Sunday, January 17, 2021

My Experience Planning A Wedding During COVID-19

I breathe a sigh of relief that I could hold my wedding during the COVID-19 pandemic. So many things happened in the past 1 year which troubled and worried me so much. Firstly, our wedding had to be postponed from July 20 to Jan 21. It was the hardest decision I've ever made. We didn't even know when to postpone our wedding to as we're not fortune tellers and do not have a crystal ball to see what is going to happen for this pandemic. 

Making the decision to postpone the wedding was coupled with the mad rush to contact all the vendors to check on the availability of dates. I had the fear that many couples are also postponing so it will be hard to get any dates in 2021. We contacted about 5 vendors we had engaged and luckily all were able to accommodate our new date in 2021. 

With postponement, cost increase is also a factor and the fear of any of the wedding vendors going bust and thus losing our deposits. I have paid a few thousand dollars in deposits to several vendors already including the bridal shop where I had sign up a package for the gowns, suits, actual day photography. Thankfully, non of our vendors went bust by the time we held our wedding. 

Experience with Hotel venue
COVID-19 has affected the hospitality business in a huge way. For hotels, they do not have any tourists coming to stay and events were also not allowed to be held. For weddings, the number of attendees was limited to 50 initially then increased to a max of 100 now. 

We chose Hilton Singapore as our wedding venue 3 years back. This became the best decision we ever made. We were served by the wedding sales executive at the point of signing the contract and paying the deposit. Few months before our wedding, the sales executive went on maternity and we were than served by the sales manager. We postponed our wedding to 2021 and never heard from the sales executive nor the manager anymore from then on. I guessed they were either laid off or transferred to other roles. Blessings in disguise, we were now served by the sales director, Anthony, who provided us the best service we could ever ask for. 

We heard of many hotels starting to increase price or cut the perks as the number of tables were reduced. Many people decided to cancel their banquet but could not get back their deposits at all. Some had their 1 night stay in the bridal suite cancelled, others had their price per table increased by 20% or the wine and beer perks taken away. Hilton did not increase our price per table or take away our perks. Instead, we got more perks and experienced the most flexibility in table arrangement which we could ever ask for. Due to social distancing, the number of pax per table could only be a max of 8. Hilton used our per table price which we signed up back then and divided by 10 to derive the per head cost. They then allowed us to be flexible in assigning any number of guests per table and only charge us base on per head. So, I had some tables with 5 guests, some with 6, 7 or 8. They even went the extra mile to not charge for toddlers as long as we tell them not to serve food for them. This could not have happened in the past as most hotels will charge by per table of 10 persons regardless of how many guests were seated on each table that day. 

Besides being flexible with the table arrangement, the sales director often calls me to assure me and update me on any changes to government regulations. We wanted an additional night before the day of the wedding so that my wife could do the make up at the hotel itself on the actual day and were prepared to pay for the extra room night. To my surprise, Hilton offered the additional room without any charge. It was initially using the day use room which we have in our package for the additional 1 night but the sales director once again thought for us and mentioned it will be difficult to move our things from the day use room to the bridal suite so he initiated to let us have the additional night on the day before at the bridal suite instead. This made it so much better for us on the actual day as we had many items in the room. If we had to move the items from one room to the other, it would not have been a good experience. 

We had a live band package which we signed up for and this was converted to virtual live band instead due to government regulations of no live performance for weddings. Hilton initiated to help us contact our virtual live band vendor to test the connection just in case it doesn't work. On the actual day, our banquet manager Hasan and sales director Anthony were there to ensure everything is ok. They took care of our solemniser to ensure he has a space to park at L1 VIP lot so that he can arrive on time and contacted my sister in law to pick up my parents in law when they arrive. I'm not sure if this is the practice for most hotels in Singapore when it comes to service excellence but I really felt like a VIP on that day. I felt that Hilton has way exceeded my expectation on service standards and would like to express my appreciation for all that they have done for us in the midst of having our wedding during COVID-19.

Experience with virtual live band
Many wedding banquets have live bands nowadays to make it more lively. Me and my wife signed up a package for live band with Musical Touch more than a year back. Unfortunately, due to COVID-19, live band was not allowed but virtual live band was proposed for us. So, our vendor actually rented a studio and had the live band livestreamed to our wedding venue. I was initially skeptical of whether such arrangements would work as there are many considerations such as whether it will be as engaging, whether the sound quality will be good and whether the internet connection will be stable etc. To my surprise, everything went well that day. The virtual live band had good sound, it sounded like they were there on that day. There was no lagging or cut in internet connection also.  

We initially signed up for a 2 piece band only with emcee service. The singer was supposed to double up as the emcee for our wedding. However, as the singer could no longer be here at the venue, the vendor had to arrange for a separate emcee to come down. There were additional cost due to this arrangement. We were initially not too happy about this as who would like to fork out additional money when its not what you wanted but Musical Touch patiently explained to us the reasons. We had several exchanges before we came to the decision to fork out the extra cost to continue with the virtual live band and emcee service. This vendor was sincere and really provided good services on that day. They even had an additional coordinator came down that day to ensure the coordination for the march in songs and accepted songs dedication as per normal. I would definitely recommend Musical Touch for anyone who wants a virtual live band for your wedding during this COVID-19 pandemic.  

Cost of wedding
A wedding is often the first money bomb in our lifetime. I wrote an article 6 years back in 2014 on how much money is needed to get married and start a family in Singapore. Here is the article:

The cost of wedding I calculated back then was: 

Cost of wedding after collecting Ang Baos: $19,000-$26,000. 

This cost included honeymoon which we couldn't go for due to COVID-19. If we add in a honeymoon cost of $5K-$10K, the cost I would have spent for wedding is in the range of $13K-$18K after deducting the ang baos collected. Yes it does cost 5 figure to get married in Singapore but I think all these cost are worthwhile to spend for your once in a lifetime occasion. I could also afford this amount as I've saved up significantly over the years since I wrote the above article and am fully prepared for the cost needed. It would not be advisable for anyone to take a loan for a wedding if you do not have the savings for it. 

All in all, we did not regret having our wedding at a 5 star hotel with all the good services which we needed to make the day better. We were happy, our guests were full of praise for the food and service and were happy too. This will definitely be something memorable when I look back in the future. 

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Wednesday, December 23, 2020

End of year 2020 - My Reflection On This COVID year

Just like that, 2020 is coming to an end. This year proved itself to be a year of surprises. This definitely isn't a normal year which we would go through as the whole world practically descended into crisis. Luckily for us in Singapore, the disease outbreak is mostly under control and we've not seen multiple waves as compared to other countries. Nevertheless, we have transitioned into a new norm of living with social distancing, wearing of mask and limitation on gatherings still in place probably for another year ahead.

What I learnt in year 2020

2020 would be a year I will never forget. For both my personal and working life, I had to make tough decisions which was not easy. I was suppose to get married this year with almost everything all planned out. Me and my fiancee made the decision to postpone our wedding 3 months before our big day. Luckily we did that else we wouldn't be able to hold a wedding during the circuit breaker anyway. 

For my working life, this is the year which I pushed myself so much that I didn't take a single annual leave at all. This is the first time in my 10 years of working life that I didn't take any leave. Working in healthcare supporting COVID operations in the frontline is never easy. There were several times which I felt totally burn out and wanted to give up but I pushed myself to continue. It was mentally and physically exhausting. I'm glad that the situation is much better now. Looking back, I learnt how much I could actually push myself. I realised how much more I could do, pushing myself to the limits. Of course, this could not be achieved without the support of my fiancee, family, friends, colleagues and even the whole nation coming together as one. During a crisis, work becomes very different. We had SOPs to follow but also had to make critical decisions when situation changes. Policy changes becomes a weekly affair too where we had to adjust to changes almost every other day. 

The good thing about working in healthcare is I didn't have to worry about whether my salary or bonus will be cut. My salary remained intact and bonus was not cut. Because of this, I took the risk to invest more of my savings when the stock market dropped drastically. The ride was really wild as stocks continued to drop every time I bought a new stock. There were times I doubted myself whether am I doing the right thing as I see losses accumulating. Facing a tough personal life, I had moments of depression where I couldn't sleep well at night which was worsen by the losses from my investments.

Fortunately, the stock market has recovered and my portfolio went back up higher than the beginning of this year. All the losses have reversed and turned into profits. I believe this is only the beginning of the recovery and there is still much room for stocks to run up. 

Income and expenditure update

For the year 2020, my income from employment continues to grow. Total income grew 13.8% as compared to year 2019. Other income drop slightly as I had lesser time for income generating outside of work and also dividends from stocks were mostly cut this year due to the economic uncertainty. Expenses also dropped as I did not travel this year and also partly because of the circuit breaker and work which I did not go out for any social gatherings for a few months. 

Stock Investment Performance

For investing, I kept to my believe that the best time to invest is when there is a crisis. I've been waiting for such a time like this for the longest time ever since I started investing more than 10 years ago. There were some small crisis during the 10 years but this is one of the crisis which I've never encountered before. 

As you can see from the blue line representing my stock portfolio value, it has increased by more than 2 fold as I injected more capital every time the stocks drop lower. As the red line (representing portfolio time weighted returns) dropped, I put in more money and thus my portfolio value still went up even though stocks drop a lot. I have seen wide swings in my portfolio to the tune of $50K just this year alone. Not an easy journey I must say but this has made me a better investor to be able to control my emotions better. I learnt not to panic sell stocks during such times and really need to patience to ride it through.

With the support from other financial blogger friends, all of us got excited and invested more as stocks drop. This proved to be the right thing to do when stocks are on a great discount to their valuation. Nevertheless, it is still hard to know which company will survive at that point in time. I had stocks like SATS and hospitality Reits which were the hardest hit. Stocks like these have also recovered back to the price which I bought them at. The whole wait took about 6-9 months for it to turn around. At that point in time when I invested in these companies, the outlook was bleek and future was unknown. There was even fear whether the companies would survive. Looking back, there was definitely risk involved. It may still be risky now as borders have largely remained close and tourism is almost non existent. 

What's in it for us in 2021?

While the stock market has recovered and a vaccine is underway to control the outbreak, there is still uncertainty over the impact this outbreak will bring to the economy. There might be permanent shift in certain industries due to disruptions and accelerating of technological advancements. 

Will travel resume in 2021? I certainly hope so as the urge to have a good break and exploring new places keeps coming back. It might take awhile for normal travel to resume though as the start of borders reopening will certainly face with some hiccups and also travelling cost will definitely be much higher initially due to pent up demand. 

Nevertheless, holiday season is here and its short working week for the rest of the year till 2021. Here's wishing all readers a Merry Christmas and Happy New Year. Have a joyous celebration with your friends and family members but do remember to stay safe too! 

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Tuesday, September 22, 2020

Taking A HDB Loan - Should I Wipe Out My CPF OA?

Starting from August 2018, we do not need to wipe out our CPF OA anymore when taking a HDB loan. Now, we can have the flexibility to leave up to $20,000 in our CPF OA when we take a HDB loan. For a couple, this means a total of $40,000 in their CPF OA ($20,000 each). 

The question now will be should we wipe out our CPF OA or leave $20,000 in our account? Leaving $20,000 in our CPF OA means taking up a higher mortgage loan and paying more loan instalment and interest per month. This may not be a bad thing. Let's look into detail on this. 

Setting out the scenario

Let's assume the following scenario for a couple who has bought a house and looking to take HDB loan:
  1. Bought a house at $400,000
  2. Has $100,000 each in CPF OA
  3. Wants to take HDB loan at 2.6%
Now, this couple wants to consider whether to leave $20,000 each in their OA or wipe out totally to pay lesser monthly instalment? 

If they wipe out their CPF OA and take a loan of $200,000 for 25 years, their monthly loan instalment will be $908/month. 

If they leave $20,000 in their CPF OA each (total of $40,000) and take a loan of $240,000 for 25 years, their monthly loan instalment will be $1,089/month. 

Looking at the above, most couple will choose to go for the lesser monthly loan instalment right? It seems like a logical choice but unfortunately logic does not always prevail. 

Interest gained for $20,000 left in CPF OA 

The decision now is whether to leave $20,000 in CPF OA. First, we must know how much interest we would have gained if we leave it in CPF OA. Here's a table to summarize:

$20,000 @ 2.5%
15 years $9,088
20 years $12,957
25 years $17,341

The above is the interest we would have gained for leaving $20,000 in CPF OA for 15, 20 and 25 years at 2.5% interest. Doesn't look a lot but let's move on to how much more interest we would have paid if we take up a bigger home loan if we have not wiped out our CPF OA. 

*Do note that CPF OA is actually giving 3.5% interest for the first $20,000 so the amount should be larger.

Interest paid on $240,000 vs $200,000 home loan

In order to know whether it is good to leave $20,000 in our CPF OA accounts, let's take a look at the interest we would have paid on a $240,000 vs a $200,000 home loan. 

25 years20 years15 years
$200,000 $72,121 $68,711 $59,081
$240,000 $86,618 $82,497 $70,921

The above shows the cumulative interest paid for a $200K vs $240K home loan for 25, 20 and 15 years at 2.6% interest rate. Now, let's calculate how much more interest we would have paid on a $240,000 home loan should a couple not leave $20,000 in each of their CPF OA. 

25 years20 years15 years
Additional interest on $240K vs $200K loan$14,497 $13,787 $11,840

Now, the additional interest paid on that additional $40,000 loan doesn't seem like a lot. Will the interest gained on the $20,000 each in a couple's CPF OA be more than the above interest paid?

Let's bring the numbers together. 

Taking HDB Loan - Should I Wipe Out My CPF OA?

Now, with all the calculations, will we see higher interest gained for leaving the $20,000 in our CPF OA? The answer is yes. Let's look at the table below. 

25 years20 years15 years
Additional interest on $240K vs $200K loan$14,497 $13,787 $11,840
Interest gained in CPF OA ($20,000 each for couple) $34,681 $25,915 $18,177
Net Interest gained for leaving $20K in CPF OA $20,184 $12,128 $6,337

While the net interest gained is more for the above, we still have to consider the higher mortgage paid per month for taking a $240,000 loan vs a $200,000 loan. The difference in monthly instalment is $1089-$908=$181 per month for 25 years mortgage. This sum will be left in our CPF OA earning 3.5% interest which can be quite significant. 

Apart from the interest point of view, leaving $20K in our CPF OA can be used as emergency fund just in case when we lose our job later. If we do not have leftover in our CPF OA, then we will have to pay our housing loan in cash at that time which makes it worse for our financial circumstances during that tough period. 

CPF OA monies can be invested as well for sums more than $20K. Leaving $20K in oir OA will enable us to invest the accumulated sums thereafter (above $20K) and may earn more interest higher than 2.5%. However, as with all investments there are always risks involved. 

Deciding on whether to wipe out our CPF OA is not an easy decision. It depends on what we really want. Nevertheless, this gives us the flexibility to choose based on our risk appetite.