SG Wealth Builder

To make money. To build wealth. To preserve wealth.

Month: September 2017

Invest in SingPost shares?

SingPost share price

The past two years had been of great chaos for SingPost as it endured a significant management upheaval, a special audit, massive impairment of an overseas acquisition and adjustment of a long-standing company dividend policy.  For a country that prides itself of being world-class efficient, the mess in Singapore’s national postman certainly raised a lot of eyebrows among concerned investors.

On looking back, the appointment of Dr Wolfgang Baier as CEO back in 2011 could be a knee-jerk attempt to re-invent the mailing company into an e-commerce company in light of consistently falling revenue from domestic mails. His appointment was itself surprising given his young age and the perceived lack of C-suite experience.

When Wolfgang was appointed as CEO, he was only 37 and was from a management consulting firm, McKinsey & Company. Given SingPost’s venerable standing in the industry, attracting a more experienced business leader should not be a challenge. To be frank, I have no objections to foreign talents taking on top positions in Singapore companies. However, Wolfgang lasted only four years and resigned abruptly in end 2015, leaving Mr Mervyn Lim to cover his CEO duties for one year.

SingPost

During Wolfgang’s tenure, SingPost had mixed financial performance, …

Retirement strategy

Retirement

It is everyone’s dream to achieve financial freedom and escape from the rat race as young as possible.  Like everyone else, I share the same aspiration. That is primarily one of the reasons for founding this wealth blog. In recent years, many local financial bloggers shared that they have attained semi-retirement status and left the corporate world for good. In this article, I will share my retirement strategy and how I aim to reach my goals.

According to BlackRock’s Global Investor Pulse Survey 2017, it was revealed that Singaporeans worry about outliving their retirement savings but not doing enough to prepare for retirement. Results showed 64% of Singaporeans worry about running out of money in retirement, the highest proportion in Asia-Pacific. Nearly nine out of 10 Singaporeans (87%) believe they are responsible for their own retirement income.

Retirement

Everyone has their pathway in life and one should not compare their financial status with others. My retirement strategy is very simple – I plan not to retire at all. This statement may come across as oxymoron but simply put, I hope to extend my career shelf life as long as possible. I don’t relish the idea of idling around and being seen …

Bullish form of Suntec REIT shares

Suntec Reit

Suntec REIT share price is enjoying some sort of bullish form in recent months. The share price hit a 2-year high in July after the announcement of a 50% interest in Premium Grade office in Melbourne. However, a look at the recent financial results indicated things may not be so rosy after all for the venerable REIT. Total return for 2Q17 was actually a decrease of 23% compared to last year. So why did the share price rise and is Suntec REIT a value trap?

Suntec REIT portfolio

Being one of the first REITs to be established in Singapore, Suntec REIT was listed on the SGX mainboard on 9 December 2004. Besides having a respectable history, the real estate investment trust also boosts a unique portfolio of properties comprising office and retail spaces.

Suntec REIT owns Suntec City mall and certain office units in Suntec Towers One, Two and Three and the whole of Suntec Towers Four and Five, which form part of the integrated commercial development known as “Suntec City”. The property portfolio also comprises 60.8 per cent effective interest in Suntec Singapore Convention & Exhibition Centre (“Suntec Singapore”), a one-third interest in One Raffles Quay (“ORQ”) and a …

Investing in bonds

SingTel stock price

Unlike many countries, Singapore does not need to rely on the issuance of government bonds to finance its expenditure as it operates on very prudent budget. However, in light of the 1997’s Asia Financial Crisis, the Singapore government saw the need to develop the market for bonds so as to meet the banks’ needs for risk-free asset in their portfolio.

One of SG Wealth Builder’s blog missions is wealth preservation and therefore, investing in bonds has always been on my mind. But is investing in bonds suitable for everyone? To answer this question, it depends on which phase of your life you are currently in and the kind of returns you are expecting from your investments.

Generally, for those who are in the twilight stage of their wealth building journey or planning for retirement, bonds offer a source of regular fixed income stream and opportunities for capital gain. But this is not to say that such instrument is safe and of low risk nature. There are certain risks that investors must watch out.

To highlight the risks, many investors were stunned by Swiber Holdings Limited’s swift collapse in 2016. It is unknown whether Swiber bondholders can get back any of …

Important Things about Insurance Nomination

Insurance

Are you intending to buy insurance policies? If so, this is an article that you must never miss. And I want you to pay close attention to the message contained in this article. If unsure, do read it over and over again. Today, I am going to share with readers the Insurance Nomination Law promulgated by the Singapore government on 1 September 2009. I suspect many Singaporeans are not aware of this relatively new legislation. So, I hope readers will find this information useful in their wealth building journey.

Insurance Nomination

In recent years, many financial bloggers have been espousing the merits of direct purchase insurance products. However, most people may not be familiar with the insurance laws in Singapore. Without the proper advice from financial advisors, many consumers may end up buying the wrong insurance products that may not suit their needs. Hence, I always feel that financial advisors offer a value proposition even under today’s technology evolution.

Again, I must emphasize that this article is not meant to be a form of financial advice. It is for information only. If in doubt, please consult your financial advisor.

Making nomination

When you buy insurance, you are seeking protection for your loved …

What Will Brexit Mean For Trade?

Brexit

At this point it’s been over a year since the UK voted to leave the European Union in a referendum that has become known as the Brexit vote. I wrote at the time about the potential devastating economic impact of the Brexit, and indeed there were many people forecasting a great deal of turmoil for the UK economy. But now, some 15 months on from the Brexit decision (and getting closer to the actual, formal exit of the UK from the European Union) we can look back with a little bit more perspective.

For starters, it’s worth remembering that this was one of the more surprising geopolitical events in quite some time, at least to a lot of casual observers. While some experts and even some polling firms believed in the end that Brexit had a good shot at passing, we need only look to the betting markets for confirmation of the surprise factor in retrospect. Brexit set a world record for the largest sum of wagers on a non-sports event, and across the board bookmakers reported massive losses – meaning the favored outcome (that Britain would remain in the EU) lost out.

This is not merely to point …

CPF Nomination and Making a Will

Astrea

The recent saga involving the will of the late founding father of Singapore, Lee Kuan Yew, has cast a spotlight on will. Of course, it is ridiculous to question the validity of Mr Lee Kuan Yew’s will as he was a trained lawyer. But most Singaporeans are not lawyers by profession. So, it is important to understand the legal framework to avoid the devastating outcome of making the wrong will. In this article, I will also share what is the outcome if you did not make a CPF nomination.

Basically, a will is a legal document that indicates the instructions on how you wish to distribute your assets after you passed on. Technically, everyone can craft his own will without the aid of legal advisors. Although this is the case, it is not advisable to do so because most of us are not familiar with the laws in Singapore. I have seen so many sad stories of legal disputes involving the challenges on the validity of wills. The biggest tragedies are often the broken ties and damaged family relationships.

CPf nomination

Before proceeding, I need to clarify that I am not a lawyer by training and this article is not meant to …

Cancer in Singapore

CPF

Cancer. The mere mention of it strikes fear in many people. Yet most of us would never imagine ourselves being inflicted by this horrible illness in our lifetime. Recently, an ex-colleague of mine died from stomach cancer. His death caused a stir in the office because he was young (in the mid-thirties) and had everything going well for him. What is it like for a wealth builder to be struck by cancer in Singapore?

According to data released by Health Promotion Board (HPB), cancer is currently the leading cause of death in Singapore, accounting for 29.7% of deaths in 2015. In the investment community, ex-SGX CEO, Magnus Bocker died from cancer last month. Prior to that, founder of SharesInvestor.com, Dr Michael Leong lost his battle against colon cancer.

It seems like cancer is on the rise in Singapore. According to the HPB report, it was estimated that the lifetime risk for developing cancer in Singapore population is approximately 1 for every 4-5 people. This is not surprising as Singapore has an ageing population, so the number of people diagnosed with cancer is expected to rise.

Cancer in Singapore

In terms of statistic for cancer in Singapore, the number 1 cancer for males is …

Negative HDB sales

Negative HDB sales

In recent years, HDB resale volume has been declining in the aftermath of various government cooling measures like the Mortgage Servicing Ratio (MSR) and capping of the loan term for HDB loans. Arising from these policies, there have been cases of negative HDB sales.

What is exactly negative HDB sales? It means that after you sold your HDB flat, the resale price is sufficient to pay off the outstanding HDB or bank loan but not enough to repay fully the CPF refund with accrued interests. In this situation, besides having no cash proceeds from the transaction, you may even require to top up the shortfall in cash to your CPF account if your property is sold below market value.

Negative HDB sales

According to CPF rule, there is also a difference for those owners who bought HDB flats with HDB loans and bank loans.

For HDB flats bought with HDB loans

The sale proceeds (including the option monies) will be used to pay off the following, in this order:

1) Outstanding HDB loan

2) HDB resale levy (if any)

3) Required CPF refund

If the sales proceeds after paying (1) and (2) is not enough to make the required CPF refund, you do …

Wealth destruction from CPF Accrued Interest

CPF Accrued Interest

Your CPF savings can be your best friend. But it can also be your worst enemy if you don’t manage it well. For some unknown reasons, some readers attacked me in my previous article, claiming that I wrote “misleading” and “nonsense” information on the CPF Accrued Interest. They refused to believe that CPF Accrued Interest could lead to potential wealth destruction if the game is not played correctly.

First of all, CPF Accrued Interest is of course your money! I have never disputed that in my previous article and I don’t know why some readers tried to stir up negative emotions without getting their facts right. I read my article over and over again and verified that I did not write that CPF Accrued Interest is not our money.

But then again, so what if readers know that CPF Accrued Interest belongs to them? Of more useful to them should be the understanding of the mechanism of CPF Accrued Interest right? Not understanding the law can cost you an arm or leg. In this article, I am going to discuss how wealth can be destroyed if Singaporeans mismanaged their CPF monies.

CPF Accrued Interest

Fundamentally, CPF’s principle is that whatever amount of CPF …

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