Singapore-based financial blog that aims to educate people on personal finance, investments, retirement and their Central Provident Fund (CPF) matters.

Thursday, 5 October 2017

Save Money in Singapore Savings Bonds or CPF?

16:46 Posted by cheez , No comments

The Singapore Savings Bond (SSB)
It is a special Singapore Government bond, issued by the Singapore Government and sold to the public as a form of savings.
Introduced as another form of investment and savings plan for people living in Singapore

The Singapore Central Provident Fund (CPF)
It is a compulsory savings plan for all Singaporeans and PR living and working in Singapore.
A portion of an individual's monthly income is channelled into their respective CPF accounts for different purpose; for buying a house, for retirement and for medical expenses,

Differences between CPF & SSB
Differences CPF SSB
Withdrawal No
Each year, you can only contribute to your CPF at max $37,740 - inclusive of both your compulsory contribution and your voluntary contribution.
Yes
You will get back the money next month
Contribution/
Investment Limit
Yes
Each year, you can only contribute to your CPF at max $37,740 - inclusive of both your compulsory contribution and your voluntary contribution.
Yes
You can buy at max $50,000 worth of bonds each month.
Holding Limit No
You can save as much money as you like in your CPF.
Yes
You can at max own $100,000 worth of bonds in total
Interest Rates Up to 3.5% on your Ordinary Account
Up to 5% on your Special, Medisave & Retirement Accounts (SMRA)
Up to 6% on your SMRA if you are above 55 years old
Interest rates are fixed
Less than 1% in your first year
Increases every year
Reaches 3+% in the 10th year
Interest rates depend on market conditions.
Interest Compounding Non-Compounding
ReturnsBeats Inflation
With inflation on average of about 3% per year compounding, CPF's SMRA account provides higher interest rates than inflation, meaning you do not lose your purchasing power over time
Probably will not beat Inflation
With an interest of 2+% per year over the long-term, it is less likely for SSB to beat inflation rates.
You are likely to maintain purchasing power or lose a little to inflation
PurposeSave for long-term
Save for Retirement
Save for medical expenses
Save for home payments
Save for short-term
Save for an expense that will occur in a few months or years time, like wedding, or home down payment

Recommended Post: Yes! CPF takes 20% of your salary, BUT...

Similarities between CPF & SSB
Similarities CPF SSB
Guaranteed Principal By the Singapore Government,
one of the remaining few AAA-rated countries.
Confirm can repay you back the money you put/save with them
Guaranteed Interest  By the Singapore Government,
one of the remaining few AAA-rated countries.
Confirm can repay you back the interest you have earned
Ownership It is your money, whether in CPF or in the Bonds,
the money is still yours
Risk Level Low Risk, or No Risk
By the Singapore Government,
one of the remaining few AAA-rated countries.
Confirm can repay you back the money you put/save/earn with them

Conclusion:
If you want to save for the long-term, go with CPF. It pays a higher interest over the long-term and ensures that your itching hands will not be able to squander it away.
But if you are just looking for a place to save before spending it (say on your home down payment), then save with SSB, it is less risker and provides a good enough interest to ensure you do not lose too much to inflation!

Recommended Post: How CPF Provide 5 Insurance to You

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Monday, 11 September 2017

SGX Bull Charge Charity Run 2017

19:53 Posted by cheez No comments
Join us at this year's annual SGX Bull Charge 2017.
It is an annual Charity Run hosted by SGX to rally the financial community as well 
as the SGX listed companies to come together and contribute back to the society
Contributions from these organisations enable beneficiaries like the Community Chest, 
Autism Association Singapore (AAS) and many others to deliver better care and assistance to those in need. 
There will also be movie screening, popcorn, food truck, live perforamnces and more!

Date of SGX Bull Charge:
Friday, 17 November 2017
4.00pm to 9.30pm
F1 Pit

This year, InvestmentStab is privileged to be able to participate in such a meaningful event. 
To show our appreciation to our readers, we are offering 10 of our readers complimentary tickets to the event!
Simply email us your full name and email by this Wednesday 23:59.
You can Facebook message us at InvestmentStab
Instagram message us at InvestmentStab
Or even email us at InvestmentStab@gmail.com
Tickets are on a first come first serve basis.

For more information on the event, you can refer to the official website: www.sgx.com/bullcharge
If you would like to donate to the cause without participating in the run, you may do so too via the link above.
We hope to see you there are the SGX Bull Charge Charity Run 2017.



Thursday, 7 September 2017

How CPF Saves You 5 Insurance Plans

11:39 Posted by cheez , No comments
Have you ever thought about CPF as more than just a scheme to lock Singaporeans' money?
There could be a lot more to it if you dig deeper - like really deeper.
There is a reason why most financial advisors actually advise you to keep your money with CPF.
Not because CPF pays them, but because CPF as a scheme is quite good - except the part where you cannot withdraw money as and when you like.
Instead of looking at the CPF Retirement Sum as a target where you can withdraw money after a certain age, look at it as a Savings + Medical + Life + Home + Annuity insurance plan.

Savings Insurance
It helps you save up money for housing, medical, kids' education, and retirement.
The "forced to contribute" part ensures that you really save your money every month.
The "cannot withdraw" part ensures that you do not anyhow withdraw this money to spend it.

Recommended Post: Save with CPF or Save with Fixed Deposits?

Medical Insurance
We have got Medishield Life, Eldershield, and other medical insurance schemes that are paid by the Medisave Account.
Medishield Life covers you regardless of your age or pre-existing conditions.
Most private insurance will not cover your pre-existing conditions - if you have asthma since young, chances are you are not going to be insured for it under your private health insurance plan.
However, it will be covered under the Medishield Life.

Life Insurance
In the event that you passed away, all your CPF money will be passed to your dependents. 
If you had bought the Dependents' Protection Scheme (DPS) for yourself, in the event of you passing away or becoming mentally or physically unable to work anymore, you will receive an insurance payout of $46,000.

Home Insurance
There is also a Home Protection Scheme (HPS), a housing insurance that will pay your mortgage in the event that any mishap falls on you and result in you no longer able to pay your mortgage.
If you are paying your HDB loan using your CPF savings, it is mandatory for you to purchase the HPS.
However, the monthly premiums are paid through your CPF - you save cash.

Annuity Insurance
An annuity is an insurance that you pay premiums to an insurance company every month, and in return, when you reached a certain age (usually retirement age), the insurance company will pay you a fixed monthly payout for as long as you live.
However, if you die early/young, the payouts will stop, which is not worthwhile if you paid 20 years of premium and took only 10 years of payouts.

When you reach 55, CPF automatically enrols you for CPF LIFE, which is an annuity plan that pays you a fixed monthly payout when you reached the retirement age (65).

However, it is better than just an annuity plan. In the event that you passed away before fully utilising the funds in your CPF LIFE, the unused money (the whole sum) will be passed to your dependents just like a Life Insurance. This feature is usually unavailable for most annuity insurances.

Recommended Post: Yes! CPF takes 20% of your salary, BUT...

And that is the 5 insurances CPF provides you with.
Are there any more that you can think of?
Share with us!
Remember to offer your opinions. If you don't put your two cents in, how can you expect to get change?

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Friday, 18 August 2017

Save with CPF or Save with Fixed Deposits?

17:23 Posted by cheez , 3 comments
This post will contain a tip on how to increase your CPF returns, namely in the form of interest.
One way to earn more interest from CPF is to transfer your extra money, into your CPF Special Account.

The choice between CPF or Fixed Deposits is determined by how much flexibility you want.

The less flexible the option, the higher the interest.
Your Ordinary Account (OA) currently earns 2.5%, Special Account (SA) and Medisave Account (MA) earns 4% interest while your normal bank Fixed Deposit (FD) earns less than 2% annually.

Recommended Post: Yes! CPF takes 20% of your salary, BUT...

If you want to be able to touch the money (to spend or to do other things), putting it in a Fixed Deposit ensures that you will be able to use the money when the situation arises. 
Of course, this would mean you will be getting a lower interest.

But if you are confident that you do not want/need to touch the money and would like it to grow faster, depositing it into your CPF account makes sense and cents (many cents).
In addition, you will get tax relief if you top it up into your SA or Retirement Account (RA), which reduces the amount of tax you pay, double win!
The interest on your SA is double that of your FD. This works even better as you get older and approaches 55 because you are closer to the age you can withdraw money in your CPF accounts.

Real Life Example:
My mum is 48 this year. She wanted to buy a 10-year Fixed Deposit which gives less than 3% per year. I suggested that she put her money into her CPF to earn the CPF interest.

Based on her current age, she can put $7,000 into her SA and earn a 4% interest. She will be able to withdraw $5,000 when she reaches 55 years old in 7 years, or any amount in excess of her Full Retirement Sum (FRS).


Of course, if my mum fails to meet her FRS, the money that goes into her CPF will not be returned to her at the "end of the maturity" - instead, she will get it as future monthly payouts via CPF LIFE.
But there will be other factors to consider and there will be ways to withdraw the money out, which will be explained in future posts.
Recommended Post: If Li Ka Shing was 20+ years old now, he would....

All in all, if you wish to have a higher interest rate than Fixed Deposit and risk-free, you can consider putting your money into your CPF, especially if you are near 55 years old - where the risk-return profile is more skewed in your favour.


Remember to offer your opinions. If you don't put your two cents in, how can you expect to get change?

Have a feedback? Tell us now!
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Thursday, 6 July 2017

So many styles but which style?!


As times change, the markets change together with it as well. This is due to the forces that shape human behavior have changed and influences how people interact in the markets. From fundamental analysis to technical analysis, to leveraged trading such as contra trading, to computerised trading such as quant trading. With so many trading strategies and techniques in play, the question now is: Which is the one that is most profitable?

While most people are pre-occupied with just profits, it is far more important to know which trading style is suitable for your personality and risk tolerance. If you are comfortable using a strategy and are disciplined enough to stick to it, trading success will also follow.

Hence, the first step is to find your winning strategy. Getting to know all the various strategies, their advantages and risks. It is important to obtain and read as much resources as possible to widen the possible trading or investing tools that you can use to enhance your trading style. It can be through books, online resources, seminars or even through back-testing of your own formulated strategy. It could also be the case where not just 1 strategy is suitable, but rather a hybrid of 2 or more. Personally, I use fundamental analysis to identify potential investment options with viable target prices while using technical analysis to better time my entry and exit points.

Exclusively for our readers, we are glad to broadcast that ShareInvestors will be having a seminar by Ronald K, who is a self-made millionaire in the Stock Market. He will be introducing the Contra Squeezing strategies and trading using tick charts. Tick charts are just another way of presenting trading prices in charts, similar to line and candle charts. This is up to the preference of the traders using it as different charting styles present and focus on data differently. Ronald will also be introducing a risk management plan that is specifically for the Contra Trades.

If you wish to register or know more information, you can visit the link here: http://notice.shareinvestor.com/email/20170722_RonaldK/index.html

Remember: Wealth is not about the money, it is about the options that it gives. Having more options to earn money will then generate more wealth.

Wednesday, 28 June 2017

WOOFR: Your Lifestyle Passport to Clubs, Bars & Music Events

13:45 Posted by cheez 1 comment
What sort of applications and revelations does your platform bring about?

WOOFR is your lifestyle passport. Within a few taps on your smartphones, we bring you instant bookings and exclusive deals to your favourite clubs, bars and music events.


What inspired this business idea?
I’ve travelled regularly as a DJ, and I’ve seen so many pain-points in the nightlife space. It’s such a hassle for tourists to discover the best nightlife spots, and language barrier makes it even harder to book a table or purchase tickets to the venue.
Nightlife venues themselves are still running on traditional methods of reservations (pen and paper), and they are unable to retain data analytics of their consumers such as the name, age, nationality and spending history.
We saw an opportunity and jumped on it. My other co-founder was ... (Continue reading)

More about WOOFR:
Facebook: @thewoofr
Instagram: @woofr_app
Website: thewoofr.com

This article is contributed by The Ventured.
We uncover and bring to our readers the success stories of entrepreneurs and also the hardship and hustle behind each of these success stories. Through these, we aim to foster a strong entrepreneurship driven community and ultimately we wish to provide a one stop solution in terms of guidance for our community. 

Facebook: @TheVentured
Insta: @the_ventured
Twitter: @The_Ventured 

Tuesday, 13 June 2017

What you are missing out that the institutional investors are doing

19:37 Posted by szcszc 4 comments

As retail investors, we often perceive ourselves or by others as inferior investors that are incapable of obtaining superior returns as compared to institutional investors. This is partly due to the pre-conception that institutional investors are more sophisticated and knowledgeable where they can utilise complicated strategies with confusing instruments. However, with more and more articles that emphasized the ineffectiveness of active institutional funds and how passive funds are outperforming active funds, you may be swayed towards believing that active funds are lacking.

So how do we, retail investors who want to take on a more active investment approach, do to outperform the market benchmarks? 

Given their long establishment and experiences, active institutional funds do have established processes and frameworks that retail investors can exploit to improve their chances. 

1. Efficient employment of capital

Institutional investors often have large amount of capital. To maximise returns, it is also prudent to manage and ensure that a comfortable level of capital is employed for the purpose of earning returns. Evaluation of options to determine returns so as to effectively utilise capital is also important. Depending on choice of asset classes, level of capital usage also varies. From personal experience, in trading forex, 60-70% of capital should be employed consistently to ensure efficient use of capital to generate returns. Comparing to other asset classes like equities, this may be low but given the high leverage nature and buffer for margin calls, this would be sufficient. 

Just based on simple logic, by having most of your capital consistently employed and utilised to earn returns ensures a higher chance of out-performance.

2. Recording your investment thesis and reviewing when necessary

Institutional investors often record their investment thesis when they invest. This is important for the management and continuity of the investment strategy where new employees can easily understand and takeover an existing portfolio based on various reasons for investment. Another important step is to review the investment only if there are material changes in the investment scenario or market. Unlike retail investors, they are less likely to be impacted by daily price movements, which are erratic and random. This could be also possible due to the bureaucracy layered in an organization where it takes slightly longer than individuals to evaluate and make decisions. This is then one advantage of retail investors where we are more nimble and sensitive to capture investment opportunities. This means that we are able to get in at favourable prices. The tough part is, hence, to differentiate from the noises of the market (daily price fluctuations) and sticking to your investment plan.

From personal experience, all these noises are often the ones that distract me from the ultimate underlying price that I have for a specific investment. The market will often try hard to force you to move your positions and fake you out before moving exactly in the way you predicted. Thus, it is important to be able to differentiate what change is material enough for a change in investment stance.

3. Having co-investment officer
We could see that there are multiple successful funds that have 2 leaders to dictate investment strategies. Examples are PIMCO, KKR. Contrasting this to traditional leadership models where one individual will make the overall decision for direction. From personal experience, by having another investor that understands the overall investing strategy, it helps to keep one another in check for emotions such as greed and fear, as well as to promote accountability in managing other's funds, there are more detailed thought process in both investors before committing to a decision. Discussions are also conducted to discuss future strategies and evaluate investment options. 
Beside these techniques, what are the other ways you try to increase your investment returns? Share it here!