Saturday, 10 August 2019

Budgeting: Why I refuse to spend >30min per month to track expenses

  Posted at  August 10, 2019 3 comments



First of all, wishing all fellow Singaporeans and investors a Happy National Day and long weekend holidays!

This long weekend is a welcomed one for me as I am finally able to get some much needed rest and re-calibrate my own investing journey after embarking on a new employment. Now, one of the things I do every month during my payday (or the weekend of that week) is to do a quick budgeting for the next month.

A Budgeting Problem: Tracking Expenses
One question I constantly get from friends and readers is: How do you keep track of expenses?

I'm sure most of us have tried some form of tool for tracking expenses one way or another. But many of us give up because it becomes a very tedious thing to do. Just watch the picture below (you might have done something similar before):

What??? I have to key in every single expense... omg.
The animated GIF image speaks for itself why most expense trackers fail for me. As humans, we are creatures of habit and when you have a 1,001 transactions, such an expense tracker becomes far too tedious:

- You can miss out some transactions
- You will forget some transactions if you do not key it in immediately
- You have to religiously and be very disciplined to key in ALL your transactions.

This is humanly quite impossible to keep up for most people and this is why after a few days, weeks or months we will eventually give up tracking our expenses. Expense app trackers are NOT the best solution.

My Solution: Use a spreadsheet and copy+paste my Bank Transaction Statement each month. 
I encountered a lot of issues initially to budget well because I couldn't keep track of my expenses. Therefore I could not know how much I spend for each category of my expenses and there was no baseline or trending I can spot.

The problem led me to explore the fastest way I can keep track of my expenses and the solution was to simply copy my bank account statement for a specific timeframe (usually the period between each payday is used). This allows me to track my expenses and budget in a matter of less than 30 minutes typically.

A sample copy of my Budgeting/Saving Spreadsheet is available at this link (Make a copy):

https://docs.google.com/spreadsheets/d/1WqjlVN2dUlHYoulqqWJsTdrb7pi1BfcbwH0p4N5FJcI/edit#gid=0



Step by step guide how to use the Spreadsheet:

1) Make a copy of the spreadsheet:
Go to File -> select Make a copy (otherwise the file cannot be edited and will be "view only")


2) Go to your bank account (spending account) and select the timeframe
For me, I use a POSB account as my spending account. I will select the transaction history to give me all my transactions for the date range that I want. E.g. My pay day was on the 23rd every month so I select from every 23rd to the 22nd of this month.


3) Copy out all transactions for the spending period
There may be more than one page so you have to copy all the pages' transactions to the spreadsheet.


4) Paste the transactions on these columns in the spreadsheet
These columns have already been customised to mimic how it looks from the bank account. You will need to repeat step 3 and 4 for each page of the transaction history.


5) Click "Sort A-Z" function to quickly re-arrange all transactions 
This will usually group all similar merchants together by alphabetical order, making it easy for you to just simply tabulate them with a calculator on hand.



6) Example set of transactions: Grab
The "Step 2" column is a column used for quick calculations using a simple excel formula. If you are not familiar with it, you may simply use a manual calculator or the windows calculator. After you taken note of the transaction, you can add them to the "Step 3" table in their respective categories. To return to default sorting, just click "sort by date". I usually colour code them to make a visual note that I have already processed the transaction amount so I can tell which ones have not been done.



7) Example set of transactions to categories: Grab (2)
Key in the respective tabulated expenses into a few bulk categories. This will help you to establish a baseline spending you have incurred on each of the respective categories. Most of the instructions are intuitive and you can feel free to adapt the spreadsheet to your liking.



Make your life easier
When you get familiar with this, you will never go back to the tedious expense trackers because it takes far less time to copy + paste all your transactions and simply tabulate them at the end of the month for a mere 30 minutes.

We might not be able to commit and be disciplined enough to make note of every single transaction but most of us can certainly spare 30 minutes in front of our computers on a weekend to tabulate our spending. Furthermore, as we are increasingly going cashless, this method becomes more efficient.

If you have any better methods to keep track of spending or budgeting, do share your personal tips with me and our fellow investors here! Feel free to use the spreadsheet and customise it to your liking. Do give me any feedback if you run into any issues or if this helps you in your savings/investing journey.

Okay. That's one article. See you next time!

Until Next Time,

K.C.
If you like this post, you might like our facebook page as well. I'm also on Investing Note.



Disclaimer: The views expressed, opinion and information in this article are strictly for informational purposes to encourage educational discussions only. It is important to conduct your own analysis before making any investment decisions based on your own personal circumstances. You should take reasonable measures such as seeking independent financial advice from professionals and/or independently research and verify the information that you find on "30 Year Old Investor" before undertaking any important investment decisions. No content on this site constitutes - or should be understood as constituting - a recommendation to enter any securities transactions or to engage in any of the investment strategies presented in our site content. We do not provide personalised recommendations or views as to whether a particular stock or investment approach is suitable to the financial needs of a specific individual. No representation or warranty expressed or implied is made as to, and no reliance shall be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained on this website. "30 Year Old Investor" shall not be liable whatsoever for loss or damages of any kind arising from the result of any use, reliance or distribution of the articles or its contents from information contained on this website. 

Saturday, 27 July 2019

Goal Setting: Why it matters in investing (and everything else)

  Posted at  July 27, 2019 6 comments




Goals. What determines those who achieve and those who don't?

Chances are you would have at least seen the S.M.A.R.T goals acronym being thrown around at different places such as work and in school. Why is goal setting such an important exercise during the course of our lives? We will examine more closely how it can apply to different areas of our lives, e.g. investing, healthy living, work/projects etc.

Time is a precious resource and unfortunately a limited one. Everyone will be demanding our time but we only have 24 hours a day. But we need more like 40 hours a day (a TwoSet Violin reference, google them for some comic relief). We have to learn to say NO to some people asking us for our time and also need to focus on what is really important.

S.M.A.R.T goals exactly help to crystallise these.

A Season of Changes 
(Background context to my need for re-setting my goals)

First of all, apologies to my regular readers for being late in updating my blog. I have been pre-occupied with a few changes in my life currently:

1. Career/ Job Transition:
I was previously retrenched earlier this year, but I was lucky to secure a job within a short time frame. It was a blessing in disguise. In short, I got out of my comfort zone from my previous job and am now given a chance at a new company to learn and deliver the work handed to me. The job comes with some perks of its own, for example a free gym access which previously was unavailable/not so convenient to me. As such 2 Goals will likely arise from here. One would be to learn well and get up to speed in my current work. Second would be to get healthier, eat well and build some muscles in the gym.

2. K.C. is now attached:
As the header stated, I would need to start to set aside a separate fund for marriage and probably down payment for HDB. More research would likely help to put some realistic and meaningful numbers to the plan. Don't worry. K.C. also realised that he has not very consistent in posting... and so.....

3. More focus on Investing and Blogging
As I would need to focus on my work, I will unlikely be wanting to be distracted on doing any investments while during work hours. My new office is also a half-open concept, so it will be really tough and definitely not right to be doing any personal stuff during work hours. As such, any investment decisions I make would be made after work hours.

Also, I will commit to having at least 2 post per month on alternate weekends. I want to avoid having too many posts but also to achieve some consistency in posting more quality content. If there are any other interesting ideas to post about I will be posting them on the other 2 weekends. I am also currently having night classes on every Monday, Wednesday and Friday so time is really limited on my side.

So, what is S.M.A.R.T goals? 

There is some debate how this acronym came about. But when I first encountered it, I was a Junior College student and the person who introduced it to me was my General Paper (GP) teacher who encouraged me to read widely and arguably had a eye-opening effect on my critical thinking. I was exposed to many good reads and concepts at that point in time:

- The Clash of Civilizations by Immanuel Kant (Religion and cultural differences will be the major source of world conflict)

- Maslow's Hierarchy of Needs (There are different tiers to human needs, survival comes first)

- Friedrich Nietzsche, Beyond Good and Evil (God/religion is Dead!)

- How to win Friends and influence people by Dale Carnegie (Basically, how to genuinely build relationships and why those lead to successes in life)

- The Practice of Management by Peter Drucker (How to effectively understand the business world, and have effective management)

Particularly, SMART goals is attributed to Peter Drucker as a means of writing management's goals and objectives. The term SMART goals was first used in the Nov 1981 "Mangement Review" (George T. Doran).

Regular readers of this blog would have realised by now that Goal-Setting is a big thing and down to the very essence of this blog: this blog exists solely as a diary, a record for me to be accountable to my investment goals (click link), and also life goals.

Specific: target a specific area for improvement.

A Goal must be specific enough. You have to know what are your pain points in life. What are some areas of life that must improve (which would otherwise result in some pain down the road)? Management goals are very targeted and root cause analysis would help to pinpoint certain areas of a company that needs to improve: safety, time management, cooperation, listening, communication, organisational structure etc.

For personal areas, it can be health, career, relationships, money management, investing. If we don't feel a NEED to change, chances are the goals won't last. There must be some negative consequence attached to not being able to get the goal, or a positive result that would be the fruit of us attaining our goals. These would motivate us to go further.

For example, one of the main pinch points for me was approaching age 30 but still having a pathetic bank account statement. I recognised that I had to do something about it. As per my page "About K.C."

My Financial Goals are to:
1. Ensure positive cash flow.
2. Gain assets (stocks and reits) that generate passive income.

If possible, we can further break down into more specific details later on as much as possible.

Measurable: quantify or at least suggest an indicator of progress.

It is best to put some numbers as a benchmark or yardstick. For example, if we want to save money, we won't know how much is a good target without knowing how much as a % we spend of our salary and on what category of items. Similarly, we also need some numbers to grapple with especially in investing since the timeframe is so long and could span decades. How do we know we are still on track?

For example, I set a long term target charted out on Excel with specific projections (which can be reviewed as we move along)


PROJECTIONACTUAL FIGURES
YearAgePortfolio
Projected 2%/yr
Current capital
injection Rate/yr
Estimated
Dividend 3%
Actual Portfolio
at end of yr
Actual Capital
Injection/yr
Actual
Dividends
Dividends carried
over to portfolio
201831$12,000.00$12,000.00$360.00$15,941.59$16,928.40513.25513.25
201932$24,600.00$12,000.00$738.00$33,831.24
(till date)
$16,093.21
(till date)
$355.45
(till date)
202033$37,830.00$12,000.00$1,134.90


204861$849,129.48$12,000.00$25,473.88
Total$849,129.48$372,000.00$311,751.57

Assignable: specify who will do it.

There is no question that for personal goals, the person to do it will be us. Will you be REALLY doing the activities that will lead to your goals? We know ourselves best.

Realistic: state what results can realistically be achieved, given available resources.

We can aim for the sky, but it likely will not be attainable and therefore is useless to us. It should also not be a too easily achievable goal but should give us a little stretch and a bit of challenge to get there.

Timeframe: specify when the result(s) can be achieved.

This is by far one of the more important components of SMART goals. If we do not set deadlines, things just never get done. We will lose focus and even lose track of our goals. Our goals will just keep get put off. I think Nas Daily does a better job at illustrating this point:


I have set my goals, have you set yours?
(If these goals are not SMART enough on this blog post, I will redefine and go more specific later on)

1. Career/ Job Transition:
My goal will be to be competent by 3 months and proficient by 6 months in my learning curve at my new job. There are 4 software and a technical library I have to be good at. I will want to be familiar with them by the 3rd month.

I also have a new goal to hit the gym twice a week. I will start baby steps to hit it once a week first.

2. K.C. is now attached:
K.C. will set up a separate fund for future family purpose (wedding, HDB). The amount to put in will be to be confirmed (TBC) since my new employment has jumbled up previous schedule of budgeting. Instead of 23rd each month, it will now be done on the 13th. 

3. More focus on Investing and Blogging
K.C. will blog on the 2nd and 4th weekend of the month. Any additional posts will be posted on the 1st and 3rd week of the month. Meanwhile, I remain committed to finishing my night classes until March 2020.

I have set these down so that I will be accountable to myself, as well as my readers. There is no backing out now. If you have any resources on how much to prepare on getting married, how much to save for HDB, do share with me! Will be looking to tap on the experience of more experienced investors and friends :)

Until Next Time,

K.C.
If you like this post, you might like our facebook page as well. I'm also on Investing Note.



Disclaimer: The views expressed, opinion and information in this article are strictly for informational purposes to encourage educational discussions only. It is important to conduct your own analysis before making any investment decisions based on your own personal circumstances. You should take reasonable measures such as seeking independent financial advice from professionals and/or independently research and verify the information that you find on "30 Year Old Investor" before undertaking any important investment decisions. No content on this site constitutes - or should be understood as constituting - a recommendation to enter any securities transactions or to engage in any of the investment strategies presented in our site content. We do not provide personalised recommendations or views as to whether a particular stock or investment approach is suitable to the financial needs of a specific individual. No representation or warranty expressed or implied is made as to, and no reliance shall be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained on this website. "30 Year Old Investor" shall not be liable whatsoever for loss or damages of any kind arising from the result of any use, reliance or distribution of the articles or its contents from information contained on this website. 

Saturday, 29 June 2019

Retrenchment and the 25% pay increase that I did not ask for

  Posted at  June 29, 2019 12 comments


I have finally confirmed that I secured new employment and by a fantastic twist of events, I got into a better situation than before. Thank God for opening doors when one was being closed. In short, I received a tidy sum of severance while my annual package increased by 25% (probably because I'm underpaid at current employment, but I won't complain)

It took me 84 days before I secured the offer that I wanted. In total, I sent out a fair bit of applications to which I landed 4 interviews and had 3 offers. I also met a few very nice potential future employers. One of them even held the position open for me for a while despite me rejecting them because I made a pretty strong impression with the boss.

For tips on interviews/career planning, refer to my previous posts:
Interview process cycle: How to increase your interview rates
Investing in our Career (Taking care of the goose) (Constantly upgrade while making plan Bs)
Why we should keep our Resume updated, always. (And dealing with interview preparation)

84 days Job Hunt Timeline
3rd April  - Announcement of retrenchment of my department (Blogged 9/4/2019)
17th April - Attended 1st interview in 1.5 years and screwed it up so bad they didn't contact me
23rd April - Attended 2nd interview (Part sales/Technical role) Offered but rejected
6th May - Attended 3rd interview (Business Support/Technical role) Eventually accepted
31st May - 4th Interview pre- video interview
7th June - Attended 4th Interview (Lab Exec role with School) Offered but rejected

As can be seen, my interview hit-rate is not very good. It is about 1 interview every 21 days or almost 1 on average per month. According to Jobstreet, my total applications was 39. I went for quality instead of quantity in doing and sending out one or two tailored good resume/cover letter per day. I also applied a few through other platforms but not much. One of the interviews that came was from being contacted by a headhunter from LinkedIn (which would become my eventual job). There were also other recruiters that contacted me but it did not materialise into anything.

Breakdown of numbers:
Assuming 45 applications made,
Returns rate of interviews for applications made = 4 / 45 = 8.9%
Offer rate  = 3/4 x 8.9% = 6.7%

From experience, the success rate based on the number of good applications made is around 5%. Alot of it was down to luck and opportunity to secure a ticket to interview. The main difficulty encountered was that my current company bogged down my job hunt with job responsibilities that I was obligated to complete. There were pros and cons to this (allowed me to look for another job while still getting paid until June 30). I was prepared to continue this numbers game if I had no offer on the table until eventually I exhausted all options. Thankfully it did not come to that.


Interesting Interview Experiences:
My first interview in 1.5 years was a total disaster. On the back drop of being retrenched, desperation, fear and unpreparedness caught me off guard. I was even ridiculed by the interviewer for even "daring to apply for their position". In the end, I said a few wrong things and gave a pretty bad impression. It is actually very normal to screw up your first interview in a while. I was sad and frustrated for a day or two over my performance but quickly moved on from it.

The second interview was a pretty memorable one. I guess I will let a screen shot with the recruiter in charge do the talking.

An offer from a reputable company listed in Singapore

After 2 years of Insurance, 2 years as a Lab analyst and now almost 1.5 years as a Chemist, I have developed quite a keen business sense despite being in the Technical side of things. As a testament and vote of confidence for my interview/rapport skills, the HR at this company also mentioned that :"Past candidates usually only get 15 - 20 minutes but you are the first that managed to chat with the Boss for 1 hour plus." I managed to add this Boss to my connections of friends after this as well.

I do think that getting relaxed and being oneself helps one to outperform during interviews (assuming you crunched the interview questions and internalised them). My third interview and fourth ones went pretty well as I looked to be comfortable and display a positive attitude to learn. In actual fact, I "failed" my third interview for the position I was being interviewed for. However, I made sure I had made a strong impression and they offered me an alternative role which was lower but had the opportunity to learn new things. This became my eventual offer that I took up (I left the headhunter to negotiate my package while giving a lowest amount I was prepared to take. They offered me better and the rest was history)

The fourth one was pretty straightforward. It also matched the offer from the third interview in terms of remuneration but it was likely to be a stagnant job going forward.

------------------------------------------------------------

Final thoughts
Overall, retrenchment could have ended badly. But it didn't, and it doesn't have to. Perhaps I am still young. Perhaps being positive and taking action helped create my own luck. But perhaps there will be a time in future when I get older and retrenchment might be more fatal.

But hey, that's why we are planning early to invest and hopefully be self-sufficient one day. Last but not least, I'M BACK. And I can start looking at investments once again.

If you are looking for a job, don't give up. It is a numbers game.

Until Next Time,

K.C.
If you like this post, you might like our facebook page as well. I'm also on Investing Note.



Disclaimer: The views expressed, opinion and information in this article are strictly for informational purposes to encourage educational discussions only. It is important to conduct your own analysis before making any investment decisions based on your own personal circumstances. You should take reasonable measures such as seeking independent financial advice from professionals and/or independently research and verify the information that you find on "30 Year Old Investor" before undertaking any important investment decisions. No content on this site constitutes - or should be understood as constituting - a recommendation to enter any securities transactions or to engage in any of the investment strategies presented in our site content. We do not provide personalised recommendations or views as to whether a particular stock or investment approach is suitable to the financial needs of a specific individual. No representation or warranty expressed or implied is made as to, and no reliance shall be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained on this website. "30 Year Old Investor" shall not be liable whatsoever for loss or damages of any kind arising from the result of any use, reliance or distribution of the articles or its contents from information contained on this website. 
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About

You don't need to pay anyone/company to have a plan of your own and work towards achieving Financial Independence. Only we alone have no conflict of interest with our own money. "30 Year Old Investor" is a personal blog about a Singaporean's savings and investing journey.


Being the average Singaporean, K.C. is also interested in good food, a little bit of politics and a good slice of humour.

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Disclaimer

Disclaimer: The views expressed, opinion and information in this article are strictly for informational purposes to encourage educational discussions only. It is important to conduct your own analysis before making any investment decisions based on your own personal circumstances. You should take reasonable measures such as seeking independent financial advice from professionals and/or independently research and verify the information that you find on "30 Year Old Investor" before undertaking any important investment decisions.

No content on this site constitutes - or should be understood as constituting - a recommendation to enter any securities transactions or to engage in any of the investment strategies presented in our site content. We do not provide personalised recommendations or views as to whether a particular stock or investment approach is suitable to the financial needs of a specific individual. No representation or warranty expressed or implied is made as to, and no reliance shall be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained on this website.

"30 Year Old Investor" shall not be liable whatsoever for loss or damages of any kind arising from the result of any use, reliance or distribution of the articles or its contents from information contained on this website.

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