The year end resolution- The Transformations

A year end. And begins another.

Many things had happened for year 2020, the most dramatic was none other than the covid-19 pandemic and its impact on the world. Not only it had inflicted loss of human life, it had transformed the life of many people around the world. The borders between countries were forced to close, trade halted, people were trapped at home with limited human interactions. Fear and panic occurred on different scale across the countries affected. The race against time to find a cure til now is still on, although vaccine has been developed, its results is yet unknown as the pandemic continued to work its havoc over the world of human race.

The pandemic has brought about drastic changes in human movement. Gone are the days of an vibrant office environments, meetings now has to be held through Skype and Zoom, more than ever now we have to rely on technology to get their messages across and assignments to be carry out. 

Singapore as a small nation relying on foreign investments and international trades faced its greatest challenges since the financial crisis 2008. As a city state, the vibrant scene of shopping malls and tourism has been the main features of the country. The impacts of pandemic has changed everything, retail business struggled to sustain in the face of shrinking customers and the loss of tourists. When the storms end, our world will never be the same again.  

45% of Singapore population are foreigners working or staying in Singapore as work permit holders or permanent residents. The transformation of the working environments meant that works and assignments are transmit through network. This totally closed the physical barrier of  distances between the parties involved, without the need to meet at a designated location or venue. What would be the impact on us? If the foreign executive talents can fulfill their assignments working from home, it is likely they could do it from their own native home without the need to come to Singapore. 

First thing that comes to mind, when these pool of foreign executives no longer need to stay in Singapore to fulfill their jobs, this may indirectly results in shrinking pool of potential tenants. Rental income especially for higher grade accommodations like condominiums which has been among the favor type of house for executives may faced difficulties in future. 

While the pool of potential executives tenants may shrink in future, the pool of skilled workers however should continued to remain in demand as the job scopes of skilled workers required them to remain in the country due to the nature of their jobs. These group however are not among the higher tier salaried jobs, and tend not to look for rental house in condominiums as these require higher maintenance and expenses. 

Our own experience with the impact on the rental market occurred in April and May as Singapore government enforced the first phase of the covid-19 restrictions, our tenants are a group of skilled workers whose livelihood were affected as they were forced to stay at home with no salary. In view of the events, we lowered the rental by 30% to help our tenants as half of them were unable to generate income due to the working restrictions. While this lessened our passive income, it provided better sustainability in retaining the tenants. I believed landlords should adjusted with the changing times to constantly meet the market demand to ensure more sustainability and stability. 

On personal level, this month sees the end of my 18 months journey in paying down my housing loan. Starting in January 2021, I no longer need to finance my house with cash, as the CPF itself is now sufficient to service the loan on its own. This neutralize the threat of a main liability and free up more funds to increase my cash holdings. 

So, whats next?

For now, I am still working from home. Even with the opening of phase 3 in Singapore, it is unlikely there will be much changes in my job. There have been some plans laid out for 2021, but the pandemic has brought about some uncertainly in my plans that will require further reviews. Until then, we shall see. 

Stay strong, mankind. Nothing last forever. So does the pandemic.  

Christmas Orchard 2020

Times passed, its Christmas again. 

This year Christmas however is rather quiet in Orchard Road due to the impact of Covid-19. Performances were cancelled, social gatherings restricted, decoration much simpler. Even the traditional giant Christmas Tree that used to highlight the entrance of Ngee Ann City is replaced by the set up of Covid-19 contact tracings facilities. 

Although the Festival moods is still evident, it is foreshadow by the presence of Covid-19. The crowd is much lesser than before.

 

Paragon Orchard still the same as before.

But CK Tang below certainly has changed, no shiny lights. Notice the bus stop in its front, less crowded and this is Christmas Eve, a far cry from the old time scene when it was usually crowded with people.

 

 

The traditional entrance into the main shopping district of Orchard Road still look shiny as before.

 

 

This clearly shows the impact of the Covid-19 on the retail business of shopping malls, with lesser retail crowd, business owners now have to rely on online sales and delivery orders to sustain their business. I witnessed one restaurant at Wheelock Place where while they were still serving retail customers within their restaurant, they were busy packing delivery meal orders on one side of the restaurant. Such a sight was never seen before the impact of Covid-19. 

 

This send a clear signal to all business owners. The world has changed, it is unlikely the past of glory will ever return, business now has to evolve to keep up with changing time.  

 

Monthly Financial Updates

This monthly sustainability report does not include any of the salaried income. The basis for this monthly financial review is to gauge the sustainability status of my financial independence based on the total amount of passive income received.

Wow, another month breeze passed. And its December, the last month of the year. The month of November has been rather eventful, suddenly I was washed with plenty of innovations and ideas to do something different. LOL. The brain overactive. Ops. Enough blabbing, lets review our finance for November.

Dividend income has lessened in the mist of the covid situation. Payout from several companies has been reduced. Total amount received was $2,765.49, almost 30% less than the projected amount. Well, it is more than our monthly expanses. Rental income remain stable. 

Portfolio remains unchanged with no addition of any counter. As such, my cash holdings continued to grow and reached 5%. And it appear that I will not be adding anymore in near future, because Mr Market has begun to climb back up the slope.

After almost 6 months of weakness hovering around STI 2500s. Mr Market begun to recover in November climbing up the slope to as high as STI 2900. With the recovery, my portfolio also begun to regain some positive results. As I mentioned before, the market eventually will recover. It is just a matter of time. 

Still, there is no improvement in the pandemic around the world. Until then, border crossing and businesses will still be affected limiting the recovery of Mr Market.