I spend a lot of time thinking.
Some say I am a thoughtful person.
However, some say I think too much.
We are all wired differently, right?
During “Evening With AK And Friends 2025,” something that kept popping up could be explained as such.
I said having money to invest with was not enough.
We must have the right mindset and the right framework for what we want to achieve financially.
Our methods and our motivation must match.
So, I shared the pyramid which I use to help ensure portfolio stability, and at the very least make sure it does not sink to the bottom of the ocean and is lost forever.
Having the right mindset is also very important.
Being prudent with money is the first and most important step as we need capital to invest with.
Being patient and pragmatic is useless if we don’t have the capital to begin with.
Patiently waiting for opportunities.
Being pragmatic to know how much we should be investing in something.
Someone asked what gave me the courage and conviction to buy into REITs big time during the GFC.
I remember in reply to another question, I said we must know what we are buying.
If we didn’t know what we were buying, then, we wouldn’t know if we should buy more or if we should sell.
We could panic and sell when the price plunged instead of buying more, for example.
I used the example of Saizen REIT and said I was sure their portfolio of assets was worth more and that there was a strong demand for them.
When they sold some of the buildings to pay down debt as required by their lenders then, they were able to sell them at a big premium to book value.
Mr. Market was feeling very pessimistic about the REIT and turned a blind eye to that.
The GFC was really a credit crisis.
Some REITs like AA REIT could not get their hands on loans.
In the case of AA REIT, a white knight came along to recapitalize the REIT.
It was controversial and very ugly but it was the only practical way for the REIT to survive.
The white knight was not altruistic, for sure.
It was all about making money and with so much money involved, they would try to make sure the REIT delivered.
So, what did I do?
I got on the boat with them.
Be pragmatic.
I also mentioned Lippo REIT during the event and how I was able to get a 25% distribution yield back then.
Indonesia was one of the very few countries that did not go into a recession during the GFC and the Rupiah was relatively strong then.
Indonesia didn’t rely on external trade much.
Their domestic economy was 60% of their economy if I remember correctly.
The country’s urban population still went to malls and they didn’t have as many big malls back then.
The malls weren’t going to shut down with demand that high.
With a 25% yield, I would have gotten back my money in 4 years.
Of course, some older readers might remember I sold more than half of my investment later for a 200% capital gain when Mr Market recovered from its depression.
That was the one year I blogged about massive capital gains from investments on top of passive income.
Be pragmatic.
I also said that I had the benefit of advice from a senior investor in real estate who said to be brave.
He said the market was behaving as if the buildings were being abandoned.
Still, we must do our own research to verify which I did.
Be brave but don’t be foolish.
Don’t borrow money to invest with.
Silly to risk what we need for what we don’t need.
Don’t follow “gurus” blindly.
Don’t ask barbers if we need a haircut.
Educate ourselves and trust ourselves more.
We cannot get it right all the time, for sure.
However, if we are right most of the time, we should do well enough.
In the 15 years after the GFC, people got used to low interest rates.
REITs got used to that too and many borrowed too much and were way too optimistic.
We want to avoid being too optimistic and being too pessimistic.
Be pragmatic.
When some were saying buy Suntec REIT, I produced a video on Suntec REIT on how much it has changed from the time I invested in it donkey years ago.
Therefore, contrary to what those influencers said, I said I wouldn’t buy Suntec REIT.
A few years back, so many influencers were saying buy Eagle Hospitality Trust and I produced a series of blog posts on why I wouldn’t touch it.
Do our own research.
Someone in the audience said my blog was hard to read and he preferred my videos.
I think the truth is more and more people don’t like to read.
Maybe, this is why in a recent international study, Singaporeans scored so badly in composition and comprehension in the years after leaving formal education.
Outsourcing isn’t always a good idea especially when it affects our personal development.
We can listen to what YouTubers have to say but don’t start relying on them for directions.
Alamak.
Nagging again.
Primary objective of this blog is to better answer a question posed during the event.
As I grow older, my brain dulls.
It takes more time for me to recall all things I want to recall in reply to some questions.
It is quite sad when I think of how I was sharper and more articulate before.
The nagging just happened unintentionally.
If AK can do it, so can you. 💯
