08 March 2016

Mortality - Are We Well Protected?

Oh dear, oh dear. It's been one death after another ever since the start of Chinese New Year. It was a spate of half a dozen who passed on in recent weeks. In all cases, they were aged parents of friends and colleagues.

Most recently, I found out that a friend had suffered a tragic medical incident. He's in very bad shape and I fear he may not make it. As a single income family with two teenagers, it is a situation that will be of grave concern and worry.

I can totally empathise with the implications as my family is likewise dependent on me as the single bread winner, with a pair of teenagers going through the paces of education. The exact situation as my friend. It led me to ask myself, how will my family tide through should anything happen to me? *touch wood* [major wood]

A quick review suggest that with my holdings in shares and unit trusts, Supplementary Retirement Scheme investments, CPF, cash in bank accounts, and insurance upon death, it would amount to $1.7m. Would that be enough?

Assuming a 4% dividend payout with $1.7m invested, it would be $68,000 per year. Wifey has her own portfolio that is generating $6,000 worth of dividends per year. So in total, that's $74,000 of passive income per month.

The car is fully paid up, although it will eventually reach its 10-year mark within a few years. The house is almost fully paid up, with less than $50,000 principal outstanding. No other debts, beyond the monthly credit card bills. I think, $6,000 a month should be enough. Worst case, wifey may have to pick up some work to supplement.

ONE major problem though: Will wifey know how to invest that $1.7m to generate a steady and safe 4% dividend return? Got to work on that. Perhaps the simplest solution is to teach her how to buy STI ETF?

Meantime, whatever faith and beliefs you might subscribe to, wish my friend and his family well. They need all the help, physically and spiritually.

Wishing all, and especially my family and me safe, healthy and happiness in the year and years ahead. Cherish what we have.

Mortality, am once again reminded.

02 March 2016

When an Exit Becomes an Investment Opportunity

Zagro has been delisted. Yet again, I've lost another decent dividend paying stock in my portfolio.

I had acquired 16,000 shares in Feb 2012. This was followed by a rights issue in Aug 2012 where I accumulated another 5,000 shares. Each year thereafter, it has issued dividends annually.

I guess I'm lucky that there was still profit to be made from the exit offer. In all,
the annualised internal rate of return was 11.5%. So overall, a tidy profit.

Time to move on. Nice to have a small bundle of spare cash in this rich market of opportunities. Am I a perennial bull or what?

Pick, pick, pick.