Saturday, 13 January 2018

This is better than many Fixed Deposit for this month

I used to be a fixed deposit person, putting my money in fixed deposit to earn the interests. So when I found out that this low risk instrument earns better than fixed deposit (or at least for this month), I am totally surprised! Based on risk and liquidity, should fixed deposit will yield better interest than them for the same tenure.

Let me give you some examples:
-  UOB gives a 1.2% per annum interest (with minimum deposit of $20,000) for a 10 month fixed deposit
- OCBC gives a 1.18% per annum interest (with minimum deposit of $20,000) for a 12 month fixed deposit
- Standard chartered gives their non- priority members 1.2% per annum for a 7 month tenor, and 1.3% per annum for a 10 month tenor, with minimum placement of $25,000. For their priority banking members, they get 1.25% per annum for a 7 month tenor, and 1.35% for a 12 month tenor.

For your information, this instrument that I am talking about is very flexible, and can be withdrawn any month (on a particular date) after its issue date, and you can start as low as $500! And guess what? It's giving you 1.55% on your first year, and 1.59% on your second year. What's more, unlike fixed deposit where you only see the interest at the end of the entire tenor, this instrument gives you your interest every 6 months. The only draw back is that you pay $2 when you get this instrument, and another $2 if you withdraw it in less than 10 years. These additional transaction fees are easily made up by the difference in interest rate.

What is this?

It is non other than our Singapore's Saving Bonds, and since this article is written in Jan 2018, I am comparing some promotional fixed deposit rates with the Singapore Saving Bonds that is to be issued in 1 Feb 2018 (you have to apply by 26 Jan 2018, 9:00 pm).

This is not a sponsored post. The writer expresses her thoughts and observation in this article.

The post is based on the online research at the time of writing. Websites referred to are referenced (via URL link to key words) in the post. Note that the information may have changed when you are reading. In addition, while the writer of this article tries to be as accurate as possible, there is no guarantee on the accuracy, completeness, suitability or validity of any information. In addition, all ideas expressed in this blog should not be thought of as an enticement to buy or sell any products, securities, assets, commodities or whatsoever mentioned.

See also, the section on disclaimer at the bottom of the website.

Wednesday, 10 January 2018

New Year Resolutions - UnSMARTing 2018

I was thinking about the new year resolutions for this year, and looking at the past years. Apparently, I only blog once about goals. Last year, I was thinking of setting monthly goals instead of new year resolution, by breaking down items into smaller bites. Well, it didn't go well. I stopped the monthly goals even before the first quarter of the year.

So this year, I'll try to be different (yet again) by unSMARTing myself.

S-M-A-R-T as in the acronym for specific, measurable, achievable, results, and time. This year's goals will be qualitative. There are things that I would like to achieve e.g. get a better job, be more involved in the stock market and so on. But these are just some things that I'll try to achieve. Not a hard and fast year. If by June, I realise that this is a totally aimless year, I can always start making more concrete plans. But for now, or at least for the first half of the year, no definite plans.

My intention of 2018 is to make it more experimental. Just like the many privileged young children today, whose parents let them try all sorts of activities before they focus on just some in later years. The parents' aim is to give the kids more exposure. When we are adults with more independence (both in terms of finance and choice of activities), shouldn't we continue with such explorations? As a kid, till my early adulthood, I have tried many things that I want to try, throw out many unsuitable ones, and kept just very little stuff. But as the demands of parenthood, work and complacency kicks in, I have stopped looking beyond what I usually do. The world has changed so much since then. What the hack was cryptocurrency then, pay from the handphone, etc. For many years, I have just looked at new things within the needs of my career, and necessity of life, I have not really tried much things. At this rate, very likely I will be like the antique using the public phone calling my friend on her landline, and getting no response. Okay, I exaggerated.

But my point is, for 2018, I will just do whatever my heart pleases me, and let's see what I'll achieve in this unSMART year.


Friday, 29 December 2017

What do Mr. Money Mustache and Early Retirement Extreme have in common?

These two are very popular people who have achieved financial independence at an age where most of us are still working, not by building a multi dollar business, but through their executive jobs, frugality and smart investment.

But apart from this, they also have supportive spouse who believe in their notion, and are working on their side to achieve this goal.

If aiming for financial independence early is your goal, it's important to get your spouse on your side (or at least someone who will be consequence natural to your goal). And in Asian context, your parents and the in- laws are important as well.

So, before you set your financial goals, perhaps it's good to get your family on your side.


Saturday, 23 December 2017

2017 in review - Current Business

It's just a week before we usher into 2018. Having done a year of review for the finance sector, it's time for me to review about my accomplishments in the current business (essentially my day job) and to plan for 2018.

2017 hasn't been so so for me. Career wise, this is the year where I feel that I have been left to "rot", and it's a year where I see the future of my career stagnating. There is no signs of promotion for me, in the near future, nor is there any signs of a change in the role (for the better) for a long time to come. It seems that I have been forgotten, or overlooked for most things. I attribute this to a lack of networking within my own organization.

In terms of pay, my pay increment has been in line with the organization's overall pay increment. With no promotion, it's a normal increment to adjust for inflation and so on. I have come to realise that significant pay increase only comes with either a change of job or promotion. Having been in the same role, same grade for almost three years, it's time I look at increasing my pay significantly. For the same amount of time and risk I put into the job, I prefer to go for the one that pays more, as it simply means a better appreciation of my efforts.

Thus in 2018, the focus will be on better networking, and also to explore better opportunities.

Sunday, 10 December 2017

2017 in review - Finance

We are now in December of 2017. How time flies. With all the dividends and coupons in at this time of the year, it would be nice to make a wrap- up of my finances for the year.

This is the year where I started to be more active in stocks, and be more vested in them. Some sales and purchases were made, and Genting which I have been holding and staying in the red for a period of time, was sold once it was profitable. 

These transaction exercises simply highlighted my "kiasuism", being so afriad to lose. Realize that I have been selling the counters once they are profitable, but on the contrary, and then holding on to those that are in the red. Well, for now, though I still have no urge to sell those counters that are in red (Kingsmen Creative, PEC and M1). 

Nonetheless, in terms of performance, dividends is at $1843.10 (as compared to $310 in 2016, of course this is mainly due to more money in the stocks market this year), with a current stock market value of $40,290.

Realized gains for this year is $2,050.85. You'll realize all counters in red are not sold, so there is only realized gains (excluding dividends). Paper losses stand at $2163.04 (excluding dividends). 

Dividend - $1,843.10; 
Current Market Value - $40,290
Realized Gains - $2,050.85
Paper Losses - $2,163.04

2. Bond Investing

This is the year where the first retail bond, CMA 3.8% I ever bought was redeemed. Total bond holdings actually dropped for 2017, compared to 2016. Some of the cash from this redemption was then channeled to stocks. Of course, with this redemption, the coupon received for 2017 fell to $4805.22, compared to $5048.61 in 2016.

I also bought some bonds, all Singapore government bonds, with $3,000 of 5- year government bonds, and $2000 of Singapore Saving Bonds (SSB) being bought. The decision to put in some money into these bonds was simply to earn the interest rates, as at this point in time. My OCBC 360 and UOB One has reached their maximum, and putting in extras here will only help in liquidity.

The foray into the SGS bonds was also to experience how the system works, though many will argue that you can just read online to find out how it works. As usual, our Singapore system, is transparent, efficient and seamless. You subscribe for the SGS bonds, and to know the results, simply check your CDP account (I have an online account, so this is simple). When the time comes to get the coupon, it gets automatically debited into your bank account. Totally like stocks when you buy them in Singapore.

Coupon Received - $4,805.22; 
Redemption Value - $130,000
(market value not considered, as there are no plans to sell them before redemption date for the time being).

3. Endowment Plan

No endowment plans bought this year. I am still holding on to my Maxsave and Maxgrowth. This year just involves paying the premiums for the Maxgrowth policy. I'm very glad the Maxsave premiums have been fully paid. The amount right now stays at $64,197.70 (by taking sum assured - premiums outstanding).

Assumed value - $64,197.70

4. Debt

My current debt will be the mortgage for my resale flat. To calculate net debt, the formula is used:
(outstanding amount - CPF OA savings of me and partner)/2

This is divided by 2 since my partner and I are responsible for the monthly repayment.We manage our finances totally separately.

Net Debt - $90,000

Saturday, 4 November 2017

The Hard Truth about Employees and Companies

Have you heard or yourself made such comments before:
"How could the company be retrenching people when they are making profits?"
"Why can't the company provide us with more benefits, they are so rich, it's just peanuts to them." 
"Why does the company only ask me to work, but never send me for any training?"
"I sacrificed so much family time for the company, why am I not promoted?" 

Whenever I read or hear such comments, it just make me wonder why do people not realize the truth about the relationship between employees and companies? As a corporate warrior for nine years and counting, each year only reminds me more firmly about this hard truth. 

Companies exist to accomplish the vision of the owners. It could be to leave a legacy, fulfill their dreams, make money or whatever. It's never, I repeat, NEVER for the employees. To a company, employing an employee is a transaction. A transaction for a service the employee can provide for the firm, to allow it to achieve the vision. This is similar to you going to the hairdresser for a haircut. The hairdresser gives you a haircut and you pay him or her. Or you going to the supermarket to buy milk. You get the milk, the supermarket gets the money. Simply, a transaction. 

To be blatant, employees are just a pawn to accomplish the vision of a company, in return for something (money or pay). To allow the pawn to help achieve the company's goals, some companies may provide training, have good benefits and so on. But the ultimate goal is to ensure that the pawn helps it achieve the target.

So what benefit does the pawn get? 

While we understand that companies exist for themselves (the owners), it does not mean that the employee is always at the losing end. For one thing, the company has to pay the employee for the work which allows the employee to accumulate and work on this  pennies to create his/her wealth. As employees, we should make full use of the opportunity when given to work for this company. How you make full use really depends on your ultimate goal. It could be to earn reputation in a certain area to spring board your career, gain experience, learn a new skill through doing, and of course build wealth from the pay. 

Since companies exist for their own goals, the pawns (employees) exist for their own goals as well. 

Once you understand this hard truth, you will know that no one owes anyone a living. The company employ you for the service they want from you, and you agreed to provide them with such service to the required standards. If the company wants you to make sacrifices that you are against your goals, then it's your job to prevent that. 

Remember, it's a transaction. 

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Sunday, 22 October 2017

Beyond Formal Education

I was recently awarded an Advanced Diploma after working on it for two years. I was looking through the past certificates that I have. Guess what! I have also an Advanced Diploma in Mass Media. I did it when I was back in University (more than 10 years ago), thinking of exposure and diversification (just in case). Similarly, I have a Certificate in General Insurance. If it were ten years back, I would be so proud of all these academic achievements.

Not today. In fact, I just wonder why on earth did I spend the money on these stuff.

So what if you have some many designations, so many degrees, so many certificates under your belt? What difference does it make if you don't make use of it, intend to make use of it, or have plans for what to do with it? It will just be a waste of time, effort and money, which could be invested in other areas isn't it? For people who are still young, getting multiple certificates, degrees, designations are good exposure. Also, when you have not much experience in the workforce, such academic achievements might give you some edge. But when you are older, does it make a difference? I wonder if I were to showcase my Mass Media certificate, will anyone bother?

I was talking to one of my friends recently who had a Master Degree, and a whole list of designations to boast of. Of course, he is a well- learned person, but when I asked him what is his purpose of having all these long list, and how has he been rewarded with such a long list of academic accomplishments, the answer I got was he understood even better the theory part in what he was doing in his job. His job does not reward nor recognize these additional designations he have.

I have seen many examples of people who did not further their studies after their formal education, but choose to self- learn or attend occasion seminars/ talks to learn more (or for the purpose of network). In terms of career accomplishments, they may be doing as good or better than those who are on the paper chase.

Since the launch of SkillsFuture, I have seen many around me jumping in to take courses for the sake of self- improvement. This is great, and that's what our government is promoting. While getting another certificate is undeniably an achievement (considering the time, effort and money required), it's just the first step. What you do after that is even more important. If you don't even have a plan what to use it for, why bother to go through the formal route to get accredited?

Perhaps, beyond formal education, or getting a certificate, having an ambition on how to use it is even more important, to ensure that the time and effort spent on this purpose bear fruit.