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Panzer's Guide to Financial Freedom: It's Your Money and It's Your Life

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Old 11-12-2008, 11:33 AM   #61
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Talking

Hi MadPrince

Thanks for visiting my old fivecentstencents.blogspot.com. It's now hosted on paid web host using wordpress as the blogging platform instead of blogger.

Yes, I finally bought a Suzuki SX-4 Sedan for $55k in Jan 2008. My daughter is now 9 months old and we use it to ferry her as well as other errands. It's reasonably fuel efficient and easy to drive.

I intend to use it for 10 years. hahah...

Be well and prosper.
I googled for it and found it a nice car, why did you choose that car over other popular models like toyota vios/altis or others? Its quite rare for a person to drive a car for 10 years, but coming from you, it might just be possible
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Old 11-12-2008, 11:39 AM   #62
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I googled for it and found it a nice car, why did you choose that car over other popular models like toyota vios/altis or others? Its quite rare for a person to drive a car for 10 years, but coming from you, it might just be possible
MadPrince

One of the reasons is that Vios/Altis/Latio too common. Thought I'd try something else.

Anyway, at that time, the difference in price is not too much and SX-4 had all the features we wanted, ABS, front airbags, leather seats, safety latch for baby car seat, huge boot etc. It happens that Suzuki is one of the few Japanese makers who still manufacture their car in Japan instead of Thailand. Also, I'm not exactly a car fanatic who will test drive 101 cars before deciding.

Me and the missus tested a few types and decided to go for Suzuki SX-4.
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Old 11-12-2008, 05:46 PM   #63
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Holding the course: investing for the long-term
Posted by panzer on December 11, 2008.

[This article was posted on 11 December 2007 on fivecentstencents.blogspot.com]

This is one of the toughest challenges facing us in our journey towards financial freedom. The ability to buy and HOLD and not to be tempted by what is happening in the markets to sell either to cut loss or take profit.

Equities have a role to play in our investment portfolio
Stocks and shares (or equities) have a role to play in our financial freedom journey. If you have an interest in general knowledge, about business and companies performance and are able to understand basic economics and how it works in the real world, investing in equities is one way to grow your money if you take a measured, responsible approach to it. Punting or speculating on share fluctuations on a hourly, daily, weekly or monthly basis is NOT investing.

Even I get caught up in share speculation. I have done my share of buying stocks in companies in anticipation that by tomorrow, next week, next month, the price will go UP without fully understanding my reasons for picking up those stocks. Suffice to say, I also pay my due of tuition fees to Mr. Market in terms of losses on sale of such stocks.

However, the more I invest in the stock market, the more I realise that buying and holding quality blue-chip companies is still a strategy that works for me. It may not work for everyone since your style of investment and your tolerance to risk would be different from me.

Here are some of my stock pick considerations in no order of merit. They are simply factors I consider before I make my decision to buy.

1) Profitability and Dividends
This goes without saying but you’d be surprised at how valuations of companies as reflected by stock prices during the dot-com days of the late 90s and 2000s sky-rocketed even when the companies were losing money year after year! When you buy a share, you are buying a part of the company because you want to participate in its profits and not its losses. But as a shareholder, you are exposed to both and hence you have to pick and chose those companies with a proven profit record and who pay you dividends. That is what I look out for.

2) Long-term business prospects
This is more subjective because your assessment about the company’s future is as good as mine and as good as the man-in-the street. No-one can predict the future, but we can have some idea on the overall prospects for a company that we understand based on available information now.

I typically like blue-chip companies with monopolies in Singapore as they are in a very strong competitive position and are a price maker and not a price taker. They tend to be big and are able to reap economies of scale. Currently I have Comfort-Delgro, SPH and SPC in my portfolio that meet this criteria.

3) Price
There are many companies that satisfy my first 2 criteria but they are expensive to buy relative to their earnings and prospects. This is where a lot of judgement is involved because everyone wants to buy low and everyone wants to sell high. No-one wants to sell low and buy high. So how do you decide if the price is what you are willing to pay given the available information about the company and its prospects?

I use dividend yield as a gauge. Since most of my counters pay dividends, I typically would only buy at a price where their dividend yield beats treasury bills or fixed deposits returns of 2%. If the company is unable to do so at the price its shares are trading, I will buy the company IF I am bullish about its prospects or think that the general market sentiment is bullish and will buy. But this is risky because if market sentiment changes, which it does very quickly, you can get stuck in counters that pay low dividends (worst than fixed deposits/treasury bills) and yet you face paper capital losses if the share price goes down a lot.

Holding power and patience
The ability to beat inflation by investing in equities takes holding power and patience. Holding power is important as it makes you less susceptible to market sentiment, i.e when market is bearish, you sell (worst time!) or when market is bullish you buy (also can be bad). You tend to invest based on your investment principles and make choices more in line with your investment philosophy. Patience is also important. I learn from stockmarket forums that the market is always there for us, so it is important not to risk all your investible savings at the roll of the dice and take a measured and balanced approach to investing. I continue to keep 10-20% of my investible savings in fixed deposits and/or treasury bills and cash equivalents. I generally do not use contra or margin to invest and hence can ride out short-term market volatility.

Investing is an art and not a science, but I believe that all of us can do better than what we are achieving now with our portfolios prudently using a measured approach that takes into consideration our skills, abilities, risk tolerance and investment objectives.

Be well and prosper!

———————————————————————————–

Panzer is a 30-something accountant who finally grasped the concept of financial freedom at the ripe old age of 32. Ever since, he has been travelling on his journey towards financial freedom and documenting his adventures through his blog Five Cents Ten Cents.

His first self-published book, “Panzer’s Guide to Financial Freedom: It’s Your Money and It’s Your Life“, was launched in November 2008 sharing his thoughts on his journey towards financial freedom.
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Old 13-12-2008, 01:35 PM   #64
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Al Jay

"my pda have a list of 600 items showing lowest costs supermarket prices."

Where to get the above list?
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Old 13-12-2008, 08:16 PM   #65
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Al Jay

"my pda have a list of 600 items showing lowest costs supermarket prices."

Where to get the above list?
Compile them slowly!
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Old 13-12-2008, 08:49 PM   #66
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Living within your means by planning ahead
Posted by panzer on December 13, 2008.

I was reading SgMusicwhiz’s blog post “Creating a Personal Budget” and was inspired to write a related post discussing how you can live within your means if you track your expenses and plan ahead. You can read his post for the basic framework on how you can plan your personal budget.

Record your past and learn to anticipate the future
One of the things I got from reading “Your Money or Your Life” by Joe Dominguez and Vicki Robin is to start tracking my daily expenses, earned income as well as passive income from investments. This tracking of cash flows allowed me to see actually how much I was really saving versus what I “thought” I was saving.

It also prompted me to be more aware of expenses that hit at various times of the year and to be in a better position to anticipate my cash flows.

What I realised from tracking my expenses is that we tend to under-budget for once a year payments. Some of these include:

* Income tax - you need to file by 15 April of each year and pay sometime in May/June/July of the same year
* Property tax - you need to pay by 31 Jan and IRAS has this annoying habit of increasing your annual value (goes up but hardly ever comes down)
* Club/Membership subscriptions in professional bodies

These expenses can be hefty depending on your income level. Be sure to set aside money to make such payments besides your day-to-day living expenses.

Besides those above, it’s good to plan to spend LESS than your monthly income because under the current poor economic sentiment, job security is a myth. Even if your housing loan is fully paid using CPF funds, can you be sure that our beloved Gahmen will not cut employer’s CPF contributions? Are you sure the bank will not raise interest rates? Are you confident that you and your spouse’s jobs are secure and will not suffer pay cuts that may result in corresponding cuts to CPF contributions (both employer and employee’s portions?) Do you trust your employer not to reduce bonuses and variable payments to employees?

Creating a buffer and being flexible
If you plan your living expenses to be below what is available after you deduct your housing loan payments (using cash, if any), car loans, utilities, transport, groceries, eating out, mobile, cable-tv, entertainment etc. Then you will be able to save and more importantly create a buffer for yourself so that you don’t feel financially stressed.

Remember to prioritize your spending. Your home and utilities are necessities. Your cable-tv and entertainment are not. So adjust accordingly. Your home can be foreclosed by the bank or HDB if you don’t pay up, but you can tighten your belt for things like eating out and watching movies.

There’s enough stress in the workplace, with relationships and what-not, why add on more stress from living close to or worse, beyond your means?

Be well and prosper.
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Old 14-12-2008, 12:19 AM   #67
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Live within yr means does not allow u to achieve financial freedom!

Live way beneath yr means is the only way!

Earn 1000, spend 999, still within yr means but no financial freedom still!

In Singapore, income tax and property and tv license can pay by monthly installments, so no worries!

My wife pay zero tax while I pay a small token sum cos srs, minimum sum top-up, parents retirement top-up! One can avoid paying tax on some 25k!

Last edited by Al-Jay; 14-12-2008 at 12:22 AM..
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Old 14-12-2008, 02:01 AM   #68
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Getting rich by being cheap .... one still ends up being cheap.
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Old 14-12-2008, 09:12 AM   #69
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Getting rich by being cheap .... one still ends up being cheap.
Indeed! Better be cheap then a begger or scavenger or a government aid receiver later on! Solidify yr back bone now, else u might just end up going back to yr mama, papa, or whoever, for allowances to survive!
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Old 14-12-2008, 10:55 AM   #70
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Getting rich by being cheap .... one still ends up being cheap.
Help yourself now or be helped later! If u want to join this Q, your choice!

4,000 queue up for hongbao attemple
December 14, 2008

THEY showed up in droves and queued up for hours - just to get a hongbao.

Some 4,000 people formed a long line outside the Thong Teck Sian Tong Lian Sin Sia temple in Balestier yesterday for the hongbao, which contained between $10 and $30 each.

The temple's secretary, Ms Tay Poey Noy, said that only people over 60 years old who are on public assistance were eligible for the hongbao.

However, those who did not have their public assistance cards with them were still given a token $10 hongbao each for making the effort to show up.

Ms Tay said: 'We had to turn people away. There were some people who were younger than 60, but considered themselves elderly. It was difficult to have to turn them away, but we had no choice.'

OVERWHELMING DEMAND: So many people turned up that the temple volunteers ended up giving away more hongbao than the 3,000 they had prepared. The crowd was much larger than in previous years. --PICTURES: SHIN MIN DAILY NEWS
Ms Tay said: 'But in some cases, they had no proof of their relationship with the public assistance cardholders, so we will have to make home visits later.'

She said: 'We officially opened at 7.30am, but people had started queuing from 6am.'

He said: 'I haven't seen such a long line for a long time. Times are really bad. I felt for the old folk.'

Mr Chua said that the last time he saw such a long line-up outside the temple was some 10 years ago, during the Asian financial crisis.

Source: http://newpaper.asia1.com.sg/news/st...86675,00.html?
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Old 15-12-2008, 09:36 AM   #71
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Living way below our means is one way to go. But I've also encountered people dying before they even reach 45 years of age, or worst, during my reservist, 33 year old NSman collapses during 2.4km run and passes away.

My approach is to live within my means, and to also focus on growing my means, saving and investing as well as protecting my means.

In so doing, I enjoy a bit of my bonus, 10% and save up the rest 90%.

I'd prefer to live life a little bit now and then but focus on achieving financial freedom.

Be well and prosper.
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Old 15-12-2008, 09:55 AM   #72
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Living way below our means is one way to go. But I've also encountered people dying before they even reach 45 years of age, or worst, during my reservist, 33 year old NSman collapses during 2.4km run and passes away.

My approach is to live within my means, and to also focus on growing my means, saving and investing as well as protecting my means.

In so doing, I enjoy a bit of my bonus, 10% and save up the rest 90%.

I'd prefer to live life a little bit now and then but focus on achieving financial freedom.

Be well and prosper.
i agree, living within our means is better then living way below or above
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Old 16-12-2008, 11:41 AM   #73
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For many years, I didn't get a car until my daughter was born.

Now that I use it to ferry her around, I find that the quality of life has improved so much than if I had not done so.

I'd like to think life is about choices, the more financially free you are, the more choices you have.

But each person's choice is unique. Everyone should live their lives the way they want so long as it does not harm/hurt other people.

Live and let live is something I try to follow.

Be well and prosper.
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Old 16-12-2008, 12:34 PM   #74
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For many years, I didn't get a car until my daughter was born.

Now that I use it to ferry her around, I find that the quality of life has improved so much than if I had not done so.

I'd like to think life is about choices, the more financially free you are, the more choices you have.

But each person's choice is unique. Everyone should live their lives the way they want so long as it does not harm/hurt other people.

Live and let live is something I try to follow.

Be well and prosper.
Not sure why u need to ferry her around! I bought a hdb one lttle street away from my in-laws (they happen to baby-sit kids before). There is child care just below it. A kindergarten is just below my block!

No kids now though!

Fail to plan! Plan to fail!
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Old 16-12-2008, 01:38 PM   #75
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Getting rich by being cheap .... one still ends up being cheap.
PZG and most here are not asking people to be cheap.

Even in luxuries, there is moderation.
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