Year: 2012

How to be rich in Singapore

Keppel REIT

 How to be rich? How to be rich quick in Singapore?

A few months ago, I wrote an article on how to become rich in Singapore. The articles has since garnered more than 2500 page views and remained one of my most popular postings. The article has also received several feedbacks from my readers. I suppose at the back of most Singaporeans’ mind, most of us wish to know what is the shortest route to being rich in Singapore. I shall attempt to discuss more about this topic.

I always pondered aloud, what is the defintion of being rich in Singapore? Does it mean setting a monetary target of $10 million in the bank or does it refers to the state of the mind? Just yesterday, I read an article from a local Chinese newspaper about the plight of a senior engineer who was addicted to gambling. The article stated that the engineer earned more than $10,000 every month but owed gambling debts of more than half a million. Unable to withstand the constant harassment from loan sharks, the engineer committed suicide. For most Singaporeans, a monthly salary of more than $10,000 would probably make us among the top earners in Singapore. Yet apparently for this engineer, his monthly salary was not even enough for him to satisfy his gambling addictions. So I suppose the moral of the story is that it is not how much you owned or earned that make you feel rich. Rather, being rich is a state of the mind. You can have a super-scale salary of $10,000 but still struggle financially if you don’t manage your personal finance wisely. You can have $10 million in the bank but ultimately this money would evaporate if you were addicted to gambling.

SG Wealth Builder

So what is the …

Your relationship with money

CPF nomination

Different people have different concepts on money. Some people define being financial free means not having to work or free from debt. Some people deemed being financial free as doing what you enjoy for a living.

Whatever the case is, it is important to define what your relationship with money is. Is your relationship with money based on fear, greed or ignorance? I came to realize that if we do not establish our relationship with money early on in our life, then we will forever have unfinished business with money. Allow me to elaborate.

Most people’s relationship with money is based on fear. We are socially conditioned to think that having a job provides us a secure income and that having a job is the only means of bringing food to the table to feed the family. However, ironically, very often we fear of being retrenched by the company during economic downturn.

We also fear of being sacked by the company when we reached our fifties and could not find another job to support our families. It is this sense of insecurity that most of us hold on to our job. To overcome this fear and insecurity, there is a need to internalize what your passion and aptitude are.

Money

Only if you capitalize on what you are good at and what you like to do, then can you excel in your job and create a niche for yourself. If you are good and always in demand, then you need not worry about being sacked by your company. Even if you are being sacked, if you have niche skills, you can always set up your own business.

Another form of negative relationship with money is greed. If you are obsessed with money, it can become detrimental to many aspects of your …

Creating Sources of Passive Income

financial freedom

Lately, my wife has been asking me what does passive income mean and how to create our own sources of passive income.

To most working adults, the concept of passive income can be quite alien or new, especially for those who are not financially educated. This is because most of us were brought up with the conventional thinking that we should study hard and then secure a good job that pays well. There is nothing fundamentally wrong with this traditional thinking but following this route will probably not set you on the path to financial success. In today’s context, with so many graduates (local and foreign) flooding the market, you need something special in order to be ahead of the peck.

Coming back to the main topic, passive incomes are sources of incomes which do not require you to actively work or labor in exchange for monetary rewards. Effectively, you are making money even when you are sleeping. Of course there are trade-offs to make. When we are working for a pay check, we are exchanging our labor or time in exchange for monthly salaries. Likewise for passive incomes, we are exchanging intangible commodities in return for monetary rewards. For example, in Singapore, one of the easiest way to make passive income is to sublet empty rooms in your HDB flat. In exchange for the rental fee, you sacrifice your personal space. Another example would be dividend investing. In exchange for principle capital spent on the stocks, you collect dividend every year from the companies.

money
The beauty of passive income is that it allows you to focus your energy to actively work for your main income and at the same time provides you additional sources of incomes. Some of my readers have lamented that “its easier said than done”. …

My views on the job market in Singapore

Leaving Singapore

It’s that time of the year again when local fresh graduates enter the job market. I still remember the trepidation and fear I had when I graduated 7 years ago.  On one hand, I was pretty excited about having an income, being financially independent from my parents and having my own purchasing power. On the other hand, I was also worried about securing a job that comes with great prospect and good pay.

Many jobs but one career
First, the good news for fresh graduates: in this day and age, it is okay to job hop. The older generation of workers tend to believe in loyalty to company and would not jump ship for higher pay or job title.

In today’s context, employee loyalty is longer relevant in view of shorter market cycles. Nowadays, companies are quick to retrench workers during downturns, so if you overstay in your company, you might be the next one on the hit list. So it is alright to switch several jobs during the first few years of your job journey. But make sure you gained enough competencies, skills or niche knowledge from each job taken.

job market

For fresh graduates, nothing is more important than gaining work experiences. Don’t be trapped in your own comfort zone. Jump if there is a need for career progression or pay rise. Remember, you can have many jobs in your job journey but ideally should have only one career. For example, you can be a teacher, head of department, principle, private tutor, etc, but ultimately, its a career in education.

You plan your own destiny
If you belong to the category of workers who believe that your boss or company plays a pivotal role in your career development, I think its time you wake up to the harsh reality. …

Difference between miser and smart spender

BullionStar

I always like to browse through some of my fellow blogger’s postings. I find many of their postings informative, useful and at times, engaging. In fact, their articles help to shape my current philosophy on life, personal developments and investments. I am just so glad to have embarked on this learning journey because it just keep making me become a better person. In this article, I am touching on the difference between miser and smart spender.

One of my favorite blogs is Janny Cole’s “How to be Rich, Happy and Free from Scams”. One unique aspect of her postings is that she covered both United States and Singapore financial tips and news.

In her latest posting, I learned something new again and that is the difference between miser and smart spender. I agreed with her wholeheartedly that time is money and that if your hourly income is more than what you would pay for someone to do the household chores, then hiring domestic helper makes perfect financial sense.

Smart spender

Working or doing business in Singapore is already so stressful and at the end of a busy tiring day, the time saved on doing household chores can be invested to relax, build bond with family or brainstorm new investing ideas.

I like that part about outsourcing household chores in order to spend time on planning our finances or investment strategies. Most Singaporeans are so engrossed in their daily lives and work that many fail to take time off to reflect on our present financial situation. I am no exception.

Being the sole breadwinner and I spent long hours at office. At the end of a long hard day, I have only time for my family. I consider my wife and my baby daughter the greatest pride of my life and they mean …

What does it mean to achieve financial freedom

CPF nomination

In my previous post, one of my readers, CreateWealth8888, commented that my ex-colleague might have achieved financial freedom and therefore resigned from my company without a job.

Well, I am not going to dwell on the issue of his resignation reason but I think CreateWealth8888 brought up an interesting topic and that is being financially free in Singapore.

Everyone has his own definition of financial freedom. For me, being financially free in Singapore means you need not work but can still live comfortably without having to worry about the bills. And I think this is an important fact.

Most Singaporeans derive their incomes from their jobs or businesses. It is crucial that after we retired, retrenched or resigned from our jobs or businesses, there are financial mechanisms or means in placed to ensure that our quality of lives do not suffer as a result of the lack of mainstream income.

salaries
There are a few who became rich overnight after striking lotteries or inheriting assets, but normally this sort of wealth do not last. So essentially, being financially free does not mean you have to be rich. But what you need is to equip yourself with the know-how on how to kick-start your life journey to financial freedom.

The reason why I used “journey” is because achieving financial freedom is a continuous learning process that requires you to learn and earn. It is hard-work and requires you to remain curious on different aspects of life. In return, you gain a life-skill that can potentially bring you much intellectual and financial fulfillment.

So what are the key aspects of financial freedom? Well I am still learning the process but perhaps would like to share my thoughts with the readers. The first key element of financial freedom should be having safety nets in …

The peril of quitting without a job

LPA

Recently one of my colleagues tendered his resignation letter. I do not know his actual reason for resigning but apparently he was unhappy that he was overlooked for promotion, so I supposed he quit to register his unhappiness. As he resigned in an abrupt manner, I can only postulate that he has not found a new job. He is 40 this year, a bachelor and held only executive positions throughout his career. He does not have management experience nor post-graduate qualifications.

Career suicide
I am no HR expert, but I think my ex-colleague just committed a career suicide. Quitting at the age of 40 is a bad, bad career move. Even though he is single, with no family commitments, given his age, he may not be able to find jobs that pay him similar salary.

This is because firstly, his bargaining power during salary negotiation for his new job will be greatly reduced as his prospective employer will know that he has no income.

Secondly, quitting without a job will surely not go down well with his prospective employer who may wonder if he has character issues. In this day and age, organizations look for employees who are team players and can fit into their organizational culture.

job

In this respect, I think my ex-colleague will have a hard time justifying his move to his prospective employer during interview.

Thirdly, even though unemployment rate is still low in Singapore, finding a job that fits his experience, expected salaries and qualification may not be easy. This is especially so in Singapore where there are just too many foreigners and PRs fighting for similar position. Most of them have similar qualifications and experiences but command lower salaries.

Quit for the right reason
People quit for various reasons. Some quit because of their bosses, …

Investment Insight: Fixed Income Securities

structured deposit

As mentioned in my previous posting, I am sharing my views on fixed income securities, which refers to financial products that offer investors a return in the form of fixed periodic payments (coupon) and the eventual return of principal at maturity. Example of fixed income securities include government bonds and preference shares issued by companies.

Benefits of Investing in Fixed Income
Historically, the returns of stocks and bonds moved in opposite directions at the same time. Investors can reduce their portfolio risk through diversifying their investments on fixed income securities, which offer investors a predictable income stream during times of market volatile.

investment

Fixed income securities are very transparent in the sense that investors would know how much interest they can expect to receive, how often they will receive it and when they can get back their principal investment monies. Investors can also check the prices in real-time and the volume information from SGX website and their broker’s trading platforms. Fixed income securities also operated like shares and investors can buy and sell them through broker anytime during trading hours.

How does it works?
Issuer borrow principal amount from investors and repay the money at maturity. In exchange, investors receive coupons (interest payments), usually paid in twice-yearly installments. For example, a $1000 bond paying $45 a year as a $45 coupon, or a coupon rate of 4.5%. Investors can also choose to dispose the security for capital appreciation. 

What are the risks?
Like all other investments, fixed income investments is not risk-free. The bond’s value will fluctuate with market conditions. For example when interest rate rise, bond prices fall. However, you need to be concerned with market risk only if you decides to sell the bond before maturity date. There is also a possibility that issuer may not be able to …

The correct way to invest your money

Manulife US REIT

In life, besides working hard for money, you have to also ensure money work hard for you. This is especially so in this era of low saving interest rates. Currently the inflation rate is about 4 to 5% in Singapore and the bank saving rates are below 1%. So effectively, your purchasing power is eroded. So how do you go about beating the inflation and make sure that money is not slipping away from the pocket? The key is to invest your money correctly.

When I mean the correct way to invest your money, I do not mean that we should immediately  take out all our money from the bank and start investing in various financial instruments. Rather, we should do our homework first before making any moves. Always remember the mantra “Don’t be in a hurry to lose away your money”.

invest

I always believe that there is a systematic approach to investing and that laying a strong foundation is crucial for every investors. We should educate ourselves the way of financial wisdom, preferably at young ages, so as to give ourselves a strong head-start. Remember, the journey of investment is a long one and there are always many new things to learn, no matter how established you are. So, it’s essential that we pick up new knowledge along the way on how to invest.

Friends around me always lamented that to invest is to gamble. I bet to differ. Investing involves taking calculated risk and making tactical move. You can manage the outcome of your investments through analysis and doing homework. For gambling, most of the times, the outcome is beyond your control. For investment, you can reduce risks through diversification across different asset allocations, such as stocks, bonds, gold, ETF, REITs and property investments.

My personal view on …

Dangerous Investment Advice

One of my readers, Createweath8888, commented in my previous post that in this era of low saving rate, it is wiser to “invest well with most of our saving” instead of putting our money in the bank. Whilst I respect his view, I consider that a reckless financial advice. Simply because investment is never risk free. There is always a risk that you could lose a portion or all of your monies.

All of us must have a certain level of saving, then can we think or talk about investing. Depending on your comfort level, the amount of savings you accumulated can provide crucial safety net in times of crisis. Nowadays, with shorter financial cycles, you never know when retrenchment will strike. If that occurs, how prepared are you? Bear in mind that when you have no job, money will stop flowing into your pocket, but expenses will never stop. In such situation, I bet you would have appreciated that “Cash is King”.

It’s not that I disencourage investing. In fact, I agreed that we must all learn to invest in order to beat the high inflation rate. But before we jump the gun and pour our hard-earned savings into investment products, we must first build our fundamentals and learn to walk before we try to run.

I consider savings as an important building block of our financial asset. Without it, you will not have holding power to ride out the highs and lows of the market. It is also important that we build a diversified portfolio consisting of bullion, cash stocks and property so as to spread out the risks.

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Magically yours,

SG Wealth …

The magic of compounded savings

CPF monies

Many people underestimate the magic of compounded savings. Two years ago, when I was wooing my wife, I gave her a plastic piggy bank as an anniversary gift. I noted back then that she had difficulty saving regularly because she needed to repay her student loan and supported her family.

So I gave her a piggy bank hoping that she developed the good habit of saving. She was pleasantly surprised to receive the gift and made a commitment to deposit only one dollar coins in it. Subsequently, I also bought one for myself and after we got married, we challenged ourselves who can save more.

savings

Recently, both of us decided to count the number of one dollar coins in our piggy banks as my wife’s piggy bank was filled to the brink. Before counting, it was obvious that I had lost as mine was only about one-sixth filled. Nevertheless, we were very excited to know how much she had saved over the last two years. In the end, we counted 2000 one-dollar coins for my wife and for me, its less than $200. Both of us marveled how much she had saved considering that she is now a full-time housewife with no income. When she was working, she don’t even manage to save this amount.

I suppose the amount of money that my wife had saved is nothing to shout or brag about. But the moral of the story is that it doesn’t matter how much income you earned or how much money you spent that determined the amount of saving you have.

Of course it is always a good thing to have high income, but at the end of the day, if you don’t make the conscious effort to save, you will not have much savings. Many people thought …

Attaining personal financial success in Singapore

funding

Some time ago, I wrote an article, “Three Ways to Become Rich in Singapore”. Recently, a reader commented that I made it sound so easy to become rich in Singapore. In this article, I would examine how to attain personal financial success in Singapore.

Striking it rich is never easy, especially in Singapore’s context. After all, if most Singaporeans are willing to toll 16 long years to obtain a tertiary qualification in the hope of securing a good job, what make you think that financial success can be achieved in a couple of years?

Success

The hard truth is that the route to wealth is never easy and the ideas which I mentioned in my post, “Three Ways to Become Rich in Singapore”, merely explore how we can become rich. It was never my intention to spread the belief that attaining financial success is easy. After all, I am not a self-made millionaire (yet) and making money really requires lots of hard work. In this respect, I think its worthwhile to share a little bit more about my thoughts.

No short-cuts
I belong to Gen-X and believes in hard work and sacrifices to attain financial success. Nowadays, the new generation of youth think otherwise and many of them believe in quick success with less effort. They were fascinated by success stories of Apple, Google, Facebook etc.

But the reality is that the founders of these companies went through much hardship and made lots of sacrifices to reach the present position they are now in. In life, unless you are born with a silver spoon, there are no short cuts to attaining financial success.

We must have niche skill and knowledge to exchange for incomes. How much you earn, depends on how competent you are in your area of expertise. That is …

The $100,000 Question

CPF nomination

Singaporeans who are contemplating a new car must be wondering if it is worthwhile to buy now. This is especially so considering the sky-high Certificate of Entitlement (COE). Despite the recent drop in the prices of COE, the entitlement to drive a new car on Singapore roads still remain very expensive. Buyers need to fork out at least around $100,000 for a new car. This is by no means a small sum, even for a big-ticket item. So let’s examine what are the factors we should consider before damaging our pockets.

Buy for the right reason
Most Singaporeans, especially those conservative and thrifty ones, consider cars as sheer liabilities, at least in Singapore context. They argued that public transport is excellent in Singapore and hence there is no need for a car. But I beg to differ. For some people, having a car can be an asset to their job or business.

For example if you are a housing agent, you definitely need a car to meet clients at different time and places. In addition, some jobs, especially those sales and marketing ones, also require candidates to possess private transport so as to meet clients.

money

On the other hand, some Singaporeans buy car because of family needs. Imagine if you have two school going kids and wife. Having a car enables you to have that little bit more of face time with your family and provides flexibility of sending/picking them to work or school. Henceforth, buying a car may not be a flawed financial decision, but that is if you buy for the right reason.

Plan your purchase
After convincing yourself that having a car is essential for you, the next course of action is of course to do a budget based on your monthly income. The easy way would …

How to find a good financial advisor

Integrated Shield Plan (IP)

Most experts recommend novice investors to engage financial advisor to help them achieve their financial goals. Yet how do we find someone whom we can trust? Over the years, I have met many financial consultants, some good, some down right bad. I would like to share with my readers some of my experience dealing with these jokers.

Title Inflation
Many of the financial advisers I met carried with them big titles like Associate Director, Vice President, Sales Director, etc. A lot of them were also quite young. I think many of them suffered from the mistaken belief that if they carry big titles, customers will respect them more and will be more inclined to buy from them. Actually I don’t care about titles when I look for a financial consultant. To me, titles are just job designation. But normally I would look out for someone who is a Certified Financial Planner. I would give the fellow slightly more face-time.

Insurance

Know your needs
Before you even sat down with the financial advisor, make sure you know what you need. Not all planners offer comprehensive advice tailored to your needs. Decide what you want and expect from the adviser. For example, last month, I was shopping around for a medical shield plan for my baby girl and invited a financial consultant to my home for a discussion. Instead of advising me on his company’s products, he enquired about the valuation of my home and asked about my pay cheque. I didn’t give him a split second chance and “thank you very much” within 20 minutes.

Find out how much they are paid
Don’t be shy to ask how much commissions or fees the financial adviser will collect from you. After all, its your hard-earned money and you have the rights to know. …

UOB Gold/Silver Saving Account

UOB share price

Two years ago, I wrote two articles on my investment experience on UOB Gold/Silver Saving Account. There were many comments and queries from my readers.

Firstly, I must clarify that I did not represent UOB when I wrote the articles and UOB also does not pay me for promoting their product. Secondly, I wrote the articles based on my investment experience. I had made some money from it and thus, wished to share with my readers.

I will not bear responsibility for any potential losses incurred as readers need to do homework before investing or alternatively, they should seek financial consultant’s advice before deciding for themselves whether to invest in this product.

UOB
Recently a reader queried the GST and fees chargeable for the transactions for UOB Gold/Silver Saving Account. Based on UOB’s website, there is no GST chargeable for transactions. As for the fees, they are indicated clearly in the website for both Gold and Silver savings. I would advise investors to confirm with the bank staff before you open a Gold/Silver Saving Account with UOB. Their customer service’s contact can be found in the website.

As I mentioned two years ago, UOB was the only bank that offered this scheme. And it still is. For this scheme, there is no physical gold or silver being transacted. Essentially, you are converting your deposits from money to gold/silver savings. The gold/silver savings is bench-marked to the gold and silver market prices. In purchasing gold/silver products, the investors must understand and acknowledge that:

a) Gold and silver market is very volatile
b) losses can be incurred from such investment
c) an investment in gold or silver provides no dividend yield or interest
d) prices would have to rise sufficiently over the investment period in order to yield a profit on sale

Good …

Manage your emotions in your investments

SembCorp Marine

In the investment circle, everyone knows the golden rule of setting targets for investments. But how many investors actually put that into practice when the crunch comes? After all, greed and fear often come into play whenever we make important financial decisions. To build wealth, you must learn how to manage your emotions in your investments

Investors often make irrational decisions, leading to losses in their investments. They sell their stock holdings when the stock market crashes and buy when the market booms. When they lost money, they blame their stock brokers, they blame the market, they blame the stock analysts. They blame the whole world except themselves. What most investors failed to realize is that the greatest investment enemy is within ourselves and that we failed solely because of our ego and fear.

investments

When I started investing as a newbie 13 years ago, I belonged to this category. I felt like a winner when I made money from my stock investments and a loser when I lost money. Over the year, my thinking changed as I read from self-improvement books, articles and magazines. I came to realize that managing your ego and fear is crucial to our decision-making and that when it comes to investing, it’s not about winning or losing the game. It’s about setting our personal targets and not let greed and fear rule our heads.

Gambling and investing are not the same. We are unable to manage the outcome of the former, but for the latter, we can always make wise decisions and produce a positive outcome. Control your destiny and grab the bull by its horns!

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Magically yours,

SG Wealth …

Enter the stock market now?

StarHub share price

The recent mini-correction in the stock market must have caused some jitters to many local investors. Most of us wonder whether the current Euro debt mess, which has been on-going for three years, will spark off a major world-wide stock market mayhem or taper off in a few years. My own personal view is that history will repeat itself all over again and that a major correction is coming, probably at the second half of the year.

During 2007-2008, my company announced pay adjustment for all existing employees and I remembered my pay was adjusted upwards by $550. The feeling back then was buoyant for everyone in Singapore. Fresh graduates got record high starting pay and people were making money in the stock market. Penny stocks were speculators favourite plays and volumes for these counters were extremely high.

Stock market

Then, reports of “sub-prime mortgages” started to surface in newspapers article. Most people just shrugged off this development in the United States. The issue dragged on for several months and soon imploded with the collapse of the Lehman Brothers. Of course, the stock markets tanked and caused world-wide mayhem. There was a U.S. Presidential Election and Obama was sworn in as the new President to deal with the financial crisis.

Fast forward to today, my new company announced a 15% pay adjustment. Last month, there was a penny stock rally. Recently, news paper reported that fresh graduates getting high salaries again, with Law graduates leading the pack. Reports of Euro debt crisis surfaced again and French has a new President. The recent developments look too similar to year 2007 – 2008 that I believe a major correction is looming.

Is it the ripe time to enter the stock market now? Get ready your investment monies to shop for bargains during the crash. …

The importance of knowing your life purposes

money advices

Are you going through the motions right now? Sometimes, we need to know our life purposes. After all, we only live once. Recently one of my colleagues attended a personal finance workshop arranged by my company. I was very interested to attend because the topics seemed very relevant to me but eventually I was unable to make it due to work commitments.

Over lunch, my colleagues updated me that the workshop indeed was very useful as it touched on various money issues in the local context, like CPF, hospitalization shields, life insurance and retirement plans. The instructor also gave tips on investments and the key concept of managing personal finances (budgeting, knowing the difference between “needs” and wants”).

OK, I thought to myself. These information and tips seemed rather useful but are actually quite fundamental stuff to me. Probably it could help a person become more financially astute but probably won’t enable him to become a rich person one day. But what set me thinking was a statement that my friend told me the coach wanted the participants to remember for life and that is: Always question yourself and know what are your purposes in life.

Life purposes

Knowing our life purposes is important. We must have goals in our lives, something that we hope to achieve one day. Money itself is only a means that can probably help us attain our goals faster. But even if we became rich overnight and yet do not have any meaningful goals in life, we will only be lost and empty in our hearts.

In fact, I have read numerous articles on punters winning multi-millions lotteries only to end up spending every single cent away after a few years. Ironically, most of these “lucky” souls ended up poorer than before they won the prizes. Therefore, …

A tribute to my Mother and Father

SPH retrenchments

Today is Mother’s Day. Me and my siblings planned to give her a treat but she felt that the restaurants would be very crowded today. So we postponed our celebrations to next weekend.

My mother belongs to the generation of baby-boomers. She is someone who don’t express love on their lips and believes in tough love, hard work and sacrifice. Mother is a great person although I am not close to her since young. This is because I used to be a very mischievous brat who liked to talk back. Of course she wasn’t pleased with that and I was disciplined by her numerous times.

One of my mother’s qualities is her love for my family. When me and my siblings were still studying in secondary schools, my dad suffered from a major stroke and was unable to work till now. It was a very challenging chapter in my family’s journey and we struggled tremendously to get by.

Mother

Mother took on part-time jobs to supplement family income and also looked after my dad and my elderly grandmother. Those were dark days for my family as money was really tight at home. Before the stroke, Father used to be the sole bread-winner. So you can imagine the kind of stress my parents went through, trying to support 3 kids and an elderly. It wasn’t easy and my parents quarreled frequently over money issues. Nevertheless, my mom became the de-facto head of the household and became a major pillar of support in the family.

Twenty years later, we managed to pull through and my siblings got married and eventually set up our own families. I guess tough days do not last but tough people do.

But deep in my heart, I will never forget those lean times and as I look back, …

Tan Kin Lian Blog

trading

Tan Kin Lian used to be my hero and I started this blog after being inspired by his blog. I like his online work helping to answer Singaporeans’ queries on matters regarding insurance policies.

Recently, I was reading Tan Kin Lian’s blog and came across his posting “Consumers who deserved to be ripped off”. I was quite angry when he made that comment because most people would find it difficult to understand the mechanism of the various insurance policies.

In the olden days, there was a lack of information available to the public for consumers to make informed choices. Thus, most of us would rely on our insurance agents to help us make the best financial decisions. In today’s Information Age, we can obtain information from online easily.

tan kin lian

Make no mistake, I totally agreed with him that we should all buy term policies and hospitalization plan for protection purposes. The rest of the money can then be used for investing or consumption.

But what I am unhappy was that he made all these comments to the public after he stepped down as CEO from NTUC Income in 2008. I have been a loyal NTUC Income for 13 years and bought 3 life insurance policies during Mr Tan’s reign as CEO.

I don’t ever recall him coming out and advocate people to buy term policies instead of life policies back then. In fact, he used to be the face of NTUC Income, until of course he stepped down as CEO. Because of him, I have bought three life insurance policies from NTUC Income. I wish he had made all these comments to the public back then rather then now.

This incident reinforces in my belief that I have a social mission to serve through this blog. My vision is that Singaporeans …

Baby bonus

investment linked policy

In my previous post, “Sentiments of a Singaporean”, one of my readers pointed out whether it is fair to burden taxpayers who are single and do not have children with heavy costs of baby bonus.

It is human nature to feel sour grape seeing others who have babies receiving monies from the government while you are ineligible. Henceforth, it is perfectly natural that they might feel jealous having to give monies to citizen who are entitled to baby bonus. After all, they themselves don’t benefit from it, while should they support such proposal?

However, if we are able to cast aside our narrow-mindedness and place national interest before us, I feel that spending the extra $4-5 billions dollars is totally justifiable. At least from the perspective of a Singaporean. After all, if we don’t implement any drastic measures to increase birth rate soon, we are going to end up paying even much more 10 – 15 years down the road.

baby bonus

People are our only resources. If we are unable to produce enough babies, there could be implications on our economy and defense. This is because in future, there may not be enough young adults to support ageing Singaporeans. We may also lack enough young males for national defense.

For sure, at the present birth rate, we are going to import more foreigners to support our economy. What will happen then? More competition for jobs, schools, scholarships and health-care facilities for Singaporeans who are currently “baby-boomers”, “Gen-X” and “Gen-Y”. In the long run, Singaporeans will end up paying even more, in terms of opportunity costs.

Of course, raising a child requires long term commitment, care and nurturing. Whilst baby bonus would not substitute such responsibilities, the cash gift is a useful financial support for young parents struggling to build wealth in …

Knowledge is key

AR

Through interactions with some of my friends, I came to realize that no investors become wealthy through herd investing. In order to become a successful investor, we need to equip ourselves with the right knowledge. We must have a curious mind and a thirst to acquire new knowledge. After all, knowledge is key.

It is very important that you start your investment or wealth-building journey early on in your life because that will give you a head-start. But before you start splashing out money on various investment schemes, always remember to build up your knowledge first.

If you plan to invest in property, options, gold, ETF, etc, attend courses and seminars to deepen your understanding on how these investments work. Read up topics on these subjects in the magazines, books and online articles on investment strategies. Talk to people, listen to their tips and learn from their investment mistakes.

knowledge

You may also subscribe to my blog for free email notifications of new articles. Over the years, my followers and readership have been increasing. While this is flattering, I also feel the responsibility to write better content.

One of my motivations of starting this online project – SG Wealth Builder- is to raise my investment competency. Through my sharing, I also hope to level up the knowledge of fellow Singaporeans. My vision is that we can build a better tomorrow together and forge a shared financial destiny. Sometimes building wealth can be a lonely journey. So in building this blog, I aim to shape a community to share ideas and information on how to be better wealth builders.

In short, sharpen your knowledge on investment first before you start investing. Don’t be in a hurry to lose your money. You will realize that the more you learn, the more you don’t …

Reflections

selling combs

My blog’s page views will be hitting 25,000 soon! This is indeed a very heartening and encouraging milestone. I am writing this post to capture some reflections.

Although my blog’s readership is nowhere near the millions of hits enjoyed by popular Singaporean bloggers like Xiaxue and Tan Kin Lian, I am pleased that there are quite a few people who took time to read my blog and provided me feedback. It is always a nice feeling to know that people read my articles and appreciate my work. I am also glad that most of the comments had been constructive, which is encouraging as it spurs me to keep on blogging.

reflections

I would like to give thanks to you readers for your precious time and feedback. Although I am unable to blog as often as I used to be (due to work and family commitments), I would try my best to squeeze in time to document some of my investment reflections. The reflections captured in this blog is not only for sharing of knowledge, but also serve as a form of an online journal to me, reminding me to avoid some of the pitfalls I suffered during the early days of my investment journey. Hopefully through this sharing, you and me can become a better and richer investor.

If you have taken notice, my blog consists of investment articles and business ideas articles. Occasionally I also blog about some social issues in Singapore. I believe that in Singapore, there are many money-making opportunities. But then again, as a society, I feel that we shouldn’t focus too much on material gains and comfort. We need to take a step back and do some reflections on what we really want to achieve in life.

I know it may sound very cliche but life …

Investment Insight 2012: Thakral

AEM share price

In 2010, I invested a fair bit of money in Thakral, one of the listed companies in Singapore. At that point of time, they declared their intention to change business focus and also proposed a significant dividend for the shareholders.

I did some research on the company and decided to invest, tempted by the declared dividend. Eventually, I did receive the dividends, but the stock prices fell in tandem. As the stock prices languished at that price, I sold my Thakral shares after a couple of months. Subsequently I did keep track of the stock price and company performance. For 2 years, the price remained at S$0.030.

Thakral

Recently, due to the penny stock rally, I realized that Thakral had rocketed to S$0.040. I wondered if I had kept faith with Thakral, I would have made thousands of profits in one week. I don’t know if you ever had such investment experience but it sure pain like hell seeing the stock which you once owned rocketed by so much.

I sure am tempted to re-enter the stock market but still stand by my resolution to wait till the next stock market crash and then invest. Hopefully I can make a killing by then.

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Magically yours,

SG Wealth Builder…

Plight of a Singaporean male

Singaporean

Recently, I was flattered to receive a long feedback from one of my readers, Hyom, to my previous post on a business idea to provide services to foreigners and PRs residing in Singapore. There was a lot of angry thinking in his response and I can also sense a tinge of injustice when he mentioned that he, as a Singaporean male, had to fork out much money for his tertiary education whilst foreigners of lesser talent received scholarship using our tax-payers monies.

I thank him for his honest feedback and can relate 100% with him as I am a fellow Singaporean.

Singaporean
Life as a Singaporean male in Singapore is not easy. My wife is a 100% Singaporean, so is my brother, sister, brother-in-law, sister-in-law, parents and grandparents.

I, too, went through the tough education system and paid for it myself. I, too, earned S$300 a month as a NSF for 2.5 years. I, too, compete with FTs for jobs in the market. Having contributed (and still do) to National Defense and economic growth for many years, I wish the country, in turn, can do something for me and fellow Singaporean.

If fellow Singaporeans do not even make the effort to look after our own countrymen in Singapore, how can Singapore continue to survive in this world? Only when we have a culture of solidarity, then can Singapore remain strong.

I feel that we were taken for granted by the country for many years. As SAF celebrates 45 years of National Service this year, I hope the country takes into recognition the contribution of NS and NSF men. We are the ones protecting this nation and sacrifice precious family times for NS training. Not the foreigners/PRs.

So please do not discriminate the Singaporean male in Singapore!

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Business Idea

SEO

Quite some time ago, a reader visited my blog and suggested that one niche business idea could be to provide a service to help foreigners or permanent residents to integrate into Singapore society.

I have mixed feelings when he suggested this to me. While this business idea is potentially niche and may have less competition, it is something which I find it difficult to make money. This is because to be a successful business man, one must have conviction that his product or service would be beneficial to his clients and thus create market demand.

Business idea

As a born and bred Singaporean, I am not so sure whether this is something which I would want to explore, even if it could bring in tonnes of money. There are definitely much better ways to make money in Singapore.

Sometime I wonder what kind of nation we want to build. Do we want to be a rich nation but with the majority of the population consisting of foreigners? Or do we want to slow down and strengthen the core population? I guess there are always trade-offs in life but as a young nation, we probably need to start to define our identity in the global stage. Otherwise, it is very easy to become a lost. confused nation.

Foreigners or permanent residents come here and compete with our locals for jobs at lower wages without having to serve National Service. As it is, they have created much social stress for the locals. They also compete with our children for schools, crowd our transport system, occupy our hospital beds, take up our scholarships and view Singapore as solely a place to become rich.

I am not sure if there are any plans to calibrate the flow of foreign talents into Singapore but it is important …

Business idea: Confinement nanny agency

SEO

I have not been blogging for quite some time. This is because last month I became a first-time dad and I was really busy with my day-time job. To manage time, I engaged a confinement nanny to look after both my wife and my little bundle of joy during this challenging period. The experience also gave me the business idea of setting up a confinement nanny agency.

During our research on confinement nanny agencies in Singapore, me and wife realised that there are not many established ones around, notably only a few. Eventually we settled for PEM which claimed to be the largest confinement nanny agency in Singapore.

The first nanny lasted for one week and left because she claimed her grandmother passed away and she needed to go back to Malaysia. The replacement nanny who stayed throughout the confinement period was old and slow.

Business idea
We were not satisfied with the services of PEM but held on to their services because we felt it was a hassle to keep changing nannies during this short period of one month. Somehow we also felt that the services rendered wasn’t value for money.

During the contractual discussion, we stated that the nanny was expected to perform basic household chores, cooked for me and my wife and also take care of the baby. However, the replacement nanny ended up spending more time in the kitchen and less time looking after the baby. Below is a break-down of the cost:

1) S$700 to the confinement agency
2) S$1300 to the confinement nanny
3) S$300 worth of herbs for my wife
4) S$140 to CPF for the foreign helper levy

Looking at the amount of money I spent, confinement nanny services is definitely a lucrative and in-demand business in Singapore. There are not many such agencies …

Make money from financial crisis

BullionStar

During the 2008 – 2009, stock market crashed throughout the world and triggered the collapse of several big US banks. It was a period of chaos and great uncertainties. Back then, even the Singapore government had to make the unprecedented move of guaranteeing all bank deposits till end 2010 to prevent bank runs. There were mayhem and carnage during the financial crisis.

There were also opportunities. There was one point I was very tempted to purchase Citi’s shares, which was trading at USD1.00 through my Philips Securities POEMS account. Citi’s shares was trading at rock bottom and anything below USD1.00, chances of it being nationalised by the US government would be very high. I did not proceed ahead to buy the shares as I thought the risk would be too much for me to take. Of course Citi survived the crisis and its stock subsequently recovered.

gold

The “Great Financial Crisis” presented many good opportunities to make big bucks in the stock market but I was unable to fully utilize my Opportunity Fund back then as I was saving up for my wedding. What a shame! The 2008-2009 financial crisis was a rare window of opportunity for smart investors to make their fortunes.

Forget about making money during the bull runs, for wealth can most likely be made during financial crisis. During major market correction, stocks would trade at a bargain and this could be the best time for investors to find value stocks.

On the other hand, there are many investors who lost their pants investing in stocks with poor business fundamentals. During financial crisis, such stocks cannot withstand the brute market force and went into liquidation. To minimize such risks, always diversify your investment portfolio and don’t put all your eggs in one basket.

BullionStar

Traditionally, physical metal such as …

How to be rich in Singapore

While we may not have investment acumen like Warren Buffett, we can still become rich through buying distressed assets in Singapore. There are always bargain around us and its only a matter of patience for the right opportunity to come. As I mentioned in my previous posts, the best time to “strike” is when the economy takes its periodical dips.

Some of you might remember that during the mid-1980s when Singapore economy went through a very sharp downturn, some condominiums in the posh Balmoral areas were selling at $170 per square foot. In two years, the prices doubled and then in 2008, some units could command around $2000 psf. As the world financial market became so globalized, the sudden need for fund managers to sell institution’s assets created good opportunity for those with financial means and knowledge to purchase assets at good bargain.

Many of us often hear stories of colleagues or friends who manage to pick up such good buys but if we make the conscientious effort to keep ourselves well informed and have the money to pump in when bargains present themselves, we can just be as successful. As the saying goes, the time to buy is when blood is on the streets!

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Magically yours,

SG Wealth Builder…

Importance of Emergency Fund

financial freedom
In my previous posts, I have written about the need for Opportunity Fund, which is meant for investing purposes. In life, we should also consider building up an Emergency Fund, which is a reasonable amount of money set aside for rainy days.
Many people live their lives as if nothing bad will ever happen to them. It is as if buying a car and not buying an insurance, expecting no incidents or accidents. Such a thinking is so unrealistic as we know that life has its share of downturns. Without an emergency fund, any setback might potentially spiral into serious financial problem for you and your family.
An Emergency Fund is considered more important than Opportunity Fund as the former is a safety net and is deemed as the shock absorber of life. Without Emergency Fund as your cash cushion, you are taking a gamble. I believe we should build up an emergency fund as soon as possible because the fund gives us time to adjust without drastically altering our lifestyles.

money

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.

How much to save?
The perennial question most people ask is how much do we need to save for emergency fund in order to effectively see through a major emergency or crisis. My thinking is that if you are single and have no dependents, S$10,000 or 4