Tag: t_table

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Posted on by tiger40490

This comparison proves to me that cpfOA is an inferior parking space.

Therefore, I should consider housing refund from FSM to OA to SA.

SA OA FSM bank
(comp)return@$1k marginal amount 4% 2.5% 2-3%
.. dependable return? yes no yes
how soon can take out without loss age 55 6M 1D
use for edu #after 55? BRS yes
use for housing before 55? no yes yes
use for U.S. housing/edu? no no yes
use for stocks mostly US no unlikely yes

##annual burn rate: exclusion standardize #

Posted on by tiger40490

 

When an amount like tax is marked “E”, it means the amount is excluded as burn rate.
When an amount like 1.9k to wife is marked “I”, the amount is included as burn rate.

                  Exclusion/Inclusion table
tax mtgP mtgI 1.9k}wife $x}wifeFSM ⬐ For what purpose?
E E I I E FullerWealth #long term
E e or i I E E core brbr #short term
i[2] i[2] I I E brbrX #short term. 12k/M presentation to wife++

Among the various goals, the priority is

  • AA: accurate burn rate recon
  • BB: brbr estimate over take-home base salary. Brbr is an informal, workman’s tool (like C++), not an economist’s tool, not sound, consistent, vigorous, not even logical. Not designed for longitudinal or peer-comparison.
  • BB1: core burn rate ..
  • BB2: brbrX .. burn rate near-horizon forecast to share with family members, ex-classmates or advisors
  • .. [2] My “presentation” includes tax and mtg-P as special outlays. In contrast, brbr and FullerWealth excludes tax and mtg-P
  • BB3: FullerWealth forecasting .. requires precision.
  • CC1: burn rate trend analysis, comparing to past years
  • CC2: burn rate fair comparison with peers .. comparison with official CPI basket composition (economics theory)

As of 2022, here’s my exclusion/inclusion criteria primarily for BB:

  1. [x=should be “excluded” for CC, using the spreadsheet technique]
  2. BB2/BB3 to exclude IRAS installment or prepayment. (Prepayment actually complicates BB1, though it helps cash flow mgmt.)
  3. loans .. see separate section. Complicated.
  4. BB to include major medical
  5. BB to include [x] college fees
  6. BB to include annual insurance premiums
  7. (all purposes) include amount transferred to wife and spent, about $2k/M
  8. .. How about any amount wife spent out of her savings? Invisible and excluded for AA/BB/CC, but this amount is low in most months.
  9. .. [x] How about any amount transferred to wife’s FSM account, not spent (like bonus sharing)? excluded for AA/BB/CC
— Mtg P+I .. Similarly to PRP, if the annual P+I payment is 88% principal repayment and 12% interest “on average over a given period“, then only the 12% would be included as expenses. The remaining is treated as investment but why bother? Well, treating P+I as burn rate would inflate my burn rate.

This ratio changes over time, so your burn rate trend line can be skewed. (Is that a problem? Well, IRAS payment is a similar problem.)

mtg-P is non-discretionary investment, excluded for AA/CC1/BB1/BB3. For BB2, see note [2]. Mtg-p is like buying an investment property by monthly instalment

— How about mtg /paydown/PRP/? More like a discretionary investment outlay, excluded for all.

If I put $10k salary into an annuity (FLI2), it increases my net asset. Same effect if I use the same to pay down a debt. If the debt is a car loan or student loan, then the paydown amount might be considered burn i.e. expenses, but I never take such loans. My debt is always investment.

— How about RBBT loans? Accrued int is usually small. Monthly P+I is considered investment, and excluded.. simplicity.
Further, the monthly int payable (eg $111 payable to bank on a $100k principal) was expected to come back like any investment, in an amount above $111. In fact, the DIR is higher than LIR so deposit interst on $100k exceeds $111.

— Income (not property) tax deduction
Sugg: If a monthly deduction is $2500, then record it as a negative income or “payroll deduction” like withholding or CPF contribution, so my monthly income is reduced by this amount.

This new practice would improve quality and usefulness of the burn rate in my recon s/s.

What about lump-sum prepayment? I would say same treatment.

— CC: As a consequence, even with a stable family size, annual burn rate would fluctuate year to year due to these items

Nevertheless, I want to follow a consistent definition of burn rate, to support 20Y trend analysis. Covid case trend becomes meaningless when a new counting method is adopted, the entire data set has to be retrospectively adjusted to follow the same methodology.

passive^active: job, investment..

Posted on by tiger40490

Instability, uncertainty is a fundamental part of my life. They may be part of your life but some people’s lives have rather low instability.

For me, it seems a good practice to embrace instability.

However, some stressors like PIP are too toxic for my “system” to manage, so I may have to avoid them.

Notes:

  • [1] my passive investments are not “safe” as comparable to insurance, time deposits etc
  • [2] startup has high risk of firm failure, but my calibre could be good enough.
  • [3] I started with mutual funds and had very poor returns. Then I had some alternative investments
  • [4] BGC, HDB…
HFT tech firm, startup ibank job contractor
#passive		 active invest #rental,stock passive invest[3] remote rental prop [4] khm shops
overall rating #9 ? #2 #1 #3 #6 #2 #1
income unsure 200k+ 170-190k 150-220k unsure unsure up to SGD2k/M up to USD1500
stability of income risk@kickout [2] worse than contract good poor reliability poor reliability poorer than khm good for now [1]
expectation@me worst ? bad best much worse than passive zero zero zero
stress like PIP stigma worst ? bad best worse than passive zero low zero

 

3choices if have cash4another property

Posted on by tiger40490

It’s highly imprecise (mostly gut feelings) to rank these choices, but at the moment here’s my tentative ranking.

scenarios
work]SG work]U.S. model mgmt legwork NGRY based@xp? quantum overall risk
bad choice #1 43R@JC by myself, but tough 10%+ 🙁 on paper USD 350k
#1 #2 HDB combo lowest maintenance 5% yes 🙂 SGD 200K lowest
#2 #3 khm/idn.. hopefully cheap local mgmt 6-10% 2 cases USD 50K highest
bad choice bad choice SG condo low maintenance 2% 🙁 on paper low

 

##high-ROI ] %%experience

Posted on by tiger40490
S$profit % realized incl capital annual ROI[2] capital category windfall
2.2k 122% over 2Y c 10.5% 10k PE German investment
6.6k very low delayed 10k PE Brazil invest #1 #3Y
2.8k 128% over 2Y [1] c 13% not 14% 10k PE Brazil invest #2
S$200k[3] zero 🙁 c 12% up to 2017 USD 90k home #2 USD90k invested in Beijing
S$240k[4] 237% over 8Y c 11% only 175k home #1 Blk 177
v v    trivial amounts     v v
1.4k 170% over 2Y c 30% roughly USD 2k US eq Legg Mason US funds
below 1k 110% within a year 15% roughly 1k equity selected eq funds

Turned out to be mostly real estate, so all my gold and bond investments pale in comparison.

Actually, at my age I need current income more than windfall… see separate blog

[1] there was $100 admin fee, but they paid out an extra $100 to compensate for it
[2] not compound return if no ‘c’. Note compound return above 4% is lucky and hard to maintain
[3] 2017 value = 20% x CNY 8.5M
[4] excluding rental savings

##conflict`preferences: Buy]Bayonne

Posted on by tiger40490

Update — JackHe pointed out that for my first buy, don’t need to think about suitability for family. I feel this attitude can be a welcome relief. Grandpa said the same — don’t need to discuss with wife.

Option C — condo Option 2 — 2FM
family use? higher chance than Option 2 yes if close to PS14 but I still prefer to live close to HBLR + parks
.. or rent out default choice. better investment value. lower cash flow risk
size up to 1300, otherwise oversize oversize would break my budget !
condition good condition. no renovation planned acceptable condition
tax + HOA higher running cost less important if letting
maintenance distraction + higher running cost
loc must: close to PS14+train
street cleanliness usually cleaner street, as the condo takes care LG
budget Ideally below 250k. Above 300k no additional value to me or tenant, and over-commitment 250k-350k

Location preference within Bayonne: [b = binary criteria. If good enough, then I don’t care how good]

  1. Better physical condition so I don’t worry much about renovation. Renovation is manageable for some buyers but a risk to a new buyer like me, albeit a well-understood risk. Jack He agreed.
  2. running cost — tax+HOA+maintenance. Tax is a big drawback to some Bayonne condos 🙁
  3. [b] Close to the better middle/elementary schools. Nicholas Oresko seems to be the best rated. Lease-spread if necessary — rent nearby [1] and rent out our home [2]!
    • [1] 1500 – 2000/month is possible.
    • [2] should be easy, though the rent amount is an uncertainty
  4. smaller price tag (and tax)? Am willing to pay a small premium for those features important to me, but overall price tag is the smaller the better. See prefer small investments,esp.property
  5. Rent amount? Those with dual entrances often come in poor condition or with bigger price tag.
  6. — less important —
  7. [b] reasonable size. See sqf: most U.S.homes are over-sized Those oversize yet clean units invariably cost more than I need.
  8. [b] street cleanliness; cleaner, richer street (usually near the parks)? still a concern.
  9. no stairs if possible. Am willing to pay a premium for it.
  10. bigger windows.
  11. gas heating is best; electric means higher running cost

https://datausa.io/profile/geo/bayonne-nj/#category_housing has nice charts. One shows the national histogram vs Bayonne histogram! Another shows that nationally 64% of homes are owner-occupied, but 37% in Bayonne.

Bayonne^Edison

Posted on by tiger40490

My wife , kids (and I) need to rent or buy a home:

  • 1200 sqf condo , town home or house
  • clean street, not “luxury” level
  • school — conducive learning env + engagement, even if academically mediocre
  • walk or cycle to train station
  • park nearby

Top 5 comparison factors are highlighted below. Bayonne looks slightly better, based on available info and my biased observations. Task ahead is to reduce the bias.

Rental income is important to cash flow. Home Appreciation is likely bigger in magnitude than rental income, but both are less important because I will have rental income from Asia.

https://www.weichert.com/search/community/city.aspx?city=3202 covers Bayonne on a nation-wide benchmark: reasonable crime rate, and statistics on income (low), education levels (low), housing…

Compare Edison — https://www.weichert.com/search/community/neighborhood.aspx?hood=15083 shows lower crime, higher education, higher income, fewer homes rented/more owned

 Edison, near train stn Bayonne
^ decent Nicholas Oresco is highly rated. Parents can more easily push kids up into a top class middle/elem school
yes yes safe for kids playing
^ has some probably less. Can drive to JC too enrichment programs for students
biggest in NJ low Chinese(parents)concentration
Strong reputation many private schools in JC; public schools acceptable schooling risk
46 – 60 minutes ? 35 average (JC/NY) commute between start/end stations. (NYC Subway Adds 15)
^ 10 min (peak) 10-20 min. Alternative to light rail — drive a few minutes into downtown JC, park and cycle train interval
no choice yes I could focus on JC and exclude NYC!  possible job locations within 20 min? I could opt to avoid the distant jobs.
?pre-school JC, NY boroughs? job for wife?
no downtown ^ much better walkable/bikeable neighborhood
not promising ^ promising appreciation
risky though reasonable demand ^ much higher percentage renting. Closer to NYC/JC. Several mid-rise rental apartments rental demand, if we need to rent out
unlikely ^ more common option to collocate with tenant?
fewer units ^ many cheaper units buy tiny 2nd property nearby?
hard ^ feasible buy 2FH under 400k?
300-400k ^ 220-330k price tag
250-300 ^ 150-200 (220 is luxury condo) psf (mostly for condo)
some small units ^ many small units, more affordable size
(lower?) middle class working class. My kids are more likely to get into top classes socioeconomic strata
^ easier, though car is prefered need car Chinese grocery shopping
1 good park ^ more parks parks

rental property JSq^Bayonne^Edison

Posted on by tiger40490

It greatly reduces the risk of failure to rent out if it can be suitable for myself.

Even at a remote location like Edison, if you reduce the asking rent enough I feel you will rent it out, since there are rental units in the area. Many people don’t mind the Edison commute. Some live even further out.

 Edison JSq/Harrison   Bayonne
 ▼ best reasonable commute self stay
land-based? most promising promising appreciation
(some demand) better? good RD
unlikely possible good chance with multi-family divide
good ▼  (possible) family stay

##nonwork income: rarely has capital appreciation except prop

Posted on by tiger40490

I know only a few reliable passive income generators. Capital appreciation + reliable and high dividend yield without active management …. a rare combination. My BridgeRetail and #4-116 are considered bargains.

  • All other properties can become vacant or rundown. All need active management
  • As Avichal pointed out, a bit of inactive management could enhance the return.
  • Most high dividend funds have no consistent and high dividend like HY bond funds
  • Unlike the property market investments, annuity products are lifetime commitments. Once you put in the money you can’t easily take out any amount without loss of the lifetime benefits.
  • As discussed with Raymond, airbnb model requires a lot of active management and legwork. Not passive income 🙁
Income Years Nett rate (not annualized credit? active mgmt? capital appreciation liquidity inflation protect
10Y 7% listed developer none. very Rare 🙂 big potential 🙂 can sell good Cambodia shops
for life:) 8-9% after 10Y wait trusted to take care of my family 🙂 none erosion 🙁 worst worst – super
long term		 CPF Life
for life:) 7-10% big insurer none erosion 🙁 worst worst Allianz income protector
5-20Y -1% to 7% 🙁 factored into price 🙂 none could drop:( excellent mixed HY bond fund
many no guarantee 5-6% gross no issue needed reliable 🙁 can sell good HDB flat
many no guarantee 5~7% no issue needed 🙁 big potential 🙂 can cell good BGC