees as you earn less. My first "school fees" was paid when I was still in army. While it was a painful lesson, on reflection, those were the best lesson learnt.


I received a reader's email a few weeks back and she is the same age as me. In her email, she said, "we have many similarities towards investment approach" and she listed 4 similarities and I also included my thoughts below her points. 

1. grow passive income from equities- my CDP holdings is significantly larger and I only have $60K worth of stocks in my SRS account.  

Mr. IPO thoughts - As i moved into mid 40s, I shifted some equity holdings into investment grade bonds bearing interest of 6-7% and levered on those bonds, giving me a yield closer to 8-10%. I am happy to compound my wealth at 6-8% annually as bonds have lower volatility. I have previously blogged about bond ladder. I will move out of bonds again back to properties when the opportunities arise. 

2. focus on building my career- so yeah, my current work income is high, but I have built my career carefully to reach where I am (similar strategy to yours!)  I am cognizant that various external factors can affect the stability of any career- so I "make hay while sun shines" to maximize my earnings.  

Mr. IPO thoughts - I agree totally. Focus on building a great career. Make hay while the sun shine! Save and invest when you are still earning a nice decent income will help you reach your financial goals much faster.

3.  I also believe in CPF!! Done various hacks such as reached SA FRS 5 years ago; repay CPF used for mortgage to earn OA interest etc.  I received $22K CPF interest for 2018, so total CPF size is around $730K now- can easily reach $1M  by 55 years old!

Mr. IPO thoughts - it is time for everyone to be less sceptical on the CPF and embrace the intent behind the CPF Scheme. Use the various hacks such as voluntary contribution etc. You can reach $1m by 55 too! 

4. Opening CPF accounts for both my kids- they have $10K each in SA, earning good interest.  Start young is good- my kids are 14 and 16 this year

Mr. IPO thoughts - good for them and my two kids have their CPF special accounts topped up as well.  I matched their CNY Ang Pow money "dollar-for-dollar" for whatever cash deposited into their CPF special account each CNY. This will be my little "help" to let them understand the magic of compounding. Below is the statement of my elder Son. 

Conclusion 

I wish you all the very best In the year of the pig 🐷. If you have yet to start planning for your retirement, hope this year will be the start of your journey. 

㊗️ 恭喜发财 💰、身体健康 💪🏻、万事如意 📈。