How to Travel to 50 Countries While Building A Passive Income Portfolio: Money Diaries #3

In this week’s Money Diaries, we speak to Ken Tan. Ken is in his 40s and works as a career coach, trainer, and consultant. He is also an avid traveller who has visited 47 countries and 147 cities so far, and is on track to visiting his 50th country this year. Due to personal reasons, Ken has chosen not to disclose his salary range. 

The following is a deep dive into his personal finance habits and investment approach.

Money Diaries #3 - How to Travel to 50 Countries While Building A Passive Income Portfolio

How would you describe the life stage you are in at the moment?

I am married without kids and living in my own house. 

Living situation: are you renting, staying with your parents, or do you own a home, etc?

I am staying together with my wife in a 4-room HDB flat.

Can you provide a breakdown of typical expenses in a month?

The way I break down my spending is based on broad areas and not by category. This is because I use my total expenditure against total income to get a broad sense of whether I am spending too much. 

Currently, I am a Lead Career Coach, Trainer and Consultant in my private practice. My coverage includes Asia and Europe. My income is dependable on a mix of projects that include training, consulting and advisory, and also encompasses coaching assignments in the field of career development and soft skills.   

Hence, I will break down my spending based on my past employment history when I used to draw a fixed salary from my full-time work in regional business development. 

My spending is around 35% of my net salary (i.e. gross salary less employee CPF). This spending covers both fixed expenses (defined as insurance expense, household expenses, and money given to my parents), and variable expenses (mainly food and entertainment).

Fixed expenses make up less than 8% of my net income while the variable portion makes up the remainder. 

Estimate of how much you save every month.

I save around 35% to 40% of my net salary.

What are your financial/investment goals?

My financial goal needs to be measurable and clear-cut. That is to hit a passive income flow in the low-to-mid four-figures every month from dividends and savings. This is based on a 6% annualised yield.

How close/far would you say you are from your financial goals?

I have attained more than 50% of my goal.

Describe your investment approach / What steps have you taken or are taking towards achieving these goals? What are some challenges you’ve faced?

To hit this passive income objective, I plan to purchase more quality S-REITs yielding 5.5% to 6% on average. 

“Quality” in this case refers to REITs with good sponsors such as Mapletree Investments Pte Ltd and CapitaLand Investment Limited. 

I also accumulated Singapore Savings Bonds (SSB) at an average yield of 3.09% per annum. 

I have purchased other types of bonds at an average yield of 6.3% per annum. In addition, quality non-REIT companies and banks are providing me with a minimum 5.5% net yield (i.e. net of withholding tax or WHT). 

Some examples will be Hong Kong H-shares (which have a 10% WHT on dividends).

The breakdown of my investment portfolio is as follows:-

• Bonds 41.3%
• REITs around 13.8%
• Listed companies (Singapore, US ADRs and technology stocks + Hong Kong stocks) around 12.4%
• Private equity around 5%
• The remainder is parked in cash

I am taking steps to achieve my passive income target by accumulating more dividend-paying companies and buying more quality S-REITs. 

The idea is to sell my holdings if there is a chance for capital appreciation, so my philosophy is to invest for a mix of growth + dividends and to hold these stocks over the long term. 

Growth can be achieved by investing in big tech (i.e. Magnificent 7 stocks) as well as two overseas turnaround companies and 1 investment with high growth potential. This business has a 3-year revenue compound annual growth rate (CAGR) of 30%, and is profitable with a 27.3% net margin. 

My aim is to achieve moderate to aggressive growth so that the value of my portfolio rises, giving me more capital to invest in dividend-paying stocks.

I rely on active portfolio management to maintain a balance between growth, and dividend accumulation.

Any capital appreciation of my growth stocks will be used to accumulate more dividend-paying assets to reach my eventual passive income target.

Read also: 

• Best Singapore REIT Screener

• Best Singapore High Dividend Stock Screener

• Guide to Bond Funds in Singapore 

• Guide to Private Equity

How would you describe your mindset with regards to money? Describe some of your money habits and beliefs.

My mindset is simple – to find a balance and spend in moderation. It’s important not to be too miserly and hard on myself, and to spend on my life’s aspirations. 

I love to travel and have visited 47 countries and 147 cities, towns and key areas across Asia, Europe, and the Middle East. 

I do not indulge in luxurious travel experiences – meaning I do not spend on fine dining or expensive accommodation. The idea is to explore new places and soak in their culture and history. 

My aim is to gather knowledge of new cultures and meet different people from all walks of life. These trips allow me to experience the joy of gaining knowledge of the world around me and along the way, I also experience the beauty of nature through hiking. 

Travelling is thus the area that I spend the most on. I do not have any monetary limit on my spending but know that I am willing to spend on myself to create lasting, beautiful memories.

I got for unique travel experiences, which are unlike what a typical traveller seeks. 

For instance, I visited Kronborg Castle in Denmark to understand more about its cultural heritage and history. I also love to engage in activities that help me understand a country and its people better. 

Another example was a land tour I took in Oman to soak in the culture there. I’ve also visited Bahrain and enjoyed my time there. 

Some of these travel experiences may cost a bit more (depending on the location) but I am fine with the additional expenses as I can gain deeper knowledge and meaning in the world I live in.

Is there an experience(s) that has shaped your relationship with money? How has it influenced your financial decisions?

Yes, the 2008-2009 Global Financial Crisis (GFC) shaped my investment experience and my financial decisions. The GFC taught me that money can buy aspirations and that was also when I made significant sums from my investments. For instance, Keppel Land was privatised at S$4.60 back in 2015 and I was handsomely rewarded for my patience. 

I tripled my investment in Citibank’s stock during the depths of the GFC because I managed to purchase it at US$1.07 per share. This is money that I was willing to lose but I ended up making a tidy profit.

I also sold off Ho Bee Land Limited back when the company was developing the Sentosa Cove project, making double my original investment. These gains have influenced the way I invest, which is to put my money down in solid investments when there is fear and uncertainty. 

The key is to remain calm and not let emotions cloud my decision-making, and to have the guts to invest in beaten-down stocks that can rebound and provide me with attractive profits.

With the profits I earned, I spent it on activities and experiences that I could not previously afford. I also contemplated investing money to build a school for underprivileged children in Kenya. 

This is just one example of how money can be used for meaningful pursuits.

What is one money habit you struggle with the most? 

The hardest expense to cut down on will be travel expenses. Simply put, I can choose to spend less by travelling like a backpacker, but I don’t want to deprive myself of the experiences I can enjoy. 

Hence, my travel expenses sit somewhere between a budget and luxury traveller. Travelling to farther places will naturally cost more money so I will need to accumulate more money to fulfil my ambition of visiting more places around the world.

My aim is to visit 50 countries by this year (up from 47). To do so, I will need to actively manage my portfolio to obtain healthy returns so that these can fund my travels.

Is there a financial decision you wish you could do over? 

Yes, back in the 1990s, I wish I had purchased an investment property. Property prices have appreciated so much since then and I could have realised a significant sum had I parked some money in this asset class.

What are you most concerned about when it comes to personal finances?

I tend to be not too worried about personal finances as I believe in living life to the fullest. To me, quality of life is important and I am willing to spend to enjoy myself.

If you won S$1 million in the lottery tomorrow, what would you do with the money and why? How would your spending/lifestyle change?

If I won S$1 million, I would donate S$200,000 to charity, invest S$500,000 in dividend-paying stocks, and save the remaining S$300,000.

In terms of lifestyle, I will use the money to travel more and go to countries I have not visited yet. I intend to draw around 25% of the S$300,000 for this purpose. 

As for my investment portfolio, it will be geared towards my investment goals of achieving a low to mid four-digit passive income per month. 

What is one practical financial tip that has been useful in your own financial journey?

It is to create my own financial monitoring sheet. I use this spreadsheet to track my monthly income and expenditure and it also has details of my investment portfolio (of listed stocks) and private equity investments. 

What is a personal finance related lesson you’ve learned that you think others might benefit from?

I feel it is the ability to be open about different asset classes and to learn more about them. Examples include equities (listed and private), property, bonds, and the like.

But, remember not to diversify just for the sake of it. The idea is to learn broadly about different asset classes to determine which fits your financial objectives. Armed with a plethora of options at your disposal, you can then better structure your investment portfolio to achieve your investment objectives.

Key Lessons

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