On 18 October, I shared my thoughts in a blog on growing passive income in an environment of heightened inflation and rapidly increasing interest rates.
If you cannot remember or need a refresher, here it is:
Growing passive income: Equities, CPF and bonds.
I submitted non-competitive bids for 6 months T-bills for both auctions in October.
The cut off yields were 3.76% and 4.19% respectively.
I will be submitting non-competitive bids for 6 months T-bills for auctions in November and December too.
This is because I expect their yields to be much more attractive than 6 months or even 1 year fixed deposit interest rates offered by the banks.
Cut-off yield at 4.6% p.a. next?
After all, the U.S. Fed is expected to hike interest rates in November and again in December.
I would avoid long duration bonds in such an environment of rapidly rising interest rates.
For sure, I would avoid bond funds.
If you are new to my blog or if you have forgotten, here is a refresher from my YouTube channel:
Remember, no one cares more about our money than we do.
Do not ask barbers if we need a haircut.
If we are not overleveraged or overly leveraged, we don’t have to fear rising interest rates.
We have not been swimming naked and don’t have to fear what the receding tide might reveal.
Yes, I know. Bad AK! Bad AK!
If we are invested in bona fide income generating assets and if we are getting a share of the income, there is really no need to panic (as long as we have a good handle on our expenses.)
The sky is not falling.
We will still enjoy some level of cash flow even during tough times.
This is what ultimately matters.
Simply, it is to keep us afloat.
Related to this:
Simple investment wisdom keeps us afloat.
Unfortunately, it sometimes takes a crisis for some people to realize that reliable and meaningful cash flow is one of the most important things to prioritize in investing and personal finance.
Getting rich slow is not sexy but it works.
Readers who have been following my blog for a long time might remember that I said this:
“Gradually, as our passive income grows from a stream to a river, our earned income could become something less critical.”
Source: Best insurance in life.
If AK can do it, so can you!
1. SSB is 2.44x oversubscribed.
2. Daiwa Logistics Trust: FX and TA.
3. CLCT: Staying defensive and Chinese banks.
If you want to find out more about T-bills, this is a good resource by DBS: Apply for T-bills.