Sit back and relax from S&P 500 index fund investment

Stock market goes up and down all the time. Is there a low risk investment in the stock market? If you are lazy to research on the company annual reports, but still want to make a profit from the stock market, there may have a easy way.

S&P 500 is a stock market index containing the stocks of 500 large capitalization corporations, mostly US companies. There are many index funds and exchanged-traded funds tracking the performance of the S&P 500, e.g. BARCLAYS's iShares S&P 500 Index Fund. If you look at the index trend below, you can see that the S&P 500 is always in the uptrend for the long run (e.g. 30 years). This is mostly caused by the inflation.

If we buy the index on 1978 (30 years ago) and sell it now, what will be our return like?

Year 1978 June, index ~ 100
Year 2008 June, index ~ 1400

Using the calculation from the financial calculator, the compound return is closed to 9%. Not a very bad investment consider that you just need to buy once and forget about it :)

Agriculture land investment ROI in Johor

My dad is a plantation owner in Johor, Malaysia. He is always interested to buy lands. When I asked him how profitable is it to own a land, he just told me that the land price appreciate overtime. Beside that, the oil palm plantation is his major profit source.

I am very interested to know how the land ROI is, thus I tried to ask him the historical price of the land. He told me that the land was only about $8k sixteen years ago for one acre. The price has been appreciated a lot nowadays. It is about $60k right now. Using the financial calculator, the compound return from the investment for the 16 years is 12.7% from the capital gain not including the income generated from the plantation. If I could generate a conservative return of $200 per month from the plantation, the yield is estimated to be 200 * 12 / 60k = 4%. Thus the total return from the land investment is roughly 16.7%.

As you can see, although it is not a very good investment compare to investing in the properties, the risk involved in land investment is minimal.

Travelling tips to Phuket - for 1st timer or budget traveller

We went to Phuket for a 4D3N trip in end April. It was our first trip to Phuket and we spent time on the island only (without going for any snorkelling tour). Below are some tips which I think may be useful:-

1. Online resources

I did research on activities/tours and book accommodation online after I booked air tickets. I find below websites are pretty useful:
* Phuket.com (comprehensive info about Phuket. You can book tours via this website too. The price of the tours *may* be cheaper. For example, Phi Phi Island Snorkling day tour costs THB1500 per pax on this website. However, the cheapest tour price I could get locally is THB1750.)
* kata-beach.com (everything about Kata and Karon beach; We stayed in Karon beach.)
* Phuket map (online free maps for major beaches and the Phuket town.)
* Jamie Monk's blog (hosted by an expat living in Phuket, a very interesting blog and provides insider's tips. He also hosts other blogs, one of which is the Phuket's weather blog.)
* Asiarooms (I found the cheapest room rate on this site after compared with other major hotel portals, such as zuji, tripadvisor, wotif, agoda. I don't dare to use unheard sites. The customer service agent of Asiarooms is helpful too though they doesn't speak English very well.)

According to the locals, end April - June is the low season (rainy days) where everything is cheaper and everywhere is less crowded.

2. Air ticket

Fly with a budget airline is sufficient as it takes 2 hour only to fly from SG to Phuket. Do book during promotional periods that you will only need to pay taxes and charges. We booked our tickets during $0 promotional period (Tiger Airways, in end February) and paid about S$300 for taxes and charges.

Tiger Airways: overall, the journey with the no-frills carrier was pleasant - width of the seat is OK for mid-size Asian, service is OK, plane take-off and land down smoothly, except the back of seat is kinda straight for me.

3. Food

We usually aim for local foods when travelling. Reasons are simple - special, authentic, and cheap. During our trip, we ate local Thai food at both expensive and cheap restaurant, and local Chinese chicken rice. No western food except the complimentary International breakfast buffet.

The Thai version of chicken rice is very interesting. We found this eatery among old shophouses when we wandered around for lunch in Phuket town. The rice and chicken tasted about the same as the Singapore style; the interesting part is that the food was served with a plate of vegetables, including lettuces, cucumbers, spring onions, and garlics. Yes, with few stalks of spring onions and few cloves of garlics!!! My husband tried both and said it's kinda weird.. haha.. :p Anyway, the diners in the easteries happily enjoyed their vege...

For Thai food, again, we explored the streets to look for authentic local food. A special note on this eatery which we went there twice! It runs by a family which the owner's job is to greet the customers and keep asking "OK?" We tried local dishes on our 1st visit and ate live seafood on the 2nd visit. The food was cheap, tasty, and authentic - 1st dinner costed us about 100 Baht for 3 dishes + rice + drinks, 2nd dinner costed us about 700 Baht for 1 vegetable + 4 huge tiger prawns + one 1-kg red snaper + drinks + rice (trust me, this is more than enough for two Asians!)

The eatery is located at Thai Na Road at Kata Beach but I can't remember its name. When you reach the junction of Patak Road and Kata Road, you will Smile Inn and Family Mart (convenience store) along Thai Na Road. You need to walk for 10-15 minutes before you pass by a small eatery selling live seafood. It's an old shop and look a bit dirty. The wall is filled up with photos of Thai royals, currency notes of different countries, and big poster featuring different ingredients.

According to the news cutting which featured this eatery, the owner used to do business in Patong beach but moved to Kata beach 13+ years ago due to exorbitant rental in Patong beach.

(Sorry that we didn't take picture on the food..)

4. Sight-seeing land tour

Do take the local bus (Songthaew)!

It is an experience. We took the local bus service between Phuket Town and Karon/Kata beach. It costs 40 Baht per person and about 45mins ~ 1 hr from Karon to Phuket Town. If you took Tuk-tuk (the local taxi), as told by the hotel staff, it costs 500 Baht for a half-an-hour ride. Few interesting parts are: 1) passengers sitting face to face and there's a bench in the center to take in more passengers; 2) the bus is actually a converted mini lorry; 3) the bus driver stops the bus at half way to collect bus fare. Honestly speaking, it's dangerous to take the bus especially for passengers sitting near the exit (see the picture above!) You don't have anything to hold on except window grill. However, it's an experiece! :)

When we reached Phuket Town, we were approached by an enthusiastic Thai man who turned out to tout business for city tour. He kept following us for a few streets (afraid that other tuk-tuk driver approached us). As the weather wasn't good we finally agreed to take his service at 400 Baht. He agreed to ferry us to the Rang Hill (the highest point in Phuket Town) for city view, tour around the city and interesting places, drop us at shopping district, drive us to Patong Beach, then back to the hotel at Karon Beach. Overall, the tour is OK BUT we felt cheated when we realized the "interesting places" are those tourist places - jewelry shop, cashew nut factory, tin factory, fruit stalls - where he can collect stamps to get free gasoline. Next time if a Tuk-tuk driver offers you a city tour, you better check the itinerary carefully! Anyway, I felt 400 Baht was worthwhile as the ride from Patong to Karon might likely cost 300 Baht.

We posted some photos on Flickr, do follow this link if you are interested to take a look. :)

How much does it cost to own a car in Singapore?

After taking so many years of public transport in Singapore, I finally decided to buy a car in Singapore. I have no complains regarding Singapore's first class public transportation. It is very efficient and convenient, and it is very cheap compare to other countries. However, I have reached a point that the car could probably save me more time to earn more money. Thus I decided to go for it.

After doing some shopping in Leng Kee road, I bought the 2008 new Toyota Corolla Altis 1.6. Since I am always looking for values, I see the Altis provided good qualities with reasonable price tag $62,700. "Reasonable" in Singapore but expensive compare to USD15k in United States :)

As you may know, Singapore is probably the most expensive place to own a car. Based on the price above, I have done some calculation to see how this is true. Let's assume that we put $15k down payment and we take the loan with 2.5% from the bank for seven years. In Singapore, you can only own the car for 10 years. After that, if you would like to keep the car, you need to bid for the COE (Certificate of Entitlement is a program designed by Singapore government to limit the car ownership in Singapore) again. We will assume we only own the car for 10 years, drive 60km every day and the fuel efficiency of the car is 13km/L, oil price is $2.1/L.

Gas/oil price per month = 60/13 * $2.1 * 30 = $290
Parking fee = $90 * 2 + $60 = $240
(Note: assume two season parking $90/month and other parking fee as $60)

Car insurance per year = $1.7k
Road tax = $851

Total interest = $47,700 * 7 * 2.5% = $8.35k
Scrapping of vehicle value = $17k * 50% = $8.5k
Car depreciation per year = ($62.7k + 8.35k - 8.5k) / 10 = $6.25k
Car maintenance per year = $400

Thus the monthly cost that we need to maintain this car in Singapore is:

(6.25k + $1.7k + $850 + $400)/12 + ($290+$240)
~ $1.3k

Based on "the key household income trends, 2007" published by the Singapore government, the mean monthly household income from work is $4.87k in Singapore. The monthly cost per car is almost one third of the mean monthly house hold income. This explains why only 13.6% (2007) of people in Singapore own a car.

Creating digital watermarking for your photos

I just took some pictures from Phuket using my new Canon 450D digital SLR. To let my wife to present the pictures online, I think it is better to create the digital watermarking for the pictures for copyright purpose.

There are many softwares available out there, but I was wondering if I could do it myself easily. After some research and goggling, I think I can just use Perl to process all my photos at once with the help of the ImageMagick since I have it installed in my Vista Premium already.

Here are the simple steps to produce the watermark photos:

1. Install Gimp or Photoshop or any image processing software to create your own digital watermark such as the following:
   
   
   
2. Install ActivePerl in your Windows OS. If you are using Linux/Unix, you may already have it installed.
3. Install ImageMagick.
4. Then copy the following perl script using a text editor to a file named "transfer.pl".
   

   
   #!/usr/bin/perl -w
   
   #Change your settings here
   $targetFolder = "converted";
   $targetFilePattern = "conv";
   $watermark = "C:\\Temp\\watermark.png";
   $imageExt = "JPG";
   
   
   $i = 1;
   
   opendir(DIR, ".");
   @files = grep(/\.$imageExt$/,readdir(DIR));
   closedir(DIR);
   
   mkdir($targetFolder);
   foreach $file (@files) {
   $targetFile = "$targetFolder\\$targetFilePattern".($i++).".$imageExt";
   $cmd = "composite -dissolve 50% -gravity SouthEast -geometry +5+5 $watermark $file $targetFile";
   print "Converting $file to $targetFile\n";
   system($cmd);
   }
   

   
   
5. Change the setting in the script, e.g. target folder name, target file pattern, watermark picture file location and the source photo file type.
   
6. Copy the file to your folder which contains the photos to convert and execute it by "perl transfer.pl".
   

Here is the final result:

A costly buffet lunch at Grand Bluewave Hotel in Johor Bahru

It was an unpleasant buffet lunch experience I ever had.

Bluewave used to offer good buffet lunches. My family celebrated few occasions there and we were satisfied with the food and the service. Although Bluewave's buffet is not the best in JB, but it's more valuable compared to other hotels. However, the last experience was a real disappointment and we doubt we will go back again.

It costed RM38++ per pax for "special" dishes for Mother's Day. It is RM25++ on usual weekends. However, I didn't see (or feel!) the differences. The variety of food was slightly more but food is being replenished slowly, the food weren't yummy, the cafe was warm and stuffy, the staff were smileless and impromptly... We even had to ask for water and they served the water more than 15 minutes later. We left the cafe about an hour later - a really short period for a buffet meal.

Apparently Bluewave's standard is going down, in term of food and service. Although my sister-in-law told me that buffet is not as popular in JB as before, the hotel still have to maintain their standard, or at least, get staff prepared well for special occasions, so as to match the self-claimed 5-star standard. Otherwise, how they can fight with other hotels such as Mutiara and Pan Pacific which offer better food?

I did a search on Internet to find reviews on buffet lunches in JB. Unfortunately, not much info can be found. I hope this piece of writing can serve as a reference for people who is looking for silmiar info and do think twice if they would like to go to Bluewave for a buffet!

How to get rich using property leverage

I started investment since year 2004, but I only invest in stocks, unit trusts and treasury bills. Recently, I found property investment the other good option to make good ROI.

One of the theory that caught my attention is the property leverage. It helps the middle class people to get rich easier.

Let's see how the property leverage can help us grow. Assume we have 400k to invest in real estate now, and there is one good property with good location cost just 400k, how should we invest in it?

There are two options, either we pay a lump sum to sleep peacefully or just pay 20% down payment and get a loan from the bank.

To illustrate the difference, let us do some mathematic exercise:

Assumption:

1. Since the property is in the good location, we estimate that the property price will become double in 10 years, and we will just sell it after 10 years.
2. The renting yield of the property is 6% annually.
3. The mortgage interest rate is 6% annually.
   
4. The property price is 400k.
   

Case 1:

Renting return after 10 years = 400k x 6% x 10 = 240k
Profits after 10 years
= property value - original payment + rental yield
= 800k - 400k +240k = 640k
Annual compound return rate = 9.6%

Case 2:

Renting return after 10 years = 400k x 6% x 10 = 240k
Down payment = 400k x 20% = 80k
Loan amount for 25 years = 400k x 80% = 320k
Profits after 10 years
= property value - original payment + rental yield - total interest paid - loan balance
= 800k - 80k + 240k - 174.5k -254.5k = 531k
Annual compound return rate = 20.5%


As you can see from the calculation above, we can get double compound rate return over the lump sum payment. The most important thing is that you only need to pay 20% of the original property price. Thus the property is more affordable to the middle class.

How smart and rich people can get richer and richer by property leverage? It is very simple. The rich people just need to put the original 400k to 5 same properties and get the loan from the banks. Just see the bank as your shareholder. Then you could get the same 20.5% compound return, and it is five times as shown below:

Compound rate = 20.5%
Payment = 400k
Profit = 5 x 531k = 2,655k


If you look at the profit amount above, it is five times more than the profit without using the property leverage! Thus, we must enforce the property leverage whenever possible to get the best ROI.

How budget is the budget terminal?

Just having a trip to Phuket via Tiger Air. Overall the airline is punctual and comfortable. For the Singapore budget terminal, it is pretty small, but I would say it is almost the same as or better than the Perth International Airport.

The budget terminal cannot be directly access via the local train service (MRT), but if you would like to go there via MRT, you could just take a free shuttle bus service from the terminals to the budget terminal. The frequency of the bus is about 10 minutes. For my case, I actually took a public bus 858 which can easily access from my place in Woodlands to terminal 2 and then transfered to the budget terminal.

My first impression of the budget terminal is very bad, it has nothing but a dining place, a children play ground, an ATM machine, a AXN machine, a terminal service counter, a small convenient retail shop and about 26 airline service counters. I had taken some photos from them as the following:



I also notice that you could get a piece of "My Paper", a free local published newspaper in the terminal. However, I think you can only get it in the early morning flights.

Actually, all of the good facilities available for the budget terminal are only available after you have gotten passed the custom checkpoint.

There are quite many facilities inside the budget terminal, here is the list:

• A free Internet access point with quite a few computers available for travelers to access and a good cafe O'Briens to you to take a cup of coffee.
  
  
  
• Two rest places that you could watch ChannelNewsAsia, a famous news channel in Asia.
  
  
  
• A money changer which allows the travelers to change money in the very last minute.
  
  
  
• A free laptop Internet access zone allows the travelers who has a laptop to access the free wireless network.
  
  
  
• There are many tax free shops available for travelers to do last minute shopping.

Overall, the budget terminal is not that budget after all, it includes all the facilities that a traveler need to get on the budget air planes.

Joining the world of blogging

Hi, everyone! Welcome to our blog.


We are a Malaysian couple leading a decent life in Singapore. Why we join the crowd and blog? We are common people but we believe that, in this info-sharing era, we can contribute by sharing our interests and thoughts concerning any aspect in our life. It would be good if our writings can benefit other Internet users; however, we think it's also a part of self-reflection and preparation, which will lead us to a more meaningful, comfortable, and happier life. Afterall, that's what everyone working hard on, isn't it? :)


OK, stop talking big. Let's blog!




Regards,

Leon & Coco