Cory Diary : Time Dependent Performance

Often people ask for annualized returns over the entire investment horizon of index or fund. This is wrong simply each human investment lifespan is limited to their relevant period and changes as we age. How the world managed financially 100 years ago, 50 years ago, 30 years ago and today can be very different too. Depending when we are investing actively determines our performance during this periods.

For myself, the active investment period is about few years before the global financial crisis till ongoing now. That's 10-12 years mark. Therefore, it is meaningless to me when fund promote their result across 20 years or 30 years horizon where tons of things can happen in-between.. 10 years before it may be mega bull or era where they face different government regulatory, technological or whatsoever industry in focus. If i have started the same, my annualized can also be different from today.

Not strictly speaking, the weight-age even for same period can be different. A single salaried person will have more and more money later into her career for investment whereas a married person may have lesser. This is crucial to understand. Because a millionaire today do not have a million dollar 15 years ago to invest to compare. For DIY Investors, your recent fund invested are likely one of your largest or heavier amount in your investment life. Recent market change can skews your returns a lot more personally.

Fund that start right before GFC 2008 and after can be just a year apart but their result can also be totally different. So we need to be very careful when reading materials given to us. How many people will know or remember this ?

A sample of Cory returns each year as below. Annualized whole period about 6.8%.

A peek on Temasek performance, their 10 years and 20 years mark are 6% annualized.
http://www.temasek.com.sg/investorrelations/portfolioperformance

GIC returns are a little complicated as they are oversea focus. A strong SGD will not help or fair. Using USD, is about 5.7% @ 20 years. This beats nominal MSCI index.
http://www.gic.com.sg/report/report-2015-2016/investment-report.html

Now, how about STI Index, my favorite. Using 1st Jan 2007 (updated) to now. Is only 0.28% annualized (updated). If we are to include dividends say 3.x% to round it off, that's 4%(updated). Dividends play a huge part in returns or damping growth depending which side you are in. 10 years before (1997) is about 5% including dividends..

Seems so far our CPF can still get the money needed. If this funds go much lower, either CPF has to give lesser, Land sales price has to go up, more tax from us or SGD will have to weaken. You choose.


Cory
20170520

Cory Diary : Singapore Tax Rate to Taiwan

Two things cannot escape in life. Death and Taxes. How do we compare with other countries in taxes ? Since i do not have more in-depth knowledge of most, I will do a rough estimate between Taiwan and Singapore.

Taiwan has a model kind of similar to some western countries in concept. In Taiwan, the medical and other benefits portion are funded separately and not part of the annual income tax. Nevertheless employees paid for it as part of the deductible in their salary. For simplification we will exclude them. Similarly we will not include Employer CPF contribution and relief in Singapore situation, and deductibles due to education and dependents in both countries.

Tax in Singapore Dollars at 1:22 rate

As you can see the tax in Taiwan is not competitive at all based on Income Tax formula.

People in $200K bracket, Singapore residents paid about 50% of what Taiwan residents would have to. No wonder the rich migrates to Singapore. 

But do we treat our poor badly ? From the above table, Singapore residents earning in S$40K bracket is only paying 17.5% of what a Taiwan residents would have paid.

This is a simplification. Are we far from reality and is this Hard Truth ?

Cory

20170516

Cory Diary : Net Worth 20170514

As I expand my Sg Equity size, feel is time to track the amount in my Net Worth chart. However data is not much but have to start somewhere. ( Yellow ). The effort is zero other than initial setup one time. This will give me guidance on my equity size relative to other lines.

Also did a one time adjustment starting on Jan'16 by removing my Property Net Asset out from the Blue line. Reason being they are not liquid for cash flow supports which is short term in nature. The other reason is the valuation is not easy to come by.

Net Worth 20170514

The Red Line is Net worth  which I manage to backdated till 2011. Would love to have more data before 2008 for my liquid portion in Blue but unfortunately it won't be possible with time passage. The Blue line is also my financial freedom line because is what I can tap on to generate returns that I can use quickly for property loan, Insurance, bills and daily needs. They are primarily supported by Salary Income and Equities.

What really unplug my growth gear ( beside 2008 GFC )  is PRC Market shake up in 2015 mid that set me back by at least 6 months. That's how integrate Singapore economy is with China now. It also takes me some period to put back my equity after. This line is make possible for meaningful change data as I move to dividend style of investing.

There is another line I like to add is the Expense line. If I have to do this directly, the task will be huge. Maybe I should look from the angle of amount of saving to deduce. I am probably too late in the game to track this as I have moved to higher spending gear ....



Cory
20170514