Monday, February 19, 2018

9 Highlights of the Singapore Budget 2018 Which Is Applicable to Most of Us

The budget was just announced on Monday at 3:30pm. This year, it is more focused on the future where the finance minister makes sure that Singapore will have enough revenue going forward. This means its not so good news for majority of the people but some things have to be done in order to be sustainable.

However, Singapore also registered the best surplus year in 2017 of almost $10 Billion. As such, there will be a sweet surprise for all Singaporeans. Read on to find out more

Here are 9 highlights of the 2018 budget which may be applicable to individuals like you and me:

1. More support for education

The annual Edusave contributions provided by the Government will be increased, from S$200 to S$230 for each primary school student, and from S$240 to S$290 for each secondary school student. This will take effect from January 2019. The Government will also update the income eligibility criteria for the Edusave Merit Bursary and the Independent School Bursary.

Currently, the income eligibility criteria for the Edusave Merit Bursary is S$6,000 in gross monthly household income, or S$1,500 in gross monthly household per capita income. From this year, this will be increased to S$6,900 and S$1,725 respectively.

Another interesting news that concern financial education is that a new financial education curriculum will be piloted at polytechnics and the Institute of Technical Education to give youth a good foundation in financial literacy.

2. Enhanced Proximity Housing Grant

The proximity housing grant will be increased from $20,000 to $30,000 for families buying resale HDB flats to live together with their parents. The keyword is live together. This will also extend to singles who will get $15,000.

For those buying resale flats to live near their parents or children, the PHG will still be $20,000. However, the live near criteria will be extended from within 2km currently to within 4km. Singles who buy a resale flat near their parents will also now receive a PHG of S$10,000.

The revised proximity condition of 4km will also apply to the Married Child Priority Scheme and Senior Priority Scheme for new flats, with effect from HDB’s May 2018 Build-To-Order (BTO) and Sale of Balance Flats (SBF) exercise.

3. Extension of S&CC rebate

For those who own a house, this is good news for you. The S&CC rebates will be as follow:

  • 1 & 2 Room HDB flats : 3.5 Months rebate with $380 GST U-SAVE voucher
  • 3 Room HDB flat : 2.5 Months with $340 GST U-SAVE voucher 
  • 4 Room HDB flat : 2.5 Months with $300 GST U-SAVE voucher 
  • 5 Room HDB flat : 2 Months with $260 GST U-SAVE voucher 
  • Executive/Multi Generational HDB flat : 1.5 Months with $220 GST U-SAVE voucher 

The money is typically used to pay town council expenses like cleaners’ wages, pest control, as well as the maintenance and replacement of lifts.

4. Foreign domestic worker levy to rise

Now for the not so good news. For those who own a maid, be prepared to pay more levy going forward. The levy will be raised from S$265 to S$300 for the first worker and to S$450 for the second worker. This will take effect from Apr 1, 2019.

For those who are paying the concessionary FDW levy of $60, they will continue to pay the same amount. However,  the qualifying age for levy concession under the aged person scheme will be increased from 65 to 67. All households with persons aged 65 and 66, which are enjoying or have enjoyed the levy concession under the aged person scheme before Apr 1, 2019 will continue to pay the monthly levy rate of S$60.

5. Tax deductions for donations

Another good news for those who have been making regular donations or want to make more donations. A 250-per-cent tax deduction for donations to charities that are Institutions of a Public Character will be extended for three more years, until 2021. 

6. GST hikes (in the future)

The most awaited news on whether the GST will increase is confirmed. The Government will raise GST by 2 percentage points to 9 per cent sometime from 2021 to 2025. Good news is this is not going to happen now so we still have time to prepare for it. 

This is to support recurrent healthcare, security and social spending so that every generation pays its share. I guess this is necessary for a sustainable future even though most of us would not want this to happen. Better get all the big expenditure items cleared off before the hikes begin. 

7. Buyer's Stamp Duty for residential properties raised

Another shocking news for those who want to buy property. The buyers stamp duty will be raised from 3% to 4% but only for properties with a value of more than $1 Million. If you have already bought a property valued at 1 Million and above and got your OTP on or before 19 February 2018, be sure to exercise your OTP on or before 12 March 2018 to continue enjoying the 3% stamp duty. 

8. Excise duty to be raise for tobacco products 

Singapore will increase excise duty on all tobacco products by 10% with effect from today. Not too good news for smokers out there.

9. Hongbao for Singaporeans: SG Bonus

Finally, the best news for this Chinese New Year. All Singaporeans aged 21 and above will get a HongBao of $100-$300 depending on our income. Here are the details:
  • $300 for those with an annual income of S$28,000 or below
  • $200 for those with an annual income of S$28,001-S$100,000
  • $100 for those with an annual income in excess of $100,000

Overall, this budget is more like planning for the future to me. I expected more support for healthcare needs in Singapore but it wasn't really mentioned in this year's budget. Long term healthcare cost such as nursing home, home nursing and those support for persons with family members who have disabilities at home are not mentioned. The only announced measure is where key services for seniors will be consolidated under one ministry for better quality delivery. I'm not sure how this will have a positive impact for the seniors or their family members who need help out there. 

Nevertheless, I believe it is important to plan ahead for the future which the government is doing so clearly for this year's budget. I would think Singapore really need to find more sources of income instead of just relying on raising taxes. There's a lot of work to do to transform industries, keep up with technological trends and the digital age disruptions and try to generate new sources of income for the country. We certainly hope that the future will be as bright as it has been for Singapore. 

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Is Comfort Delgro Still A Good Investment? - FY17 Full Year Financial Results and Thoughts

Comfort Delgro recently just released their FY2017  full year financial results. Previously, I did an estimation on how its results will look like in this post. The good news is the results came in better than what I had expected.

Actual results vs what I estimated

In my previous post, I painted a very bleak picture of its business especially its taxi business. I estimated that the revenue of the taxi business will be at $1270.8 Million. Indeed, the taxi business continued to suffer and came in lower than what I had expected at $1208.7 Million.

This was offset by the rise in its public transport business which is the core of Comfort Delgro's business. I estimated the revenue of its public transport business to come in at $2302.2 Million but this came in much higher at $2392.8 Million. This came in higher due to the bus contracting model and also higher revenue for its rail business when DTL-3 started in Oct 2017.

In summary, full year operating profit came in at $409.2 Million, higher than my initial estimate of $379.4 Million. Actual EPS for FY 2017 is 13.95 cents, higher than my estimate of 11.40 cents. With this, the PE ratio is about 14x at current price of $2.05 which is better than what I estimated the PE to be 17.37x at $1.98.

Moving Forward plans of Comfort Delgro

I can sense the management of Comfort Delgro trying as much as they can to get other sources of income and also prevent its taxi business from getting worse. They have formed an alliance with Uber where all Comfort Delgro taxis are under the Uber app now. It is unknown whether this will stop its current taxi drivers from going over to the competitors but seems like it is getting stable as of now. This deal is still pending regulatory approval in Singapore.

Elsewhere in the world, they have made the following merger and acquisition:

  1. Acquired remaining 49% of shares in ComfortDelGro Corporation Australia Pty Ltd
  2. Acquired remaining 49% of shares in CityFleet Networks Limited in United Kingdom
  3. Acquired business assets of Metro Taxi with a fleet of 170 taxis in Perth, Australia
  4. Acquisition of 217 Taxi Licences and Vehicles in Shenyang, China
  5. Acquisition of 100% of shares in New Adventure Travel Group with a fleet of 117 buses and coaches in Wales, United Kingdom
  6. Acquired remaining 51% shares in ComfortDelGro Insurance Brokers in Singapore
Despite all the acquisitions, its financial position is still stable with gearing of 10.6% and cash of $596.2 Million. At current price of $2.05, the valuation is actually quite decent if we expect its business to remain constant. Hopefully, the acquisitions is favourable for the company and they are able to generate more profits from all these. If that happens, then really the stock price of Comfort Delgro will go up. 

If business gets worse, then all these might change and stock price can go south again. I am of the opinion that the worse is over for Comfort Delgro at least in the near term. There is still a lot of monitoring to do for this stock and it is still a high risk one. As of now, I am still vested in this stock and will continue to monitor the developments.  

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Tuesday, February 13, 2018

Here's Why The First $100K Savings Is Really Important

Here's Why The First $100K Savings Is Very Important: 
"The first $100,000 is a bitch, but you gotta do it. I don’t care what you have to do—if it means walking everywhere and not eating anything that wasn’t purchased with a coupon, find a way to get your hands on $100,000. After that, you can ease off the gas a little bit" - Charlie Munger
The above quote is adapted from Charlie Munger who's a popular name in the investing world. He is vice chairman of Berkshire Hathaway, the conglomerate controlled by Warren Buffett. There is much truth in his words as I personally experienced it myself saving the first $100,000. It was real hard, very hard at the start. After that, its true that it gets easier.

To illustrate the point why saving the first $100K is very important, I've put the numbers into various charts to visualise how life actually pans out after we have saved the first $100,000. The scenarios are based on saving just $10,000 annual and investing at a 7% investment return.

How long does it take to save the first $100K?

The first $100K is the hardest. If we only save $10,000 annually and invest at 7% return, it takes about 8 years to reach the first $100K.

The journey beyond $100K

Let's look at what happens after we have saved the first $100K assuming we continue to save only $10,000 annually and invest at 7% interest rate.

From $100K to $200K, it takes about 6 years

From $200K to $300K, it takes less than 5 years

From $300K to $400K, it takes less than 4 years 

From $400K to $500K it takes about 3 years plus

And from $500K to $600K, it takes only less than 3 years

This is the summary of how our money compounds after the first $100K. As we can see, the line gets steeper indicating the the power of compound interest and also the importance of saving the first $100K.

There is another interesting fact we can see through the charts. The fact is investing is less important when we have less money as even if we can get 10% on just $10,000 savings, it is only $1000 returns. This doesn't add much to our wealth. But if we have $100K savings, the same 10% will increase our wealth by $10,000.

For my own financial journey, I set out a goal to save $100K when I started my blog back in 2013. I saved aggressively and managed to achieve it in less than 5 years. Did it get easier after that? Yes it did and I really can ease off a little bit and spend more without hurting too much.

For those who are still on your way to the first $100K, get it as early as you can. For those who have already got your first $100K, you can actually relax a bit.

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Tuesday, February 6, 2018

Here's How To Easily Get At Least $2000 Monthly For Retirement

All of us will think of planning for retirement at some point in our life. However, when we start thinking of retirement, many times we ask ourselves how we can go about to start planning for it? How much do we need to save and invest? This is always the answer we would like to know.

One thing we must know is that retirement can never happen by chance. If we do not plan for it, we will never have enough when the time comes. This is a scary fact when we actually reached that stage. In this article, I will write about some of the easiest ways to plan for retirement. The ways I will be writing about will NOT require much effort and most of us will be able to do it. The goal is to plan to have at least $2000 monthly to spend during our retirement years. This amount may not even be enough for some people but we will start of small first. The more you need, the more you need to plan.

The assumption of the scenarios will be to start work at age 25 to age 65 (40 years of working) and retire at age 65 to live till age 85 (20 years of living).

$2000 Monthly for retirement through savings only

If you just want to live on your savings alone for retirement, this is not difficult to calculate. If you approach a financial planner, this would most often be the method. They would advise you to get a retirement savings plan so that you can save up for your retirement and have some cash when you stop working. However, this is not the best method which you will find out why later.

Let's assume you retire at the age of 65 and live to age 85, this is 20 years of retirement life. Using a simple calculation, you'll need $480,000 to draw-down $2000 per month for 20 years. How are you able to save $480,000? If we assume we start work at age 25 and work till age 65, this is 40 years of working life. To save $480,000 in 40 years, we'll need to save averagely $12,000 every year for 40 years just to achieve that.

$2000 Monthly for retirement through savings & investment

If we up our game and not just save but invest also, how much do we need to save every year to achieve the same $480,000? The answer is a stunning $3758 only as compared to $12,000 for a person who does not invest.

For a person who invests, they can even retire earlier. For the same $2000 monthly for retirement, a person can save $10,000 every year and be able to accumulate $480,000 in about 24 years. This means if this person starts working at the age of 25, he or she can probably retire by the age of 50. However, this $480,000 still can last 20 years only if we draw down $2000 monthly.

$2000 Monthly for retirement through CPF Life

For Singaporeans, we are all under this CPF life scheme whether we like it or not. However, we can actually use it to our advantage in planning for our retirement.

As we can see earlier, we actually need $480,000 savings to have $2000 monthly for retirement which can last for 20 years only. With CPF life, we will only need $256,000 savings at age 55 to get monthly payout of $2000 for the rest of our life from age 65 onward.

How do we achieve the $256,000 in our CPF by the time we are 55 years old? The strategy is to utilise our Special Account (SA) to let the money compound to reach that amount. If we have $38,000 in our SA at the age of 30 and have $300 monthly contribution till age 55, we would easily achieve that $256,000 in 25 years.

Which method will you use to plan for retirement?

I have stated 3 methods which are most common in retirement planning. I have summarised the different methods in the below table:

Method Accumulaed SavingsAnnual SavingsHow many years to save?How long the money can last?
Savings only$480,000 $12,000 40 years20 years
Savings + Investment (5%)$480,000 $3,758 40 years20 years
Savings + Investment (5%)$480,000 $10,000 24 years20 years
CPF Life$256,500 $3,600 25 yearsLife

There is no one method that fits all. The most important thing before planning for retirement is to know how much you need when you stop working which can sustain your lifestyle for as long as you live.

It is also crucial to plan early as the earlier we start, the less we have to save to achieve the same amount of funds for retirement. Just like a marathon race, the road to retirement is the same length. If we start early, we have the luxury to jog or even walk to the finish line. If we start too late, we may have to even sprint just to reach the same finish line. It can be very tough at that time.

There is one last method for retirement planning which is creating passive income for retirement. The most popular way is to create a sustainable dividend income stocks portfolio or through getting rental from properties. Both these method need a significant amount of savings in order to create that income. For dividend income through stocks investing, the rule is 4% draw down during retirement years which according to research is sustainable can last a lifetime. This means if we have 1 Million dollars, we can generate $40,000 dividends every year using the 4% rule. If we have $500,000, then we can generate $20,000 every year. This should be sustainable and not difficult to achieve.

No matter which method we use for retirement planning, starting now is the key. Try thinking how much you need per month when you retire and work backwards from there. Its actually not as difficult as we thought it would be once we start the ball rolling.

Monday, January 29, 2018

How I Use Credit Cards To Better Manage My Finances

Credit cards are great tools for me to better manage my finances. There is ease of tracking my expenses as there is always a record of my spending. I also use credit cards to get bonus interest on my savings plus get rewards in the form of cashback and miles.

In this post, I will share the credit cards I have and how I use them in the right way to maximise the benefits. Let's begin.

1. Standard Chartered Unlimited Card & AMEX True cashback card

The first card I have is the SCB unlimited card. This card is straightforward to use as it just gives 1.5% cashback on all spending. There is no minimum spend and no cap to the cashback given. I use this for most of my spending to make sure I get cashback on every single cent I spend on. I seldom use cash to pay for anything now unless the shop does not accept credit cards which is rarely the case now.

Another good cashback card is the AMEX True cashback card which also gives 1.5% cashback. AMEX has good perks and their customer service is top notch. Many offers they have linked up too for their customers.

You can apply for both the SCB Unlimited and AMEX True cashback card here.

*Get 1 Year LiveUp subscription + 3 x GuavaPass classes + $50 Takashimaya vouchers on approval for both cards above

2. American Express Singapore Airlines Kirsflyer card

This is a new card which I got as AMEX offered the card to me in exchange for my previous AMEX true cashback card. The previous true cashback card is similar to the SCB unlimited card so I opted for a switch to this krisflyer card instead to try earning air miles.

Maybe you've heard of miles card or you have not heard of it. Initially, I was confused on how miles card work too but after some searching, I begin to understood it better. Its true when people say miles card earns better rewards as compared to cashback card. For this AMEX krisflyer card which I have, it earns 1.1 miles per $1 spend. There are also some spend which earns 3.3 miles for every $1 spend such as on Grab and Uber.

Miles can be exchanged for free air tickets as well as purchase upgrades. You can apply for this card here. You can get 5000 free bonus miles on your first spend (any amount) and first year annual fee waiver.

3. Safra DBS Credit Card

The third card I have is the Safra DBS credit card. There is 3% cashback on groceries, all online spend and also all contactless payment. The only issue here is you can only get this card if you're an existing Safra member. I applied for Safra membership during my NS days so I still have the membership until now. There is no annual fees for this card as long as you remain a Safra member which is not expensive to be one. Its just $270 for a 10 year membership but of course you have to be an NSF or NSmen in order to apply for membership.

You can apply for this card here.

Paying my credit card bills to get higher interest on my savings

After all the spending I have on my 3 credit cards, I pay all the bills in full every month using my OCBC 360 account. With the salary credit plus the 3 credit card bill payment, I can get 1.50% interest on my savings. This is what I do to get close to $100 every month on interest alone.

Bonus Card: UOB Yolo Card

There is another card which I think is good for those who frequently eats out or enjoys spending on entertainment. This card gives 16% rebate on dining and entertainment on weekends. You can also get 3% rebate on online, fashion and travel spend.

You can apply for this card here

In collaboration with Singsaver, they are also giving away one year LiveUp subscription plus 3 Free complimentary Gym classes from GuavaPass. For the gym classes, you can choose from Yoga to Kickboxing, Spinning to Dance, CrossFit to Pilates!

You might ask what's LiveUp subscription? It is actually a membership programme started by Lazada and Redmart together with other online services. You can get discounts and special deals from Lazada, Taobao, Redmart, Uber, Ubereats and the membership even included a 6 months subscription of Netflix. This promo applies to the SCB Unlimited card, AMEX True cashback card, UOB Yolo card and some other cards as well. You can check out the cards available here.

Credit cards have worked well for me so far. I will always pay my bills on time to avoid the high interest and the late payment fees. I did miss my payments once and was charged a late fee but just one call and they waived the fees for me. If we really cannot pay up, the fees are really high so it is important to control our spending if we were to use credit cards. Never spend any money which you are not able to afford. This will get you into more trouble than what you could imagine.

However, when used wisely, credit cards can be a good tool to better manage our finances.

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Monday, January 22, 2018

1.55% Interest On The Singapore Savings Bond

I have been monitoring the Singapore Savings bonds for quite some time now since its launch in 2015. The interest was not that attractive to me in the past until now when I notice the first year interest for this month's SSB is at 1.55%. This is higher than most fixed deposits currently and definitely a good place to park extra cash in.

The attractiveness of the SSB

What is so attractive for the SSB is that it is capital guaranteed so there is no risk of losing your capital. There is also the flexibility to redeem the bond every month so we do not have to lock in our money inside for one year like what is required for fixed deposits. This presents a very good opportunity to get higher interest while still maintaining the flexibility for our money.

The below table shows the interest for February 2018 SSB which will be issued on 1st Feb 2018. As we can see, the 1st year interest is already at 1.55% and if we keep our money inside longer, the interest steps up as well.

Details and buying the SSB

Some details of the SSB are as follows:

  • The 1st interest payment will be made on 1 Aug 2018, and subsequently every six months on 1 Feb and 1 Aug every year. 
  • You can invest a minimum of $500, and in multiples of $500 up to $50,000 for this issue. The total amount of Savings Bonds held across all issues cannot be more than $100,000.
  • Application starts from 2 Jan 18 and closes on 26 Jan 18 (9pm)
  • Apply through DBS/POSB, OCBC and UOB ATMs and Internet Banking, OCBC Mobile Application from 7.00am - 9.00pm, Mon - Sat, excluding Public Holidays. On 2 Jan 2018, these channels will be open from 6.00pm to 9.00pm. CPF and SRS funds are not eligible.

How to redeem the SSB?

As mentioned earlier, there is a flexibility of redeeming the SSB every month just in cash you need the money. Similarly to buying the SSB, you can also redeem the SSB through the DBS/POSB, OCBC or UOB ATMs, or online through DBS/POSB’s Internet Banking portal. 

The redemption period opens at 6pm on the 1st business day of each month and closes at 9pm on the 4th last business day of the month. Redemption proceeds will be paid by the end of the 2nd business day of the following month.

Do note that the SSB pays interest every 6 months. If you redeem your bond when there is a scheduled interest payment, you will receive the scheduled interest together with your redemption amount. If you redeem before the scheduled interest is paid, you will receive a pro-rated amount, called the accrued interest, which is the interest you have earned but have not been paid. In essence, even if you redeem the bond early before the interest payment, you will still get pro-rated interest. 

I will be investing some of my money in the SSB for this month as the interest is quite attractive. Nowadays, the stock market valuation has been quite high and I will be looking to re-balance my portfolio to sell some of my stocks which are already overvalued. 

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Sunday, January 21, 2018

Beware Of Mortgage Reducing Term Insurance From Private Insurers

When we buy an insurance policy, we hope that we can activate the policy and make claims when situation arises. However, there are times when we realise that actually the insurance we buy cannot be claimed as fast as we hope for or could not be claimed totally at all because of some terms and conditions which were not made known to us when we had bought the policy.

It has been brought to my attention that the reducing term insurance from AIA is not easily claimable in the event of total permanent disability (TPD) or even terminal illness. I'm not sure if this is the case for other private insurers but in this post, I will focus on the reducing term insurance from AIA and its limitations. This is shared based on my own experience claiming for the benefits of this policy and the policy contract which I have managed to obtained. 

If you're using CPF to pay for your HDB flat currently, it is compulsory to be insured under the home protection scheme (HPS). You can opt out of the HPS if you have other term insurance from private insurers to cover your mortgage in the event if something happens. The HPS is a mortgage reducing term insurance to cover your outstanding mortgage on your HDB flat in the event of death, TPD or terminal illness. 

This mortgage insurance takes 2 years to payout for TPD

Some people would buy a private term insurance and opt out of the HPS as premiums are normally cheaper for private insurers. However, it is important to note the fine prints as it can be difficult to claim. I will take the AIA reducing term insurance as an example and have reproduced the policy summary of the product benefits below:

AIA reducing term insurance contract in 2017

The first image is the old contract from AIA for its decreasing term insurance which was bought back in 2003. The second image shows the new contract which is obtained in 2017. If you notice, the contract terms are the same. The red box in the image above shows the total and permanent disability benefit. If you notice, 10% will be pay out on the first policy anniversary and the policy can only pay out the full insured amount at the second policy anniversary as indicated by the green line. This means that if you are claiming for this policy due to TPD, you have to wait as long as 2 years before you can get the payout. 

The problem is if you have an outstanding mortgage which cost thousands of dollars a month and you had some illness or accident that caused disability, most likely you will not be able to work and lose your income. Your family remembered you had this mortgage reducing term insurance but only to find out that they have to struggle to continue paying for the outstanding mortgage for another 2 years before they can claim from this policy. This is going to cause a lot of problems later. 

Is HPS a better choice if you own a HDB?

For the HPS, which is a mortgage reducing term insurance administered under CPF board, it might be a better choice for HDB flat owners. If you own a private property, you'll have to get a term insurance from a private insurer so make sure you check the terms and fine prints before you purchase one. The term insurance I bought from Aviva doesn't need to wait for the second policy anniversary to payout for TPD. It just need a standard 6 months continuous TPD to claim for the benefit and the assured sum will be paid out in one lump sum. 

Back to those who own a HDB, the HPS protects us and our families against losing our HDB flat in the event of death, terminal illness or total permanent disability. The HPS does not payout in cash like how private term insurance does. The HPS will offset whatever outstanding mortgage loans instead. The claim criteria has also widened where CPF members with terminal illness and total permanent disability but are still able to work will qualify for claims under the Home Protection Scheme (HPS) and Dependants’ Protection Scheme (DPS), after Parliament passed changes to the definition of “incapacity” under the CPF Act on 29 February 2016. This was also reiterated by Mr Lim Swee Say, Minister of Manpower, on 8 May 2017 in a written reply to a question in parliament

No matter what, having a mortgage term insurance which can only payout in full in 2 years is really a long time. Most TPD benefits just require 6 months of continuous permanent disability to claim the benefit. I am disappointed that the AIA reducing term insurance can only payout fully on the second policy anniversary. If you're considering to get a mortgage insurance for your property, do take note of the contract policy. If you already have a mortgage insurance, you might want to take a look at the contract terms too.

*Disclaimer: I am not recommending or advising on any insurance from any companies. This post is only a sharing of my personal experience and the facts which I manage to find

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Monday, January 15, 2018

The Rising Property Market And Interest Rates

Most of us would know that housing prices is rising again in Singapore. The sales of new private homes are also going up where we see more and more people getting interested to buy properties now. This seems to be the right time to purchase a property at the right price and also when loans are still cheap.

The following chart shows the SRX non-landed private property index from January 1995 to December 2017. We see a dip in the property market after the high in February 2013. The lowest price recorded was in December 2014 and November 2016. At current prices, it has almost reached the high back in February in 2013. It seems like the property market may breakthrough that level and continue to go higher soon. This explains why many people are entering the private property market now hoping that prices will continue to go higher.

For HDB, it is a totally different picture. Resale prices of HDB seems to be continuing on a downtrend after falling from the high in March 2013. The regulations for HDB flats such as the 5 years minimum occupation period, the limitation of loans to 30% of your gross monthly salary, the maximum loan tenure of 25 years as compared to 30 years for private properties and the restrictions of not being able to rent out your HDB flat even if you purchase a private property makes it hard for the prices to go up.

This is in line with the government's push for affordable public housing in Singapore. I don't see HDB as an investment at all because the main use of it is still for personal accommodation. However, I do foresee that private home prices should continue to go up moving forward with better economic outlook.

For those who already own a property

On the other side, many people would have already bought a property previously. If you've bought your private property at a high back in 2013, the good news is that prices are going above that soon. For HDB, its a different story.

With better economic outlook and rising property prices, interest rates are rising as well. If your housing loan is still currently on a floating rate package, its time to take a look at it before it creeps up. The SIBOR, which is the Singapore Interbank Offer Rate is the most commonly used benchmark for housing loans in Singapore. The 3M SIBOR now stands at 1.42% and the 12M SIBOR is at 1.66% as at 5th January 2018. You can refer to the official SIBOR rates here. The 3M SIBOR has increased more than 0.5% from the previous low.

Interest rates will surely go higher from here. There is no doubt about that. Its just a matter of time interest rates will increase. With the US Federal Reserve hinting on more rate hikes and stock markets across the globe rising to record levels, interest rates should not be remaining low forever.

How Much Your Loan Instalments will Rise? 

If you have a $300,000 loan, a 1% increase in interest rates will result in your monthly instalment increasing by close to $150/month. That is additional $1800/year. For a $500,000 loan, an increase in interest rates of 2% will result in your monthly instalment increasing by about $500/month. This is $6000/year. The higher your loan amount, the greater the impact it will be.

Don't forget that the norm for interest rates were about 3%-3.5% in the past. We should always be prepared for this to happen.

Refinance Your Home Loans to Lessen the Impact now

Fortunately, before the rates rise even higher, we can always refinance our home loans to lessen the impact at least for the next few years. I have worked with banks in Singapore for many years now and always on the lookout for the best loan packages for everyone.

It is recommended to go for fixed rates now and the best I can get is as below:

For both HDB and private property (Min loan amount $200,000)

2 years fixed rate

Year 1: 1.65% (Fixed)
Year 2: 1.65% (Fixed)
Year 3: SIBOR + 0.70%
Thereafter: SIBOR + 1.00%

3 years fixed rate

Year 1: 1.85% (Fixed)
Year 2: 1.85% (Fixed)
Year 3: 1.85% (Fixed)
Thereafter: SIBOR + 1.00%

For the above 2 packages, you can get cash rebate and shopping vouchers as below:

Isetan Shopping Vouchers

* Shopping vouchers applicable for both new purchase and refinancing

Cash rebate

*Cash rebate for refinancing only

If you're interested, click on one of the options below to fill up a form for me to contact you back:
Alternatively, you can email me directly at

I'm not sure when this fixed rate package will be revised as many banks have already adjusted their fixed rate package upwards in the last few weeks. This is the last one which still has attractive rates.

For those looking to buy a HDB flat or a private property, now is a good time to look at it. If you need assistance in your property purchase such as knowing your loan eligibility or not sure what's the process, you can email me as well. Any other questions you have, I'll try to help as much as possible too.

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Sunday, January 14, 2018

Setting My Directions And Goals For 2018

2018 came as a bad start for me as I experienced the loss of someone close to me. You can read this episode of my life here. My world view has changed because of this. Nevertheless, I am still living in this world and will still be setting my goals for this year.

Life is really short and this has kept me thinking what kind of goals should I set for myself this year. I should be asking what kind of thing I want to do so that I do not take life for granted and make an impact as much as possible. This sets the directions for my goals this year.

My Goals for 2018

1. Helping more people

The first goal which I want for this year is to help more people. There are many ways to help people but the best way is to enjoy doing it rather than helping for the sake of helping. When it comes to helping people, most people think of volunteering. While that is one way to contribute back to society, we can also help people through our own life.

For instance, blogging has allowed me to help more people than I can ever imagined. Since the start of my blog, I've replied to all emails as much as I can to answer any questions which readers might have. I enjoy doing it because I get to help someone out there. For the year 2018, I will continue to do that and reply to all emails which anyone sends asking for advise or help. I also thank the readers who have contacted me to tell me how my blog has benefited you personally. This keeps me going as the motivation of this blog is to help as many people as possible.

I have also helped people through my expertise in housing matters. Since 2 years ago, I started a free mortgage advisory service on my blog where I personally advise people on housing matters including how much loan one can take and also the best loan to take for housing. I also work with law firms to do the conveyancing. I am happy to say that I will continue to do this for this year. I will continue to give my best advice for any housing matters.

Lastly, I'm thinking of setting up additional complimentary services to alleviate the pain and problems which people will normally face on another aspect of life. This is a project in progress and will be revealed when its ready.

2. Do at least one thing I've never done before in life

Yes life is short and this made me want to experience life as much as possible. I've done many things in my close to 30 years of life but I want to set myself a goal to do something I've never done before this year.

Honestly, I have no idea what I really want to try or experience but I will give it a good thought in the next few months. Hopefully by the end of the year when I review back my goals, I can then write what I have done differently in year 2018.

3. Spend more quality time building relationships

Relationships become even more important after the death of a close cousin of mine. I still remembered the last words I told him was to meet up after he comes back from his overseas trip. In the end, he never made it back... It was quite a shock to me.

There are so many relationships which we may take for granted especially our family members. I always value family a lot because as time goes by, I realised my parents are getting old and time is running short. All of us have limited time in our life. With work taking up most of the time in life, what we are left with is just that few hours a day to spend time on friends and family. Not forgetting spending time with our love partner if we are attached or married.

With limited time, the key is spending quality time with our loved ones. This include friends too. Quality is the key for me this year as I refocus to build quality relationships too with friends and family members.

4. Achieve $20,000 passive/other income 

Money may not be everything but everything needs money. I'm still on a mission to replace my active income as much as possible so that I can get more time by making money work hard for me. To have the freedom of time to do what we love is always a dream for many. To make it happen, it requires deliberate planning and execution and patience to see through it. 

Because of certain things that happened, money is needed more than ever before. Even though my goals is not just to make money for the sake of it but it is to make sure there is enough for the future.

In 2017, I manage to create $19k+ in passive/other income. For 2018, I think it would be good if I can just maintain it.

You can read this post on how I manage to create the $19K+ passive/other income.

5. Planning for the future 

Lastly, and the most important one, is to plan for the future with my partner. We are still in the process of trying to get a flat and also trying to plan for wedding and all the necessary stuff for our future.

It has not been an easy time in 2017 and even going to 2018 as many things happened. I pray that 2018 will be a better year for me as well as my loved ones. This sets the direction of my life in 2018.

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Sunday, January 7, 2018

Life Is Too Short - Experiencing The Pain Of Life

This week has been an extremely tough week for me as well as my family. On new year's eve, I received information that my cousin could have got into an accident. Moments later, his passing away was confirmed which was a devastating news for me personally. He was only 27 years old and just celebrated his birthday a few days before the incident happened.

This cousin was close to me, very close in fact. 2 days before his passing on, we still communicated on the phone and I said that when he comes back from his overseas trip, we can arrange a time to meet. But, he didn't manage to come back. The whole of this week was very tough. We tried to help out for his wake as much as possible. It was an emotional 3 days as his friends came one after another. Hundreds of them came from all across Singapore. Some gave their eulogy and I could sense my cousin made an impact in his short 27 years of his life.

It is painful to lose someone close to you in life. We grew up in the same neighbourhood together for the past 20 over years. I would go over to his house and he to my house as we stayed quite nearby. A lot of things I do now still reminds me of him. Even going to the gym this morning reminds me of him because we went to gym together before and he would always encourage me to do more sets and tell me how the exercises should be done. We also had late night chats at one of the benches at the sports complex. Its hard to forget someone close and really now I understand what it means to lose someone.

My cousin was special. He was passionate about finance and investments as well. We often talked about life, about investments and the dreams he had to have his own business. Knowing I had a financial blog, he got me involved in the investment club he was in at NTU. I attended a few events organised by NTU interactive investment club back in 2015 such as FINEX which is a financial amazing race style event, Singapore Financial conference and lastly the National Cashflow competition. Some of you may have attended these events too as I posted it on my blog.

The national cashflow competition used the financial boardgame cashflow 101 for many years but some of the concepts were not that applicable in the Singapore context. One of his NTU professors whom he respected a lot came for the wake. The professor said he was a special student, often standing out among the class. When the professor said maybe we should have a Singapore version financial board game, my cousin was quick to take up the task and created a whole new financial board game for use for the competition. To this day, I'm impressed with the concepts he came out, the game flow and the many late nights he spent just to complete the board game in time for the competition. The financial board game was named Asset Finesse which means having the skills and ability to manage our assets with ease. I was told by the professor that the game is still used in the national cashflow competition till this day. He has indeed left a legacy behind.

As you can see, the board game was played by hundreds of students all across Singapore, 500 to be exact every year. I am proud of the achievements he has made. Even though he is no longer in this world, the ideas he left behind is still making an impact.

He was also very hardworking in his life. He made it to the deans list during his studies in a local Polytechnic. In army, he made it as an officer. In University, he was actively involved in the investment club and still got a first class honours for his degree despite his busy schedule. At work, he got a scholarship from Spring Singapore and started work in an SME under their management associate program. For his life, I would think he has lived a fruitful one. He went to Indonesia to start a business for 6 months and he managed to speak fluent Bahasa Indonesia in a short time. He also went travelling to many countries, making new friends and was also able to pick up and speak fluent Japanese.

I'm sure he is in a better place now with no sorrows or worries or burden. We are both Christians and we believe in eternity. When I received news of his passing on, a passage from the bible just pop up in my mind which I reproduce below:

A Time for Everything

For everything there is a season, a time for every activity under heaven. 

A time to be born and a time to die. 
A time to plant and a time to harvest. 
A time to kill and a time to heal. 
A time to tear down and a time to build up. 
A time to cry and a time to laugh. 
A time to grieve and a time to dance. 
A time to scatter stones and a time to gather stones. 
A time to embrace and a time to turn away. 
A time to search and a time to quit searching. 
A time to keep and a time to throw away. 
A time to tear and a time to mend. 
A time to be quiet and a time to speak. 
A time to love and a time to hate. 
A time for war and a time for peace. 

What do people really get for all their hard work? I have seen the burden God has placed on us all. Yet God has made everything beautiful for its own time. He has planted eternity in the human heart, but even so, people cannot see the whole scope of God’s work from beginning to end. So I concluded there is nothing better than to be happy and enjoy ourselves as long as we can. And people should eat and drink and enjoy the fruits of their labor, for these are gifts from God. And I know that whatever God does is final. Nothing can be added to it or taken from it. God’s purpose is that people should fear him. What is happening now has happened before, and what will happen in the future has happened before, because God makes the same things happen over and over again.

Ecclesiastes 3:1-15

Life is short. Experiencing this episode has changed the way I see life from now onward. Who would have expected that a young man in his 20s would pass away so quickly. Rest in peace my dear cousin and till we meet again in heaven.