Make money. Build Wealth. Preserve Wealth
This week, an article by Reuters reported that gold jewellery exports by India is expected to grow by 25% in the year to March 2015. This is an impressive figure given that last year, the Indian government raised the import duty to a record 10 percent and also make it mandatory for merchants to export 20 per cent of the imported gold. In Asia, various data released by gold analysts indicated that China and India will continue to be the leading consumers for gold. The key reason for Asian’s fascination for gold is because the Chinese and Indians understand the value of gold as a means to preserve wealth.
Over in Singapore, the government is beginning to appreciate the role of gold bullion in the investment fraternity and has been implementing policies to develop Singapore as a metal trading hub for gold. In 2012, the government removed 7 percent GST from investment-grade precious metals, hoping to spur Singaporean’s demand for gold.
As a result of this policy shift, many gold dealers, such as BullionStar, has set up shop in Singapore. For many international and domestic investors seeking safe haven for their precious metals, Singapore is considered one of the best choices because of its reputation for being a safe country with low crime rate.
After reading the article, I was really impressed by how he built his wealth and was also heartened that he unselfishly shared his money secrets to Singaporeans . Unfortunately, there were many cynical and negative remarks given by readers in the Yahoo website. Many of them were jealous of his achievement and took the chance to throw brick bats at government policies that restricted them from becoming rich through property investments. Usually these naysayers are those people that would never ever become rich because they don’t appreciate good advices given to them for free.
Singaporeans must realize that to become rich, you must adopt the habits of rich people and arm yourself with knowledge.
The Singapore economy grew by 4.9% on a year-on-year basis in the first quarter of 2014, unchanged from the growth recorded in the preceding quarter. Global economic growth is expected to improve in 2014, supported by continued recovery in the US and the Eurozone. The overall unemployment rate in Singapore remained low at 2.1% in March 2014.
Against this backdrop, the Government has decided to pay a mid-year Annual Variable Component (AVC) of 0.5-month.
The Government also supports the National Wages Council’s (NWC) recommendation to grant a built-in wage increase to raise the wages of low-wage workers. The Government will give a built-in wage increase to Division IV and III civil servants. This will be in addition to their annual increment in 2014.
Division IV civil servants will receive a built-in wage increase of $70 in their monthly salaries. This will benefit around 3,500 Division IV civil servants. Division III civil servants will receive a built-in wage increase of $30 in their monthly salaries.
Recently I read that one of the fellow bloggers has resigned without a job. When I saw his article, I immediately commented to him that doing so was a terrible career move. Obviously people resigned for various reasons. The push factors could be because of bad bosses, poor company culture, lack of motivation to work or being overlooked for promotion. Whatever the reason it might be, you should never quit without a job, unless you are cocksure that you are going to be your own boss. Ten years ago, I made this career mistake, so now, I am going to share my experiences to young folks who feel like quitting from their jobs. Read on before you take the plunge.
Ten years ago
I resigned from my first job almost ten years ago, after deciding that I had enough of the stressful manufacturing environment I was in. As a young engineer, I could not imagine spending the rest of my career doing the mundane stuff I was doing. The pay was not bad, but not good enough for me to do over-time every week. So after quitting, I was very relieved and ready to venture out to another new job. I went for a few job interviews and the first question that the hiring bosses asked would be why I resigned from my previous company without a job.
Last Saturday, there was a protest against the Central Provident Fund (CPF) system, drawing almost 3,000 people at Hong Lim Park. During the protest, the speakers demanded amongst many things, a better CPF interest payout, the allowance to draw out their CPF savings at 55 years old and to be able to opt out of CPF Life. The protest highlighted certain misconceptions on the CPF System which I find worrying for fellow Singaporeans. Obviously most Singaporeans don’t understand how to manage their monies.
Higher returns, higher risks
Being a value investor, I buy shares of growth stocks at a price below or near it’s intrinsic value. Even though I am not a trader, I believe it is important to keep an open mind and understand the insights and strategies of traders. This is because whether you like it or not, there will always be speculators and traders in the markets. Their behaviors and actions will invariably affect market performances and impact the way you make money in the markets.
In The Little Book of Market Wizards: Lesson from the Greatest Traders by Jack Schwager, I realized that there are many relevant investment principles that are useful for investors and wealth builders. For example, to be a successful trader, you need to manage your ego and develop a set of trading methodology that best suits your character. The important thing to note is that losing money is part of process and you can never win all the times. This principle is applicable to investing as well. Most traders and investors lose money in the stock market because they try to avoid losing money. On the other hand, professional traders who become rich from stock market understand that they have to take losses in order to win the game.
Yesterday, you moved into a 1,000 square foot condo in Novena.
Today, you board the North-South line for your office at Raffles Place. For every minute you are on the MRT, you have saved $81,479 on the purchase of your home compared to someone who has purchased a comparable unit within a kilometer of Raffles Place.
$81,479 a minute.
For the first time in your life, you wish you had a longer commute. In your case, Novena is 11 minutes from Raffles Place. You saved a total quantum of $896,269 by living within a kilometer of Novena MRT.
$896,269. Not bad for an 11 minute commute. And, think of how productive you were in those 11 minutes. You probably read the Today paper and answered your emails.
Or, perhaps, you listened to some music while you dreamed of how you’re going to spend the $896,269.
Asian Gold Mindset
The Asian mindset to gold is different from in West says Managing Director of the World Gold Council, Mr. Albert Cheng, at the presentation of the World Gold Council’s publication “Q1 Gold Demand Trends” to which BullionStar was grateful to be invited. Many Asians view gold as a conservative way of saving.
With the increase in life expectancy in Singapore, senior workers are considering to postpone their retirement beyond the country’s statutory minimum retirement age of 62 years old. JobStreet.com recently conducted a survey to find out if employers in Singapore are willing to accommodate them. Responses were gathered from 150 employers and 1,400 Singaporean workers aged 40 years and above .
If you want to see out how impactful the government’s cooling measures, look no further than District 9.
In many of my previous articles, I have always encouraged Singaporeans to buy precious metals such as gold and silver bullion as a means to build up wealth in Singapore. This is because I have always believed that wealth is more secure in the long run when invested in physical bullion than in the current stock market, which I think is long overdue for a massive correction. But the perennial question is: is it worthwhile to buy silver or gold bullion? How do you build wealth with silver and gold bullion? To answer this question, it is important that Singaporeans understand the risks involved in silver investments.
Many novice investors thought that prices of silver tend to go in tandem with gold. This is not true and history has validated this point. During the Great Depression in the early 1930s, many people were buying gold to preserve their wealth, resulting in surging gold prices. But surprisingly, silver demand declined sharply during that period. Also, during the Civil War in America during 1860s, silver fell while other commodities like steel and rice soared. So the gist is that unlike gold, silver should not be mistaken as a form of wealth preservation during turbulent times.
Another piece of advice that has persisted through time is buy the worst house in the best neighbourhood you can afford.
Both of these ideas point to the fact that location is by far the most important of all the factors that determine the value of a home. While the quality of a building and its interior impact price, it is the location that ultimately drives the value of a home.
For example, savvy buyers and investors are combing through Geylang in search of bargains that will rise in value as the area upgrades. They see opportunities to buy at a dip in the price.
While most books focus on a “number”, this reliable resource shows readers that attitude is also an essential part of the equation.
Whenever I flip through The Strait Times, there are so many get-rich quick seminars advertisements on forex trading. It seems that the advertisers are targeting the growing aspirations of middle-class Singaporeans seeking to build their wealth quickly through forex trading. These seminars are often marketed as “enrichment classes” with catchy tag lines such as “Mr X makes 2,000% profit in one month, so can you!” or “Mrs Y turned $2,000 into $50,000 in three weeks, so can you! Also, during the seminars, the modus operandi is to highlight the opportunity to retire young and the chance to earn extra income. The organisers would use hard-selling tactics and misled people into the false impression that the trading techniques can produce good money. In return, consumers had to pay thousands for these seminars or buy their in-house trading software.
I do not have the figures on the profile nor the number of Singaporeans who attended these forex trading seminars, but I suspect that many Singaporeans had already lost a lot of money from forex trading. This is a worrying trend which I think Singaporeans need to be aware of. Firstly, forex trading is a form of high risk activity as you are betting the future movement of currency exchange rates.
Many Singaporeans are obsessed with property investments but not many have been successful. Some have made a windfall, while many have lost a lot of money. Those who have become rich through property investments are reluctant to share their experiences and prefer to keep a low profile. This is understandable as who would want to reveal their secrets to building wealth? Therefore, I was a bit skeptical initially when Property Soul asked me to do a book review on her newly launched book “No B.S. Guide to Property Investment – Dirty Truths and Profitable Secrets to Building Wealth through Properties”. I thought that she must be a property agent trying to market her services through publishing a book on real estate investments. But after a phone chat with her, I realized that I was wrong.
Property Soul was a Hong Konger who relocated to Singapore in 1998 (she subsequently converted to Singapore citizenship). She bought her first private property for rent in 2002 and within 4.5 years, managed to build up a portfolio of 5 properties. By 2008, her total investment value doubled. She sold 4 of her properties in 2010 and 2011 and made a handsome profit of 80 to 120 percent.
Recently, I saw an article in The Straits Times which reported the increasing trend of local PMETs being laid off in Singapore. It brought home the hard reality that professionals and skilled workers are no longer safe from being made redundant in their jobs. From the perspective of a wealth builder, it also reinforced the belief that in order to sustain in this dynamic economy, it is very important to build a solid personal finance foundation and master niche skill sets.
I always encourage young people who just entered the workforce to build up their own emergency funds as soon as possible. Life is always unpredictable. You never know when you will lose your job or encounter personal crisis. Having an emergency fund can help to provide short term security against market uncertainties. It allows you and your family to carry on life as per normal whilst you embark on the recovery journey. Without this sum of money as interim support, you have no choice but to borrow from friends and relatives. Personally, I don’t like to, and have yet, to borrow from my friends and relatives.
Of course, having this emergency fund is only one of the key elements of the personal finance framework.
To become rich from your stock investments, you must do your research first before you invest. The following analysis covers one of the listed companies, SMRT, the largest rail operator in Singapore.
In recent years, every time the Singapore railway system broke down, it was like a nail to the counter’s coffin. Due to the service disruptions, SMRT stock price has plummeted at a frightening rate from $1.74 in 2012 to $1.02 in March 2014. Speculators must have lost a lot of money in this counter. This is not surprising because to invest in SMRT, you need to hold a long term investment horizon.
Fundamentally, even though SMRT has a monopoly in the public transport system, its business model is heavily dependent on government policies, and because of this, investing in this company is not so often straight-forward.
On 24 April 2014, SMRT share price rocketed 21% on rumors of CEO Desmond Kwek’s submission of new financing framework to Singapore government for the company’s assets. The increase was the biggest ever one day gain for the stock. I reckon that the CEO had to do something drastic to reverse the destiny of SMRT. In January 2014, the company reported a set of dismal results for the third quarter.
When you are facing death, what is the last thing on your mind? In a recent radio report by UFM100.3, it was revealed that two thoughts commonly fill the mind of dying people. On their death beds, most dying people worried that they would become a financial burden to their families and many were concerned on how their families could cope financially after their passing on.
As a wealth builder in Singapore, I think the survey was quite accurate because when facing death, probably you would not be thinking of how much money you have in your bank accounts nor would you be concerned about the assets that you would leave behind. Very likely, it is the thought of not being able to see your loved ones again that made the pain of death so unbearable.
Are they going to suffer as a result of your prolonged stay in hospital? How are they going to cope if you are the sole breadwinner? These are perhaps some of the worries that most dying people have in their last journey.
Death is an inevitable journey that everyone would go through and everyone is equal, regardless whether you are rich or poor. Yet most people refused to think or prepare for it.
Opportunity is like a ball. Sometimes when the ball is passed to you, you may not have ample time to think and execute the ideal actions. A professional player will grasp the opportunity and went on to score crucial points. Mediocre ones will let opportunity slip.
Recently, I chanced upon www.data.gov.sg, a useful website for entrepreneurs and Singaporeans to search and access publicly available data published by the Singapore Government. This website contains many wonderful data and apps, such as Activtify, EduChoices, etc. Besides government data and metadata, data.gov.sg also offers a listing of applications developed using government data, as well as a resource page for developers.
In today’s context, whether you are an entrepreneur, an employee or full-time investor, data is important to help you forms important decisions. Those who are able to analyze the situation will seize the opportunity to grow wealth, build wealth and create wealth.
Take for example if you are choosing the university courses to enroll, the website is able to provide valuable data for you to crunch. If you are an investor, you would be interested in the health of the economy and business sentiments. If you are an employee, you may be interested in the data on job vacancies in the market.
Singapore minted Gold Bars
These gold bars are unique as they are the only gold bars minted with Singapore themed design. We currently have three different motifs in stock – the 50 gram Singapore Orchid gold bar, the 100 gram Marina Bay Sands gold bar and the 100 gram Merlion gold bar.
Chow Tai Fook Gold Bars
We have limited pieces of the beautiful .9999 Chow Tai Fook gold bars. They have the popular Chinese creatures such as the dragon, phoenix and horse exquisitely etched into them. These gold bars are easily sold at a much higher premium at Chow Tai Fook retail stores.
We have the 50g dragon, 100g horse, 112g dragon & phoenix and 200g horse gold bars.
I used to enjoy reading Tan Kin Lian’s blog because it contains a lot of useful tips on life insurance and personal finance practices. In fact, he inspired me to set up this blog to share my thoughts on career and wealth building journey.
Somehow, after his failed presidential election in 2011 (he garnered the lowest vote of 4.9%), he became more vocal against the Singapore government. Out of ten articles, five of his articles would criticize government policies. Tan’s style of writing has also become more cynical and self-righteous. His articles have become such a huge turn-off to me that I did not follow any more since 2011.
However, in one of his rare articles on career advice, “How to build a long-lasting career“, I think there are some good take away which I would like to share with my readers.
Tan Kin Lian wrote that to be successful in your career, you need to choose a job that fits your skill set. Whilst I agree to this statement, this context may not be applicable to fresh graduates who lack working experience and relevant skills to prospective employers.
In order to embark on a long-term career, you must first work in a specific industry.
If you are in sales and therefore have the ability and vehicle to write your own pay cheque, your duty is to go out and expand your income. Why? While it looks like the world economy is rebounding post 2009 it is in no way, shape or form back to boom times. Governments are struggling to find their feet and control debt and the government is not going to repair the world economy – business will! And it’s the sales people in businesses that can make this happen.
There is plenty of money in the markets; we just have to get it moving.
There was an online article written by a foreigner who described her experiences living in Singapore. Not too long ago, she came here with high expectations of Singapore and our culture. After some time, she was indeed happy with her life here, until she became pregnant recently.
She complained that nobody gave up the reserved seats in the train. Once, when she almost fainted at the train platform, nobody came forward to help her. She felt disappointed by Singaporeans’ lack of empathy and compassion.Being a local and having lived in Singapore for 34 years, I can concur with her that Singaporeans are basically self-centered and very money-face.
When her article was published, a lot of Singaporeans came forward to dispute her views and threw brick bats at her. Many claimed that what she wrote was based on an isolated incident and argued that it was unfair to judge us based on that single incident. Many also threw up lame excuses to justify our lack of compassion. There are very few locals who supported her views and many just dismissed her accusation as baseless.
When we come across such an article, instead of doing self-reflections, we are always quick to go into defensive and denial mode.
There are many online articles on how one should invest physical gold and silver, but very few people actually revealed their experiences on the precious metals. So it is refreshing to read Doug Casey’s experience on bullion investments in his book, “Right on the money: Doug Casey on Economics, Investing, and the Ways of the Real world with Louis James”. The book contains forty interviews Doug had with Louis, touching on topics such as investments, assets, gold, real estate and ethics.
My favorite chapters are from Chapter 9 to 14 under the segment “The Art of Investing”. In these chapters, Doug shared his candid thoughts on physical gold and silver. Interestingly, even though he made his fortune through speculation, he actually advocated investors to avoid trading physical gold. In fact, he urged investors to accumulate it as an asset on a consistent basis. Even though the interviews were held in 2011, I believe his views remained valid today because he was convinced that gold would go higher and that he saw any form of correction as opportunity to buy. He viewed the US government as the greatest danger to Americans today and labelled Bernake “as zero experience in the real world”.