I want to share with you my portfolio breakdown. Financial management is one of the fundamentals I have been taught by a combination of financial agents, workplace seniors, and some wise friends. Surprisingly, the average person out there don't manage finances well because they are too afraid to open doors to the stock market or touching their CPF money and make sound investments. Here is the breakdown of my financial net worth:
Of course, with investment comes risk. There is a chance you don't make money for a few years before you figure out which stocks, funds or indexes is right for you to settle down on for years to come. I take risks seriously. 24% of my net worth is used to invest in Equities, ETF and copy trade. The companies I'm invested in are TESLA, NIO, MICROSOFT, SONY, TENCENT, ALIBABA, SLACK, SUNCOR Energy, AT&T, Disney, NVIDIA, TENCENT MUSIC. With a projected rate of 0 - 25% yield. I am a huge fan of electric vehicle and sustainable energy. There is an chance that I might not make any money from the transformation of the energy consumption. But one thing I am certain of, is oil and fossil fuels will eventually run out one day in the future and economies will depend on renewable energy like solar panels, wind turbines, hydroelectric generators etc. So I am really bullish about energy transformation to renewables and electric vehicles on roads everywhere in the future. 1% of my net worth is in Bitcoin. For hedging purposes.
30% of my net worth are in savings, fixed deposits and bonds. There's not much action going on here. It's my liquidity and emergency funds. The fixed deposits yields 2% a year, while bonds on government funds yields 2.5 - 4% a year.
15% of my net worth are CPF in my CPFIS and CPF OA account, yielding a projected 8%(REITS) and 2.5%(OA $20k requirement) respectively.
5% of my net worth are in insurances. Insurances are get once and forget about it forever, unless misfortune strikes. I make sure that I am fully covered of life(leaving a neat 500k legacy if I die before 100), hospital(100% coverage of ward B and below, inclusive of operations), accident(coverage of minor injuries like sprain, cuts, bruises), critical illness and early stage critical illness(coverage of 200k lump sum)
25% of my net worth are in savings plans. Some of you may find it unusual why the savings plan percentage is so much, it is because I had no knowledge of stock markets when I was in my 21 and made decisions I regretted on savings plans. I have been in my savings plan for 5 years already so I don't see a point in surrendering them. My 2 Savings plan yields me a projected rate of 4 - 5% a year. With payout at 10 and 15 years from now.
So to break it down:
- 25% on equities and commodities, yielding projected rate of 0-25%pa. With maximum effort of keeping yield near 25% through stock and ETF, and copy trade rotation.
- 30% on fixed deposits, bonds and cash yielding average of 1-3%pa
- 15% on CPF and CPFIS investment on REITS yielding projected rate of 5%pa
- 25% on saving plan yielding average 4-5%pa, and 5% on insurance with health coverage benefits.
I will share with you 5 methods I used on money management next time.