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My money portfolio mid-year report

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After reading fellow blogger B’s article on his “Mid Year Goals Review”, I was inspired to craft this post. I think it is a good practice to note down the progress made in our financial journey because it can help to crystallize our thoughts and at the same time, provides visibility of our financial status. I am not the type of person who will track my daily or monthly expenses. Neither do I make long term planning for my personal finances. But I believe setting financial goals can help to chart our progress and highlight areas to improve.Health Insurance
Earlier this year, I reviewed my NTUC Enhanced Incomeshield and felt the need to upgrade my current Basic Plan to Private Plan. This was after I read from the news that public hospitals in Singapore are overcrowded nowadays due to the mass influx of foreigners. In fact, Changi General Hospital had to even set up temporary tents outside the hospital in order to address the shortage of hospital beds. I was told that if the beds in the public hospital are fully occupied, the hospital staff would transfer you to a private hospital for treatment. When this happened, you have no choice but to pay the bills for the private hospital stay, which can be really expensive. I hope this would not happen to me but I am not going to take chances. So I visited NTUC Income website and read up on their policy on pro-ration factor.

For in-patient, day surgery or Out-patient Hospital Treatment
Pro-ration factor on claimable bill
Preferred Plan
Advantage Plan
Basic Plan
Enhanced C
Private Hospitals/Private Medical Institutions
N.A.
65%
50%
15%
Restructured Hospital Ward Class A
N.A.
N.A.
85%
20%
Restructured Hospital Ward Class B1
N.A.
N.A.
N.A.
40%

I found out that if my hospital stay is higher than my entitled hospital and ward class, a pro-ration factor will apply. According to the table above, I will need to pay 50% of the claimable bills for a private hospital stay and 15% of the claimable bills for public hospital ward class A. As I have purchased their Plus Rider, the deductible and co-insurance payments would be waived off. Thus, I am thinking of upgrading my plan to Private Hospital, using my CPF Medisave to pay the premium. Since the fund in our CPF Medisave cannot be taken out, might as well use it to pay for the private shield!

Rating: B

Life Insurance
Life is full of uncertainties. As the sole breadwinner, it is important that my earning ability is protected. Many Singapore parents make the mistakes of buying expensive life insurance policies to cover their children instead of themselves. Actually they should realize that the aim of insurance is to provide for financial protection against unforeseen circumstances which could destroy our earning abilities. So from this perspective, it is not necessary to cover your children when they are still financially dependent on you or your spouse. For me, I am covered for $500,000, which I feel is sufficient enough to meet my family needs after my death. But I am also thinking of buying term life policy for my wife to cover terminal illness and death. However, all these plans would need to be discussed with my wife in details, taking into consideration our monthly budget and CPF savings.

Rating: B

Will
Last year May, I wrote an article on the importance of making a Will. In the absence of a Will, your assets will be distributed according to the Intestate Succession law. The rules are rather inflexible and sometimes, your estate might not be allocated according to your wish. That is, your money might not go to the people whom you feel need it most. For example, if your wife and children are financially independent, you might want to provide for your elderly parents instead. However, things can be really tricky if both you and your spouse die at the same time, leaving behind young kids who are still not financially independent. In such scenario, in the absence of a Will, the guardian(s) for your children and your assets may not be executed according to your wish.

I have procrastinated on making a Will and have completely forgotten about it since last year! During a chat with my colleagues this week, I found out that they both have made their Wills. They have paid about $500 to engage their lawyers to make their Wills. Technically, if you are 21 years old and of sound mind, you can draft your own Will. However, in doing so, the risk is that your home-made Will may not be valid. Therefore, it is important to seek the help of a lawyer who can assist in drafting your Will in accordance to Singapore’s law. High time for me to work on this item!

Rating: F

Household Debt
My current debts are my housing and car loans. After some discussions with my wife, we plan to pay off our housing loan by next year. As for the car loan, the outstanding amount is not significantly large as it is a second hand car. So there is no merit in paying off the car loan as soon as possible because I still prefer to have cash on hand. In addition, I settle my credit card bills on time every month and thus, do not have outstanding credit card bills. So overall, my current debt is manageable and under control.

Rating: B

Career (Active Income)
My active income is still derived from my day job. I love my job but of course, like many Singaporeans, wish for a higher salary. I suppose inflation has made things very expensive and jack up the cost of living in Singapore. To sustain a modest lifestyle here, our salaries must be able to peg to the rate of inflation. Due to my promotion last year, I barely managed to save 20% of my take home pay. I am looking at the salary increment for this year and thereafter, review my monthly budget. One thing for sure is that I am not going to take on a part-time job to boost my house-hold income because I want to spend quality time with my family. My day job is already draining up most of my energy and I see no point in having additional active income streams at the expense of my family time. So the strategy to make more money is to focus on my passive income streams.

Rating: B

Passive Income
Since last year, I sold off all my shares as I felt that many counters in the SGX were over-valued and not worth investing. Thereafter, I started to do research on precious metals and accumulate bullion. Gold has not disappointed me – the value has risen 10%. I don’t intend to sell off my bullion any time soon as my intention is to hold for the long term.

My main source of passive income is actually from blogging – I made about $1000 from this blog for the first six months of this year. The money came from product reviews, advertisement fees for banner displays and affiliate programs. Not a significant amount of money, but sufficient enough to supplement my active income. I am happy with the results, enjoy blogging and would continue with this passive income strategy going forward.

Rating: B

Cash flow and Emergency Fund 
Although many people are convinced that an emergency fund is necessary, many still procrastinate building up such fund. Common complaint is that the money would be sitting in the bank and not fully utilized. Majority of the people also think that they can borrow against credit cards or credit lines. If you are gainfully employed, there is no doubt that you can easily borrow money from the bank. However, if you are retrenched, getting access to credit is going to be difficult.

I have set aside a six-month Emergency Fund to provide a reasonable safety margin for my loved ones. Due to the competitive job market, I find that it is not easy to secure a job if I were to be sacked or retrenched from my day job. So I am not worried about the returns because the purpose of this fund is not for investment purposes. Its purpose is provide insurance against life uncertainties.

Rating: A

If you like this article and find it useful, please share it on your Facebook account! In addition, I look forward to any comments from you.

Magically yours

REITS Master Class

Reits Masterclass
Updated: January 10, 2015 — 2:45 pm

8 Comments

Add a Comment
  1. Hi Gerald,

    Your report card looks good. Wow! So you’ve sold ALL your shares and invested solely in bullion now? No diversification at all?

  2. Hi Gerald,

    I think your review provides a good personal finance review framework. I think I may use this for myself and my wife.

    Given that you are the sole breadwinner, I think you should have more cover for yourself. What I think should be the coverage would be total liabilities, eg debts such as housing and car loan, and how much your dependents would require before they become financially independent. For example, if you have a child who is 1 year old and becomes financially independent at 25 years old, your coverage should be how much would your child needs over the 24 years. For girls, I think it’ll be when they reach 23 years old given that they do not need to serve NS. You may want to consider term insurance to increase your coverage.

    Also, I strongly advocate integrated shield plan (private hospital) for everyone. So, you should also cover your wife and other dependents with health insurance too.

    Just some thoughts.

    Best regards,
    naro

  3. Hi Gerald

    Your report card looks solid on all fronts. I don’t think you have any major worries since you’ve covered yourself all enough.

    Regarding your will, does that mean that you would like to have them distributed differently from the estate law? E.g you would like to include your parents in the mix?

  4. Hi Richard,

    I have sold all my shares but I did not invest all my monies in bullion. Only 5% in bullion.

    Regards,
    Gerald

  5. Hi Naro,

    Yes I got bought Aviva SAF Term insurance, one of the best value for money insurance!
    Indeed, I have been trying to persuade my wife to take up the private hospital shield plan.

    Regards,
    Gerald

  6. Hi B,

    My only concern is when both my wife and myself were to passed away together, the distribution would not be according to our wishes. You brought up an interesting question which I would be addressing in my next article.

    Thank you!

    Regards,
    Gerald

  7. Hi Gerald,

    Aviva SAF Term is really good value for money!!

    Medical fees are not cheap and can be a huge drain on finances.

    Regards,
    Naro

  8. hi for your investement in gold bullions, did you buy physical gold bars from bullionstar which you have mentioned on your blog? would the cost incurred to store these gold bars be high and how liquid is this investment?

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