A nation in disgrace

Would you take our children to court if they do not support us when we are old and jobless? This was the question that I posed to my wife after I saw an article by a money blogger who regretted the way he treated his late father.  Apparently, he was not on good term with his father and was compelled by the family court to support his father under the Maintenance of Parents Act.

After reading his article, I could feel his remorse, but I was not impressed with him either. To be taken to court by parents is a shameful thing, especially in an Asian society like Singapore, where family disputes are often confined within homes. Because of dignity and face value, very few parents are inclined to haul their children to court for not supporting them. Those who did are usually driven to desperation and forced to make their children pay up.

SG Wealth Builder

The Maintenance of Parents Act was promulgated in 1995 to give parents above 60 years old who could not support themselves the legal means to claim maintenance from their children. The implementation of such an Act in a First World country like Singapore shows the lack of social value and filial piety among many Singaporeans. Apparently, such social tragedies are becoming the norm nowadays and the government was even forced to amend the Act in 2010 to make more children support their needy parents.

Even though I am the sole breadwinner, I am still supporting my mother and mother-in-law financially. My wife and I share the same value and believe that this is the right thing to do. This is because our parents’ generation is totally different from our generation.

The baby boomers did not receive good education. They do not understand what is financial planning …

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Homeowners feel the heat from rising interest rate

It is like a rude shock to a sweet dream. Singapore homeowners are given a reality check since the start of the year when the key interest shot up like nobody business. Perhaps it is a sign of things to come but the trend is expected for a long time since the last financial crisis in 2008, which led to many countries to adopt loose monetary policies in the form of quantitative easing, notably from United States, Europe, Japan and China.

According to the Association of Banks in Singapore’s website, the latest three-month Singapore interbank offered rate, SIBOR, was 0.972% as of 20th March 2015. This was the highest level since 2008 amid expectations that United States Federal Reserve would possibly raise the lending rates mid of this year.

Obviously the above information is bad news for home-owners who borrowed a lot from the banks to finance their properties. Any slight incremental increase in the lending rate would affect their spending abilities.

I can relate to homeowners’ fear as I have home mortgage loan as well. Any form of market uncertainty is bad from a homeowner’s point of view because of budgeting concerns. Incidentally, in a few months’ time, the tenure of my mortgage loan will expire and I am looking to refinance my mortgage loan. The amount is not significant and I can choose to repay in full with my savings and CPF monies. However, doing so would reduce my cash flow and affect my ability to upgrade to a bigger house to cater to my growing family size. So my wife and I decided to go for refinancing after weighing the opportunity costs.

For HDB owners who have sizeable outstanding loans and choose to repay in 25 years, the best option is always to opt for HDB concessionary …

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When is the best time for you to invest in great businesses?

Investment moats is the competitive advantage of a company that allows it to fend off competition from its rivals and enable it to earn excess returns for many years. According to Morningstar’s Why Moats Matter, there is a stock research process which guides investors on how to invest in great businesses at the right time and make money from the stock market.

The process involves a bottom-up approach which requires investors to identify the company’s moat(s), establish the fair value and determine the margin of safety. On the surface, it may seem straightforward but when you put it into practice, it is not so simple.

Moat Sources

According to Morningstar’s investment framework, there are five main sources that a company may possess: intangible assets, cost advantage, switching costs, network effect and efficient scale. Now why is having a moat source important from an investor’s point of view? If you recall that 15 years ago, Nokia used to dominate the worldwide mobile phone market and boasted the majority market share for a number of years. However, the entry of Apple’s iphone in 2007 changed the game and led to a dramatic shift towards smartphone, leading to Nokia losing its status as the market leader. Therefore in a competitive market, a firm must have the ability to withstand the onslaught of competition for a long period of time. Otherwise, growth would not be sustainable.

Fair Value

If a house is worth $300,000, would you pay $450,000 for it? You might probably do so if you like the house very much and intend to stay in it for a long time. However, if the house is meant for investment purposes, you would benefit from the capital gain from the sale of the house if you sell the house above $450,000. But that …

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Capital Match: Singapore’s Peer-to-Peer Lending Fintech

Capital MatchKevin LimCapital Match

Capital MatchSince SG Wealth Builder was founded in 2010, I had the opportunities to meet CEOs and entrepreneurs who unselfishly shared with me their visions and investment insights. Today, I am excited to be granted an email interview with Pawel Kuznicki, co-founder of Capital Match. The company is a peer-to-peer lending fintech start-up in Singapore.

1) Can you share with the readers your background and business model?
I started my career as a consultant with McKinsey & Company in Europe and Africa. Then I moved to Rocket Internet, global venture builder, to build their portfolio companies in Southeast Asia (Zalora and Lazada). Last year I started my current business, Capital Match.

Capital Match is a peer-to-peer lending online marketplace to SMEs. Peer-to-peer lending is essentially banking without a bank as an intermediary – investors lend money directly to companies with Capital Match facilitating the transactions by providing credit risk assessment, legal documentation and debt collection services.

We mainly serve SMEs who cannot get a bank loan (a majority of SMEs in Singapore). We provide them loans of SGD 50,000-200,000 for a term of 3-12 months. Loans are syndicated with multiple investors providing funds to one borrower. The interest rates vary from 1.5% to 2.5% per month (on top of it there is additional processing fee of 0.2-0.5% per month). Investors have full discretion which loans to invest in and what amount. Their return is interest rate less 20% commission that Capital Match collects.

2) What are the needs that your business is addressing?
Two-fold:
1. Of SMEs: Providing SMEs with a substantial alternative financing option to improve their working capital or stimulate the growth
2. Investors: Providing alternative investment option with full operational support offering 1.2-2% return per month (15-25% annualized) and a minimum investment of S$1,000

3) How does

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Bullion Star Financials 2014

In a step to further increase customer transparency, Bullion Star published its financial information such as sales revenue, number of orders, average order, medium order, website visits and other key data in its website on 14th March 2015.

Sales revenue was impressive and amounted to $53 million with average order of $6475. BullionStar.com also had more than 850,000 visits from 268,000 unique visitors in 2014. Among the 180 different products that Bullion Star carries, gold bars were the most popular products, consisting of 52% of its total sales, followed by silver bars (18%).

To be frank, I struggle to find another bullion dealer that carries so many variety of bullion products that Bullion Star offers. Furthermore, the prices of their bullion products are among the most competitive that you can find in Singapore.

The company was started in 2012, straight after the Singapore government announced GST removal for investment grade precious metals, and became operational in 2013. SG Wealth Builder is honored to partner with Bullion Star to bring new exciting technology into the precious metal industry since 2013!

Among the various product offerings of Bullion Star, my favorite one is the Bullion Savings Program (BSP) that are fully backed by precious metals and allows customers to convert to physical bullion at any time. There are numerous gold saving programs in Singapore but I believe BSP is the only one that allows wealth builders to convert to physical bullion.

BullionStar Financials 2014 - Year in Review

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SG Wealth Builder…

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CPF Medisave Minimum Sum to be scrapped on 1 January 2016

Health Minister Gan Kim Yong announced in Parliament yesterday that the Medisave Minimum Sum will be scrapped next year January. For many Singaporeans who had been lamenting that their CPF monies “don’t really belong to them”, this is definitely a form of greater flexibility on the uses of their Medisave accounts. This is because when Singaporeans withdraw their CPF monies at age 55, they will no longer need to first top up their Medisave accounts to the MMS. Instead, they will only need to meet the withdrawal rules.

Another change would be the Medisave Maximum Ceiling, which would be fixed for each cohort of Singaporeans when they turn 65 years old. Mr Gan reiterated that the ceiling has to be raised every year to keep pace with rising inflation and increasing life expectancy. Given a choice, I would not touch my Medisave monies even if I am 55 years old now because the interest earned in Medisave account is so much higher than the current bank saving rates. However, going forward, the interest rate environment might change, so I really appreciate the scrapping of the Medisave Minimum Sum.

The revised Medisave rules is a sign that the government is beginning to soften its hardline approach on CPF monies. The previous approach involved a blanket rule that assume all Singaporeans can’t manage their personal finances and health-care costs in their retirement years. Henceforth, the need for minimum sum to prevent Singaporeans from using their Medisave before they reach retirement.

This development was in line with what PM Lee had announced a while ago – giving Singaporeans more flexibility in the use of CPF. Given our government’s conservative style, I think there would be more changes coming along for our CPF Ordinary and Special accounts. I am hoping for more good news!…

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Monetary Authority of Singapore (MAS) is proposing new rules on securities-based crowdfunding

Crowdfunding is the latest investment trend that uses online technology platforms to address both the needs of investors and small-medium enterprises (SME). At one hand, retail investors are looking for viable fixed income sources to grow their wealth. On the other hand, we have start-ups and SMEs which lack access to alternative pools of private financing, other than commercial banks. This is where crowdfunding can help to bridge the gap.

In a recent consultation paper issued, the Monetary Authority of Singapore (MAS) is proposing measures to facilitate crowdfunding involving securities.

Generally there are four types of crowdfunding – donation-based, reward-based, lending-based and securities-based. According to MAS, donation-based and reward-based are not subjected to securities regulation as there are no exchange of securities and promised of financial returns. However, for lending-based and securities-based, MAS deemed that they are subjected to securities rules.

Henceforth, MAS’ proposed framework for securities-based include the requirement for companies operating lending-based or securities-based crowdfunding platforms to hold Capital Markets Services (“CMS”) licenses. In addition, MAS would restrict offerings from lending-based and securities-based to only Accredited (AIs) and Institutional Investors (IIs). The rationale for this approach is because MAS aims to safeguard the interest of retail investors as there is a certain amount of risks in such investment products and MAS deemed that AIs and IIs are better positioned to handle the level of risks involved as they have more capitals and experiences.

In the paper, MAS listed a number of risks involving securities-based funding platforms, such as lack of liquidity of the investment products, potential loss of capital, frauds and closing of platforms. My view is that MAS’ concerns are probably valid because crowdfunding is something very new and is gaining tract globally in the investment community. As such, the regulatory framework is still not …

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BullionStar is hiring!

Below is newsletter from BullionStar, a Singapore online bullion company where you can buy gold and silver at competitive prices. To be a successful wealth builder, investors must always stay ahead of the the curve and keep abreast on the latest development in investment trends. For the past few years, the government has been trying to establish Singapore as a precious metal trading hub, with the aim of creating good job opportunities for Singaporeans. The salaries offered by BullionStar is really attractive and competitive. So Singaporeans should have no valid reason to complain the lack of good paying job positions in Singapore. Read on to find out more

BullionStar is currently hiring for customer service roles. Singapore is the go to place in the world for precious metals. If you are passionate about the bullion industry, now is the time to join our team!

 We are hiring 1-2 people for customer service roles which include serving bullion customers, handling transactions, handling bullion and carrying out various administrative tasks.

BullionStar is a fast paced company. To contribute to our team you will have the following skills:

– Accurate and meticulous
– Versatile and hard working
– Communicative taking initiatives and giving feedback

The job location is BullionStar’s bullion shop, showroom and vault at 45 New Bridge Road.

Salary and benefits: The starting salary is SGD 2500 – SGD 5000 depending on knowledge, experience and skills plus one month’s bonus, reimbursement of medical bills and public gym free of charge.

Knowledge, interest and passion for precious metals is a big plus.
Please feel free to send your CV and personal letter in which you describe why you are suitable for the position and what you can contribute to BullionStar to career@bullionstar.com

Kind Regards…

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Sheng Siong Group’s net profit grew 22.3% yoy to S$47.6 million for FY2014

Singapore, 25 February 2015 – Sheng Siong Group Ltd. (“Sheng Siong”, together with its subsidiaries, the “Group” or “昇菘集团”), one of the largest supermarket chains in Singapore, reported a 22.3% year-on-year (“yoy”) increase in net profit to S$47.6 million for the full year ended 31 December 2014 (“FY2014”), mainly because of higher turnover and improved gross margin.

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Revenue increased by 5.6% yoy in FY2014 of which 2.3% was contributed by the new stores which were opened in 2012, and 3.3% from comparable same store sales for the old stores. The increase in revenue was driven mainly by growth in the new stores, longer operating hours, marketing initiatives and renovation to some of the old stores. Most of the new stores, which are now in their third year of operation, continued to grow within expectations. Revenue contraction in the Bedok and Tekka stores appeared to have bottomed out in 4Q2014, despite growth remaining negative for the full year, though of a lesser magnitude compared with FY2013.

Gross margins increased to 24.2% in FY2014 compared with 23.0% in FY2013, driven mainly by lower input costs derived from the distribution centre, better sales mix, and stable selling prices.

Sheng Siong

Administrative expenses increased by S$6.4 million in FY2014 compared with FY2013, mainly because of the increase in staff costs. The increase in staff costs came from salary adjustments as well as a higher provision for bonus arising from the improved financial performance of the Group in FY2014.

The increase in bonus was in line with the increase in net profit. Rental expenses remained at about 2.7% of revenue, despite an overall increase of 3.2% in rent compared with FY2013. Operating costs were tightly controlled and administrative expenses as a percentage of revenue remained stable at 16.2% in FY2014.

The Group continued to generate healthy cash …

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What is it like to catch a falling knife?

One of the golden rules in investing is never to catch a falling knife. Yet when it really does occur on one, most of the time, most investors would enter into self-denial mode and refrain from exiting their investments or cut losses early.

You can term it as a classic investor’s symptom or attribute it to ego, greed and fear of cashing out too early. Whatever the case it is, catching a falling is a very painful experience and investors must not confuse it with the technique of dollar-cost-averaging. In my early days of investing, I made this folly in one of my investments – China Enersave.

Stock market

About 10 years ago, the renewable energy sector was seen as a hot prospect because of the sky-high fuel prices and the Clean Development Mechanism (CDM) under the 1997 Kyoto Protocol. Many companies were engaged in various alternative fuel solutions and one of them was China Enersave, a Singapore company which operated biomass power plants in China. When I came across the profile of the company, like many novice investors, I was intrigued by the business model and therefore invested in the stock. In my excitement, I threw all caution to the wind and ignored the early warning signs – poor management execution, lack of company’s track record and the high risks of doing business in China.

Enter the 2009’s financial crisis. The company could not fulfill its target of opening 20 biomass power plants in China and was suffering from consecutive years of operational losses. To make things worse, it deviated from its business goal and switched to investing in a coal powered plant in China. Not surprisingly, the stock price started to fall but still, I kept faith and continued to accumulate more shares. I thought with a strong backer like …

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Singapore Memories: Chinese TV Drama – The Unbeatables

As we celebrate Singapore’s 50th birthday this year, I can’t help but look back at how much our society has transformed and progressed over the years. I grew up in the 80s, a time when smart phones and Internet were non-existent. Though life was simple, the pace was also less stressful. In fact, my generation’s main sources of after-dinner family entertainments were television and radio only. To capture the memories of this past generation, I decided to blog about this beautiful chapter of my life in a series of articles starting with this one.

Widely seen as the trail-blazer TV drama serial in Singapore’s Channel 8, The Unbeatables was the first show that featured gambling as the core theme and took the Singapore’s audience by storm more than twenty years ago. Even though the show was produced in 1993, an era without the distractions from cable TV and Internet, most Singaporeans would agreed that it was one of the greatest shows that SBC (the predecessor of Mediacorp) has ever produced, even until today. In my view, I would say that The Unbeatables, was truly unbeatable, and had set the gold standard for the media industry. For more than two decades, no other shows had come close to matching The Unbeatables’ quality, class and enthralling twists. Even its two sequels failed to match the high standard set by the 1993’s version, so you can imagine the incredible level of enduring success this show has achieved.

The Unbeatables aimed to entertain, not to educate, the audience on the vices of gambling. The story was set in a fictional island called Coral Isle and the plot centered on the intense rivalry between the gambling families – the Longs and the Yans. The main storyline was a bit cliche – male protagonist fell in …

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