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Whats your net worth

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  #2701 (permalink)  
Old 22-05-2020, 06:19 AM
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Wow didn't expect so much posts on me taking leverage for investments. So maybe just to share a few thoughts and calculations that I thought through.

My investment approach is simple: Valuing investing in companies with strong balance sheet and deep economic moats that have business performance temporarily affected because of covid-19. I stick to my area of competence and only invest in companies I understand. Time horizon is flexible but usually hold for 6-24 months historically.

There's two kind of debt I'm using:
1) Personal Loan aka unsecured debt (DBS/SC personal loan at APR 3.88%). I have to make monthly payments to the bank/FI. Market fluctuations have no impact on me. E.g. if I buy DBS shares today at $19.40, even if it falls to $12 by May, my creditor cant force me to sell my shares. My only risk is my ability to make monthly payment which for most people is dependent on my job, and thankfully for my case is not an issue even with covid-19.

2) Share financing aka secured debt (Vickers/Poems at interest rate 3.2 and 3.1%). Market fluctuation will have impact because you have to maintain margin maintenance at 1.4x. Once you deposit cash collateral, the credit line is ready for you to tap but if you dont tap, you earn low interest on the cash collateral.

If market goes down, personal loan goes in first. If market recovers, good. If it doesn't and falls further, share financing comes in. I never deplete all my cash. If market side ways, dont do anything.

Let's try a gambling example. In an extreme case where new waves of covid-19 pops up/country in extended lockdown/travel remains unviable, Genting Singapore crashes back to March lows (that's around 40% fall from now). I go in with 0.5x leverage (50% use at unsecured credit and 50% use cash). Maintenance margin is only triggered at $0.35/share. Of course anything is possible but bear in mind Genting Singapore is holding net cash of $0.31/share. Even in March lows, they are trading at 2-3x their forward operating earnings. Take a look at Macau casinos where 97% of their revenue evaporated and they are still trading at a higher multiple. At least that gives me sufficient comfort to sleep soundly at night. Of course, the underlying assumption is the company you choose is good.

Then what if Covid-19 last for many years? That's not impossible but even Spanish flu in 1918 lasted for only >1 year. I choose to have faith in human ingenuity when almost the whole world is trying to find a vaccine for it..

Just want to put a disclaimer: I am not encouraging reckless stock market investments using leverage. It has to be used discretely. It has to be tailored to your financial situation and current position in life (in my case, i'm 26 and my parents dont rely on me financially/I just give them allowance etc).
You are asking shifus here for advice and yet you dont seems too be receptive.

Appears that you understand what you are doing with stocks; I am sure you know how to make it to 1 million by 30 by leveraging on stocks.

Value investing is nothing new and it is important to understand the companies you invest in.

I think you did not point that the main risk out of this situation is retrenchment.

What if you have to sell all your investment today? Will you get back all your initial invested amount. How much will you have made considering if bank wants you to pay back all fhe money with interest today?
Have you wondered why you cannot defer your personal loan payment or not encouraged to leverage into stocks?

Just bringing in different perspectves here and not putting you down on your stock investment knowledge.

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  #2702 (permalink)  
Old 22-05-2020, 08:35 AM
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Originally Posted by Unregistered View Post
Wow didn't expect so much posts on me taking leverage for investments. So maybe just to share a few thoughts and calculations that I thought through.

My investment approach is simple: Valuing investing in companies with strong balance sheet and deep economic moats that have business performance temporarily affected because of covid-19. I stick to my area of competence and only invest in companies I understand. Time horizon is flexible but usually hold for 6-24 months historically.

There's two kind of debt I'm using:
1) Personal Loan aka unsecured debt (DBS/SC personal loan at APR 3.88%). I have to make monthly payments to the bank/FI. Market fluctuations have no impact on me. E.g. if I buy DBS shares today at $19.40, even if it falls to $12 by May, my creditor cant force me to sell my shares. My only risk is my ability to make monthly payment which for most people is dependent on my job, and thankfully for my case is not an issue even with covid-19.

2) Share financing aka secured debt (Vickers/Poems at interest rate 3.2 and 3.1%). Market fluctuation will have impact because you have to maintain margin maintenance at 1.4x. Once you deposit cash collateral, the credit line is ready for you to tap but if you dont tap, you earn low interest on the cash collateral.

If market goes down, personal loan goes in first. If market recovers, good. If it doesn't and falls further, share financing comes in. I never deplete all my cash. If market side ways, dont do anything.

Let's try a gambling example. In an extreme case where new waves of covid-19 pops up/country in extended lockdown/travel remains unviable, Genting Singapore crashes back to March lows (that's around 40% fall from now). I go in with 0.5x leverage (50% use at unsecured credit and 50% use cash). Maintenance margin is only triggered at $0.35/share. Of course anything is possible but bear in mind Genting Singapore is holding net cash of $0.31/share. Even in March lows, they are trading at 2-3x their forward operating earnings. Take a look at Macau casinos where 97% of their revenue evaporated and they are still trading at a higher multiple. At least that gives me sufficient comfort to sleep soundly at night. Of course, the underlying assumption is the company you choose is good.

Then what if Covid-19 last for many years? That's not impossible but even Spanish flu in 1918 lasted for only >1 year. I choose to have faith in human ingenuity when almost the whole world is trying to find a vaccine for it..

Just want to put a disclaimer: I am not encouraging reckless stock market investments using leverage. It has to be used discretely. It has to be tailored to your financial situation and current position in life (in my case, i'm 26 and my parents dont rely on me financially/I just give them allowance etc).
I think the main risk is job retrenchment. Are you able to use your cash in collateral when you lose your job? Are you able to sell ur investment immediately without losing money?

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  #2703 (permalink)  
Old 25-05-2020, 03:17 AM
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28. Working for 5 years+
Husband 29. Working for 3 years+

Comb income: ~20k/month
Cash: 100k , Stocks: 50k
Own a 1.2m 2 bedder (downpayment was about 300k so we had to wipe out our savings last year)

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  #2704 (permalink)  
Old 25-05-2020, 01:39 PM
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28. Working for 5 years+
Husband 29. Working for 3 years+

Comb income: ~20k/month
Cash: 100k , Stocks: 50k
Own a 1.2m 2 bedder (downpayment was about 300k so we had to wipe out our savings last year)
That's amazing! Well-done. What industry are you and your husband in? Many of my peers in their thirties dont even make that much.

Is your condo and cash/stocks just built through your salary?
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  #2705 (permalink)  
Old 25-05-2020, 03:35 PM
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That's amazing! Well-done. What industry are you and your husband in? Many of my peers in their thirties dont even make that much.

Is your condo and cash/stocks just built through your salary?
We are both in the airline industry. Iím a pilot. Through celery.
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  #2706 (permalink)  
Old 26-05-2020, 12:00 AM
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Originally Posted by Unregistered View Post
Wow, just came across this. So here is my stats.

34 YO

+ 220k : Cash savings
+ 340k : CPF
- 380k : outstanding mortgage

~ 700k : 1 bedder condo (freehold)
~ 400k : 1 B1 Industrial Property (freehold)
~ 400k: Warehouse (freehold)
+ insurance policy (term, so i think no value)

No car, all properties above are rented out

Base salary is 150k/pa after taxes and rent of my own house which I am staying in.

Wife not working, 1 kid.

Not sure how I am fairing but we live quite frugally, eat at home often and no expensive holidays or car.
Oh hey, i'd love to know more about he B1 and the Warehouse properties.

Some questions to start if you don't mind:
- how is the tax situation surrounding these properties? Eg, we all know about residential's ABSD and AV taxes, what's the situation on these sorts?
- How did you go about finding out these properties are up for sale? Or was this built from ground up etc?
- Are there any pitfalls here that you could share? There are plenty of residential property investment stories here and i'd love to hear more about the non-resi ones.

thanks man
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  #2707 (permalink)  
Old 26-05-2020, 09:32 PM
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Originally Posted by Unregistered View Post
That's amazing! Well-done. What industry are you and your husband in? Many of my peers in their thirties dont even make that much.

Is your condo and cash/stocks just built through your salary?
Iím in insurance sales (fluctuating income) for about few years, husband is in investment banking last 3 years too (saves a lot) so both in finance. We teach classes during our free time as well.

And yes, condo & stocks built through salary as well! Took slightly over 2years for the condo purchase.
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  #2708 (permalink)  
Old 26-05-2020, 11:02 PM
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35 male single

1m bonds
400k cash
400k equity
150k funds
~ 300k cpf

haven't bought a property yet. planning to buy one but thinking if prices will go down more. currently renting.
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  #2709 (permalink)  
Old 27-05-2020, 09:51 AM
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Quote:
Originally Posted by Unregistered View Post
Wow didn't expect so much posts on me taking leverage for investments. So maybe just to share a few thoughts and calculations that I thought through.

My investment approach is simple: Valuing investing in companies with strong balance sheet and deep economic moats that have business performance temporarily affected because of covid-19. I stick to my area of competence and only invest in companies I understand. Time horizon is flexible but usually hold for 6-24 months historically.

There's two kind of debt I'm using:
1) Personal Loan aka unsecured debt (DBS/SC personal loan at APR 3.88%). I have to make monthly payments to the bank/FI. Market fluctuations have no impact on me. E.g. if I buy DBS shares today at $19.40, even if it falls to $12 by May, my creditor cant force me to sell my shares. My only risk is my ability to make monthly payment which for most people is dependent on my job, and thankfully for my case is not an issue even with covid-19.

2) Share financing aka secured debt (Vickers/Poems at interest rate 3.2 and 3.1%). Market fluctuation will have impact because you have to maintain margin maintenance at 1.4x. Once you deposit cash collateral, the credit line is ready for you to tap but if you dont tap, you earn low interest on the cash collateral.

If market goes down, personal loan goes in first. If market recovers, good. If it doesn't and falls further, share financing comes in. I never deplete all my cash. If market side ways, dont do anything.

Let's try a gambling example. In an extreme case where new waves of covid-19 pops up/country in extended lockdown/travel remains unviable, Genting Singapore crashes back to March lows (that's around 40% fall from now). I go in with 0.5x leverage (50% use at unsecured credit and 50% use cash). Maintenance margin is only triggered at $0.35/share. Of course anything is possible but bear in mind Genting Singapore is holding net cash of $0.31/share. Even in March lows, they are trading at 2-3x their forward operating earnings. Take a look at Macau casinos where 97% of their revenue evaporated and they are still trading at a higher multiple. At least that gives me sufficient comfort to sleep soundly at night. Of course, the underlying assumption is the company you choose is good.

Then what if Covid-19 last for many years? That's not impossible but even Spanish flu in 1918 lasted for only >1 year. I choose to have faith in human ingenuity when almost the whole world is trying to find a vaccine for it..

Just want to put a disclaimer: I am not encouraging reckless stock market investments using leverage. It has to be used discretely. It has to be tailored to your financial situation and current position in life (in my case, i'm 26 and my parents dont rely on me financially/I just give them allowance etc).
Seems very nicely thought out. Wish you all the best in your journey!
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  #2710 (permalink)  
Old 27-05-2020, 03:28 PM
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Originally Posted by Unregistered View Post
35 male single

1m bonds
400k cash
400k equity
150k funds
~ 300k cpf

haven't bought a property yet. planning to buy one but thinking if prices will go down more. currently renting.
10m bonds
900k cash
800k equity
750k funds
~ 900k cpf

I more than you ...
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