Money management; personal finance

No winter lasts forever and fortune favours the brave. Could the Wuhan virus be the proverbial Black Swan event that investors can exploit? It is still early days of the outbreak of Wuhan virus but wealth builders must prime themselves to strike when the iron is hot.

Amid the global outbreak of the Wuhan virus, there have been media reports of numerous retailers looking to profit from the coronavirus by increasing prices of facial masks. It is not for me to make moral judgements on whether the actions of these retailers are ethical. After all, many of them are businessmen and not charity bodies. But as an investor, I ask myself how I can make money from this Wuhan virus in a responsible, safe and ethical manner.

Health crisis like this Wuhan virus can present opportunities but such crisis only occurs once in a blue moon. Prior to the Wuhan virus, the last flu epidemic that sparked off such global panic was the SARS in 2003. In view of this, wealth builders must be able to spot and seize opportunities when they surfaced. Many investors like to lament that there is a dearth of opportunities in our generation but when opportunities present themselves, investors often don’t dare to take the leap of faith.

This is an article on an ancient money concept which you should not dismiss. You might have heard of the phrase “money not spent, not yours” What is the meaning of this phrase and does it even make sense? After all, if the money does not belong to you in the first place, how do you spend it? Let me share with you some insights of mine.

As a finance blogger, I do not advocate saving as a route to building wealth. I know, I know. The perennial thinking is that we should save for the rainy day, be frugal and practice good money habits. So, to encourage people not to save money would come across as weird, or even disrespectful to some people. In fact, it is almost criminal for a finance blogger to tell readers not to save. But read on if you think this article may be useful to your money journey.

In my life, I have come across many frugal people. In general, they are good people. I also have many friends who are generous and are successful in their careers despite being big spenders. Based on my observation of their character traits, I think I fall somewhere in between of being frugal and spendthrift.

Against the backdrop of improving economic performance, Singapore government announced civil service bonus of 2 months, consisting of Annual Variable Component (AVC) of 1 month and Non-Pensionable Annual Allowance (NPAA) of 1 month. Lower-wage civil servants will get a minimum year-end AVC of $1,800.

Together with the mid-year Annual Variable Component (AVC) of 0.5 month, the total civil service bonus that will be paid to civil servants in 2017 is 2.5 months. This is excluding individual performance bonuses and other additional bonuses.

The civil service bonus was announced at a time when Singapore economy is undergoing a period of restructuring. Even though the economy expanded at a better than expected 3.5% for the first three quarters of 2017, labour demand remained uneven across sectors in 2017. The number of retrenchment for 2017 is expected to be much lower as compared to 2016, which hit a peak of 19,170, the highest since Great Financial Crisis.

The civil service bonus is widely used by the private sector as benchmark for staff bonuses. Usually, private companies tend to peg staff bonuses to civil service bonuses and reward staff who had performed well. Nonetheless, the private sector bonus also depends on how well the sector is doing.

The soaring SIBOR rates have created much havoc for many home owners as banks started to adjust upward their mortgage interest rates. I am one of those affected as my bank increased the interest by $200 per annual. More carnage is expected for the market as the Federal Reserve is expected to hike interest rates in a couple of weeks. Thankfully, my loan amount is not too big, so the impact of the upcoming Federal Reserve interest rate hike will be minimal. For many home owners, it is prudent to choose the best mortgage loan.

Incidentally, the lock-in period for my mortgage loan will end next month, so I am looking at refinancing or repricing my outstanding mortgage loan. Lets take a look at the important factors when choosing the best mortgage loan packages in the market. You won’t want to get ripped off by the banks.

My first consideration for a mortgage loan is actually the lock-in period. I am looking at 2-3 years of lock-in period because I aim to pay off my housing debt by then using my CPF savings. For the uninitiated, the term “lock-in” is a clause which restricts you from switching to another loan package.

In the course of my blog adventure, I am privileged to meet people who shared with me their financial insights unselfishly. From them, I gleaned some knowledge on Singapore’s finance sector from the perspective of a retail investor. One of the important lessons I learned is what does being an accredited investor really means in Singapore.

Before you skip this article, take note that being an accredited investor is NOT about taking financial courses to qualify for investing in risky products. It’s about how much money you have in your bank and your earning income bracket. 

Under Securities and Futures Act Paragraph 4A, an accredited investor means[This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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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.

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.

A CPF nomination allows CPF members to specify who will receive their CPF savings, and how much each nominee should receive when they pass away. Here’s a list of FAQs to help you better understand it. Information on CPF nomination is also available at the CPF website.

Q1: What happens to my CPF monies if I pass away without making a CPF nomination?

Your entire savings in all your CPF accounts will be distributed by the Public Trustee to your family members according to the intestacy law or the Certificate of Inheritance (for Muslims).  So, you need not worry about your CPF monies landing in the wrong hands even if you do not make a CPF nomination.

In my previous blog, I mentioned about how to become rich in Singapore. One of my readers, Eric, replied that most Singaporeans faced the “need” to be “rich” now rather than in their fifties. While I agreed that most youth nowadays want instant gratification and quick results, I cannot agree that being rich is a “need”. Rather, the desire to be rich is a “want”, rather than a “need”. It is important that readers differentiate the difference between needs and wants. I shall proceed to elaborate.

In life, we can have many “wants”. We can desire for new and bigger cars. We can for desire designer-style apartments. We can desire to have a European honeymoon. Nothing wrong with these desires. But it is important to note that these are not essentials to our life. They are merely “wants” rather than “needs”.

For example, in Singapore, if you need a car for certain valid reasons, you can buy a pre-owned car rather than paying through the nose for a brand new car. If you don’t have the sufficient fund to go for a European honeymoon after your wedding, then probably the best option is to plan for a short trip instead.  Therefore, before we purchase big-ticket items, spend some time to think through whether they are actually “wants” or “needs”.