Monday, May 16, 2016

Having A More Secure Financial Future Not Only By Saving And Investing

I started working 5 years ago as a fresh young polytechnic graduate after serving my NS. To be honest, my starting pay was not very high, it was below $2000. Today, fresh young polytechnic graduates are getting higher pay than 5 years ago. It was reported that the graduating class of 2015 who landed full-time jobs were hired on a median monthly salary of $2,100.

In my short 5 years of working full time, I've seen my fair share of complaints from my colleagues and friends that their pay is low, career progression is slow etc. I have seen more foreigners coming in, taking up management positions. There will always be feelings of unfairness among Singaporeans when it comes to the rights of us as citizens.

Then, there is also chatter about unions in Singapore. That the unions do not do much and they support the government. The National Trades Union Congress (NTUC) is our union in Singapore and has over 60 unions affiliated under its umbrella.

The 1st of May, which is also known as May Day or Labour Day is celebrated in many countries as a traditional springtime festival or as an international day honoring workers. This day seeks to honor the hard work which workers put in. Many workers in various countries stage protests because they feel that they are being treated unfairly. But how is it like in Singapore?

I have mentioned in my previous blog posts that increasing our income is important. Planning for our financial future is also important as we really do not know what will happen in the future. We can be retrenched and lose our jobs the next day. Besides focusing on growing our money, setting aside emergency funds etc, there are other factors which I think is very important to have a more secure financial future.

I always think that I am very fortunate to live in Singapore. Besides having a safe and peaceful environment, we also have many opportunities to learn and grow and fulfill our dreams. Let’s see the opportunities we can grab hold of to have a more secure financial future for ourselves.

A Cautious Outlook Ahead

On May day this year, Prime Minister Lee Hsien Loong made his speech at the May day Rally. You can read more about it as reported on Straits Times and other news portal here and here. A big part of PM Lee's speech was to address the concerns in this current economic outlook and how the government is working together with the labour movement to cope with the issues ahead.


As we all know, many countries are still experiencing slowdown including China while Europe and the US are still struggling to recover. Unemployment is high in many countries and youth unemployment is worrying as well.

PM Lee said that a person from the Singapore Port Workers Union told him that there was one day when for two shifts out of three, PSA's Tanjong Pagar Terminal did not receive a single ship. There is certainly a slowdown in the marine, oil and gas industries which will cause many workers to lose their jobs.

With the cautious outlook and headwinds ahead, the government will deal with changes in three areas namely:

1. In our industries
2. In our jobs
3. In our workforce

You may have heard many of your friends are buying things online now such as on Taobao. Taobao is an online retailer website owned by Alibaba and is the world's most valuable retailer. However, it does not have any physical shops or own any stocks.

Airbnb is now the world's largest accommodation provider but it does not own a single property!
Uber is the world's largest taxi firm but it hardly owns cars.

The industries around the world are definitely changing and if we don’t change the way we do business, we will definitely fail. Look at past big companies such as Kodak or even Nokia. They get taken over by companies who embrace change and technological advancements.

Jobs are changing

Jobs will change as industry transforms. With current technological advancements going at even faster pace, we need to be prepared that our jobs may be replaced and the skills we have now will become obsolete. For those who are at risk of losing their old jobs, they can get help to make the transition by reskilling and upskilling. NTUC provides training courses which you can find out more below. This is unique as very few countries actually have trade unions providing courses for the workers.

For example, the ICT sector is growing currently and will need a lot of workers in this industry. The government set up the Tech Skills Accelerator to train Singaporeans so they can be matched to these jobs. It is estimated that there would be as many as 30,000 new jobs in the ICT sector by 2020.

I was in a seminar 2 weeks ago listening to the technological advancements which will happen from now to 2020. It is a big WOW as I listen to the speakers. Our current mobile internet connectivity is amazing with 4G speeds of up to 450 Mbps. We will have 1 Gbps speed very soon and even 20 Gbps speed with 5G coming in 2020. 5G is a key technological advancement which will make automation and smart cities a reality. This is also a project which the Singapore government is embarking on. With automation, many jobs will be replaced. For example, I heard they can even automate hospitality and construction sectors. A worker can control a machine in a construction site located in another country using real time robotic hands with haptic feedback to sense the pressure and force of the digging work. A cleaner can control several robotic cleaning machines in a control room without having to do the manual work. All these will certainly replace manual labour and it is timely to retrain these workers so they can continue to be employed and even get a higher pay in the future.

It was announced that NTUC will partner with NTU to support mid career workers, including PMETs, to learn new skills. Currently, NTUC has been partnering with the Polys and ITEs for trainings. NTUC intends to raise $50 Million to work with Universities and the government has decided to support by matching $3 to every $1 which NTUC raises. This means $200 Million more in the NTUC Education and Training fund. This is how our trade union is different from other countries where we focus on the bigger picture instead of the now.

The partnership with NTU will focus on short courses to help working people keep up with technology and industry development. NTUC will expand the programme to more universities in time to come. Courses will include digital electronics, molecular genetics and enterprise and innovation which are key growth sectors to come. SkillsFuture credits can be used to offset course fees, and NTUC members will enjoy an additional subsidy of up to $250 a year under the Union Training Assistance Programme.

With jobs changing, I think it is necessary for us to have more skills on hand so that not only we will stay employable but our income will also increase. This is important in having a more secure financial future. Imagine if we lose our jobs and can't find another job because our skills become obsolete, how much impact will it have on our life and finances?

Workforce is Changing

Lastly, the workforce is also changing with times. In Singapore, more than half of the workforce are PMEs (54%). By 2030, it will be two-thirds. The labour movement needs to adapt to meet new needs and stay relevant. The needs of workers are changing. Therefore, for unions to stay relevant to workers, they need to expand their services. This also includes growing their networking because this is something that workers are interested in, networking for better opportunities.

Not only will unions provide collective bargaining, they will also provide other services such as career counselling, networking, skills upgrading etc. As more of us progress better in our careers, it is important to network and explore more opportunities. I think this is a very good move and a platform for us to develop further. Furthermore, the labour movement will be exploring a pay-per-use model with PMEs instead of their usual pay-per-month model. This is also disruption as the traditional operating model of unions is broken down to meet evolving needs of the working people.

To me, Singapore has a unique model where businesses, unions and the government can work closely together to ensure a more sustainable economic environment for its people. Taking care of workers' rights and balancing it with the long term view of the economic structure has always been tricky. I think that there are certainly opportunities in Singapore as long as we work hard for it. If we want to increase our income, we have many opportunities to upgrade our skills. We also have opportunities to learn new skills so as to boost our employability and make us more relevant to the industry needs. No longer is the working environment the same as 20 years ago. We have to embrace change and be prepared. Having another skill on hand will help when we realise our current skills become obsolete. Losing our jobs can be a very painful experience. Are you prepared for a more secure financial future ahead?

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  1. Replies
    1. Hi Henry,

      Thank you for your kind words :)

  2. Hi SGYI,

    It's been awhile. I always like your non-complaints and positive attitudes. It is also shown in this article.

    There are so many good things about Sg. It's no doubt, and I love this country. But honesty, I am quite a paranoid about the next 50 yrs.

    Every country has their problem but having the humble luxury of being to many parts of the world and working with many people globally, and looking back to Singapore, one thing I am worry about Singapore is "the lack of failures and willingness to take risk!"

    This problem is created by our over-sheltered culture and yet sometimes we really think over-highly of ourselves as a country and as a nation. Can be double-edge sword.

    Frankly without enough failures in life, effectively means without sufficient exposure or trial and error. And without exposure outside Singapore, meaning we can only do things for our own country!

    And frankly Singapore does not hve a big population, we need foreign investments. That is how we thrive in the last 50 yrs.

    We are starting to lose competitiveness, because we are having more and more govt-led organization and putting too much effort in civil service. Remember the private sector is the core and government sector is just the facilitator.

    People are getting more comfortable as we enter a prosperous stage of economy evolution. This is inevitable but I really hope that the next generation forming the backbone of the country can be more forthcoming in learning from those who are more experience/exposures in life how to be patient and resilient and take painful failures, in return they exchange the creativity and innovative mind and dynamism.

    We need the old and young in this country to connect and the middle age to facilitate for us to shine in the next 50 yrs. Venture out if possible and learn the world and return back with the knowledge to bring Sg to the next level.

    A father who is deeply concern with my children's generation.. :-)

    1. Hi Rolf Suey,

      Indeed its been awhile. Hope you've been doing well?

      Yes Singapore is too comfortable averting many major financial crisis over the years. To be honest, when i tell my peers about financial crisis, very few will know how its like coz we never experience it before. I forsee that the next 10-20 years will be a new era with new technologies changing the whole landscape. The rise and fall of SG can be fast if we're not careful. We will need to change along the way and people must be willing to change if not that will be the end of us.

  3. Hi SG Young Investor,

    Have you ever thought of working in the insurance industry since it can be extremely lucrative? I'm interested in your views :)

    1. Hi E,

      Yes I've thought before to join the insurance industry but I have some issues with some of the plans which is not so beneficial for the general public which insurance companies are agreesively promoting. Furthermore, i realised that how agents make more money is by selling higher premiums plans which may not necessary be good for the clients. Yes we want to make more money but if its at the expense of others then i rather not do it. These are my thoughts :)