Tuesday, May 31, 2011

Target for June

Total expenses for May was around $350, which translates to an average daily spending of $11.30. This month, I will reduce my expenses to $300($10/day) and this would mean that I will be able to save an additional $100 from my $400 allowance. In addition, I will be getting around $1,000 from my internship program. Thus, cash holdings should increase by $1,100 in June. 

Monday, May 30, 2011

Shipping Trusts in Singapore

A Spreadsheet says a thousand words

Although the distribution yields of shipping trusts are generally high, we have to be aware that a portion of the distribution is a fair compensation for the loss of value of the invested principal due to a decline in vessel value over the years(depreciation). The difference between a REIT and Trust is the underlying asset. REITs invest in land and buildings which will appreciate in value over time but give lower dividends. Shipping trusts invest in vessels which will depreciate over time but give higher dividends as a result of high risks. 

First Ship Lease Trust is my top pick due to the following reasons:

1) Highest dividend while trading near 52 weeks low
2) Stronger balance sheet at lower price
3) Most diversified shipping trust in Singapore(in term of its lessees and vessels)

However, we have to take note of the high gearing and the not so positive outlook on shipping trust in Singapore. For now, I will stay away from shipping trusts and focus more on stable dividend stocks.

Net Worth (May 2011)

Sources of income

- Monthly allowance from parents: $500
- Income from part time jobs/tuition/internship : $500 to $800

- No fixed expenses as mobile phone and internet bills are being paid by parents(lucky me).
- Set a spending limit of $10 per day. This amounts to $300 a month. In this case, I will  be able to save $200 of my allowance and 100% of my income from part time jobs/tuition/internships.

Savings will be dependent on the type of part time job I work. Normally, I will be able to save at least $500 per month by giving tuition. $150 will be allocated to the investment linked policy fund while the remaining will be deposited into one of the saving accounts.