Thursday 25 April 2019

(Post 86/Year 2 week 23)Investment project updates(Peer to peer lending):Moolahsense(My thirteen and last campaign)

Moolahsense(My thirteen and last campaign with Moolahsense)

Note*the company name will not be revealed just like the previous post as my money are still inside moolahsense, haha(this is not a sponsored post by the way)

Issuer summary
Date of listing:April 2018
Tenor: 12 months
Note type: Equal installment

Quoting from the moolahsense website
  • Equal installment:A promissory note by which an installment of the principal subscription amoung and/or interest accrued and due up to the date of payment shall be payable on such dates as set out in a repayment schedule specified in the promissory note, and on the maturity date, the principal subscription amount would have been paid in full
Repayment frequency: Monthly
  • Repayment frequency: Will be paid monthly
Target interest rate:18%P.A

Quoting from Moolahsense website
  • Target interest rate: The maximum rate the issuer is willing to provide the interest on the principal subscription amount which the issuer wished to obtain, as notified in writing by the issue to Moolahsese
Purpose: Working capital

Quote from valuepenguin:
  • Working capital: It is a concept to describe a business ability to cover its short-term operating costs
  • E.g For this campaign, I have funded $100 into it
  • As the target interest rate is 18% PA, this means that at the end of the tenor, which is 6 month I will expect to receive $118
  • 100%=$100
  • 18%(Interest for 12 month)=$18.00
  • 118%(The Principal + the interest)=$100+ $18.00=$118.00
  • Since the tenor is 12 months, each month I will receive $9.83(inclusive of interest) in payment/equal installment
  • 1month=$118.00/12=$9.83
Summary company profile

  • The issuer is a company incorporated in Singapore in 2014
  • The Issuer is in the food and beverages industry and has around 10 employees. 
  • The Issuer specializes in the retail sale of snack food products (including chips, cookies, chocolates and candies) sourced primarily from Japan. 
Detail of purpose
  • The Issuer seeks working capital for the performance of various contracts which have been awarded to the Issuer.
Financial statement

Will only reveal a part of the financial statement due to confidentiality. As I have mentioned a few weeks ago in my post, that I only mainly use this three ratio: current ratio, quick ratio and debt to equity ratio to decide in investing in a campaign, hence I will be showing its ratio below

The ratio is as follow(left side of the column is for the year 2017/right side of the column is for the year 2016)

Year 2017/Year 2016
(Current ratio 2017:8.53),(Current ratio 2016:10.49)

  • A simple ratio of current asset divide by current liabilities
  • Current liabilities are debt that needs to clear in the short term(in a year)
  • If a company has a current ratio less then 1.0, do not invest in it
  • If a company has a current ratio more then 2.0, May consider investing in it
  • The higher the current ratio, the better
  • For the current ratio of 2016:8.53, it is higher than the recommended range(>2.0)
  • For the current ratio of 2017:10.49, it is higher than the recommended range(>2.0)
(Quick ratio 2016:6.52),(Quick ratio 2015:9.54)

  • The quick ratio is almost similar to current ratio except that it is assumed that the company does not sell its inventories(e.g Toyota inventory is its car) or stock, it is still able to fulfill its debt
  • If the company has a quick ratio of 0.75 and below, do not invest in it
  • If the company has a quick ratio of 1.25 and above, May consider investing in it
  • The higher the quick ratio the better
  • For the quick ratio of 2016:6.52, it is higher than the recommended range(>1.25)
  • For the quick ratio of 2017:9.54, it is higher than the recommended range(>1.25)

  • (Total liabilities/equity 2016:0.3),(Total liabilities/equity 2015:0.41)

  • The debt ratio is calculated by total liabilities divided by the equity
  • If the company has a debt ratio of 1.5 and above, do not invest in it
  • The company should essentially have a debt ratio of 1.0, if the debt ratio is below 0.75, do consider investing in it
  • The lower the debt to equity ratio the better
  • For the Total liabilities/equity of 2016:0.3 it is within the recommended range(<0.75)
  • For the Total liabilities/equity of 2017:0.41, it is within the recommended range(<0.75)

    Why did I invest in this loan?
    • All current ratio,quick ratio and total liabilities/equity ratio meet the requirement,hence invested in it
    Repayment schedule?

    link on how too read the effective interest rate for moolahsense:

    Monthly interest rate:interest/start balance=$1.50/$100=1.5%(Percentage conversion must *100)
    Effective interest rate:1.5%*12=18% same as the target interest rate at 18%(see the top of the post))

    From the above picture, you can see that the Net repayment is at $9.08 instead of the $9.83 that I have mentioned above at the working capital, hence I will do a calculation here again

    1-month repayment:$9.08
    12-month repayment:$9.08*12=$108.96

    $100(the amount I put in this campaign=100%

    The target interest rate as you can see in my above post is at around 18%P.A, after taking into account of the tenor rate being 12 months, which is 18 % and comparing it to 8.96% its almost 10% difference(i shall call this net interest rate instead)in this campaign. To conclude, this means that if you invest in a (18%P. A) high-interest rate campaign in moolahsense which has a tenor rate for 12 months, you will get only about 8.96%

    The reason for quitting moolahsense is because I prefer investing in stock and also some of the delinquent payment via moolahsense, that's why this is the last campaign in moolahsense, who knows i will return in the future?

    Do look out for future update on this blog!

    Thursday 18 April 2019

    (Post 85/Year 2 week 22)Learning investing/trading together part 17: Practical Guide On Financial Planning (By Tan Kin Lian) part 3

    Continuing on from part 1 here... and part 2 here...

    21.Structured Product
    • Simply avoid products that are complicated to understand, unless you have a lot of time on your hands
    22. Unregulated Investment Product
    • MLM, wine investment etc, you name it, avoid it!
    23.Investing In A Life Annuity
    • The book recommends putting your money in a life annuity, but I think you are better off parking your money with SSB(Singapore Saving Bond), which is backed by the government and either in the STI ETF or Singapore ABF bond
    24. Writing A Will
    • Definitely a must for retirees!
    25.Experience Of Consumer
    • various scenario of people with a different financial and family background,nothing much here

    26.Commonly used words and what they mean

    Annual management fee
    • This is the fund management fee, charged by the fund manager to manage your fund
    Benefit illustration
    • Shows the benefit you get from the insurance before you sign the dotted line
    • Do read carefully, if in doubt refer back to the company
    Bid price
    • The selling price of your stock 
    • A bond is like a loan
    • When you "buy" a bond, you effectively "lend" the government or company some money, in return for some interest over the next few years
    • The ability of the government or the company to repay this interest is known as the creditworthiness of the government/company
    • A common measurement is this creditworthiness is the credit rating of the government/company(e.g the bond is rated AAA)
    • A bond issue by the government is a government bond,a bond issue by the company is a corporate bond
    Offer price
    • Price at which you buy the shares, also known as "asking price" or "selling price" or "buying price"
    Sales charge
    • the charge you pay initially when you buy a financial product
    • This is a paper which represents a unit of ownership in a listed company.
    • With a purchase of a stock/share, you own a small fraction of the company, depending on how many shares you have accumulated'
    All in all,that's is a quick summary of the book:Practical Guide on Financial Planning,in the next few post,we are going to learn on how to read financial statement which is useful for long term investor(and also short term investor aka traders),do look forward to it!

    Monday 1 April 2019

    (Post 84/Week 69) Just for Laugh part 1: 20 Wise And Funny Working Life Quote

    20 Wise And Funny Working Life Quote

    Image result for working life cartoon

    After blogging for personal finance for a year, I had the "feel" to blog something else other than the usual personal finance, hence I am creating a new segment for my blog known as chill and relax! For now, it would be some interesting jokes and quotes, so do look forward to this segment!

    Anyway, here are some funny working life quotes that I saw in magazines, Source: reader digest

    1. Keep track of what you do, someone is sure to ask

    2. Be comfortable around senior manager or learn to fake it

    3. Never bring your boss a problem without a solution, you are getting paid to think not to whine

    4. Long hours does not mean anything, result counts not effort

    5.Write down ideas,they get lost like good pens

    6.Always arrive at work,30 minutes before your boss

    7. Help other people network for a job, what goes around come around

    8. Don't take sick days, unless you are

    9.Assume no one can take a secret

    10. Treat everyone in the organization with respect and dignity, whether it be the janitor or the president. Don't ever be patronizing

    11. When you get the entrepreneurship urge, visit someone who has his own business, it may cure you

    12. Career planning is an oxymoron, the most exciting opportunities tend to be unplanned

    13. The size of your office is not as important as the size of your paycheck

    14. Job security does not exist

    15. Always have an answer to the question"what would i do if i lost my job tomorrow?"

    16. Go to the company holiday party

    17. Avoid getting drunk at the company holiday party

    18. Avoid working on the weekend, work longer on the weekday if you have to get

    19. Understand your skills and abilities to set you apart, whenever you have an opportunity, use them.

    Hope you enjoy reading!