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:

No	Item	Cost per month
1	Hiring a maid to care for their disabled father	$600
2	Levy for maid	$265
3	Milk Powder	$1,000
4	Adult Diapers	$200
5	Home Therapy (3 sessions a week)	$1,200
6	Home Nursing	$200
7	Follow up appointments	$100
8	Medication	$100
	Total	$3,765.00

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 sgyounginvestment@gmail.com 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: https://www.silverpages.sg/  

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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Long Term Healthcare Cost Survey - A Mission to Create Awareness for healthcare cost in Singapore

Do you have family members who have disabilities whom you need to support and care for? The care giving journey is often an unprepared one and caregivers need all the help which they can get in this difficult time. I'm embarking on a mission to create awareness of the difficulties which caregivers face especially when it comes to the long term financial cost involved.

If you or someone you know is caring and supporting a family member with disabilities, do help to do this survey which I will use the result in a blog post. This will create awareness on the difficulties faced by the family members. I also hope to gain the attention of the relevant government authorities so that better care support policies can be implemented. You can help to make a difference by doing the survey here: https://www.surveymonkey.com/r/LY8CW5K

Previously I sent out an email to my readers on this survey but realised that the survey had errors and could not be submitted. For those who tried to submit previously but could not, please try again as I've edited and tested the survey to be working now.

Feel free to share this survey to your friends and family members too! Thank you for your time!

MAS To Allow Singdollar To Rise - How Does This Affect Our Investments And Life?

Singapore's monetary policy is a unique one and also well respected in the international space. Many countries, such as the US, adopts an interest rate policy where they increase or decrease interest rates to steer the economy into a certain direction. However, Singapore is different. We adopt an exchange rate policy where the Monetary Authority of Singapore (MAS) steer the Singdollar into a certain direction.

Just last week. MAS announced that they will will allow the Singapore dollar to rise in the first tightening of its exchange rate-based monetary policy in six years. This is in view of the stronger economy where MTI announced a 4.3% GDP growth for the first quarter of 2018. A stronger Singdollar will make exports more expensive and strengthens the purchasing power for us in Singapore. This is more to control any inflationary pressures due to the stronger economy.

The strengthening of the SGD will definitely affect our investments in terms of the earnings of different companies. It will also affect our personal life. Let's take a look at how a stronger SGD will affect us?

If you're interested to know how Singapore conducts its monetary policy especially what is the S$NEER policy band, you can read a previous article I wrote here: How MAS conducts its monetary policy in Singapore?


How does a stronger Singdollar affect our investments?

1. Lesser income for companies that has overseas businesses

A stronger Singdollar will affect the income of businesses who operate in Singapore and reports their financial results in Singdollar but have many businesses overseas. Let's take for example Singtel which has many subsidiaries and associates overseas. When they report their income in SGD and the SGD becomes stronger, its income from overseas business in other currencies will definitely drop when they convert it back to SGD. A case in point is where its share of revenue from its Australia Optus business was affected because the AUD depreciated against the SGD by quite a lot in recent years. Some companies do hedge against this risk though.


2. Lesser dividend payout from companies that has revenue in other currencies but pays dividend in SGD

A company that pays dividends in SGD but receives revenue in other currencies may give lesser dividends to shareholders as the SGD strengthens. Examples are some Reits which receive rental income in other currencies then distributes the income in SGD to shareholders. Watch out as their dividend yield may be affected. I say may be affected is because some of these companies actually fully hedge their distribution to a certain price of the SGD so it is not affected by the fluctuations of the SGD itself. As interest rates can be pegged and hedge to fixed rates, exchange rate can be hedged too.

3. Lesser business for export oriented businesses

For businesses which are export oriented, a stronger SGD will make exports more expensive to other countries and thus may decrease the demand of the goods which are being sold. Do watch out for your investments in companies which are based in Singapore but sells products to other countries. Their profits can be affected by the stronger SGD.

4. Stronger purchasing power for companies that buys overseas products and sells it here

Good news comes for businesses who buy products from overseas and sells it here. F&B businesses may benefit from this as their cost price for ingredients imported from overseas will be cheaper with a stronger SGD and thus increasing their profit margin.


How does a stronger Singdollar affect our life?

A stronger Singdollar is definitely better for consumers as a whole. It will moderate the increase of prices thus making things less expensive. Perhaps the most noticeable effect is when we exchange our SGD to travel overseas. A stronger SGD will allow us to have greater purchasing power in other countries. In fact, the SGD has appreciated against many other major currencies the past decade which is perhaps the reason why Singaporeans love to travel. Cheers to those who love to travel. It gets cheaper for Singaporeans again.

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Everyone hates the corporate world but what can we do about it?

Everyone seems to hate the corporate world but we have no choice but to work for a living. Let's face it, even if you like doing the job, you won't like handling the bosses or the office politics that comes your way.

Your choices affect your outcome in life

A fellow blogger and friend who blogs at Investment Moats wrote a post which recounts his conversation with a fellow colleague who decided to call it quits in the corporate world. He resigned from the job at the age of 45 without another job. This was possible because he choose this path right at the start. He planned out his path to exit the corporate world many years ago when he was much younger.

Most people do not act like the colleague above. In fact, most will never even think that they could exit the corporate world so the only choice is to climb the corporate ladder or choose a role which is less tough to deal with. In my previous company, there were many people in their 40s who didn't want to be promoted because they know that they would face more shit if they go higher up the corporate ladder. Well, its a personal choice and there is no right or wrong in our choices in life.

Also in my previous company, I saw some colleagues who were able to call it quits and enjoy the freedom which they set out for in their early years. Yes, all these people have one thing is common. They made this choice early in their lives.

In my current company, most are young people around my age and a lot are busy climbing the corporate ladder at this age. I too am climbing the corporate ladder but I know my end destination should not be getting stuck in this rat race. I do like my analysis job but there are many re-organisation happening which affected morale a lot and having to deal with this is not something pleasant. There are also many additional "jobs" which are not in my control. People not cooperating is another issue to deal with coupled with demanding and unreasonable bosses.


Why its hard to enjoy your work even if you like it?

Its a irony that I deal with data analysis on my blog too which I often break down numbers and create charts to analyse as well. This is similar to what I do at work. However, it is very hard for me to enjoy the same analysis work in office because of the deadlines, bosses comments, approvals and the many meetings (which may be pointless).

Imagine if I have to meet a deadline for a blog post or having to seek approval just to post an article on my blog. Add in many pointless meetings and presentations just to post that one article. That will be disastrous. Ideas flow because of the freedom to think and not fearing of what will happen if we do the wrong things.


What can we do about it?

Getting out of the corporate world does not mean retiring totally. There have been much discussions on the idea of retiring partially which can be achieved at a much younger age. Instead of doing work we do not like and staying in the corporate world, we can generate enough passive income to cover our fixed expenses and do some freelance work to supplement our variable income lifestyle.

Imagine if you have $300,000 savings and invest it to get 5% passive income, you would be able to get $15,000 annually which is $1250 per month. This can cover some fixed expenses or probably most fixed expenses if you have no outstanding debts. Thereafter, some freelance or part time work can be done to get additional few thousand dollars monthly to supplement our income. This is just an example and it really depends on individual lifestyle on how much they need monthly to survive.

The most important thing is what we set out to choose early in our lives. Do you choose to stay in the corporate world till you're old or you choose to have the freedom in your life? This is an important question and whatever choices we make will ultimately lead us to that end destination which we choose. Remember, there is no right or wrong choices. There are people who like the corporate world but I just don't think that's me. How about you?

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Investing In The Hospitality Industry - Breakdown of Individual Hotels Revenue

Its earnings season again. I've received a couple of annual reports as many companies have just closed their financial year to wrap up FY2017. I'm particularly interested in the results of the hospitality trusts which I own as 2018 is suppose to be the year where we should see some great recovery for this sector.

Most of the annual reports are now in a booklet format which saves a lot of cost for the companies as well as the environment. I have to go online or use the CD to view the annual reports. 2 hospitality trusts which I own are CDL Htrust and Far East Htrust.

In this post, I will deconstruct and dive down into the performance of individual hotels which they own which I believe will give us a better picture of the outlook of the hospitality sector in Singapore as well in other countries.

CDL Hospitality Trust - 20 Properties in 7 Countries

CDL Htrust has done well over the years not because its Singapore hotels have done well but because of the stellar performance of some hotels overseas. Let's take a look at the gross revenue breakdown of each hotel:

Hotels	Gross Revenue FY16 S$'000	Gross Revenue FY17 S$'000	Variance $	Variance %
Singapore	89,265	89,037	-228	-0.3%
Orchard Hotel	21,707	20,712	-995	-4.6%
Grand Copthorne Waterfront Hotel	18,117	18,948	831	4.6%
M Hotel	13,741	13,572	-169	-1.2%
Copthorne King's Hotel	7,733	7,237	-496	-6.4%
Studio M Hote	7,047	6,875	-172	-2.4%
Novotel Singapore Clarke Quay	20,920	21,693	773	3.7%
Australia	14,438	14,466	28	0.2%
Mercure Brisbane	2,570	2,576	6	0.2%
Ibis Brisbane	1,714	1,717	3	0.2%
Novotel Brisbane	5,217	5,227	10	0.2%
Ibis Perth	1,956	1,960	4	0.2%
Mercure Perth	2,981	2,987	6	0.2%
New Zealand
Grand Millennium Auckland	13,274	19,419	6,145	46.3%
Maldives
Angsana Velavaru	8,304	8,289	-15	-0.2%
Dhevanafushi Maldives Luxury Resort	17,481	14,587	-2,894	-16.6%
Germany
Pullman Hotel Munich	-	5,468	5,468	100%
Japan
Hotel MyStays Asakusabashi	5,994	5,701	-293	-4.9%
Hotel MyStays Kamata	4,578	4,144	-434	-9.5%
United Kingdom
Hilton Cambridge City Centre	21,418	20,344	-1,074	-5.0%
The Lowry Hotel	-	16,053	16,053	100%

As we can see, most of CDL Htrust's income comes from Singapore. It makes up about 56.8% of its net property income. The Singapore hotels performance largely remained flat with Orchard hotel as its main contributor of income. The boost comes mainly from its one and only New Zealand hotel which contributed $6 Million more to its revenue in FY17.


Far East Hospitality Trust - 8 Hotels, 4 Serviced Residences

Far East Htrust is a pure Singapore hospitality investment. All its properties are located in Singapore which has not been doing well for the past few years. Similarly, 2018 should be the year of recovery for the hotels in Singapore as the hotel supply tapers off this year.  Let's take a look at the gross revenue breakdown of each hotel:

Hotels	Gross Revenue FY16 (S$Million)	Gross Revenue FY17 (S$Million)	Variance $	Variance %
Village Hotel Albert Court	5.7	5.9	0.2	3.5%
Village Hotel Bugis	11.5	11.2	-0.3	-2.6%
Village Hotel Changi	10	9.5	-0.5	-5.0%
The Elizabeth Hotel	6.9	6.3	-0.6	-8.7%
Oasia Hotel Novena	14.3	13.1	-1.2	-8.4%
Orchard Parade Hotel	20.6	20.3	-0.3	-1.5%
The Quincy Hotel	3.4	3.4	0.0	0.0%
Rendezvous Hotel Singapore	13.5	12.4	-1.1	-8.1%
Serviced Residences
Village Residence Clarke Quay	9.2	8.9	-0.3	-3.3%
Village Residence Hougang	2.9	2.2	-0.7	-24.1%
Village Residence Robertson Quay	4.9	4.4	-0.5	-10.2%
Regency House	6.2	6.2	0.0	0.0%

2017 was a tough year for Far East Htrust. Both its hotels and serviced residences properties suffered a drop in gross revenue. In 2018, it will have a new addition to its portfolio which is Oasia downtown hotel where they acquired just recently. Another hotel, The Outpost hotel at Sentosa will also be opened in the second half of 2018. These 2 hotels are expected to boost its income for FY2018.

Artist impression of the outpost hotel, Sentosa

The hospitality sector is very much affected by the demand and supply of rooms. Tourist arrival is expected to be strong in Singapore increasing by about 4% in 2018. Supply of rooms will be low in 2018 as compared to 2017. Globally, the economy is on track for a recovery and this should benefit tourism as a whole. As corporate demand increases, serviced residences should be in demand as well. Let's see what happens in 2018 for the hospitality sector. I continue to be vested in this sector.

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Reflections on turning 30 years old

I have officially joined the 30 league today. To me, turning 30 years old is a milestone in life. The 3 in front of the age psychologically makes one look older too. I started this blog back when I was 25 years old and named it SG Young Investment. I grew with this blog and it has been 5 years now. Can't believe how time flies just like that.

This blog is a personal blog where I document my journey towards financial freedom. It is also a blog where I write on my thoughts on finance stuff. I have learnt a lot just by blogging for the past 5 years. Yes indeed as I write on various topics, I learnt the most myself too. Over the years, my motivation changes as I grew older and experiencing life's happiness and sorrows as well. This post will be some thoughts I have for turning 30 years old today.

1. Money is not everything in Life

A big realisation in my life is that money is not everything. Over the past 5 years, I made more money and my net worth grew because of the plans and goals I set for myself. I was able to generate multiple streams of income and spend more on the good things in life too.

However, after all these, honestly I don't feel much happier just because I had $100K more in my bank account. Don't get me wrong. It is still important to save up for our future especially if we want a good life for our love ones. But, honestly, money is not everything in life.


2. Life can hit you hard when you least expect it to happen

Life is not always smooth sailing. In fact, the past few days before my birthday, I felt an intense sadness reflecting on what had happened in the past and worrying about the future. I realised that I have totally no control over what would happen at all because of some unfortunate experiences in the past 1 year.

Personally, I have witnessed the sickness and death of 4 close relatives in just 1 year alone. One of which was a close cousin who was younger than me where he died in an accident. It hit me really hard that life does not give second chances. We can have all the plans we want but how it turns out later is unpredictable. I struggled a lot because I have been a person who believed in planning for the future a lot. It made me think what's the point of planning anymore.

Fortunately, my parents are still healthy but after seeing unfortunate things happen to people around me, I begin to worry for them also.


3. Keep walking is the only way in life, relationships and hope brings peace to our hearts

Yes there are worries and hurts in life that will bring us down. However, time does heal wounds as long as we continue walking. In fact, this is the only way in life. We either continue walking or we stop walking. But, I don't think to stop walking is a choice at all in life.

In times of trouble, we will know who are the people who really care for us. Relationships are tested and those that can withstand the test of times will become stronger. Even in the midst of all the worries, hope will bring peace to our hearts. I learnt not to give up hope no matter what happens. Whatever may happen in the future, I tell myself not to give up hope as well.

In the financial blogging world, we bloggers know each other in real life as well. It is these relationships that makes blogging much more alive and real. We are all still passionate about financial education which is a common goal we have. We also have families and some of them have spouse and children whom they work hard for.

I asked myself what is my motivation in life after 30. Deep down in my heart, my motivation comes from providing a good life for the people I love especially to my fiancee who will be my future wife. There is still a long road ahead to experience the good things life have to offer. My parents are getting older too and its time for them to enjoy life in their golden years.

Its a coincidence this year that my birthday falls on the same day as Easter Sunday. It reminds me to focus on what God has given me and to give thanks for the small things in life. Happy Easter everyone! :)

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