I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!


Click to email CW8888 or Email ID : jacobng1@gmail.com



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

Saturday 30 October 2021

When Your Bank RM Called??? (7)

Time flies fast; but this time is boring! Only consolation out of these two boring years is that he was shown his basic living expenses by Mr. COVID since he is an Ant in retirement planning. Ants love Numbers!

Read? When Your Bank RM Called??? (6)

12 months of interests payment have passed. Another 24 months to go before receiving monthly few hundred bucks till 2040 when the loan period end by surrendering the policy to fully redeem $144K loan.

Let see how fast can interest rate rises in 2022 and 2023!





3 comments:

  1. Uncle8888,

    If your loan is based on sibor or sora, pray that Fed doesn't raise rates early!

    ReplyDelete
    Replies
    1. Currently, it is still on sibor; but that time RM told me all loans from DBS will be transited to sora soon. "Soon" is already 1 yr since Dec 2020. LOL!

      Delete
  2. Was publicly announced that SIBOR will be discontinued by end 2024. Transition would probably take place earlier. Won't be a straightforward transition because SORA is more predictable & stable than SIBOR, thus rate is lower (latest 1 month SIBOR ~0.265%, vs ~0.123% for 1 month SORA). Spread will be adjusted to take account of the difference in rate, just hope existing borrowers will not be shortchanged by the banks (given vast majority of existing home loans are priced in SIBOR, MAS will probably intervene if otherwise).

    re the projections above. these were based on investment return @4.74% & borrowing cost @ 2.5%. not realistic anymore. If the current low interest continue, investment return will be less than 4.75%, but so is borrowing cost. You will benefit overall, with return above 7.8%, probably above 9%. For my case, just received a letter from Manulife saying my monthly payout will be reduced by $600, but my monthly interest payment to DBS is reduced by $2,500! Just "make" an extra $1,900/month out of the policy thank to COVID! a bonus unexpected when I bought the policy in 2019 based on an investment case of borrowing cost @2.7%

    With US seeing 5+% inflation for the past few months & lots of basic goods/commodities at multi-year high (energy, electronics chips, aluminium, steel, copper..), a matter of time FEB will raise rate. Your return would be reduced if this happens, lower than 7.8% if all in interest exceed 2.5% (versus 1.04% now). But need not be too concerned, there is a sizeable safety margin to breach before your return drop to CPF OA 2.5%, or worse, turn negative. Will share how I come to this view if interested.

    My only concern is this coming inflation is not a "normal" one triggered by red hot economic expansion, but one by supply chain disruption, unlimited & irresponsible money printing (especially US) to combat economic fall out from COVID, shore up the equity markets etc. Hope this is not the onset of stagflation or a return of ultra high inflation in similar fashion as that triggered by NIXON when he abandoned the Brenton Woods Agreement & unpegged the US$ from gold. But under such a scenario, there will be no escape for all forms of investments - property, equity, bonds. Just hope for the best.

    ReplyDelete

Related Posts with Thumbnails