CPF OA-SA Transfer for Millenial.. BTO How?!

The post today is inspired after sharing my last post on InvestingNote about my CPF transfer. 

Read: Peep into 20-year-old boy CPF Account - OA to SA transfer

This post has sparked off a certain level of controversy and a fair amount of input from wise seniors from InvestingNote regarding the OA account for first property.

All the comments are wise inputs which I acknowledged to and is learning from.  

Let's take a look at some of them:

For those that are curious, here's the link to the post which you guys may refer to. There's more comments that are added but I will likely not include everything here.

While I'm certain for now that the upcoming years will stay as per planned, I hold no crystal ball. 

Should god give me a beautiful princess to love and that I've decided to move on to Chapter 6 of my life directly, things will be changing. 

For those that are wondering what Chapter 6 is, please refer to the post below for more clue. 

Read: A letter to my 30-year-old self - 10 years ago

Having that said, I've decided to look into and write a little more about the BTO processes and what I thought about it. I'm not too sure about the exact procedure so readers that has experience in this, please feel free to drop by in the comment section below to add in more for me :)

Taking a look into HDB's official website, there's certain criteria for which one will have to look out for when the couple decides to go for a BTO application. Apologies for readers aboard as this will be a post more to Singaporean's context.

I've mentioned several times in many of my other posts that it is extremely important for one to consider their own profile before acting and numerous time I've repeated that it is important for us to know ourselves. 

As the topic of HDB is a really big one and there is too many different ways to work around with it, I will simplify it as much as I could and lean towards to most mainstream cases to tackle the debate between OA-SA transfer. 

Well, at least for my personal stand.

To make it simple, if you'd like to apply for a HDB flat in Singapore. Be it resale flat/BTO, here's the thing one should look at first


1. For singles that are unmarried/divorced you have to be 35 years old and above while those that are widowed/orphan could apply for one if they're 21 years old and above.

2. For those with a beautiful second half, both of you will have to be at least 21 years old.
For those that have yet to wed, you will have to ensure that you obtain a marriage certificate within 3 months of your completion date for your HDB.




There's a many different schemes available but the top two are the main criteria one should look at prior to selecting on the schemes.

Moving forward, I guess this is the area where most are curious in. 

I guess the main concern here today is the funds that you will require upfront as opposed to the mortgage that one will service when the flat arrives since the duration of wait should technically serves as a buffer for one to build more funds in their OA unless you're not working.

The financing part. 

There's 2 main types of financing means for you to choose from: 

1. Housing Loan from HDB
2. Housing Loan from Bank

Here's the downpayment you will need to fork out:

Read more on HDB website here.

So keeping things simple again, we will assuming we were to take up HDB housing loan, we will require 10% of the purchase price and 20% for those taking up a bank loan.

This downpayment can be paid using your CPF OA account/Cash.

Should you be able to use your CPF OA savings entirely for the downpayment, I believe one will probably smile as they do not require to fork out a cent from their own pocket.




Retrieving the records from HDB Feb 2018's BTO launch in Woodlands for a 66 sqf 3-room flat, this is what you'll need minimally:

Or slightly bigger if neccessary

Definitely you could pick a slightly better area and I'm sure it will cost more. But taking this example into consideration for BTO application.

A fair amount of S$15,500 - S$24,500 is needed for your BTO application for this particular launch. Meaning to say the combined OA balances between you and your honey will have to make up this amount for you to make the downpayment.

So how difficult is that?

Below the age of 35, one will receive 23% of their salary channeled to their Ordinary Accounts each time they draw their salary.

Meaning to say, if one is earning S$3,000, we're looking at S$690 into their OA monthly. To save up S$10,000 in their OA will require 14 months of employment with that salary.

If you're taking home S$6,000, you will then need 7 months of employment to build up this chest here.



Should you require a larger the deposit the time will then stretch longer.

See? Everyone has a different profile! 

And this is where it is important for you to consider on your own situation before acting! 

Read here for more details about Feb 2018's HDB Launch.

But let's not forget that there are other fees involved that will require cash from your pocket. But that is insignificant since our topic today is more on the bigger tickets and primarily addressing the issue towards the transfer of OA-SA.

Hence if we were to ever do any CPF OA-SA transfer we should be reminded that the transfer is irreversible.

For those millenial that are single today at my age, that is pretty much looking towards getting your own flat at 35, I'm very sure that the timeframe ahead is relatively long and you're actually on the safer end.

For millenials that are of my age today that has a beautiful wife waiting, the choice of OA-SA transfer will be largely dependent on how early you decide to get a HDB flat with your other half. 

If the thought of getting a HDB flat with your other half is within the next few years, it might not be a good choice to do the transfer since you'll be needing a fair amount of monies to be paid in time soon.


Like I always mention, I'm not a smart person. This is why I decided that I shall keep things simple for myself and should I ever want or think of getting a house, it's important to have choices and plan 
for the important decision.
 
What's more important is the peace of mind in doing so. I guess I'm being too simple minded and there's too many things to consider, this post today might probably end up as a hilarious one. But it's too much for my brain to process!

Ok.. let me not complicate myself again. 

So will I go for a BTO balloting next year?

I'm sure I won't!

The year after? 

Nope!

But I'm sure I would one day and right now I'm anticipating to see my CPF yearly statement that will be coming to me in 2 months time!

How about you?



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FY2018 Q3 Dividends

3Q 2018 is a pleasant quarter for me as all of my companies paid its dividend. 

Yes, that's right all.

And that makes me smile.

Not forgetting AA REIT in September and FEO in July. 




Tasty.

But I guess they're all good doses of panadol for now as my portfolio is taking a beating from Mr Market. 

Ouch! 


Having that said, I believe most readers would easily identify and knows that I'm very much looking forward to receiving the payout from SingTel in mid-August. The payout received from SingTel is the largest single payout I've ever received till date and stands at almost 30% of my entire dividend received in 2018.

I've been increasing my exposure significantly to SingTel, from a small position to a really big one in terms of my portfolio. But to be fair, 1,000 shares of SingTel means totally nothing to many. 

But for a pico-sized portfolio like mine, it is actually something. In fact, something significant. And for the 1,000 shares I'm holding, I've received $107.00 from them. 

With the price slipping down once again, I'm accumulated a little more of SingTel today at 3.09.

I'm sure some readers would wonder if I'm comfortable having such a big fraction of my portfolio tied to a single stock that is constantly making a new low.

All I can say is, I hold no crystal ball. 
But, I'm fairly comfortable with my exposure to SingTel. 

And I would likely accumulate more. 

Read: Portfolio - May 2018

Moving on, aside the dividends received from SingTel. I had trimmed what used to be my largest holding, CDG to one that is free. 

Read: Free Shares from CDG

With that in mind, I've received significantly lesser dividends from them as projected due to the reduced exposure. However, in the recent days, ComfortDelGro price is seen coming down again. 

Should the price continue to fall once again, I believe we will be able to see some value surfacing for CDG. When that happens, provided if I have sufficient funds, I'll be more that glad to make my investment in CDG a more significant one again. 

With that in mind, the 100 free shares account to only $4.35 of dividends received this time round. 




Indeed pathetic. But it's free.. why not? 
2 more Ala-carte Fillet-O-Fish on the set to fill my tummy!  

In 3Q 2018, this is also the first time I'm receiving dividends from the ever-falling Far East Orchard, a property developer that I'm bought into back in October 2017. 

Read: Portfolio Update - Far East Orchard

FEO is a mainly a hotel developer and they have a lower ROA due to the type and nature of the asset. But aside from being a hotel developer, FEO do have other developments as well. Residential projects such as Harbourfront Balmain in Australia or RiverTree Residences in District 28 of Singapore.

As opposed to companies like CDG/SingTel with a healthy cash flow, FEO being a property developer, their earnings are lumpy and only would be recognized upon selling the units out. 

Therefore, it is a different game as compared to companies mentioned above. But as much as dividends are of concern, it is always good to know that the dividends that we received are sustainable. 

Which will brings me to the only question for FEO on whether the 6 cents dividend paid are sustainable. 



In order for dividends to sustain, the company should generate sufficient cash flow for which dividends could be paid. Else, the company will only be paying their shareholders out of their pocket, which is very unhealthy to the company's balance sheet. 

To simplify it. If I'm earning $1,000 and spending $2,000. The only means for me to do so is to either to use my savings (retained earnings) or to take up a loan in order to spend that additional $1,000.

Hence, to pay the dividend off with their earnings, a sufficient and healthy cash flow is neccessary. This will brings me to the development of their UK Student Hostel, which I view that it would creates an additional source of income stream for FEO to make dividend more affordable for them.

Looking back, it had been a couple of years that FEO has timely development and sales to cushion that 6 cents of dividend paid to its shareholder. 

With that in mind, I'll be looking closely to the student hostel's project while waiting for the value of FEO to surfaces. Meanwhile, the dividend should serves as a dose of pandol to temporarily ease the headache. 

At $1.30, FEO P/B ratio stands at 0.447. It's just like buying a SGD 1 coin with SGD 0.447!

But nothing too profound as we will never know when will the price of an asset moves close to their value. All I know that, I'm fine for now and we must have the patience to let time unlock the value for such assets. 

Some vote of confidence from Mr Ngs?

 Read more HERE.

The other contributors to the dividend of 3Q 2018 received are AA REIT, SGR and SSB. 

Not forgetting Wilmar, which is a very amazing company that I'm forward very much to accumulating more shares from them. However, investors of Wilmar must be well-reminded of the company Wilmar is and we should not be throwing in a very big ticket to anticipate that we will be receiving a very big fat dividend from them.

Read: Analysis on Wilmar



Enough of typing for now... It's time for the quarterly FOF check!

Total dividends received in Q3 = $221.82
Total dividends received in 2018 = $357.74
Average dividends/months = $29.81

Fillet-O-Fish check: 71 !!
FOF/month : 6 !!

Now... I can finally fill myself for 2 complete days of Fillet-O-Fish meal from morning till night!  

You will also be able to look for me on some other platforms:
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2. InvestingNote - sleepydevil
3. SGX Cafe - sleepydevil
4. You may also subscribe to receive my latest email updates here. 

Portfolio - August 2018

Current Portfolio (31/08/2018)

No.	Counters	No. of Shares	Market Price (SGD)	Total Value (SGD) based on market price	Allocation %
1.	SingTel	1,000	3.23	3,230.00	28.44%
2.	Wilmar Intl	500	3.20	1,600.00	14.09%
3.	Starhill Global REIT	1,700	0.695	1,181.50	10.40%
4.	Far East Orchard	800	1.32	1,056.00	9.30%
5.	AIMS AMP Cap REIT	400	1.40	560.00	4.93%
6.	ComfortDelGro	100	2.29	229.00	2.02%
7.	Singapore Saving Bonds	1	1,000.00	1,000.00	8.81%
8.	Warchest	1	2,500.00	2,500.00	22.01%
	Total SGD:			11,356.50	100.00%

The month of August is a dividend racking month for most dividend investors out there. Similarly, most of my companies has paid out dividends and they're well sitting in the bank account today. 

It has been a pretty boring few months for my portfolio here as there hasn't been any significant injections nor purchases since June. It's a big pity that I've missed out on the opportunity to add onto my favourite telco operator when it went down earlier this month.

Any guesses for what my favourite telco is? 

Any guesses??

Yes, you're right. I'm referring to SingTel.

I'm in the queue lately to nibble a little bit more on SingTel, but fortunately anot, the bull and white solider on Thursday has actually prevented my order from going through.




Is that a good news!? 

Well. Good in a sense, my portfolio is moving up and bad that I missed out on the opportunity. 

Nonetheless, I'm looking forward to nibbles on SingTel coming ahead in September. 

Many might be scatching their heads when they know that my portfolio is heavily exposed to SingTel and why am I still adding onto them!?

Maybe I need some medication!
  

Overall Portfolio Performance (as of 31/08/18):
Total (Capital Injection) in 2017 = S$ 6,566.79
Total (Capital Injection) in 2018 = S$ 3,569.79
Total Capital Injection 2017 & 2018 = S$ 10,136.58

Realized P/L = 16.64% or S$ 1,583.79 (Based on total injection)
Unrealized P/L = -4.78% or -S$ 438.27 (Based on total cost for each counter)
Cum. Dividends = S$ 453.04
Realized + Unrealized P/L + Dividends = $ 1,598.56 (15.77% base on cost)


Current Portfolio Value: S$11,356.50 (+5.41% m.o.m due to capital injection, dividends and portfolio performance)

CAGR = 7.63% (Based on start date at 14/02/17) - Days Count: 563
XIRR = 8.10% (This high % you see here is due to the wild card from Crypto in 2017 and relatively short duration)

Do take note that both XIRR and CAGR % is on a relatively high side due to the short duration that I'm in the market. As a reminder, a simple bear market should be sufficient to wipe out all the positivity you see up there.


As the time goes on, the % will be significantly reduced and adjusted based on time.

Current Cash Position (based on Opportunity Funds + SSB) = 30.82%

 

Dividends received in August: $151.26
Total dividends received in 2018: $345.70
Average dividends/month: $28.81



You will also be able to look for me on some other platforms:
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2. InvestingNote - sleepydevil
3. SGX Cafe - sleepydevil
4. You may also subscribe to receive my latest email updates here.