Who wants to be Rich By Retirement?

I have just recently finished a book titled "Rich By Retirement" by Joshua Giersch (a.k.a Shiny Things on HWZ).

I would say this book is really a pleasant and easy read. I would recommend this book for anyone who wants a fuss free method of constructing your portfolio that works!

Below are some of the key points I have managed to digest from the book.

1.     Make sure you have some liquid cash on hand before you do any investment. The liquid cash should cover 6 months of your expenses just in case you lose your job. I have my liquid cash in POSB and SSB earning about 1 to 2% interest.

2.     You should have yourself covered with hospitalization insurance. Insure with term life insurance if you have dependents. The Medishield Life (MSL) plan from CPF should cover the hospitalization insurance. The term life should cover your dependent expenses until they are self-reliant. I got my MSL covered but need to add on to my life insurance.

3.     The rest of your savings after covering all of your expenses (including 1 and 2) will go to investing. Ideally you should start as early and as much as you can save. However, it's always better to start now and whatever you can save (as low as $100). Better be late than never!

4.     Split this sum of money into 2, one for investment in equity and the other in bonds. Percentage of investment in equity should be roughly 110 minus your current age and the rest will go into ETF that tracks Singapore bonds.

5.     The amount for equity is further split equally with 1 pile going to ETF that tracks Singapore Stocks and the other into ETF that tracks Global Stocks. See table below for the ETF to get.

6.     You can do step 3 to 5 regularly (monthly or quarterly) while maintaining your Percentage in Stocks and bonds. i.e you put more money into the ETF where you are short of.

7.     Twice a year, in May and November, re-balance your portfolio. i.e sell whatever is more to buy whatever is short.

8.     If you can consistently do this for the next 10, 20 or 30 years, you should be on your way to a richer retirement!

Type	ETF to get	Tickers	Where to get it from*
Singapore Bond ETF	Nikko AM SGD Investment Grade Corporate Bond ETF	MBH	POSB Invest-Saver OCBC Blue Chip Investment Plan Standard Chartered Bank (Manually)
Singapore Stocks ETF	Nikko AM STI ETF	G3B	POSB Invest-Saver OCBC Blue Chip Investment Plan Standard Chartered Bank (Manually)
	SPDR STI ETF	ES3	Standard Chartered Bank (Manually)
Global Stocks ETF	iShares Core MSCI World UCITS ETF	IWDA	Interactive Broker (Manually) Standard Chartered Bank (Manually)
	Vanguard FTSE All-World UCITS ETF	VRWA	Interactive Broker (Manually) Standard Chartered Bank (Manually)

*Where you get the ETF from depends on the cost. You should go for one that cost you the least. You can use Shiny Thing spreadsheet to help you determine that.

Happy Value Investing