As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

Welcome to Ministry of Wealth!

This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

Think Investing as Tug of War - Read more? Click and scroll down



Important Notice and Attention: If you are looking for such ideas; here is the wrong blog to visit.

Value Investing
Dividend/Income Investing
Technical Analysis and Charting
Stock Tips

Monday, 29 January 2007

Create Wealth Portfolio - add SML

Bought SML @ 3.32

Create Wealth Portfolio is as follows

SML 3.32
SPC 4.04
SCI 3.64
KEP 17.7

Friday, 26 January 2007

3 Possible Income Streams

Before we could create wealth, we have to be aware that there are 3 possible income streams

  • earned income
  • investment income
  • passive income
Earned income is the most common stream for many people, you go to work and get paid salary every month. You trade your time, talent, capability, and energy for income. If you do not work, you don't get paid.

Investment income is the income stream we receive when we invest in asset class such as stock, bond, or fixed deposit. In another word, we trade money for money using our talent, time, capability, and energy for income.

Passive income is the income stream that comes from an income source that regardless of whether or not that you are working such as:
  • Profit from business as a business owner
  • Rentals
  • Royalties
  • Franchises
Currently, I am working towards increasing wealth through investment income and target in 5 years time that I will not need earned income for a living.

Thursday, 25 January 2007

A Gift From A Friend

Today, read a book entitled "A Gift From A Friend" by local writer Merry Riana. I really like the "Coke Story". The story goes like this...

There were three cans of coke. All 3 cans were maunfactured from the same factory.

During the day of delivery, a truck came to factory, loaded all the cans of coke and headed off to different locations for distribution.

The first stop was actually a local supermarket. The frist can of coke was unloaded there. It was displayed on the shelf together with many other cans of coke and it was labelled $0.80.

The second stop for the delivery truck was a big shoppin centre. There, the second of coke was unloaded. It was placed inside the fridge to keep it coll and was being sold for $1.50

The last stop for the delivery truck was a luxurious 5-star hotel. The third can of coke was unloaded there. This can of coke was not put on the shelf or a fridge. This can of coke was supposed to be taken only when there is an order from a customer. And when it was taken out, it came with a crystal glass filled with ice cubes. it was served together on a platter and the hotel waiter would be the one who opened the can of coke, pour it on the glass and then polite served it to the customer. It was worth $12

Why do the 3 cana of coke have different prices although they were manufactured by the same factory, delivered by the same truck and they even have the same taste.

Your environment determines your price.

Same person, same talent, same capability + different environment = different worth

Wednesday, 24 January 2007

The Slow And Steady Way To Wealth

Published January 24, 2007
MONEY MATTERS

Investing takes time and the patient investor knows delayed gratification will be amply rewarded in future
By WONG SUI JAU

IN TODAY'S materialistic society, it is very common to have a whole list of wants as we go shopping and see all the nice things for sale during the festive season. Especially when year-end bonuses might be given out, and with easy spending offered by credit cards the temptation to spend is even stronger.

The important thing is not to be penny-wise and pound-foolish. Very often, it is the big-ticket items and events that result in us depleting all our preciously built up wealth and reserves. Your nest egg should be something that is constantly growing.
However, a key part of building your wealth, especially when you are starting out, is to save. You can't build wealth from nothing. So, every cent of savings that you can set aside for investment helps. It is important though that we do not get into the mindset of seeing saving and investing as a huge sacrifice, or think that we need to really scrimp and scrouge in order to save for retirement while living a hard life now.

It is far better to think positively and be goal-oriented about the future rather than bemoaning any current sacrifices made in the name of saving and investing. Some people think 'I have to set aside some money, so I will not buy this branded bag, or this plasma TV' - and so get depressed, even resentful, about saving. Perhaps after a while, they break down and buy the treat anyway, and just give up even trying to save, because they feel that it's impossible. This is worse than saving less because they have totally given up saving.

The better way might be to rather tell yourself, everything should be done in moderation, and that saving and investing is about delayed pleasures. Don't tell yourself you will never get that plasma TV. Tell yourself that with the money you save and invest, in time to come, it will have grown enough so you will be able to buy that plasma TV later, and still have money left to build up your wealth.
An easy method to gauge how wealth might grow is to bear in mind that at the rate of 10 per cent return per year, your net worth will double every seven years. So, if you are able to achieve returns of about 10 per cent per annum on your investments, then any amount you put into them will have paid for itself in seven years' time.
Investing is about time. You have to be patient. Short cuts often lead to grief.

Investors who think they can hasten the way their wealth grows by going into very high risk investments are generally taking on too much risk, and often eventually end up losing money instead, because of their impatience. So, rather than tell yourself 'I have to scrimp and save for these next seven or 10 years before I can spend this money', instead, give yourself certain goals within a shorter frame of time and give yourself small rewards when you achieve those goals.

Instead of thinking that money needs to be hoarded, think of your wealth as a reservoir. You are adding diligently to your reservoir of wealth, but every now and then it is fine to reward yourself with the fruits of your investing success. The saving-diligently part still comes in. You cannot and should not stop saving, especially when you are in the initial phase of building up your wealth. Some people save and invest through their entire life, simply because it has become a lifelong habit, which is a very good thing.

Here's an example of how to adopt a more positive way towards saving and investing.
Adopt a regular saving plan with a fund you feel you can hold for the long term: savings plans can be as little as $100 per month. Then set a certain threshold of cash you are comfortable with in your bank account. At the end of the month, if you have more than that threshold, then that excess amount can be set aside as savings and investments.

When you get your yearly bonus, before you even start to spend it, take half of it and invest that first, then spend the rest. Then, at the end of the following year, if your investments have done well, reward yourself by taking some money out and buying something you fancy.

This way, you are not trying to dramatically tone down your lifestyle just to save. Look upon it more as living a lifestyle in moderation such that you are able to set aside some savings which will bear fruit in future.

Here's an example how this might work in practice. Please note that this is a example and may not be appropriate for every investor out there. Alicia has $1,000 in investment already. She also keeps a threshold of $3,000 in her bank account at all times. Here's how she saves her money and rewards herself with some of the returns each year (see table).

You can see the entire process of wealth building from $1,000 to $8,600. This did not require her to totally sacrifice her lifestyle. She had just $100 less to spend each month and she spent only half of her year-end bonus. When she did have extra, she saved it. And gradually but surely, she is building up her wealth.

And as she sees her wealth grow, she is able to give herself small rewards as the fruits of her success. The important thing is not to take away too much money to reward yourself, especially at the start when you are building your wealth. Many years later, when your wealth is large enough such that it is generating a large amount of returns purely on its own, then you can afford to give yourself some bigger rewards.

The key thing is to get into the habit of saving and investing without having to make it a big chore and feeling resentful about it. To some, this may still be a rather painful adjustment in lifestyle (especially if they have been living beyond their means in the first place). But for others, once they get into the habit, it will be an unconscious thing they will practise throughout their lives.

The important thing is not to be penny-wise and pound-foolish. Very often, it is the big-ticket items and events that result in us depleting all our preciously built up wealth and reserves. Your nest egg should be something that is constantly growing (unless it is a very bad year of markets).

Even your rewards to yourself should not cause it to shrink by more than what it gained in that year. So, as best as you can, try not to treat it as something you will freely dip into every time you need cash. That is the surest way to end up with nothing at all again. Some big ticket items would include spending on a car, renovations for a house, buying a house, costs of a wedding, expensive vacations and expensive electronic items.

The whole point is to moderate your spending, or perhaps in some situations, even delay it. Do you absolutely have to buy a car right now? If you can do fine without one, perhaps 10 years down the road, you would have enough wealth to buy that car and still have a substantial amount left in your savings.

So, your savings and investments would have paid for your car instead of yourself. Or weddings. I read of some couples that spent tens of thousands of dollars on their wedding, which when you boil down to it, is just one day. Take it as experience from one who has got married himself, it's not worth overspending on weddings just to have a 'perfect, once-in-a-lifetime' memory. Because after all, when the wine is drunk and the guests have gone home, that's when you true marriage starts. How happy a marriage you will have depends on what you and your spouse do after the wedding day, not during.

Or instead of buying that expensive $10,000 audio set plus LCD 40-inch TV now, settle for something half that price, and invest the $5,000 you saved. Sure, it might mean a slightly smaller picture (maybe 32 inches instead of 40 inches) and a slightly less ear-shattering sound system (your neighbours will thank you for it). But in the years to come, that money you saved might be generating you free DVDs each year while adding to your reserves of wealth.

In conclusion, get into the habit of saving. But do not treat it is as a chore or a big sacrifice. Instead of telling yourself 'I have to spend less and scrimp,' tell yourself 'By spending less now and saving it, I will be rewarded every year in future.' Investing can be a happy thing, especially when you see the fruits of your investments and get to spend some of them. Think of it as planting the tree now so that you can eat the apples that the tree grows each season in future. Investing is very much the same.

The writer is the general manager of Fundsupermart.com Pte Ltd, a division of iFAST Financial Pte Ltd.

Tuesday, 23 January 2007

SCI

SCI hit a new 52 weeks High @ 4.08 so I took partial profit today @ 4.06. ROC 7.8% in 35 days. Risk of market correction looked higher now.

Create Wealth Portfolio is as follows
SPC 4.04
SCI 3.64
KEP 17.7

Sunday, 21 January 2007

Create Wealth Portfolio

SPC 4.04
SCI 3.74
SCI 3.64
KEP 17.7

Monday, 15 January 2007

Young and financially free

An article from BT
Published January 15, 2007

Young and financially free

This 28-year-old is living comfortably on the income generated from his equities, writes JASON LOW


FINANCIAL freedom may be a distant reality for most youths, but not for this particular savvy private investor.

Well-travelled investor: MrChia's investing style and occupation give him a lot of free time to pursue his interest in trekking in tough terrain

Alvin Chia, 28, gained financial freedom a year ago through private investing and is living comfortably on the regular passive income that his equities are generating for him today. This is a remarkable feat considering that most people find it hard to be financially free even in their senior years.

With a very substantial six-figure equities portfolio, fully paid condominium home and various overseas investments, Mr Chia is very much the ideal investor that youths want to be these days.

When asked how he started out, Mr Chia explains: 'I come from a middle-class family and my parents emphasised the importance of saving right from the start. I did not receive much pocket money and had to work and save to buy what I wanted.'

For Mr Chia, the importance of investing struck him at a young and tender age. 'I made my first conscious investing decision when I was in secondary school while I was selling hamsters to schoolmates,' he says. 'I realised that the more I invested in rearing hamsters, the more the passive income I will receive once the hamsters reproduced.'

Indeed, it is such financially astute decisions that made him the successful private investor he is today. Working as a tuition agent and toiling long hours in other part time jobs, he managed to save $40,000 for investment in equities by age 21.

But like all young investors, he made some costly mistakes at the start but managed to turn the tide since then. In fact, he became so confident about his improved investing techniques that he decided to invest full time a few years back.

'I learnt from my initial mistakes and right now, I only invest in fundamentally good dividend yielding stocks at a discounted price from its book value,' he says. 'These stocks give the investor passive income on a regular basis and the potential capital appreciation to its book value in the long term makes them a highly attractive investment.'

And that has been his investing philosophy for the past seven years. Even when he decided to invest full time, he did not trade in the market.

Instead, he went long on several fundamentally sound dividend yielding stocks and has reaped the dividends ever since. Indeed, his investing style and occupation give him a lot of free time to pursue his interest in trekking in the tough terrains, especially those in Nepal and Thailand.

'I am adventurous by nature and relish the challenges posed by tough terrains,' he says. 'It truly develops my adeptness in making the right decisions in severe conditions, a quality that is vital in making crucial investment decisions.'

In fact, he can converse fluently in both Nepalese and Thai and he puts it to good use. 'Learning to speak the native language is not only essential in understanding the instructions from the trekking guides, but it also gives me the opportunity to have a heart-to-heart chat with the natives to really understand the local environment.'

Indeed, the well-travelled investor feels that local youths are taking the stable and safe environment in Singapore for granted.

'The local youths are so much more fortunate than those in other parts of the world and should really take this opportunity to work even harder in upgrading themselves and contributing to the society,' he says.

Inherent risks

But perks aside, the inherent risks of being a private investor are evident. Mr Chia has no fixed income to fall back on during rainy days and his portfolio value is vulnerable to the volatility of the market.

Thus, he has to monitor the market constantly and does his own in-depth market research. 'Reported market news are usually second-hand information, hence I cannot usually rely much on these outdated information in making my investment decisions,' he says.

He also has this last piece of advice for young budding investors out there: 'Cultivate good investing habits early by reading about Warren Buffet's trading philosophy and learning from the mistakes made by other prominent and successful investors.

'Saving and acquiring financial knowledge are two life-long habits that a young investor must practise right from the start. And while mistakes are bound to be made in the process, take them positively as mistakes are the best teachers in life.'

Friday, 12 January 2007

SPC

Bought SPC @ 4.04. How low will oil drops? Surely, OPEC will need to step in to protect their own interests.

Wednesday, 10 January 2007

Semb Corp

Market correction today. Bought SCI @ 3.64. Expecting there will be a earning surprise to move its price towards 4.04
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