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March 2023 Portfolio Update and Thoughts on Inheritance

Mar 23 Portfolio Update

Portfolio allocation as of Mar '23.

• SG Shares: CDG, DBS, SGX, Valuetronics

• SG Reits: Syfe Reit+, Digital Core Reit


Another relatively quiet month in terms of capital deployment, with the main purchase being Digital Core Reit ("DCRU") at $0.50. It promptly fell to $0.40 within a few days, as one of their major customers was facing refinancing concerns. I think my purchase price had a reasonable margin of safety, as DCRU was trading at around 0.6x P/NAV at that point. Additionally, DCRU is one of the lower geared reits here, which would provide some buffer in the event that cap rates expand and valuations fall.

I also added a small amount to my Syfe Reit+ portfolio, which is part of my regular DCA.

Taking stock at the end of Q1 '23, my overall portfolio allocation stands at 50% in Singapore, 24% in Hong Kong and 26% in the US and Developed Markets. This is roughly in line with how I envision my long term portfolio allocation to be. As for my active vs passive split, this stands at 44% active vs 56% passive - the passive component has actually gone down compared to the last time I mentioned this (62% passive in Sep '22). I am a strong believer in passive investing, and longer term I want to increase my allocation to passive instruments.

As for dividends, total dividends collected for Q1 '23 came in at around $500. I didn't track the corresponding number in Q1 '22, so I don't know how much of an increase this is. But it appears to somewhat fall short of my dividend target for this year. In my previous post, I mentioned that I am on track to hit my $6k annual dividends, this is contingent on being able to deploy capital over the next 3 quarters. With last year's bonus paid out earlier this year, I do have a considerable amount of cash on the side. However, I want to be selective in this environment, and dollar cost averaging of passive ETFs and looking for undervalued stocks remain my preferred strategies. 

Random musings

This is slightly different from the “FIRE musings” section that I usually include at the end of my monthly updates. I’ll be discussing the topic of inheritance, which based on what I’ve seen, is definitely something rather taboo among Singaporeans.

It might be obvious, but I would still like to highlight that if you’re in your 50s or older today, and nearing retirement / have retired, then obviously your main priority should be to ensure your own retirement adequacy first, before even thinking about leaving an inheritance for your kids.

Having said the above, I think the perspective I’m sharing will still be controversial – perhaps some may agree with my point of view, but I’m sure there will be a fair share of people who disagree. At the end of the day, it’s your money, your call… if you’ve already made up your mind that you want to spend all your money before you die (because you earned it), then by all means do so!

For a start, I am single and I don’t have kids. These are mainly my observations of how people perceive the utility of money and approach the topic of inheritance, by sharing a few examples that I’ve come across in recent years.

I think it would be good to set the context for this discussion – people tend to use the word “rich” a little too broadly. “Rich” can be further split into mass affluent, high net worth and ultra-high net worth. The 3 examples I am sharing further below fall into each of these categories.

For the purposes of this discussion, I think any inheritance amount nearing or greater than SGD $1 million (including owner-occupied residential property) would be relevant – broadly, people in the “mass affluent” category and above. The reason I include owner-occupied residential property is because we are discussing the topic of inheritance here – so obviously when you pass on, the property you are occupying forms part of the inheritance. I think this probably represents the top 20% to 30% of the relevant age groups (people in their 50s and above), mainly because of the sky-high property values in Singapore. But if you think about it, while $1 million and above appears to be a large number, it may be more common than you think – after including residential property, CPF accounts, equities, cash value of insurance policies and savings.

I think this is most relatable, especially in the context of a couple in their 50s or 60s thinking of bequesting their wealth when they eventually pass on.


$800k HDB flat – fully paid up, possibly purchased for much less.
$500k CPF accounts at retirement age (combined; FRS + Medisave)
$400k investment portfolio (combined)
$200k cash value of insurance policies (combined)
$100k liquid cash / fixed deposits (combined)

Based on the above, that’s a combined net worth of SGD $2 million per couple, or SGD $1 million per person. Obviously, some of that would be drawn down (spent) during the retirement period, but even if the eventual “total net worth” is halved, and given that people usually have 1 or 2 kids these days – that’s still a sizeable sum of inheritance.

You might look at the above numbers and say:

1) That’s too low, I have more! Congrats, if you have kids, and you believe in the idea of inheritance, then they are lucky.

2) That’s too high. As I’ve mentioned above, your priority should be to work towards your own retirement adequacy first.

For those of you who fall in to category (1), you can adjust the above numbers in the above example, based on your personal circumstances. I think when people think of “inheritance”, probably the complex cases of the top 1% comes to mind – infighting among siblings for a larger share of the pie, long drawn-out lawsuits and so on.  My point here is that the groups of people in the category of having SGD $1 million net worth, including owner occupied residential property, is actually more common than you might think. And people who fall into these groups should give inheritance some serious thought as well.

We know that 20% of Singaporeans live in private condominiums and landed properties, and the average price of an OCR condominium probably goes for around SGD $1.5 million today. Additionally, with the top end of HDB flats transacting for anywhere from $1 million to $1.5 million… I would think these form a sizable group of Singaporeans, perhaps closer to 1 in 3 of the relevant age groups.

This 1 in 3 could be your colleagues, your relatives, your parents, or even yourself, who will be dealing with the “good” dilemma of having to decide how to pass down the inheritance.

Let’s now look at the 3 examples.

The “Mass Affluent”

The first example is a Facebook post made by someone by the name of Michael Chong, on the Seedly Facebook group. I saved this post when I read it a few years ago, because I felt that the story represented what is possible for a significant number of people in the mass affluent category.


To summarise what Michael had shared, their family was thinking of selling their condominium and moving to a 4-room flat. Using the proceeds from the sale, together with their existing investment holdings, they will likely have around SGD 2.5m combined as a couple. Based on his projected returns of 4% a year, will yield around SGD 100k/year or about $8k/month. Presumably, this passive income will be enough to sustain their family expenses. Additionally, he mentioned that he will still get CPF Life payouts when they turn 65, potentially bringing the passive income to 10-12k/month for their family of 4.

The two sections that stood out for me in the article were:

“If this goes well, the portfolio can give us about 8k in passive income monthly, with some capital gain. My dream is to pass this on to my children and grandchildren one day. Maybe my grandchildren will not have to work a single day in their life, and can follow their passion.”

“I have also encouraged her to save and invest since she was 18, so she has about 6 years of experience. I have also taught my children financial responsibility, so they are very thrifty too.”

I won’t interpret the “will not have to work a single day in their life” too literally, but rather, I think the idea of allowing his children or grandchildren to freely follow their passion sounds like a great life to live. I also think the part about imparting frugality and managing money is paramount, especially in the context of succession planning.

By selling their condo and buying a cheaper HDB flat, they could use the proceeds, plus their current investment holdings, to create a perpetual cash flow generating machine for themselves, their children and even their grandchildren. Simply amazing.

The “High Net Worth”

The second example was a recent Straits Times article that I read. Mr Yong is the CEO of a marine engineering firm.


The part I would highlight is “The priority in my savings plan is to buy a house for each of my children, so that they are not burdened by mortgage loans in their adult life. With their own roof over their heads, they can afford to take career risks and pursue their passions in life.”

Not much for me to elaborate on this, because I don’t think the average person would have resources to give 4 houses to their 4 children. But I think the broader takeaway here would be giving your children a leg up in life, especially when they need it and when it matters most.

Oftentimes when I see comments on social media, the prevailing thought among Singaporeans seem to be that assisting your kids monetarily would “spoil” them or make them “soft”. I completely disagree with this view. Undoubtedly, talent and hard work are paramount when it comes to determining whether one can succeed or not. A talented and hardworking person will do well in life. But when it comes to achieving greater things, such building a trillion-dollar internet company? Wealth plays an important part too. For intelligent and hard working kids, wealth supercharges their odds of success, instead of hindering it.

Examples of how wealth breeds wealth – Bill Gates and Jeff Bezos. Bill Gates was undoubtedly a computer whiz, but it was through his wealthy parents that gave him access to the tools to fully develop his potential (I’d recommend reading the book “Outliers” by Malcolm Gladwell on this). Jeff Bezos was a Managing Director at a leading hedge fund before he left to start Amazon. Yet, his parents still invested $300,000 (in 1993) to help him get started. Even Donald Trump - claimed that his father gave him $1 million (in 1975) which he used to build his real estate company.

I wonder – if the parents of these people had decided against helping their children out of fear of "making them soft", would they have had the same level of success?

The ”Ultra-High Net Worth”

This article was written by Abigail Disney, from the Disney family.


Although the intent of the article was to criticise the ultra-rich for fervently trying to lower their tax obligations, one paragraph sheds light on how families of dynastic wealth view their money:

“When you come into money as I did—young, scared, and not very savvy about the world—you are taught certain precepts as though they are gospel: Never spend the “corpus” (also known as the capital) you were left. Steward your assets to leave even more to your children, and then teach them to do the same.”

To me, this is perspective is simple and straightforward. It’s not even a “secret” of the ultra-rich. Use your capital to create a passive income machine, collect passive income into perpetuity, and keep your annual expenses below your annual passive income. Re-invest the surplus which will then increase your capital even further. Over the years, this snowball grows larger and larger, and finally pass this down to the next generation. To quote part of Patek Philippe’s slogan, “You merely look after it (this perpetual passive income machine) for the next generation”.

My takeaway from the section above, is that while most people are unlikely to amass more than 7-figures of net worth in their lifetimes, the perspective of capital preservation isn’t exclusive to people who have hundreds of millions or billions. If we apply this concept to a more “realistic” scenario of Michael Chong (the first example above), we see that their SGD $2.5 million combined portfolio can provide comfortably for their family of 4 ($100k/year) – building a perpetual stream of cashflows and eventually bequesting the principal to his children.

Common themes:

1) Preserve the capital, spend only the interest / dividends / passive income. This creates a perpetual stream of cash flows and yet grows the capital over the long term.

2) Impart their children with knowledge of managing the assets.

3) Let their children pursue their passions.

I think it’s easy to fall for cliches of “spoilt rich kids”. There will be bad apples. But based on what I’ve seen, more often than not, money itself does not result in negative outcomes.

Anecdotally, by and large, most of the “rich” friends I know, are mostly hardworking, driven people, who go on to excel in their chosen fields. They recognise their privilege, which affords them some inherent advantages, but at the same time with the right upbringing and values, will continue to be prudent stewards of their families’ wealth.

Thus, instead of seeing money as the root of evil, the source of family feuds or something that makes children become “soft” or “strawberries” … why not learn from some of the examples above, and think of how to make the capital last for generations to come?

How this aligns with FIRE

To me, money is simply a tool. It is meant to buy me freedom, to allow me to enjoy life (reasonably, within what I can afford). While I don’t need multi-millions or billions, I think ideas discussed in the examples above are actually in line with how I envision my financial situation to look like, once I’ve achieved FIRE.

The idea of generating a perpetual stream of passive income, keeping my expenses below this passive income, and re-investing the surplus to continue to grow my capital, is exactly my plan. The idea of seeing money as a tool which buys me the freedom to pursue my passions freely, strongly resonates with me.

And taking a step back to consider how taxes in Singapore incentivises us to accumulate wealth and capital. Let’s say Ronaldo comes to play in the S-League. If a club is willing to pay him $40 million per year, based on our current tax brackets, Ronaldo will probably have to pay around $9 million a year in taxes. $9 million of taxes a year is probably more than what most people would earn in a lifetime. Let that sink in.

But compare that to families of dynastic wealth, with their investments based in Singapore. A 4% per annum return on $1 billion of investment holdings generates $40 million a year, which will be entirely tax free! There are no dividend withholding taxes or capital gains taxes in Singapore.

Accumulate wealth, create a perpetual stream of passive income, and enjoy the fruits of your labour for many years to come.

While I don’t have a million dollars or more (yet), I am working towards that. With the right money mindset, coupled with the values of frugality and prudence, I’d say the odds of succeeding is more likely than not.

The best time to plant a tree was 20 years ago. The next best time is now. 

Start planting that passive income tree today, that will bear fruits for generations to come! And maybe, save this article for your grandchildren. One day, they will be thankful you read this.