Wednesday, June 20, 2018

REITS Are Falling - Will This Continue?

REITS have been falling lately and my portfolio was not spared either. There are a few reasons to this which I will simplify and explain in this article. Investing in REITS have been a favourite among investors due to its income generating feature which provides good dividend income for investors. Typically, we can look at around 5%-7% dividend yield investing in REITS. Will this be sustainable going forward?

The Rise of Interest Rates

The main reason for the drop in REITS price is due to the rise in interest rates. Why is this rise in interest rates so damaging to REITS in the first place? To explain it simply, the main cause is because the rise in interest rates make REITS investment less attractive. There are 2 main reasons to this:

1. Interest expense reduces distribution of income

REITS are required to payout 90% of its taxable profits to shareholders in the form of dividends. As such, they have little left at the end of the day and thus have to take on more debt to boost their returns. This is the nature of a REIT's business.

All debts have interest payable just like we pay interest on the loans we take up. When interest rates increase, the interest expense which a REIT has to pay generally increases as well. There are some strategies to mitigate this which we will look further into later in the post below. The increase in interest expense reduces the cash flow that is available to pay shareholders and thereby reducing its distribution income and the dividend yield.

2. Attractiveness of REITS decreases

Building up from the above factor, as distribution income and dividend yield reduces, it makes REITS less attractive as an investment bearing in mind the risk which is involved as compared to safer assets like bonds or fixed deposits.

Furthermore, in a rising interest rate environment, those safer assets such as bonds or fixed deposits have their rates increased as well thereby making them a more attractive investment option. This is called the risk free rate.

The Rise of Other Alternative High Yield Investments

If you've not noticed, there are many alternative safe investments out there now. Additionally, the rates which these safe investments give are going up as well. Just take a look at Singapore Savings bond which is capital guaranteed and still have the flexibility to sell anytime without losing any capital. The interest rates it gave earlier this year was about 1.2% for first year but it has risen to 1.72% for the June issue. If you put your money there for a period of 10 years, the average return per year is at 2.63%. Not bad for a capital guaranteed investment. For REITS, we still can get higher dividend yield at more than 5% but the question is will people want to take the risk to get that additional 2%+ return?

From the subscription rate of the Singapore Savings Bond, it is oversubscribed every month for the past 3 months. This shows that people are rushing in to invest their money inside There was another bond which was launched by a Temasek Holding subsidiary, Azalea Asset Management. It offered retail investors a coupon of 4.35% per annum which is really quite high. Even though there should be higher risks associated with this kind of high yield, the bond was still oversubscribed by 7.4 times which again shows the interest of the retail investors in this kind of higher yield investments.

All these alternative high yield instruments started to come most probably because of the higher interest rate environment as well. In a rising interest rate environment, it actually signals the recovery of the global economy and these government or privately owned funds are more likely to issue bonds to raise money because they are more confident of getting back a higher return for the money they borrow.

Another capital guaranteed interest generating instrument, the fixed deposit accounts, have been neglected for quite some time now due to the low interest rates environment. However, if you notice, banks have actually started to raise their fixed deposit rates again. I just checked and saw that DBS 1 year fixed deposit rate is at 0.60% now. I think it was lower just a few months back. Banks are in the business of loans and they have been raising their rates for mortgage loans as well as for other loans as well. The demand for loans have probably picked up as the property market recovers and also better business environment for businesses to expand. The banks are willing to raise their interest rates they give for deposit accounts in order to get more money to loan out at a higher rate.

How To Check If Your REIT Will Suffer?

Coming back to REITS, does all the above factors mean that its the end for REITS now? It may not be the case actually. As mentioned earlier, rising rates signal a better business environment and may benefit REITS which rents out its business space to various businesses. However, as REITS have to pay high interest expense, it is a balance now whether they are able to generate more income even as interest expense increases? There are a few things we can check to see if our REIT will survive or suffer:

1. Percentage of debt on fixed and variable rate
2. Gearing ratio
3. Weighted average debt maturity
4. Average cost of borrowings
5. Interest coverage ratio

What we essentially want to check is in the balance sheet. Fortunately, we don't have to calculate or dig the financial statements as most REITS regularly report their debt profile in easy to read slides. There are quite a few terms which may be new to some of you. Let me explain more in detail as simply as I can.

Let's start off with this REIT called Frasers Centrepoint Trust (FCT). I like this REIT a lot because of its defensive nature. Its malls are located in the suburban areas such as Causeway Point in Woodlands and Northpoint at Yishun.

Below shows one of the slides which FCT has for its Q2 2018 financial results. We can see the gearing ratio, the interest coverage ratio, the percentage of borrowing on fixed rates and average cost of borrowings etc.

One look at the slides, we can see that FCT gearing ratio is at 29.2% which is not too high for a REIT. The gearing is calculated as the total outstanding borrowings over the total assets. It has 56% of its borrowings on fixed rates which is quite low in my opinion. I've seen most other REITS already have more than 70% of their borrowings on fixed rate. However, this also explains why the average cost of borrowings for FCT is only 2.4% while if we compare for another similar retail REIT, Capitaland Mall Trust, their average cost of borrowing is higher at 3.2%.

For its interest coverage ratio, it is 6.64 times which is quite good. For interest coverage ratio, it is calculated as the earnings before interest and tax (EBIT) divided by interest expense. This means the lower the ratio, the more the company is burdened by debt expense. This is expected to be lower when interest expense increases due to higher interest rates.

The last thing we should be looking at is the weighted average debt maturity. For this, most REITs would have a slide as well which is easy to refer to. The reason why we have to look at this especially in rising interest rates environment is because when the debt is about to mature, the company will have to refinance its debt. During rising interest rates environment, refinancing will definitely be more costly. We can expect the interest expense to increase once the debt matures and it is refinanced at a higher interest rate. On the other hand, some REITs may choose to pay down its debts if they have the funds to do so.

For FCT, it has $91m of borrowings maturing in FY2018. These are unsecured bank borrowings. With the banks already raising their rates, if FCT were to refinance this loan, the interest will most probably be higher.

REITS Prices Are Falling - Will This Continue?

I would think there are actually opportunities to invest in REITs again as the prices continue to fall. We just have to evaluate and make sure we buy at a discount to NAV and also take into consideration that dividend may fall in the future as interest expense increases. We can also take reference to the risk free rate such as the 10 year Singapore government securities bond which is known to be default free. Using this rate, we can determine the yield spread of REITS dividend vs this risk free rate. There are people who use standard deviation to determine a good price for REITS but I will not go into this which is too technical for this post. In simple terms, it is just to gauge the attractiveness of the dividends given by a REIT as compared to the interest we can get in a default free asset.

Some REITs are managed better than others so its important to separate the good from the bad. By looking at its balance sheet, it will tell a lot on how the management is prepared to handle this rising interest rate environment. Just look through the slides of a few REITs and I'm sure you will be able to see it for yourself as well.

Want to learn more about dividend investing in REITS and how to value them correctly? Check out this online REITS masterclass here

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Tuesday, June 12, 2018

Long Term Healthcare Cost In Singapore - Are Subsidies Enough?

In a previous article, I wrote about the real issues which people face when having to care for a family member with disabilities at home. You can read the previous article here. Also, as what I have said previously, the purpose is to bring the issues of long term healthcare cost to the government. I have managed to contact the Agency for Integrated Care and Ministry Of Health and I attended a session on the enhanced Eldershield (Careshield life) to learn more about it as well as give my thoughts on the recommendations.

In this article, I will dive into the various subsidies available for this group of people and whether they are adequate? Also, I will talk about what we can possibly do to prepare for the future in the event if this happens to us or our loved ones.

On 6th February 2017, NCMP Mr Dennis Tan Lip Fong asked the Minister for social and family development: " how many persons with disabilities and/or special needs are there in Singapore;". The reply was as follow:
  • Student Population: 2.1%
  • 18-49 years old: 3.4%
  • 50 years and above: 13.3%
Based on the above statistics, this is almost 20% of the population with disabilities. It was further added that persons with sensory (blind and deaf) and physical disabilities would constitute half of the disability group. The remainder comprises those with Intellectual Disabilities and Autistic Spectrum Disorder. 

Furthermore, the committee in-charged of reviewing the Eldershield scheme estimates that 1 in 2 healthy people age 65 today run the risk of becoming severely disabled before they die. This is quite a high percentage and I can imagine if nothing is done in the future, it will be a disaster. 

Subsidies Available for Long Term Healthcare cost - Are they adequate?

There are various subsidies available which can alleviate the financial burden of those who need it.

To be honest, AIC and MOH has done a good job to try to set up a system and compile the information for subsidies into one place. Most subsidies can be applied through a medical social worker who will be assigned to each patient. All hospitals including community hospitals have full time medical social worker for this purpose. If you need subsidies for long term healthcare cost, do remember to approach one at your hospital.

Let's take a look at the various subsidies available:

1. Foreign workers concession levy

The normal levy which is required to be paid for hiring a maid is $265. However, if we are hiring a maid to care for a family member with disabilities, the concession levy will be only $60.

2. Enhancement for Active Seniors (EASE)

EASE is a subsidised home improvement program offered by HDB. Improvement items such as grab bars in the toilet, slip resistent floor tiles and ramps can be installed to make your home more elderly friendly especially for persons with disabilities.

If you're eligible, the cost is reduced from $2000+ to $100+ only depending on your HDB flat type. You can refer to HDB website here for more information.

3. Intermediate and long term care (ILTC) subsidies

This ILTC is the most common form of subsidy which covers both home care services such as home nursing and home therapy and residential services such as community hospitals and nursing homes.

What you can expect is at least 20% subsidy for nursing home if your household per capita monthly income is less than $2600. For home care services, it is at least 30% for household per capita monthly income of $2600 also. You can refer to the subsidies for ILTC here.

As much as there are subsidies already available, the cost is still a huge burden for families. Nursing homes in Singapore cost somewhere between $2500-$3000+ per month. Even with a 20% subsidy, the cost is still at around $2000-$2500+. Most nursing homes fees also do not include disposables such as diapers.

For those who brought their family members home and require home care services, I did check with some home care service providers on their cost and the estimate cost is as follow:

  • Home Medical – $223
  • Home Nursing – $95
  • Home Therapy – $125

The cost above is per session and before subsidies. After a 30% subsidy, as you can see, the cost will still be high.

4. Community Health Assist Scheme (CHAS)

The CHAS is essentially a card to get subsidies when we see a doctor at a private clinic. There are 3 different types of card namely the CHAS blue card, the CHAS orange card and the CHAS for pioneer generation  card.

The blue card is for low income households with household monthly income per person of $1100 and below while the orange card is for households with monthly income per person of $1,101 to $1,800. For pioneer generation, there is no income criteria so as long as someone qualifies as a pioneer generation person in Singapore, he or she will get all the CHAS subsidies.  There are subsidies for common illnesses, chronic conditions and even dental services. For more details on the scheme, you can refer to the CHAS website here.

5. Seniors mobility and enabling fund (SMF)

The SMF is a fund which subsidises 3 groups of items and services. They are home healthcare items, assistive devices and transport. For home healthcare items and assistive devices, the income criteria is household monthly income per person of $1800 and below while for transport it is $2600 and below. For more information on the SMF, you can refer to AIC website here.

Long Term Healthcare Cost In Singapore - Are Subsidies Enough?

Indeed there are already various schemes which act as social safety net to support those who are burdened with long term healthcare cost in Singapore. However, I would think the schemes mostly benefit more for the extremely low income people only. For those with middle class income, it is hard to get help on this.

In a survey which I conducted previously, I asked the percentage of subsidies which people receive for the most common scheme which is the ILTC. To my surprise, most people do not receive or do not know such scheme existed and a minority get low subsidies amount with some lower income households getting higher subsidies amount.

For middle class households, the financial burden and stress is real. Some are just slightly above the income level criteria and most of them are in situations where their parents become disabled suddenly and the children have to take up the responsibility. While the children want to give the best for their parents, they also have to plan ahead for their future especially with the high cost of owning a home and also having their own children in Singapore.

To me, it is a negative cycle that if more and more people are caught up in this situation and the young adults cannot move ahead in life, there will be more social problems in the future.

What can we do to prepare?

While we hope for more schemes to support those with disabilities, we may also do our part especially if we are still healthy now. Getting hit by critical illness and becoming disabled is more real than we think. 

1. Be insured with Eldershield (Careshield life from 2020) or disability income insurance

Firstly, we can look into getting Eldershield or disability income insurance. Eldershield is an auto opt in scheme when we reach 40. The basic plan pays out $400 per month for up to 72 months (6 years) in the event of disability if we cannot perform 3 out of 6 daily living activities. There are supplement plans which offer higher monthly payouts for life also. Aviva, NTUC income and great eastern provide the supplement plans. You can refer to MOH website here for more information on Eldershield.  

Starting from 2020. there will be a new enhanced Eldershield which is renamed as Careshield life. All those born on or after 1980 will be included in this compulsory scheme which pay out $600 pr month for life in the event of severe disability. I've written a separate article for Careshield life which you can read here

For disability income insurance, it can be bought separately and can possibly replace our income in the event of disability. The premiums may be quite high so make sure you can afford it before purchasing. 

2. Term plans which covers critical illness

The second and most important thing we can get for ourselves is to purchase an insurance with critical illness and total permanent disability coverage. There are probably about 36 critical illness covered which includes stroke, heart attack and many of the different cancers. A Straits times article recently wrote about a study which suggest that working adults in Singapore have inadequate cover if critical illness strikes. The study by Life Insurance Association (LIA) showed that an average working adult in Singapore only has critical illness cover of just $60,000 which is well under the LIA recommendation of $316,000. 

I would think the problem is people generally buy whole life policies and the premiums are too much if we want to get a high coverage. Buying a term insurance with critical illness will be much more affordable. It probably will only cost around $1000-$1500 a year to be insured sufficiently with term insurance for those 30 years old and below so its good to get some term insurance if you're still young.


This ends the 2 part series on creating awareness on the issues of long term healthcare cost in Singapore. The government actually has a 3rd enabling masterplan to support persons with disabilities but how long all these will get implemented is another question. The ageing population problem in Singapore is real. Disability is real too and that's why we have all the wheelchair accessible initiatives all around the nation now.

I understand that there is an ongoing review for the various support schemes under the health ministry. I feel that some of the middle class families still fall through the cracks when it comes to support for unforeseen circumstances. Family members becoming disabled is one of them and this often comes with huge long term healthcare financial burden to deal with. Hopefully we will see more support along the way as our society progresses. Nevertheless, it is impossible for the government to support everyone as it would mean the younger generation have the bear the cost instead.

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Wednesday, June 6, 2018

Should I Get A BTO or Resale Flat?

There are pros and cons of getting a BTO vs a resale flat. In Singapore, a BTO flat is heavily subsidised by the government and we try our luck to ballot for a chance to select a unit. These flats are build to order (BTO) meaning those who managed to get a unit will have to wait about 3-5 years before they can collect the keys to their flat.

I would think most people will go for the BTO option first if they have the time to wait. However, even if you have the time to wait doesn't mean you will have the luck to get one of the units. The next best choice will be to go for resale flats which will ultimately cost more as compared to a BTO flat.

The Process of getting a BTO flat

BTO flats are launched every quarter which means we have 4 chances a year to try our luck. I have tried since 2016 but till now I didn't manage to get a good number. When people say its hard to get a good location through BTO, it is really true. Non-mature estates such as Sengkang & Punggol are generally easier to get precisely because the demand is not so high there. I did managed to get a queue number to select a flat in Sengkang but in the end decided to give it up as after consideration for the long term, the location is still important for me and my partner.

The process to getting a BTO flat can be quite long so if you're planning to get married in the next 3 years, then its better to start your BTO process earlier. The balloting process is fuss free. It can be done online and no documents need to be submitted in the early stages. You just have to fill in some information of yourself which takes less than 10 minutes.

BTO balloting guide

Have you wondered how the BTO balloting process work and how people are chosen to select a flat? Let me try to explain it based on the information I managed to find.

Firstly, first timer applicants will always have the priority in the balloting process. 85% of the 4/5 room flats and 70% of the 3 room flats are set aside for first timer applicants for non mature estates. For mature estates, 95% of the 3/4/5 room flats are set aside for first timers. If you think that its easier for first timers to get a unit in mature estates since 95% of the flats are set aside, its not true as there are many other first timers also aiming for a flat in the popular mature estates.

How the BTO balloting process works is unclear to many as HDB did not really state clearly how it is done. I tried to find as much information as I could and summarise my findings in this post. In essence, there is no way to get any advantage from the balloting process. HDB tries to ensure fairness to all parties in this process. As a first timer, even though you get to enjoy priority in getting a queue number, it does not mean you will get a good queue number. I will explain this in the next section below.

Why its so hard to get a good queue number?

The balloting process is completely random and it very much depends on our luck in order to get a good queue number. After the application closes, HDB will first shortlist first timer applicants based on the percentage of flats set aside for them. Then, HDB will shortlist second timer applicants based on the percentage of flats set aside for them. After the applicants are shortlisted, they will all go into a computer system and be assigned random queue numbers. Both first timers and second timers are in this pool. This means that even if you are a second timer applicant and you managed to get shortlisted into the ballot pool, you may still get a better queue number than a first timer.

There are also other priority schemes. The 2 main schemes are the Parenthood Priority Scheme (PPS) and the Married Child Priority Scheme (MCPS). For BTO, 30% of the flats are set aside for PPS and another 30% set aside for MCPS. Let me explain more on these 2 priority schemes.

Parenthood Priority Scheme (PPS) 

The PPS is for those who have kids or are going to have soon.

The eligibility condition as stated on HDB website is as such:

"You must be a first-timer applying as a married couple. In addition, you must either be expecting your first Singapore Citizen child at the time of your application, or have at least 1 Singapore Citizen child aged below 16 (natural offspring from the lawful marriage or legally adopted)."

Married Child Priority Scheme (MCPS)

The MCPS in essence is for those who apply for a flat to stay with their parents or near their parents. For those who apply to stay with their parents, the parents name must be included in the application. For those who apply to stay near their parents, as long as it is within 4km of your parents house, you will be eligible for it. Do note that for staying near parents, there is a restriction that your parents must continue to live in the same town or within 4km of your new BTO flat for 5 years after you collect your keys.

For more information on the priority schemes, you can refer to HDB website here.

Balloting process scenario

Now, let's get back to the balloting process and why its so hard to get a good queue number. As a first timer applicant, 70%-95% of the flats are set aside for you depending on the type of flat and the location. Within the 95%, 30% are set aside for PPS and another 30% for MCPS.

Let's take for example the following scenarios:

Location: Toa Payoh (Mature Estate)
Flats available: 1000
Total number of applicants: 2000 (Oversubscribed)
  • PPS applicants: 400
  • MCPS applicants: 400
  • Other first timers: 400
  • Second timers: 800

1. Flats for first timer: 950 (95%)
  • Flats for PPS: 300
  • Flats for MCPS: 300
  • Flats for other first timers: 350

2. Flats for second timer: 50 (5%)

Now, with the above scenarios, we can predict how the ballot process will work. This is just based on my understanding but it may not be exactly how it is done.

First, HDB will shortlist applicants up to 100% of the flat supply. There are 1000 flats available in this instance. 

Step 1: 
PPS applicants will be shortlisted first. 400 PPS applicants are shortlisted for 300 units set aside for them. This means that 100 PPS are out of the shortlist. 

Step 2: 
MCPS applicants will be shortlisted. 400 MCPS applicants are shortlisted for 300 units set aside for them. This means that 100 MCPS are out of the shortlist. 

Step 3: 
Other first timer applicants will be shortlisted. There are 400 other first timer applicants plus 100 PPS who failed in step 1 and 100 MCPS who failed in step 2. They will probably be shortlisted in this step 3 as well. This part is unclear as I could not get any information from HDB. If the PPS and MCPS are put in this pool as well, we have a total of 600 applicants who will fight for 350 units. This means 250 first timers (regardless of priority schemes) will be out of the 1000 queue number. 

Step 4:
Now, second timers will be shortlisted. 800 second timer applicants will be shortlisted for 50 units set aside for them. This means that 750 second timer applicants will be out of the shortlist. As a second timer applicant, you must be really lucky if you can get shortlisted within the 100% supply of flats. 

Final step:
The final step is all those who are shortlisted (first and second timers) will now be assigned random queue numbers. A first timer applicant can still get the last queue number 1000 and a second timer applicant can get queue number 1. Those who are out of the 1000 flat supply will still be assigned queue numbers as HDB gives out queue numbers for 300% of the flat supply. 

By now, if you managed to follow the above scenario, you would have realised that the balloting process is completely based on luck to get a good queue number. It doesn't matter if you applied under any priority schemes. The priority schemes only increase your chance of being assigned a queue number but not your chance of a good queue number. 

Increasing your chance to get a BTO flat

Even though the ballot process is completely based on luck, there are still ways to increase our chance to get a BTO flat. 

Firstly, we can consider non mature estates which are not too high in demand. If you don't mind that its far from the city and not near the MRT, applying for a flat in a non mature estate will definitely increase your chances of securing a unit. The prices are much cheaper too. A 4 room flat in a non mature estate cost about $300K to $350K while the same flat in a mature estate can cost more than $500K. 

Secondly, if you still want to get a BTO in a good location, you can consider applying for a 3 room flat instead of a 4 room or larger flat. The demand for 3 room flats is definitely much lower even in mature estates and I think it is probably due to the fear of not enough rooms if you have more than one kid. However, I think 3 room flats in a good location is still a good consideration at least for a start. The price of 3 room flats in good location is also much lower than a 4 room flat.  

How about resale flats?

If all else fails and there is just no luck to get a BTO, then the plan will be to get a resale flat. Resale flats although they are more expensive, there are still grants available. The resale grant for first timer families is currently $50,000 and an additional $20,000 if you stay within 4km from your parents.

A quick check on the price of resale flats in non mature estates can be selling as high as $500,000 for a 4 room flat near Buangkok MRT. If the flat is further away from the MRT, it'll be about $50K to $100K lesser. For mature estates, we should be looking at around $500K to $600K for a 4 room flat.

There is also a visible advantage when buying resale flats. We can view the actual flat itself before committing to buy the flat. This cannot be done with a BTO flat. However, resale flats tend to be older and needs more renovation as compared to a new flat. This can be overcome by buying a newer resale flat (5-10 years old) with good renovation already done by the previous owner although there is almost certainly a premium price to be paid for this kind of flats.

Buying a resale flat will let us be able to move in almost immediately as compared to the waiting time of a BTO which can range from 3 to 5 years. If we buy a resale flat and take the grants available, we will automatically be considered as second timer if we ballot for a BTO in the future. If you still want to be considered as a first timer for BTO even after buying a resale flat, you have to make sure you do not take any CPF housing grants when you buy the resale flat. In this way, you can still have a higher chance of balloting for a BTO flat while staying in your resale flat. However, do take note that the 5 years MOP will still be applicable before you can sell your resale flat and buy another HDB.

Should I Get A BTO or Resale Flat? 

Buying a flat can be a long process so opening up this conversation early with your partner is important. There is much planning to do in terms of deciding on a location, planning for the finances and also deciding whether to go for a BTO or resale flat.

If you and your partner decides to go for a BTO flat, it is always better to apply earlier as it can be quite long before you can get your desired flat. If you fail to get a BTO or running out of time, resale flat is definitely another option worth a consideration. Nevertheless, having a stable relationship before committing to a flat purchase is important too since this is a long term commitment with great financial responsibilities.

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Saturday, June 2, 2018

Hear From Financial Bloggers Live At Investors Exchange 2018

The financial blogging community is not a very big one in Singapore. Most of us do know each other in the real world.  This year, you'll have the opportunity to hear from some of the financial bloggers where they will share about how they invest their personal money and also their journey to achieve financial freedom.

My friends at BIGScribe is back with another edition of Investors exchange. Last year, there was one and it was a sold out event. This year, they are making it different. Investors exchange 2018 will feature only bloggers who walk the talk by investing their own money. The criteria for this year's speakers is:
"They should be active investors who are willing to share the same strategy that they are using to grow their own money and portfolio."

Let me introduce you to 5 speakers and bloggers who will be speaking live at the event:

1. Stanley, Value Invest Asia

Stanley is currently the chief editor of Value Invest Asia. Over the course of his career, he has written close to 2000 articles online, on investment education and market analysis. Stanley is the co-writer of the Asia-focused investment book: “Value Investing In Asia“.

He'll be sharing about "Spotting growth stocks in today's market".

2. James, Small Cap Asia

James Yeo is the founder of Small Cap Asia, where he and his team aims to help investors get the best deals out of their investments.

He is a financial analyst by profession and focuses on growth investing through small cap stocks.

We're up for a treat as he reveals his 'GARP' Investing Strategy and give you the steps to use the strategy to grow your money

3. Brian Halim, ForeverFinancialFreedom (3Fs)

Brian is the writer behind foreverfinancialfreedom. He is currently pursuing his choice of financial freedom and he has a passion for dividend investing and loves traveling together with his family.

I've known Brian for quite a few years now since I started blogging. His blog has been around much longer than mine. His strategy on dividend investing is definitely a solid one as he himself has managed to achieve a dividend income of more than 5 figures annually.

He will be revealing "The Evolution of Dividend Strategy" and give you a peek to his current portfolio as well as bring you through real life stock case studies.

4. Rusmin, Fifth Person

Rusmin is the co-founder of The Fifth Person, and the co-author of the book 'Value Investing in Growth Companies'. He had been featured on Channel News Asia and 938 Live multiple times for his views and opinions on how to invest successfully in the stock market.

The Fifth Person shouldn't be an unfamiliar name in the financial blogging world. Rusmin is a down to earth guy who really has the passion for investing. I managed to meet and talked to him in one of  SGX's dinner event just a few months back. He has picked quite a few stocks successfully and I believe his investing method works.

He'll reveal: How You Can Build A Consistent Stream Of Passive Income and Maximise Your Dividends with Stock Investing.

5. Christopher, Growing Your Tree of Prosperity

Christopher is the financial blogger behind the blog Growing Your Tree of Prosperity. He earned his financial independence at age 39 and has recently completed his Juris Doctor degree. Christopher was featured in Me and My Money sections in the Sunday Times, and has written about his journey in 3 popular personal finance books. I've known Christopher as a person who never gives up. Even after achieving financial independence, he quit his job and then went on to study law and recently just graduated. He's definitely a good speaker and an experienced investor too who has achieved his dreams.

Christopher will be sharing how he attained financial independence at 39 using the concept of F.U. Money (Freedom Unlimited).

Here are the details to the event:

Investors Exchange 2018

14th July 2018 (Saturday)
1 pm to 5 pm
DBS Auditorium, Marina Bay Financial Centre Tower 3

Ticket Price: S$65

Early Bird Discount: S$49 [Only valid till 30th Jun]
*Light snacks will be provided during tea break

For more information and to get a ticket for the event, please click here

P.S: I'll probably be there too to support my friends. If you're going for the event, feel free to drop me an email.

Tuesday, May 29, 2018

All About The New Careshield Life (Enhanced Eldershield)

The Ministry of Health just announced last Sunday that there will be another compulsory healthcare scheme which all Singaporeans and PR from the age of 30 to 40 will be automatically enrolled in starting from 2020. In future, everyone who reach 30 years old will be compulsory enrolled in this scheme as well.

Currently, all Singaporeans and PR are also insured under the Medishield life scheme which covers for some basic hospitalisation bills. This is also a compulsory scheme.

What is Careshield life all about?

Careshield life is renamed from Eldershield and is an enhanced version of it. Careshield life will provide monthly income for those who become severely disabled and cannot perform 3 out of the 6 daily living activities.

It will be compulsory for those age 30 to 40 in year 2020 and also future cohorts of those who turn 30 years old. This means that it is compulsory for everyone who is born on or after 1980. For those born in 1979 or earlier, you can still remain on your current Eldershield or opt in to the new Careshield life if you are not disabled. It is reported that this can be done from 2021 onwards.

The best news for this Careshield life is for those who are born on or after 1980 and have disabilities currently, they will still be auto enrolled in this scheme and get the payout immediately. They just have to pay a 1 year premium and get the monthly payout of $600 for the rest of their lives. This will lessen the burden of the caregivers who are taking care of these young persons who are mostly their parents.

How much premiums do I have to pay?

One question we will all have is how much do we have to pay for this? This is definitely another expense which is in a way forced even if we don't want to pay for it. Fortunately, this can be paid using our Medisave, similar to the premiums we pay for our Medishield life.

Premiums to be paid by each individual at different age will be different. Males and Females will pay different premiums also with females paying higher premiums as statistics shows that women live longer than men. The premiums payable is expected to go up by 2% for the first 5 years and continue to go up as needed. There will be a council set up to review the premiums thereafter.

A 30 year old male will have to pay premiums of $206/year starting from 2020. If you are age 40 in 2020, the premiums payable will be $295/year. The premiums will increase by 2% every year for 5 years so a 30 year old male in year 2020 will be paying premiums of $223/year in 2025.  For a 40 year old male in 2020, the premiums would go up to $320/year in 2025. For females, the premiums would be higher but i do not have the exact information on it yet. The premiums will be paid until age 67 but coverage will still continue for life.

Indicative premiums table before any subsidies for males:

Age upon scheme launchYear 1Year 2Year 3Year 4Year 5

All in all, the total premiums paid will be around $10,000 or more for 37 years. The thing I do not like about the increasing premiums is that there is no certainty of how much premiums I have to pay say 20 years from now. Don't forget we still need to pay for Medishield life premiums and adding up this Careshield life, it can be quite significant in the future and most of us would not have much left in our Medisave account.

The premiums for Careshield life as compared to Eldershield definitely increased and without certainty also. For the current Eldershield, a male person at age 41 only needs to pay a fixed premium of $295/year up to age 65 years old and still get the same $600 lifetime payout coverage. For Careshield life it is $295/year at age 40 with increased premiums every year. Fortunately, there is permanent means test subsidies of up to 30% for the lower to middle income Singapore residents. There is also transitional subsidies of up to $250 for the first 5 years for all future cohorts of Singapore Citizens. 

Permanent Means-tested Subsidies for Singapore Residents:

Monthly Per Capita Household Income (PCHI)Monthly PCHI $1,100 or lessMonthly PCHI $1,101 - $1,800Monthly PCHI $1,801 - $2,6002
Subsidy rates for Singapore Citizens30%25%20%

The good thing is there is increased coverage also so we might be looking at around $1200/month payout in our 60s. This brings me to my next point on how much payout will we receive in the event of disability?

How much payout will I receive in the event of disability?

In the event if a person becomes severely disabled and cannot perform 3 out of 6 daily living activities, he or she will receive $600 per month from 2020. This payout is expected to increase 2% for the next 5 years. So for example if a person is enrolled into the scheme in 2020 and becomes severely disabled in 2025, he or she should get about $660 per month for their whole life.

I think this is fair since the premiums are increasing also. The plan is to have a payout of $1200/month at age 67 for those who are age 30 in year 2020.

Estimated Monthly Payouts for CareShield Life:

Year from launch of CareShield LifeCareShield Life Monthly Payouts

Why make it compulsory?

I think many people will wonder why does this scheme have to be compulsory? Another thing which will be on most people's mind will be that I don't need this disability coverage at age 30 since I am still young.

The politically correct answer which the government had gave is that they want to create an inclusive society where everyone chip in a bit to take care of one another. While this sounds good, I think it is human nature to ask what is in it for me? I've already saw many feedback and from conversations with my friends, most of us would think disability won't really hit us at least for now. Who will want to be disabled at a young age anyway? Its not just about money but also not being able to have the quality of life and do what we like if we do get disabled at a young age.

It has always been the government's way to risk pool everyone together. The CPF life works in this way too where the younger people contribute to the CPF pool of funds to support the payout of older people. The fund is always invested to generate interest income to support those who are drawing down from it. Medishield life was implemented also to cover even those with pre-existing illness.

For this new Careshield life, those who have pre-existing disabilities are also covered but only for those born on or after 1980. This means that for those who have pre-existing disabilities but are born in 1979 or earlier and do not have Eldershield, they will not be included in this scheme at all. I found out from MOH that they did consider covering everyone with pre-existing disabilities but the premiums will be too high for most to afford so this plan was put aside. However, MOH did say that they are also concurrently reviewing the other long term healthcare schemes in order to support this group of people who are left behind. It may take some time for more information to be available.

I do not have the statistics for disability trends in Singapore but from MOH's data, it is 1 in 2 healthy Singaporeans aged 65 could become severely disabled in their lifetime. How true this is, is anybody's guess. What I do know is that if we really do have family member's who become disabled, the financial strain can be quite difficult to cope coupled with emotional stress. I have seen this happen to a few of my relatives due to accident or illnesses. It is more common than we think. This Careshield life is the first step to provide support in the event if really disability happens.

For more information on Careshield life, you can refer to MOH's website here.

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Monday, May 28, 2018

Will Hyflux Survive?

Hyflux has been the talked of the town among the investing community as they had recently announced the commencement of court supervised process for reorganisation. This is to protect them from creditors as they sort out their debt issues. Shares of Hyflux and its related securities were halted for trading since 21st May 2018. It is unknown what will happen from now.

Hyflux was a rags to riches story. However, at this point in time, the rags to riches seem to have overturned. The question is will it survive the crisis and will investors get back their money? In this post, I will try my best to dissect its business and only focus on its balance sheet and equity. Hopefully this will give us some clue to what is happening and what will happen in the future.

Who are the people who should be worried?

For Hyflux, there are generally the following retail investors who will be concerned now:

  1. Ordinary Shareholders
  2. Those who invest in the ordinary bonds
  3. Those who invest in the perpetual securities such as the Hyflux Cumulative Preference Share (CPS) 
For ordinary shareholders, there will surely be losses incurred as Hyflux's business has not been doing well with a negative financial position for FY2017. With the current suspension, I don't see any light at the end of the tunnel at least for the near term as they face a really challenging business environment in the energy market. 

For those who invest in the perpetual securities, the previous Hyflux 6% CPS which were supposed to be redeemed in April were unfortunately not and the interest was stepped up to 8%. In addition, there is another $500 Million 6.00% Perpetual Capital Securities (SGX:BTWZ) which should have coupon payment on 28 May 2018 but no payment will be made as announced by Hyflux. Whether these 2 perps will be redeemed in the future is also a question mark. If they can sell their assets and repay the bank loans and still have leftover to redeem the perpetual securities, then it could happen. Otherwise, its mostly a waiting game now. 

For bond holders, the likely scenario is that Hyflux will propose an extension for the bonds maturity. It may still be redeemed if Hyflux's business can turn around in the future. 

There are indeed many uncertainties but I don't think all is gone for the time being. Let's take a look at its financial statements to assess the impact properly. 

Dissecting Hyflux's Financial Position

As at 31st March 2018, Hyflux had total liabilities of $2.6 Billion with total assets of $3.6 Billion. Out of its $3.6 Billion assets, it has $233 Million in cash and equivalents. Most of its assets are held for sale of $1.4 Billion which is the Tuas Spring plant it is trying to sell. 

Out of its $2.6 Billion liabilities, $361 Million are loans and borrowings which have to be repaid in 1 year and another $1.2 Billion of loans and borrowings which are repayable after 1 year or more. Looking at this situation alone, Hyflux's ability to repay the loans and borrowings due in 1 year's time is questionable. 

The perpetual securities are not listed as liabilities but as equity even though these perps are actually also loans to the company. The Hyflux 6% CPS is listed under share capital in the owner's equity statement. This is about $400 Million. The 6% Perpetual Capital Secutiries (SGX:BTWZ) is worth $500 Million. In essence, they have another $900 Million worth of securities to redeem and pay back on top of the $2.6 Billion liabilities.

Will Hyflux Survive?

With all the numbers above, now the question is will Hyflux survive? 

Let's say if they are able to sell their Tuas power plant at $1.4 Billion, this will allow them to payback the $361 Million loans and borrowings due within 1 year and still able to redeem at least the $400 Million Hyflux 6% CPS which was supposed to be redeem in April 2018. However, the situation can be much more complicated than this as other creditors such as the banks and other senior unsecured creditors will not be happy if they use the proceeds to redeem the CPS. For those holders of BTWZ, it might be harder as there is no fixed maturity and this was only launched in 2016. The first callable date is in 2020. 

Now, this situation is dependant on 2 main issues. The first is whether Hyflux can sell its asset, especially the Tuas power plant for that $1.4 Billion. This will give them the cash to pay back some of its loans and redeem the CPS. The second is whether Hyflux can come up with a good proposal for all its creditors so that nobody brings them to court. It will get ugly if that happens. 

Now, the court protection is for 30 days so there will surely be more news after 30 days. This protection will allow them to focus on the pressing issues of restructuring their business.

It is not all over for investors of Hyflux. For ordinary shareholders, perhaps they will be the worst hit as it is unlikely that Hyflux will turnaround its business in the near term. The focus now is to clear its debt obligations so that it can still be in business. For bonds and perpetual securities investors, Hyflux might be able to redeem the loans if they can liquidate their assets or if there are new investors who inject funds into the company. If not, the situation will be bad also. Let's see what happens this year. 

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Wednesday, May 16, 2018

Bitcoin for Gold Exchange

After the craze for Bitcoin and other crypto-currencies, it would appear that the trend is currently in favour of Gold.

Indeed, the collapse of crypto-currencies (loss of 70% of the total value of virtual currencies) in recent months and especially Bitcoin which fell below 7 000 USD, encourages investors anxious to preserve their capital to move towards precious metals.

But first of all, what is Bitcoin and what is its origin?

Bitcoin would have been invented by a Japanese named Satoshi NAKAMOTO in 2009. However, this remains a rumour as many people have proclaimed themselves as the inventors of the famous digital currency.

The Bitcoin principle is quite simple. It is a new currency outside the banking system based on what is called the "Block-chain". The block-chain being metaphorically a chain of bicycle of which each link is a book of account which lists a great number of transactions.

In a classic banking scheme, transactions are collected in the bank's computer and validated by the bank. In the case of Bitcoin, transactions are validated by the block-chain which is distributed on a multitude of computers around the world that download and validate transactions from the block-chain. Namely that these computers generally belong to private individuals and are paid in Bitcoin for their work. These are called "miners". Therefore, the advantage of the block-chain lies in these computers whose system is very secure thanks to the many mathematical algorithms used. A transaction cannot be usurped.

On the other hand, the reliability of crypto-currencies has been called into question several times following computer bugs. Moreover, like any currency, Bitcoin is subject to speculation and is as likely to appreciate in value as to lose. Indeed, the Bitcoin having plummeted by more than 60% of its rate since the beginning of this year, worried investors are forsaking digital currencies to transform them into a more real and ancestral value such as Gold.

For example, Bunker Gold&Silver, a leading precious metals dealer based in Singapore, whose customers have turned away from crypto-currency in favour of physical gold. Investors fear and worry that the massive price appreciation is not sustainable. More and more people are realising that these digital assets have much higher levels of risk than traditional assets.

The advantage of gold is the fact that there is no password or digital wallet to lose, volatility is much lower, growth is historically sustainable and most importantly, you can hold your investment in your hands.

Indeed, gold is considered as the safe investment because it has existed for 4 000 years against other currencies such as the US dollar which is the current world reference currency. For example, after a long period of stability between 1792 and 1971 (-100.00 USD on average), its price has soared to over 1,000.00 USD and is steadily increasing. Today, the gold price is approaching 1,400 USD/OZ.

One of the good reason to invest in Gold is for insurance against a financial meltdown, disintegration of fiat currency and or crypto-currency collapse. This is why many investors buy physical gold with their Bitcoin in the end.

*This is a guest post

Wednesday, May 9, 2018

Why TPG Telecom Is Not A Threat To The Incumbent Telcos In Singapore?

The telecommunication industry is set to change in the near future with the fourth telco, TPG telecom starting business in 2019. However, I don't think this will be a threat to the incumbents in Singapore and I will tell you why in this post. Previously, I spent 6 years in the telecommunication industry working as a telecommunication engineer. Deploying mobile networks was bread and butter for me and I know this industry inside out including the challenges of setting up base stations all around Singapore just to provide the coverage that is needed.

TPG Telecom announced on 19 March 2018 that it will be launching its first mobile product aimed at seniors aged 65 and above, offering several free perks for them. TPG said it will offer this group of customers a SIM card, 3GB of monthly mobile data and unlimited local calls for free for the first 24 months. This is actually a good move to get customers on-board. However, I would think those who subscribe to the new telco will face a risk of poor network coverage. Why is this so?

Why TPG Telecom Is Not A Threat To The Incumbent Telcos  In Singapore?

Mobile Coverage

TPG telecom has to provide outdoor street level coverage for 4G within 18 months from the start of the new spectrum rights. This should be done by December 2018. However, do note that this is only for outdoor coverage and not for indoor coverage so the mobile coverage is expected to be weak in buildings and underground premises all around Singapore.

Under the spectrum rights, they are only suppose to meet 85% of In-building coverage by 1 Jan 2020 and 99% MRT underground stations coverage by 1 Jan 2022. Imagine subscribing and paying for your mobile phone bills and realise you can't use your phone in your office building, shopping malls and while you take the train? This is a scenario which is highly likely.

Outdoor street level coverage

Before I go into In-building and MRT underground stations coverage, let me talk a little bit about outdoor street level coverage. In order to deploy a mobile network which covers outdoor areas, mobile base stations have to be built and connected to an antenna which transmits and receives signals. These base stations are mostly deployed at roof tops of HDBs, private residential buildings as well as commercial buildings all around Singapore. It is said that TPG has to secure spaces for 3000 base stations in order to meet the network coverage required. This deployment will not be cheap or easy at all.

From my own experience of deploying mobile base station, many roof tops in Singapore have already limited spaces to deploy these mobile base stations. There is constantly a need to seek approval from relevant authorities and private building owners for this. There are also requirements to meet safety standards so the antennas cannot be deployed just anyhow. The challenge is there and I'm not sure how TPG is able to deploy their network in such a short time with existing spaces on roof tops of buildings already taken up by the incumbents.

Furthermore, base stations and antennas are not cheap. I will not reveal the actual cost of these materials but from what TPG said that they are predicting to spend between $200 million to $300 million for the rollout of its mobile network here, I really think they will most likely over spend on this budget.

For your information, according to M1, their fixed asset cost for network and related application systems already cost $517M as at end Dec 2017. This is almost double the budget of TPG telecom. For Singtel, they indicated that they spent $150M just to upgrade their network from 3G to 4G a few years ago. In my opinion, TPG telecom's budget of $200M to $300M seems too low to deploy a new mobile network in Singapore from scratch.

In-Building coverage

For in-building coverage, it is even more complicated thus the reason why the authorities gave more time to meet this network coverage. In order for mobile coverage to work in buildings, TPG telecom will have to build a base station inside the building itself and lay cables and indoor antennas all over the building just to provide the mobile coverage. You can look up the ceiling of buildings in Singapore and you'll notice some small cone antennas which has the sticker Singtel, Starhub or M1. These are the antennas of the incumbents and the reason why we can use our mobile phones inside the building.

The deployment of mobile coverage inside buildings is a tedious job. Because of the need to lay cables practically on all areas of the building, the job process is long and costly as well. This can only be done at night when the office building or shopping centres are closed. It takes a few months just to complete one building in Singapore. For bigger buildings, it can take up to a year. Can you imagine how many buildings are there in Singapore?

Singtel has a video to explain how mobile network coverage is deployed in Singapore. You can watch it here below:

MRT underground stations coverage

The next level and the most difficult is deploying mobile networks in MRT underground stations and the tunnel itself. In my work experience, it is practically hard to get the mobile network to be deployed in the MRT underground tunnels. The reason is simply because there is limited time for the company to work in the MRT underground tunnel network.

Most of us should be aware that there is major MRT infrastructure upgrades all across Singapore. There is limited maintenance engineering hours because the MRT runs all the way to midnight and starts early in the morning. As such, there is early closure and late opening of the MRT operations since the end of last year just to cater more time for MRT infrastructure upgrades.

The priority will always be given for MRT upgrading works and track access is always controlled by the operator themselves. I am of the opinion that TPG telecom will have a hard time deploying their mobile network in the MRT tunnels as they compete with the MRT upgrading work projects and the limited hours available. The incumbents took many years to upgrade their mobile network from 3G to 4G in the MRT tunnels and some parts are still not ready yet even until now.

It is unlikely that TPG telecom can have much mobile coverage in the MRT tunnels itself.

Another failure in the making?

It will be tough competition for 4 telcos to exist in Singapore altogether. Especially for the 4th telco, it is exceptionally hard to operate in Singapore itself. In the past, there was also another fourth telco in Singapore but it failed and exited the Singapore in 2001 just 1 year after it started. This company was Virgin mobile.

Besides that, a lot of mobile virtual network operators (MVNOs) have already started their business in Singapore. Some of these operators are Circles life, Zero Mobile, Zero1 and most recently My Republic also announced they will partner with Starhub to start their mobile services. How is TPG going to compete in an already saturated market?

Because of the impending entering of the fourth telco, shares of Singtel, Starhub and M1 were depressed for quite some time now. When Singtel shares went lower to $3.40, I accumulated more along the way and it is currently the largest stock holdings I have in my portfolio. I believe Singtel will be the less affected by the fourth telco even though there are other things to consider when investing in Singtel such as its weaker overseas business.

Ultimately, let's see how the telecom industry develops in Singapore. The future will speak for itself when the time comes.

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Monday, April 30, 2018

The Scary Truth Of Long Term Healthcare Cost In Singapore

Most of us would have heard of the saying "you can afford to die but not get sick in Singapore". There is definitely truth in this saying because healthcare cost is really a bomb and this bomb will get bigger in the future. Healthcare spending budget is the 4th largest in Singapore at $10.2 billion for 2018. This amount is expected to be increased over the years as we prepare for an ageing population and rising healthcare cost.

A more scary cost than hospitalisation bills

While all of us know that hospitalisation bills can be quite scary, I think many do not know that there is another more scary cost than hospitalisation bills. This is the long term healthcare costs after a patient discharges from hospital. Hospitalisation bills can often be covered by Medishield life or private integrated shield plans but long term healthcare cost can rarely be covered by any insurance at all. The best we have is disability income or Eldershield which pays out a sum of money in the event of any disability but not many people would have this.

According to statistics from MOH, in 2016, there are 2.6 Million people with integrated shield plans but only 437,000 Eldershield policyholders with supplements. MOH did form a special committee to look into this Eldershield and some recommendations were made. You can read about it here.

The purpose of my article here is not to talk about insurance but to go into detail the possible long term healthcare cost needed and the various subsidies available. The question is are there safety nets for this in the event if our love one falls ill and require long term medical treatment and are subsidies enough? What can we do to prepare for this?

Another purpose of writing this article is to create awareness on the difficulties which caregivers faced when caring or supporting a family member with disabilities. This is a concern which many people face but help is limited. I've done a survey where many people participated in and voiced out their main concern areas which I will share in this post as well. Thank you to all who participated in the survey to make this post possible.

The scenario of needing long term healthcare cost

A family of 4 with a Father, Mother and 2 children live in a 4 room HDB flat in Singapore. The father is the sole breadwinner of the family and earns about $5000 while the mum is a housewife. Their 2 children are studying in University in their final year of studies. One day, the father suffered a heart attack and was rushed to the hospital. He survived but the father became disabled and became bedridden. He also lost his ability to eat and drink and requires to be fed through tube feeding of milk only. He is unable to work and the family lost their only income as a result.

The above is a typical scenario of what happens when a family member suffers a critical illness. It can be heart attack in the above case but can also be other critical illness such as stroke, cancer, accidents, organ failures etc. With advance healthcare, most patients survive but the illness renders most people disabled after surviving the episode.

Long Term Healthcare cost required

When a person becomes disabled due to a sudden illness, the income is lost completely. The family members most probably have to find ways to sustain their lifestyle and find as much help as they can. Continuing the above story, it is fortunate that the 2 children just managed to graduate from university and they found a job. They earn a combined gross salary of $7400 which is quite a decent salary and they decided to care for their father at home after he discharges from the hospital.

However, they soon found out that the long term healthcare cost needed for their father are as follow:

NoItemCost per month
1Hiring a maid to care for their disabled father $600
2Levy for maid $265
3Milk Powder$1,000
4Adult Diapers$200
5Home Therapy (3 sessions a week)$1,200
6Home Nursing$200
7Follow up appointments$100
The above cost is for more severe cases of disability. For those with less severe cases of disabilities, the cost may be lower. The costs are also before any subsidies. 

The list above may not be conclusive and there may be more or less items according to different circumstances. Just like that, the 2 children have to fork out additional $3765 a month just to care for their father. This is on top of their current life which they still have to continue sustaining. With combined gross salary of $7400, their combined take home pay is only $5920. After deducting the healthcare cost needed, they are left with $2155 for a family of 4. Is this even enough for living expenses? 

This scenario is more real than we think. I can come up with the various cost at my fingertips because this happened to people around me recently and I've been researching and finding out more in order to help them. 

Also, with their income, they are not eligible for most subsidies even though they don't really earn a lot. 

Survey of People Who Need To Take Care of disabled family members

As mentioned earlier, I had done a survey to gather information on the issues which people face when they are caregivers for a disabled family member at home. With disabilities, there will certainly be long term healthcare cost involved as the disabled family member cannot work anymore and have to depend on someone to take care of him or her. Let's take a look at the questions and the responses in detail:

Q1: Which family members with disabilities do you have to support or care for?

Most people are supporting their parents (66.67%) or their grandparents (25.93%). 

Q2: How many family members with disabilities do you have to support?

Most people are supporting one family member. There are some who are supporting 2 or even 3 family members which is quite tough. 

Q3: Where are the family members with disabilities staying at?

Most of their family members are either staying with them or staying at another family member's house where they have to take care of the family member at home. There are some who have family members staying at nursing home probably due to lack of time to take care. 

Q4: Which of the following assistance does your family member need help on?

Most family members when they are faced with disabilities, they need help for most of the 6 daily living activities with mobility ranking the highest.

Q5: What is the amount you have to fork out in order to support the family member/members with disabilities?

Now comes the financial cost part. Most people have to fork out between $1000-$1999 per month just to care for the disabled family member at home. I reckon this will be for the milder cases of disabilities where the family member still can eat and perform some daily living activities at home. 

There are some who have to fork out between $2000-$3000 a month or even more than $3000 per month for more severe cases of disabilities. 

Q6: Which of the following subsidies do you receive?

Question 6 is all about subsidies. There are various subsidies which I will talk about in a subsequent post. People who are in this situation would have tried to find all kinds of subsidies available in order to continue living a normal life as much as possible. Ultimately, this is not a situation which families would like to be in so it is a tough time to go through. 

For the subsidies, we can actually see that most people do not get the subsidies which are available out there. The most common subsidy which people get is the foreign domestic worker concession levy and the grant where they will be eligible when they hire a maid to take care of their disabled family member. Other than that, most people do not get much other subsidies. I'm not sure if it is a lack of knowledge on knowing the subsidies available or the subsidy is just too difficult to get once you have a higher income. By higher income, the threshold is actually only $2600 monthly household income per person. Once you are above $2600, you would most likely not be able to get most of the subsidies. 

For the response which people put as "Other", most of it is NIL which means they do not get any subsidies at all. 

The Scary Truth Of Long Term Healthcare Cost In Singapore

I hope this article has done its purpose of raising awareness on the issues which people faced when caring for a loved one with disabilities. The last 2 questions I had in the survey were open ended questions where I asked what is the biggest financial cost and also what is the greatest challenge they faced. 

The biggest financial cost comes from the milk feed, medication, transport fees, diapers, domestic helper, hospital bills, medical equipment and many more. The responses were vastly different for different people which shows that the cost involved is quite wide ranging. 

The greatest challenge was more aligned where most people comments were quite similar. Most people stated that having not enough time and money was the greatest challenge. There were also emotional stress dealing with the issues at hand including the worry of the family member's health going forward. 

Being a caregiver is not just about the long term healthcare cost but also the emotional anxieties and stress involved. I'm sure more can be done to support these caregivers in the form of support groups and also financial assistance. There are already schemes in place and support rendered which I will go into detail in the next post. However, I still think more can be done for this group of people. 

If you're from any voluntary welfare organisations or the relevant government ministries, I would love to have a chat and hear from you if there are more things which can be done for caregivers in Singapore. You can drop me an email at and I will get in touch with you.

For those who are caregivers currently, the road is certainly tough and you would probably need as much support as possible. You can refer to AIC silver pages to find some of the help you need:  

Everyone can help to share this post to help create awareness for those who are facing challenges on being a caregiver.

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