Archive for the ‘Personal Finance’ Category

Posted on August 26, 2010 - by musicwhiz

Personal Finance Part 18 – To Crave and Covet (C&C)

It’s been a while since I’ve talked about aspects of personal finance, as I was kept busy the whole of May to July 2010 with analyzing the financial results of the companies in which I hold shares, as well as writing about Sun Tzu’s War On Business episodes. I’d realized the last entry on personal finance was back in April 2010 and was on cycling! I had been thinking in the last couple of weeks about the problems associated with our society in relation to over-spending and lack of prudence or knowledge about financial matters; and it boils down to one major problem which I term “C&C – Crave and Covet”. This will link up to many other concepts which I will point out later (and which have been popularized by the mass media as well).

The simple definitions of the words crave and covet are as follow (from Dictionary.com):-

Crave – To long for; want greatly, desire greatly
Covet – To desire wrongfully, inordinately, or without due regard for the rights of others

It is in our basic human nature to crave and desire for more, of course after ensuring our basic necessities are provided for. But society today is a lot more materialistic and capitalistic than it was say, two generations ago. This is sadly due to the modernization of Singapore, which in some ways has outpaced the maturity of the young minds, who are still struggling to adapt to the “First-World” mentality inculcated within them by our education system. A mature mind is one which is able to handle pervasive emotional influences which may have a detrimental effect on one’s wealth and spending habits. (more…)

Posted on August 23, 2010 - by Wilfred Ling

94% “voted” against CPF Life

I read with dismay from Straits Times article “CPF Life: Some want to be given a choice” dated 18 August 2010 that out of 700,000 of CPF members who are eligible for opt-in, only 40,000 took up CPF Life and committed S$2 billion to the scheme. This means that the remaining 94% said “no”. This is shocking to me. I think the government should listen to what the ground is saying and review why the take up rate is so low. Do bear in mind that the CPF Life will eventually be compulsory.

Straits Times Singapore, 18 Aug, 2010, Wednesday
CPF Life: Some want to be given a choice
Not everyone is keen on auto-inclusion, say MPs and financial advisers.
Read more…

Posted on August 18, 2010 - by Kay Toh

Why rising property prices are not healthy for the majority

At the end of the previous month, HDB just released the latest update of the Resale Price Index (RPI) and this latest update shows that the RPI has increased by another 4.1% in the Q2 of 2010. The chart above shows the historical RPI and as you can see, the RPI is some way above the previous peak already.

I noticed that many have the misconception that rising flat prices are beneficial since it makes them richer, or at least on paper. After all, the current flat prices are way higher than the original buying price. But that is only true if you own more than one property. Read more…

Posted on August 12, 2010 - by Adrian Khiat

Best time to save for Retirement?

Whether we are happy or not, the day of our retirement will come. It may come earlier or later than we expect, depending on our luck and strategy to stay ahead in our senior years. It will be fortunate if we are able to work like our MM Lee at a ripe old age of 85 earning $3million a year and enjoying what he is doing. But I don’t think everyone of us will be that lucky under a highly competitive and intense environment like Singapore where talents from every corner of the world are completing with us.

As a Financial Planner in my early 30s, I’d met many people of around my age and get the privilege to understand how they feel about retirement. I also get to see the challenges faced by Singaporeans in accumulating this nest egg when there are always so many other things in life that grab away our retirement monies.

I am far from retirement age but I always believe that that we have to plan for it as young as from our first pay-cheque regardless how little we may start out with. Failing to start early and consciously will mean more challenges as we get older. Today, I will also like to share my views on these challenges towards retirement planning. Read more…

Posted on August 12, 2010 - by Alvin

How much money do you need (want)?

Have you ever asked yourself how much money do you need? Everyday we are working for money, constantly worrying about it and always hoping we can have more. Most of us will think that we will be happy by having more money. Is that so? How much do you need?

If you say we need money to survive, then you would not need that much. Maslow’s hierachy of needs (see figure below) specified that humans need to fulfil the basic physiological needs like food, water, clothing and shelter in order to think about something else. I would say most Singaporeans would be able to afford these basic necessities. The question is how expensive you want to eat, wear and stay. Hawker or restaurant? Functional clothes or branded? 3 room HDB flat or Condominium? If you already have the latter for most of the questions, you have more than fulfilled your physiological needs. In fact, you are choosing a particular lifestyle.

What if you have achieved your desired lifestyle? Do you forsee yourself being fulfilled and happy? Or when you have a condominium, you would want a landed property? Read more…

Posted on August 7, 2010 - by PanzerGrenadier

Up Close with Resorts World Singapore (Casino)

I was at the Resorts World Singapore Integrated Resort recently and stepped into the casino for the very first time. The occasion was my mother’s birthday and she was staying at Hard Rock Hotel for her birthday vacation with my father. My parents are social casino patrons who do visit Genting and those Casino Cruises on occasion given their status as retirees who have provided for their medical and living needs.

It was truly interesting to see that even on a weekday afternoon, there were enough patrons to keep many of the tables at RWS humming along. Pai Gow, Pontoon, Blackjack, Caribbean Stud Poker, Roulette and countless number of Jackpot machines lined rows by rows with neatly attired croupiers and supervisors greeted the visitor who came in there.

Why am I talking about the casino at Resorts World Singapore?

Epitome of Singapore Inc.

The integrated resorts (aka. casinos) encapsulate what is the essence of Singapore. MONEY. The casino is a place where despite the $100 levy, Singaporeans and PRs queue up to throw money at the gaming facilities. It is a place where fortunes can be made or lost in a few short seconds, minutes or hours. It symbolises really that with MONEY, anything is almost possible. (more…)

Posted on July 24, 2010 - by PanzerGrenadier

Lifestyle Design and Retirement

The more I read about lifestyle design and think about how it applies to retirement, the more I realise that my paradigm on what constitutes retirement has fundamentally changed.

Previously, I used to think like what many of us did, that retirement was an age and it was not to work. But increasingly, my own research and reading of books such as Tim Ferriss’ “The Five Hour Workweek” and thinking about the day-to-day trends we see in Singapore has led me to re-evaluate what it means to retire when I advance another 20 years in life from today.

Retirement is Not an Age

The CPF system and the traditonal life of study-work-retire is under pressure. First of all, increasing life expectancy sees us living longer and hence needing to fund our living over a longer period of time. Secondly, the concept of lifelong employment and having a job for life is under threat from today’s volatile world. Thirdly, research has shown that mentally we degenerate if we do not keep ourselves active mentally and physically after we transit from a full-time career to a post-career lifestyle of not going to a routine of working from 8.30 AM to 6.00 PM Mondays to Fridays. (more…)

Posted on July 13, 2010 - by Drizzt

Cost of Car Ownership Calculator

I used to think that buying a car involves paying for car loans and paying for petrol. It turns out that there is more spending and budgeting that needs to be done when it comes to planning for car ownership.

As a finance blog, my research is not to show you the best way to choose a car or the best car recommendation to you. At Investment Moats, we hope to equip you with a good estimate of how much it will cost you to own your prospective car.

What is Cost of Car Ownership Calculator?

My cost of car ownership calculator aims to provide you with a summary of information detailing:

• How much is your car loan
• How much you have paid in interest + car loan
• How much is your total expenses in car ownership
• How much is your yearly or monthly total cost of car ownership as a portion of your income

This will be a good budgeting tool to estimate whether you can afford a car comfortably monthly. It is design more towards a Singapore user but is flexible enough for other country’s car owners. Read more…

Posted on July 1, 2010 - by Alvin

Money, Wealth and You

I have heard from different sources about value creation brings about wealth. You get richer only if you increase the value that you give to others. Zig Ziglar said, “you will get what you want if you help enough people get what they want.” Initially, I am not sure about this principle even when teacher Dennis mentioned about providing value and not to aim for financial freedom as a goal. If I give something to others, wouldn’t it make me worse off? As I continue to learn and inquire about money, that I start to understand this principle. When you provide a service or product that is needed by the society, you solve problems and people who need the service or product will pay you for it. They become better off consuming the service or product, and you become wealthier. It is a win-win relationship. The more value you can create, the more money you can make. Hence, it is contrary to what most people believe, in order to have more, you need to take more. Instead, in order to have more, you need to give more.

Thanks to La Papillion for recommending “Killing Sacred Cows” which gave me a better understanding of this principle. I cannot explain better than the author, Garrett Gunderson, so I shall quote his passages:

“Focusing on accumulating money is like wanting to harvest the fruits of a tree while ignoring the roots. As we accept the accumulation theory, most of us become frustrated with the lack of fruit on our tree – or lack of money in our bank accounts. And what do we do to solve this problem? Read more…

Posted on June 29, 2010 - by Eng Tiang Chuan

It Comes From Within

If you have been approached by an Independent Financial Adviser (IFA) before, you would probably been told that IFAs can offer products from many providers and put client’s interest first. There is a fact and an opinion in the statement. The fact is that IFAs does have access to many different products from different providers while putting client’s interest is an opinion. Having access to different does not mean the IFA will put the client’s interest first and source for the best deal. The adviser might take advantage of the situation and opt for the products with the best commission structure instead!

In an Straits Times article on 26th June 2010, Excuse me, are you an independent adviser?, the issue of volume bonus was raised by Lorna Tan. Read more…