Saturday, January 01, 2022

Happy New Year ! Cautiously optimistic about 2022

It's the first day of 2022 and I've already gotten my share of silly adventures. Last night, I gathered with a few financial influencers to attend my first "CPF Interest Party" where we celebrate the crediting of interest into our CPF. Throughout the evening until countdown, the CPF website was down for maintenance so I was only able to check this morning.

I did not start the New Year on a particularly good note. We left the party at around 1am, I tried to take the MRT home but it terminated after 1 stop so I got stuck at Botanical Gardens. Then I took a rest at Macdonalds Serene Centre to get a drink, then call for a grab car but there were no cars available at 2am in Serene Centre on Grab or Gojek. 

Initially, I thought I could read a magazine until 530am and then take public transport home. 

I finished the latest Economist at 3am and then realised that I have nothing left to do, then I realised that I had to take a leak but there were no toilets at Serene Centre that are open at that time. Staff said that access passes are only for themselves. Half groggy, I walked over to Adam Road Hawker Centre to relieve myself. 

After that, I realised that I might be too old for this shit, and I might fall sick if I waited for sunrise to get some sleep. So I walked along Bukit Timah Road, walk across Hwa Chong Institution and kept a lookout any passing cab. I thought if no cab showed up, I'd be able to get a teh halia at Beauty World. By then my phone has lost all its juice.

In the end, I found a cab at 4am. I hiked a fair distance by then. 

I got home and fell asleep at 5am.  

Hopefully, the financial markets will be less bungling for me in 2022. 

1) The biggest jackass move this year was putting 37% of all my revenues into my CPF voluntary contribution. That made 2021 quite difficult to handle as my training fees had to feed into portfolios built by my student. Any amount left had to go to the $15,300 Supplementary Retirement Scheme contribution. 2021 felt surreal because there were moments, I felt I was farming my dividends from REITs into my CPF account.

2) The combined moves paid off today when the interest was credited into the CPF account. But I will do things differently in 2022. A friend suggested that I put it in stable coin yields farming and earn an interest rate on my holdings until 2022 December before extracting it for tax management purposes. This sound like a decent idea. 

3) Business revenue for 2021 has been down more than 50%. The pandemic has made the investment training business more competitive as barriers of entry dropped once everyone got online. I don't see things improving in 2022, but I hope I get to launch a new product to sustain my current lifestyle. The thought of failure has loomed large in my mind and I have been making enquiries to smaller law firms since I have cleared all my weekday normal office hours. I like my life, don't need the money but I have enough self-awareness to know that I may do something destructive if I stop exchanging time for money.  

4) While the revenue has been down, as a sole proprietor, I made more milestones than if I were in the Employee quadrant. I worked with iFast to launch my introducer service and someone stumbled into a regular segment on iFast TV.  I'm producing a lot more videos than before. 

5) A more detailed writeup will be made on the Dr Wealth Blog on portfolio results. Student portfolios did 13.52% this year compared to 12.92% for the STI ETF. I cannot emphasize how hard it is for factor models to beat the index this year as the STI ETF now has 7 REITs and is fairly formidable as an opponent. Do note that we do take less risk with a beta of 0.8. Factor models also missed out on restructuring efforts as laggard Temasek counters caught up. My students have now beaten the STI ETF three years in a row. 

6) Of course 13.52% returns are not too shabby if you consider the fact that I leverage all my student portfolios for myself. 

7) Thanks to the pandemic, we could not travel, so we did not spend a lot of money. I spent $15,000 on home improvement at the end of the year. 

8) My mum's angioplasty was financially the riskiest event we faced, but we took 3 months of dividends to offset the costs. This is a serious privilege that has been built up by my dad for the past half-century.

Still, 2022 is starting on a fairly good note. 

I think 2021 was kind to me although I took steps to make it tougher to shore up for the future. At least all that work in 2021 was supposed to lower my tax bill so, due to a drop in revenues, I expect lower expenses this year. I've got a solid plan moving forward to survive in my business.  

Let's see what this new year can bring for us.


1 comment:

  1. Nice story, thanks for sharing. Haha..."CPF interest party", u must be getting old :)