Micro-Mechanics Holdings 1H2024 Earning Result

Micro-Mechanics Holdings ("MHH") reported their 1H2024 earning result yesterday [here].  Here is a quick dive into the numbers:

Numbers in S$ million unless stated otherwise.

Six Months Ending	31 Dec 2023	31 Dec 2022	% Change
Revenue	29.35	36.91	(20.5)
Gross Profit	13.93	17.86	(22.0)
Net Profit	4.11	6.14	(33.0)
EPS (in cents)	2.96	4.42	(33.0)
DPS (in cents)	3.00	6.00	(50.0)

By geography, Singapore revenue declined 56% to S$4.98M; Malaysia revenue declined 9% to S$5.34M; U.S. revenue declined 34% to S$9.39M; while China revenue increased 4% to S$9.90M.  1H2024 cash & equivalents declined 17% to S$14.82M with no bank borrowings.  CEO of Micro-Mechanics, Mr Chris Borch said, “The Group continued to experience significant challenges during 1H24 with lower sales registered across the majority of our key geographical markets with the exception of China.”  An interim DPS of 3 cents was declared, which will be paid out on 19 Feb 2024.

My Thoughts
MMH is experiencing a cyclical downturn in the semiconductor industry, which resulted in significantly lower earnings from a high base in 2023.  But this is part and parcel of a business.  The company was generous to declare a DPS of 3 cents, even though EPS was only 2.96 cents.  So far, I have not identified any reason to change my view of the company and its management.  Will monitor for opportunities to accumulate.

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Steady Sam vs. Genius George - Why capital matters in investing

Being able to identify winning stocks is a valuable skill in investing.  There is no lack of investment newsletters out there purporting to share potentially profitable trade ideas, albeit on a paid subscription basis.

However, there is another factor in the investment equation that is seldom mentioned, or conveniently left out.

That is: a LARGE CAPITAL BASE is also required for creating meaningful cash impact in your portfolio, not just the rate of return.

In other words:

Capital $$$  x  Rate of return %  =  Portfolio cash impact $

In fact, knowing how to amass capital should be the Number One lesson for every retail investor.

Let me explain why.

If you are a salaried worker like me, your investment capital will have to come from your savings, which is taking income minus expenses.  (Lucky you if your capital is a lump sum from inheritance!)

Most jobs offer an annual increment, so your wage goes up every year.  With a bigger paycheck, many people tend to upgrade their lifestyle, for example, from taking Grab to owning a car, from staying in a HDB flat to staying in a condominium, from short overseas trips to extended vacations.

This is known as lifestyle creep.

If you are disciplined enough to stick to a simple lifestyle, and use the excess money to invest, you can build up a sizeable portfolio over time and enjoy a comfortable retirement, even when you are just an average investor.

Let me illustrate this by introducing you to two fictitious characters: Steady Sam and Genius George.  Steady Sam and Genius George are of the same age, and have just begun working in the same profession with the same starting salary.  Both of them are inspired to achieve financial freedom, and have amassed $10,000 each to start off their investment journey.

After one year on the job, Steady Sam manages to save $5,000 through frugal habits.  Genius George is less diligent with his money, but manages to save $4,000 nonetheless.  Additionally, both of them are given a salary increment of $500.  (They have an annual bonus too, but it is used to pay income tax, so the net amount is negligible.)

So far so good for both Steady Sam and Genius George.  However, this is where their financial paths start to diverge.

Steady Sam is contented to stick to his current lifestyle, and invests the $5,500 ($5,000 savings plus $500 increment) into his portfolio.  Steady Sam is only an average investor.  His portfolio earns a return of 9.58% per annum, equivalent to the annualized gain of the S&P 500 Index over the past 30 years (from 1993 to 2022, source: Motley Fool [here]).

Genius George, on the other hand, invests his $4,000 savings, but spends his $500 increment on a new iPhone.  (This model has periscope camera!)  That said, Genius George is a brilliant investor with the Midas touch.  He is the Asian version of Warren Buffett.  His portfolio earns a superior return of 13.57% per annum, equivalent to the annualized gain of Berkshire Hathaway over the past 30 years (from 1993 to 2022, source: Berkshire Hathaway 2022 Shareholder Letter [here]).

The same situation repeats every year - Steady Sam saves $5,000 while Genius George saves $4,000.  Both of them get a $500 salary increment.  While Steady Sam invests his savings and increment, Genius George invests his savings but splurges his increment.  Steady Sam's portfolio earns the standard market return of 9.58%, while Genius George's portfolio earns the superior return of 13.57%.

Where do they stand after 10 years?  Here is a look.

After 10 years, Steady Sam has invested a total capital of $77,500.  His portfolio is worth $130,205, representing an overall gain of 68 percent.  Meanwhile, Genius George has invested a total capital of $46,000.  His portfolio is worth $107,447, representing an overall gain of 134 percent.

Genius George is so proud of himself.  He has grown his investment by more than two-fold!  But notice at the end of 10 years, Steady Sam has a BIGGER portfolio value than Genius George.  In terms of wealth, Steady Sam is ahead, though Genius George has probably led a more exhilarating life.

Let us extrapolate further.  Assume the same situation recurs every year for 30 years till their early retirement.  While Steady Sam and Genius George are capable employees, they remain unappreciated and do not get promoted or any significant pay bump.  They only get the same increment year after year.  The portfolio returns remain the same.

Will both of them be able to retire as millionaires?  Let us find out.

At the end of 30 years, Genius George's portfolio has grown to $1,762,389 after investing a total capital of $126,000.  Steady Sam's final portfolio value is slightly lower at $1,607,835 after investing a total capital of $372,500.  Both Steady Sam and Genius George have comfortably reached millionaire status through the magic of compounding.  However, Genius George has managed to overtake Steady Sam in wealth by the 27th year of their investment journey.

Now, I hear you ask, "Hold on a minute. At a mere 4% excess return and one-third of the capital, Genius George can enjoy an extravagant life and still end up richer? What is the catch?"

The catch becomes evident when you think in terms of PROBABILITIES.

Consider this: what is the likelihood that you can earn a superior return of 13.57% consistently every year like Warren Buffett for 30 consecutive years?  On the flip side, what is the likelihood that you can save an extra $1,000 ($5,000 - $4,000) plus an incremental $500, and invest this amount consistently every year for 30 consecutive years?

It is hard to pin an exact number to the odds, but our gut instinct tells us that the second scenario is probably more achievable than the first.  After all, saving money is within our control, investment return isn't.

Capital matters in investing.  Keeping lifestyle creep in check and investing the excess cash can make a big impact to your portfolio, instead of striving for an elusive superior rate of return via brillant stock picking.  In the game of life, emulating Steady Sam is a far easier feat than emulating Genius George.

No subscription required too.


PS: If you are keen to get behind the math, you can download the Excel file [here].  Notice I did not take inflation into account, but since it would impact both Steady Sam and Genius George to the same extent, it does not matter in the comparison.

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When investing, it is okay to...

One morning while I was riding on the MRT train, I caught sight of a lady wearing a green tee-shirt with the following words printed on the back:

"It is okay to pause and relax. The most productive thing you can do is to rest and rejuvenate yourself."

Whoever coined the phrase must be worldly-wise, though I suspect it is the nifty advertising slogan for some product brand.

Nonetheless, it triggered a wave of self-reflection within me.  With the benefit of hindsight and maturity, what are the things I will do now, which I was hesitant about before?

Somehow, the stream of thoughts landed on the topic of investment.  I recalled my experience as an investor over the past two decades.  If I could travel back in time, I would like to teach my younger, rookie self about three things that are okay to do when it comes to investing.

These are the three lessons:


1. It is okay NOT to know everything about a company.

It is important to understand the financial health of a company before buying its stock.  However, there ought to be a limit as to how much research one needs to do before arriving at an investment decision.  If one insists on learning everything about a company first, information overload is bound to occur, which can cause analysis paralysis.  Moreover, if you dig deep enough, confirmation bias will always lead you to find reasons to buy - or not buy - a stock.

Legendary investor Warren Buffett has advised us to only evaluate companies that are within our "circle of competence".  Sadly, I am guilty of committing this transgression.  I have invested in companies where I do not have complete knowledge and are beyond my expertise.

One example is Nanofilm Technologies International (Nanofilm).  Nanofilm specializes in coating technologies.  To be precise, they do Physical Vapour Deposition (PVD) and Filtered Cathodic Vacuum Arc (FCVA) coating.  Nanofilm is also involved in nanofabrication as well as hydrogen energy solutions.  Nanofilm is founded by ex-NTU professor Shi Xu, who is still the Executive Chairman of the company today.  Even though I have an Engineering background, I have absolutely no idea how PVD and FCVA technologies work, what other competitor systems are out there, or how big the market size is.  From this aspect alone, I should have kept a wide berth from this stock.

However, I have reviewed Nanofilm's financial results.  The company has been able to generate a ROE above 10% over the past few years.  Nanofilm has also maintained average gross margin above 40%.  It is also in a net cash position.  Hence, this is a stock that passes my screening criteria.

Granted, due to the slowdown in China's economy, Nanofilm has faced headwinds in its most recent financial year, which diminished its profitability.  Thus, the stock has been brutually sold down by investors.

1-year price chart of Nanofilm Technologies International.

That said, nothing so far has caused me concern to change my investment decision.  I believe the company is still in good shape and will be able to make it through the downswing before improving its earnings again.

So here is Lesson #1: I may not know everything about Nanofilm, but what I do know is good enough for me to decide on owning a stake in the company.


2. It is okay to cut loss and move on.

Historical data has shown that only a small group of super investors are able to achieve market-beating returns consistently year after year.  For the rest of us, we are better off investing our money in low-cost ETFs and holding them till retirement.

So why do I still engage in active stock picking?

The main reason is because I enjoy the process of analysing a business.  I like to find companies that are able to profit their shareholders handsomely over time.

Needless to say, I do not have a perfect track record of picking multi-baggers.  There have been times when the original investment decision looks smart, but as circumstances change, the company is no longer attractive.

One example is SATS Limited (SATS).  This company is no stranger to many Singaporeans.  SATS provides aviation catering as well as gateway services at several international airports and Marina Bay Cruise Centre.  SATS also deals in commercial catering and air cargo handling.  If you have eaten a meal onboard Singapore Airlines, you would have eaten food prepared by SATS ground staff.

When I first invested in SATS, the company had very healthy margins and a low debt burden.  Unfortunately, the COVID-19 pandemic grounded air travel to a halt and SATS suffered a massive loss during the period.  The company had to retrench staff and withhold its dividend so as to conserve cash.  These are understandable measures for the firm to survive through the crisis.

But when SATS acquired Worldwide Flight Services at a hefty price tag of 1.3 billion euros (S$1.9 billion), the company had to issue new shares and take on significant debt, which changed the financial health of the company.  Despite the recovery in international air travel, SATS has yet to turn in a profit.  With a heavier debt burden and inflationary costs eating into its margins, there is no guarantee how long SATS will take to return to the same level of profitability in its golden years.

The market is aware of SATS' predicament.  The stock has been stuck in the $2+ range for some time now and has not been able to recover to the height of the $4+ range in the past.

5-year price chart of SATS Limited.

When a company's situation has changed significantly, it is imperative to review whether your original investment rationale still holds.  If it does not, then the stock should be sold.

In December last year, I sold my position in SATS at a loss.  It was a painful decision, but I figured it is way better than having to pray continuously for the day when SATS can achieve positive shareholder return again.

So here is Lesson #2: When things have changed for the worse, don't dither and hope for a miracle.  It is okay to cut loss on your investment and move on.


3. It is okay to be a lonely investor.

Singaporean investors are a dividend loving bunch, and S-Reits appeal to many people for their high yield.  It is common to find fellow retail investors holding the same S-Reits in their portfolios.

On the other hand, our local small caps are not well covered by broker analysts and liquidity is low most of the time.  If one has found a highly investible candidate, chances are nobody in your social circle knows about it, let alone holds it in their portfolio.  Hence, there is no comfort of the masses to speak of.

Either one ends up as an astute investor when the price soars after market recognition of its hidden value, or one ends up as a fool for buying a dud that remains rangebound in price.

Given the above outcome, will you still consider investing in small caps?  Will you still want to be a lonely investor?

For me, I have decided long ago to go on ahead and invest in the small caps anyway.  This is why you will see a few lesser known entities in my portfolio.  Even if the stock fails to garner public attention, as long as the company remains profitable and financially strong, and the management act with shareholders' interest in mind, I will gladly park my money in the stock.

And this is Lesson #3: Trust in your own analysis and buy the small cap stock.  It is okay to be a lonely investor.


I hope you have found some food for thought from the three lessons above.  I know my younger self would.

Thank you for reading.

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Don't throw caution to the wind for S-Reits

The financial world - broker analysts in particular - have turned bullish on S-Reits as a horde.  You can read about their upgrades [here], [here], [here] and [here].

What's with the sudden exuberance?

The answer: Words.

Literally.

Post the 12-13 December 2023 meeting of the U.S. Federal Reserve, Federal Open Market Committee (FOMC), a press release was made.

Here is a snippet from the official statement:

"The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run.  In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent.  The Committee will continue to assess additional information and its implications for monetary policy.  In determining the extent of any additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.  In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans.  The Committee is strongly committed to returning inflation to its 2 percent objective." [emphasis mine]

If you have read the above paragraph attentively, you will notice that the Fed did NOT say, "That's it, folks.  We are done jacking up interest rates.  On the other hand, we will start cutting interest rates in 2024. Bring out the champagne!"

And yet, the financial world chewed on the announcement, consulted the stars and reacted as if the rate cut is a sure thing.

Granted, the Fed's latest dot plot, which shows the interest rate projections of individual FOMC members, highlighted the possibility of 75 basis points easing in 2024.  But we ought to remember that these are merely projections and not set in stone.

Interestingly, the Minutes of the December meeting [here] showed that the FOMC members had gone through the trouble to choose their wording carefully, so as not to cause the animal spirits to run amok:

"Members generally viewed the addition of the word 'any' to this sentence as appropriately relaying their judgment that the target range for the federal funds rate was likely now at or near its peak for this policy tightening cycle while leaving open the possibility of further increases in the target range if these were warranted by the totality of the incoming data, the evolving outlook, and the balance of risks." [italics mine]

The market heeded the front part of the message and threw away the rest.  The Fed had emphasized that any rate decision will depend on incoming economic data (which is what the Fed has always done).  The latest U.S. inflation print came in at 3.4% y/y on Thursday, higher than the previous month's 3.1%.  If the number continues to persist around this band, while no risk to the economy emerges, there is a chance that the Fed is going to sit pat on their hands and do nothing to the federal fund rate for now.

According to CME FedWatch, four out of five traders think the first easing will happen in March.  Most participants are confident it will happen by mid-year.

There are financial experts who think that the Fed may have to cut interest rates steeper than expected, such as JP Morgan Asset Management [here].

Regardless, I play the Devil's advocate, and question WHAT IF the U.S. inflation remains sticky and the rate cut does not happen until after June?

This means any relief is only likely to come in the later half of the year.  Hence, it may be prudent not to throw caution to the wind for S-Reits just yet.

The impact of high cap rates has yet to be reflected in the property valuation of most S-Reits.  Last month, Elite Commercial Reit reported a portfolio valuation value that was 11.5 percent lower than the previous year [here].  Meanwhile, Manulife U.S. Reit reported a 8 percent decline in property valuation [here].  Not to forget the warning by CapitaLand Investment of the significant valuation decline for the past financial year [here].

Add to the fact that most S-Reits will have to refinance their debt at a higher cost this year with no certainty that salvation is just around the corner.

In short, go into any trade with your eyes wide open.  Things can get messy before they get better.  But don't take my word for it.

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HC Surgical Specialists 1H2024 Earning Result

HC Surgical Specialists ("HCSS") reported their 1H2024 earning result yesterday [here].  Here is a quick dive into the numbers:

Numbers in S$ million unless stated otherwise.

Six Months Ending	30 Nov 2023	30 Nov 2022	% Change
Revenue	9.62	10.12	(4.9)
Gross Profit	7.99	8.73	(8.5)
Net Profit	3.45	2.05	68.3
EPS (in cents)	2.29	1.38	65.9
DPS (in cents)	0.70	1.00	(30.0)

1H2024 gross profit declined by 8.50% compared to 1H2023 mainly due to increase in cost of inventories, consumables and surgery expenses.  Two new orthopaedic centres, Total Orthopaedics Pte. Ltd. and HC Orthopaedics & Surgical Centre Pte. Ltd. have received their medical licenses from MOH in October and November 2023 respectively.  Management is confident that these two orthopaedic centres, which are located in Novena Medical Centre and Tampines heartland area, will grow steadily due to their synergy with the Group’s network of endoscopy centres.

My Thoughts
I hope HCSS management has gotten over the saga with Julien Ong and continued to focus on growing the business.  I like HCSS because they have been able to maintain a very high ROE of 46% over the last five years.  HCSS also has admirable gross margin and net margin of 37% and 32% respectively.  With total liabilities of $13.3M and retained earnings of $15.2M, they are in a net cash position.  The only problem is the low liquidity, which is typical of our local small caps.

Earning season is coming up.  Will share the results of those companies in my portfolio.  Watch this space!

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Don't predict the market. Stick to the plan.

Endowus CIO Samuel Rhee penned an op-ed in the Business Times today, titled "Market predictions could go awry; stick with long-term investment plan" [here].

He reminded how the market forecasters were so pessimistic at the start of 2023, but the major equity markets had actually ended the year higher.  He also shared a quote from the famed American economist John Galbraith, who humorously categorized the crystal ball gazers into two groups:

Samuel Rhee ended with some sagely advice for investors, and that is to "let go of what we cannot control - the market direction, economy, or the circumstances of war and pandemics.   Focus on the only thing actually within our control: our behaviour."

I couldn't agree more.  Through my years of investing, I had never gotten the timing of my stock purchases and sales right.  I had bought shares that continued their decline in price significantly before reversing; I had sold positions, only to see them climb higher the next day.  What lousy timing!

Recently, I read a book written by a local investor and financial coach.  It was published in November 2011.  In the book, he had made a bold prediction that the next global financial crisis was likely to hit as soon as late 2011 or in 2012.  The financial expert had sold his equity positions and was holding cash to take advantage of the crash when it occur.

But surprise, surprise, the stock markets did not crash in 2012.  On the contrary, the S&P 500 Index rose steadily over the next five years (2012 to 2017), ending the period with a 112 percent gain.  Factor in the dividends and the index had a total return of 140 percent!

The dip only occurred when the COVID-19 pandemic struck in 2020.  Even then, the S&P 500 Index was still higher than where it was at the start of 2012.

Humans are poor predictors of the future.  We suffer from all sorts of fallacy, including recency bias.  We never know what will happen to us the next day, let alone nail down the next stock market upheaval.

The late legendary investor Charlie Munger once quipped, "All I want to know is where I'm going to die, so I'll never go there."  That is a wonderful wish, albeit one that will never come true.

So I am going to ignore where the market is heading and focus on my game plan instead.  I will search for companies with solid fundamentals, determine the share price I am willing to pay, put in the order and let time do its compounding magic.

And I am going to hold the stock for as long as my rationale for buying it is still valid, global financial crisis or not.

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The Veiled Threat of Inheritance

This is a non-investment post.  Sharing an incident that happened in my life recently.

My wife and I were visiting my parents-in-law during the New Year.  My parents-in-law are a classic rags-to-riches story of the Merdeka Generation.  After graduation from NTU with an Accountancy degree, my father-in-law (FIL) started work as a property manager, earning a paltry income.  It was after he headed to China to work for a Singapore conglomerate, that his income improved significantly.  Over the decades, he managed to save a considerable sum of money.  My mother-in-law (MIL) did not complete her secondary school education, but has a knack for savvy property investment.  She took the saved money, invested in local real estate during the boom years and grew it multiple fold.  At present, my parents-in-law are sitting on net assets worth over 3 million dollars.

After exchanging pleasantries, my MIL popped a question to my wife out of the blue: is she (my wife) willing to accommodate my FIL to live in our HDB flat?

Now, my wife and I know this is a hypothetical question.  This scenario will never occur, unless my FIL is bedridden and my MIL passes away.  My MIL had commented once that she cannot tolerate our 'stingy' lifestyle.

My wife is a millionaire herself, much richer than me.  She has worked hard since graduation and saved every cent, never wasting it on frivolous stuff.  My wife has a stubborn streak, and is defiant against spouting 'sweet words' that she does not mean in her heart.  Even though filial piety dictates us to say "yes", we are well aware of the limited space in our HDB flat, and the inconveniences which will result in conflict.  So my wife tersely replied my MIL with a flat "NO".

What came next was expected, typical of a family drama.  My MIL responded with a barbed comment, telling my wife not to expect much from her share of the inheritance.

My wife and I have never dreamt of getting any inheritance from our parents.  We firmly believe in self-reliance and striving for our own goals.  There is satisfaction in exchanging honest effort for reward.

Being an outsider, I was not in a position to comment.  So I pretended to be reading my book, seemingly not paying attention, even though I heard every word of the conversation.

A few days later, my wife and I discussed the matter.  We agreed that our kids should NOT look forward to getting an inheritance from us.  They should work hard for their own financial future.

All through these years, we have told our kids that we are an average middle-income family.  Nothing in our daily habits betray any hint of our affluence.  We always advocate prudence and frugality when making lifestyle decisions.  Our kids have grown up in the HDB heartland eating hawker food, taking public transportation and wearing non-branded hand-me-downs.  The sole exception is our annual family holiday overseas.

My concern is whether my kids will morph to be 'revenge spenders', who splurge every cent of their salary in their adulthood, as they recall a sense of 'deprivation' in their childhood.  (I hope not!)

My wife and MIL are still on talking terms.  But when inheritance is a veiled threat, the harmony in the family can become broken.  Have you ever encountered a similar situation before?

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You have S-Reits. What about S-Banks?

Perhaps the worst kept secret in the financial world today is that the U.S. Federal Reserve wants to bring the benchmark overnight borrowing rate lower this year.

A lower rate means that banks will have to lower their loan rates, resulting in a compression of the Net Interest Margin (NIM) - the lifeblood of their profit.

For the uninitiated, NIM is the difference between the rate banks charge their borrowers versus the rate banks pay to depositors.  Banks cannot afford to lower their deposit interest rate too much.  Otherwise, depositors will flock to another bank.  This leads to the dilemma above.

Accordingly, broker analysts have started to downgrade their view of the local banking sector, as reported [here] and [here].

However, it is my belief that the Singapore banks remain an attractive investment proposition.

DBS 9M23 total income was S$15.2B (up 27% y/y); UOB was S$10.5B (up 28% y/y) over the same period; and OCBC was S$10.2B (up 24% y/y).  9M23 net profit was S$7.89B (up 35% y/y), S$4.3B (up 26% y/y) and S$5.4B (up 32% y/y) respectively.  Even if the NIM is compressed come 2H24 and loan growth stalls, the banks will still be highly profitable.

Unlike other global banks which suffered significant losses due to investment and trading, our local banks are cautious risk-takers and big brother MAS is always watching over their shoulder.  I wouldn't expect any rouge trader to bring the house down.

I read [here] that the three banks had the highest S$2.6B of net institutional selling in 2023.  When the professionals decide to park their funds elsewhere, they sell by the buckets and price retracement occurs.  This presents an opportunity for us retail investors to buy the bank stocks cheaper.

If you are big on S-Reits, I recommend to get some S-Banks (Singapore banks) exposure too, never mind that the quantum is large for the lot size.  The banks are in a strong position to grow and increase their payout over the long run.

If you worry about over-paying, you can use the Price-to-Book Value (P/B) Ratio as a yardstick to determine whether the bank stock is cheap or expensive.  The P/B ratio measures the market's valuation of a company relative to its book value.  For banks, it is considered a less volatile measure compared to the Price-to-Earnings Ratio.

The table below shows the P/B ratio for UOB, and is taken from Morningstar, which you can access for free [here]:

Source: Morningstar

UOB is currently trading at a P/B ratio of 1.04, close to its 5-year average of 1.05.  In layman terms, it is not exactly expensive *relative* to its history.  (Remember: valuation needs to be evaluated in a relative manner, either against its peers or compared to historical data.)

Circling back to my opening paragraph, all these institutional selling is banked on - pardon the pun - the U.S. Fed cutting interest rate.  What happens if U.S. inflation reverse its trend and head back up?  In all likelihood, the Fed will maintain the current rate, which is a boon for the banks.

Hope the above information is useful.

As usual, here is a disclaimer: I hold shares in DBS, UOB and OCBC Bank.  This post is NOT a recommendation to buy any stock.  Please do your homework and review your financial circumstances before making any investment decision.

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To Invest, Start With Lunch

This is a non-investment post.  Sharing a sneak peek on my life.

Working in the Central Business District has its advantages and disadvantages.  One advantage is that transportation is convenient, since it lies in the heart of the city.  If you like crowds, you will always find a lively atmosphere here during the daytime.  Just visit Raffles Place.

One disadvantage is that things tend to be expensive, for example, food.  Eating at a restaurant costs no less than 10 bucks.  Even takeaways cost north of 6 dollars.  For me, I usually take a walk to Hong Lim Food Centre at Upper Cross Street.  There is a particular economic rice stall that I usually patron.

This is my lunch for today.  Four dishes and rice cost only $3.60.  What a steal!

I usually bring my tupperware to pack lunch so that I can skip the Styrofoam box and cut down on environmental waste.  Additionally, I bring my mug to another stall to get my kopi siew dai.  It is my lunchtime fix, and it costs $1.  Yup, Starbucks doesn't get my business.

Overall, I spent $4.60 on my lunch, and I thoroughly enjoyed the food.  I repeat this routine daily.  On rare occasions when I meet up with my friends, I will be 'generous' with myself on spurging more for good food amid good company.  No reason to be Scrooge all the time.

I believe my minimal lunch expense is one reason why I can save a significant portion of my salary for investment.  Do your daily habits support or detract you from achieving your financial goals?

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