Wednesday, December 27, 2017

Reviewing My Goals For 2017

In just less than 1 week, we will bid goodbye to the year 2017 and welcome the year 2018. I looked back at my goals for 2017 here. Honestly, I didn't really remember what goals I set for myself. The best thing about having a blog is that I can read back on what I have written.

1. Rethinking retirement   

Honestly, I haven't been thinking much abut retirement this year. I've been thinking should I top up my CPF SA to get more interest and plan for my retirement but did not do so until now because its going to be lock in for a long time. It will probably be a good idea to put money in my CPF special account because I will get 5% interest. My CPF SA has not reached the first $40,000 yet. I will continue to give it a good thought and may top up sometime this week. There will also be tax savings through cash top up.

2. Focusing on my new job in 2017

This was a challenging year taking up a completely new role in a new company. The biggest challenge was when one of the team members left and I was tasked to take on his role which is the biggest among the others in the team. I was actually quite scared to take on such a big role just 2 months into my new job but still survived in the end.

I'm glad I stuck it out and persevered to the end even though it was really tough and I thought of giving up many times. The working culture was also very different from my previous company. I realised its through getting out of our comfort zone where we will really learn. I did learn a lot this year.

3. Saving for the future

In order to save more, I embarked on a journey to increase my income. I wrote it in a separate article here on the income I managed to create. Out of all my income, I managed to save about 64% even though expenses increased. This is more than the 50% savings I set out for. If i didn't create additional income, savings rate would have been about 30% only.

4. Relationship Goals

This is the toughest part personally for me this year. Not that I didn't have time for relationships but unforeseen circumstances happened to people around me this year. Life has its ups and downs. The people around us may no longer be the same or even may no longer be around before we know it. I learnt to not take for granted the things we can do now because we may not be able to do the same thing again in the future. Even simple things such as eating, walking we should not take for granted.

Life is short. Treasure the people around us and enjoy what life has to offer. Yes, planning for the future is still important but try not to over plan. There is a season and time for everything.

This should be my last post for 2017. Here's wishing all a happy new year ahead! May 2018 be a great year for you!

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Friday, December 22, 2017

A Sneak Peak Of My Investments And How I Track My Portfolio

Stocks portfolio tracking can be quite a tedious task. I used to key in my transactions into excel individually and it took up quite a lot of my time as I still had to track my dividends and investment returns as well.

However, over the past 1 year, I manage to track my stocks portfolio automatically through a website called stocks cafe. I personally know a few other bloggers and fellow investors using it to track their stocks portfolio as well. It is really easy to use and best of all it sends report on my investment results to me every single day so I got an overview on how my portfolio performed.

This is the kind of update I received in my email every day. I can view it easily on my phone while on my way home after work:

There are also details of each individual stock and how they performed for the day in the email. This allows me to have a summary of what is going on in the market when I have no time to look at my stocks while at work.

The website of stocks cafe gives many other details including news and basic fundamental of stocks. Every morning, I will go to the website and read the news which are specifically filtered based on the stocks I have in my portfolio. This is how the website looks like:

The first news I see is on Suntec REIT which is a stock I have in my portfolio. There are many other news when you scroll down. When I click on my stocks portfolio, I get the details of each individual stocks I have in my portfolio. I can see the % allocation of the stock in my portfolio, the dividend yield, my average price, the profit and loss and also the dividends I received. This is more than enough to give me an overview of how my stocks are doing and how I can re-balance my portfolio when needed. 

Next, I can see the closed positions and the profit I get from each sell transactions:

I can also see the dividends I received and the dividend yield of my portfolio. There are also details of how much dividends I received from each stock and the projection moving forward. As seen below, I still have one final dividend not yet paid out from Singtel even though it has already XD.

And finally, I can even see my portfolio performance for the current year as well as the past few years. XIRR has been exceptionally good this year at more than 21%.

For research of stocks, the platform also allows me to get basic financial info of the companies and there is always a link to the investor relations page of the individual companies if I'm interested to find more information. Let's take an example of Suntec REIT to view its information on stocks cafe:

Firstly, we can see the stock chart. This is particularly useful for me as I will always at least look at the chart before I buy the stock. I want to try to buy a stock at good support levels.

Next, I can see basic information of the stock including its fundamentals and basic description. Basic financial ratios such as PE, PB, ROA, ROE and also dividend yield can be seen. As mentioned earlier, there is a link to the company's investor relation page under the general section which we can click through to get more information and do deeper research on the company.

Stocks cafe has been useful for me as a portfolio tracking tool and also a platform I am using if I want to find more about a stock. It has served me well for the past 1 year plus. It is free to use but there are some limitations for free users. You can try it first to see if its useful for you. Sign up here using my referral code and get 2 months friends of stock cafe for free.

The holidays are coming as well as the end of 2017. Here's wishing everyone Merry Christmas and happy holidays ahead!

* This is a tool I use personally. This is not a sponsored post

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Wednesday, December 20, 2017

A Letter To My 20 Year Old Self 10 Years Later

Soon, I'll be turning 30 in 2018. I'm growing older each day with this blog even though its still called SG Young Investment. This blog will always stay young and continue to inspire the next generation of young people even as I grow older.

There are many decisions which I have made in the past 10 years, some good while some not so good. This is a letter which I would write to my 20 plus year old self which shows my life journey and also what I've learnt so far. Hopefully through this letter, you would be able to learn from some of the decisions I made and if you're in your early 20s or younger, this letter will hopefully let you make wiser decisions and motivate you in your life.

Dear 20 year old,

Life is always a roller coaster. It is also an unknown what will happen 10 years later. But one thing for sure is the decisions we make in life will somehow determine our future. However, fate still determines some key milestones in our life.

At the age of 20, you will go through a major milestone in every Singaporean boy's life, that is serving national service. The experience will show you that life can be pushed to the limits even when we think we can't do it. If we persevere on, we will see results. The spirit of never give up is born in the army.

It is also during this time when you will start to get serious about your life. What shall I do in my life is the question? There were actually few choices left since your polytechnic results were not that fantastic to get into a university. You also did not know what to really further your studies on. The decision was made to just work in the same field which you studied for your diploma. Through scrimping and saving, you managed to save your first 5 figure savings of only $10,000 at the age of 21.

Money was the focus after you came out of army. Receiving just a salary of $1700 was the largest amount you have ever earned a month since you were born. Yes you had worked several part time jobs in the past but this was the first full time job. Not knowing what to expect is always on your mind before the first day of work. Through working, your savings manage to increase and because of the frugal lifestyle, you could even save $20,000 a year.

Stepping into the working world wasn't a bad experience. The colleagues were nice, the boss was nice and the working culture was good too. You were the youngest in the company and people took care of you and often giving you advise of life. Some were about your father's age and listening to them gave you some perspective of life from different people, their regrets and their achievements which they were proud of. You listened attentively day in and out and got some really good lessons from some of these older and wiser people.

Many people regretted staying too long in the company and always advised you to further your studies and advance in your career. After much consideration and deliberation, you decided to take up a degree course of economics which was completely different from the engineering which you studied before and what you are working as. It was a very tough choice coupled with having to balance both work and studies at the same time. The few years, no doubt were tough, but also the most fulfilling time of your life. Even as you studied part time and worked full time, this blog was born because you found the passion for financial stuff. You met more like minded people, made new friends, did stuff which you never thought you could do such as public speaking, attending conferences and events and talking to successful people at the top. You graduated with the degree eventually and never regretted the decision you made.

Even though you reminded yourself not to stay in the company for too long, you still did. After graduation, you continued staying in the company for another 2 years. Was it a wrong decision? It is really very hard to tell. Getting out of the company earlier will allow you to advance your career faster but you may not have met some people or have done some stuff if you had left earlier. But really who knows what really would have happened if you had made a different decision.

Still, staying in the same company after graduation seemed to allow you more time to focus on life beyond work. You met your girlfriend during this time and life changed after that. Fortunately or unfortunately, as a guy in the relationship, your expenses increased. This motivated you to think about increasing your income instead of just trying to save money. I could spend lesser alone but I don't want to save on my partner. So, the journey to embark on increasing income started from then on. Fortunately, opportunities presented itself even when you did not really look for it. The goals were mainly focused on savings beforehand but it changed to creating income thereafter and things just worked out accordingly somehow.

On investing, you tried all sorts of style and attended lessons outside but mostly did not work out at the start. Investing only worked when you found the style that suits you and never think of making money. Its a psychological game of greed and fear afterall. Once these 2 are removed, investing is much more easier.

Through this life, you learnt that people matter in your life. It is the people around you which make life interesting or sad. So, it is important to surround yourself with the right people in your life. The right people will motivate you while the wrong people will drag you down. The rest of the plans such as setting goals are but a road map on the destination which you want to reach. In the end, its the journey that matters. Just like planning for a holiday, we do not focus on reaching the destination only but enjoying the journey to the destination as well. The time spent with the people along this journey, the experience experienced goes a long way in our memories. Therefore, enjoy the journey while reaching your goals.

Are there any regrets in life? Most probably yes but I think everything happens for a reason. Instead of regretting, focus on the future and get back on the path which you set out initially. Sometimes, we may have gone off course but there is always time to get back on track. To my 20 year old self, there is still a long road ahead. Life will be good as long as we believe it. Never give up on your goals.

Yours truly,
From the 10 years later you

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Wednesday, December 13, 2017

How I Save Almost 100% Of My Salary In 2017 And How You Can Do It Too

2017 has been a crazy year for me. Firstly, this is the year I spent the most. My expenses almost doubled from a year ago. This was probably the result of me foregoing tracking my expenses like how I used to in the past. My goal in 2017 was still to save at least 50% of my income which I would not have been able to achieve if I just relied on my main income alone.

In 2017, I changed job for a higher income role. It didn't really make up for the increase in expenses. My savings rate would have suffered tremendously. However, because of a change in focus, I didn't just complain that my salary was low and sit there and do nothing. In the end I managed to revive my savings rate and save almost 100% of my salary for 2017.

How is it possible to save 100% of my salary? The reason is simple, it is the answer to financial independence too. I created more side income (lots of it), to cover almost all my expenses. Even when my expenses doubled, I still created more side income to cover it. This is the strategy of financial independence which I learnt from the book "Rich Dad Poor Dad" almost 8 years ago. In the book, it taught me to use assets to create cashflow that puts money in my pocket. Do this until it covers all your expenses and there you have achieved financial independence. Although the book talks more about investing in real estate for cashflow which is difficult for average Singaporeans, the concepts taught were still applicable.

Here is a summary of my income and expenses for the year 2017 (up to Nov 2017):

The additional income created is almost enough to cover my expenses for 2017. The expenses are not in thousands but in tens of thousands so it wasn't easy creating the income to cover it. It took time and effort and lots of hard work. It is a far cry from the passive income which we are all familiar with.

With the additional income created, I am on track to save almost 100% of my basic income in 2017. If not for this, just by relying on my main income will achieve only a savings rate of about 33%.

How You Can Do It Too

There are many ways to create income by doing what we enjoy and using the skills that we have. The world has changed and we can virtually work anywhere in the world. Yes we all want the passive income so we can sit back and relax and wait for the money to come in but that does not happen overnight. We have to create active income first then slowly transform it into passive income. This is my strategy for next year and moving forward for my life.

Active income is necessary to create passive income. Without cash, we can't buy assets that generate passive income. For now, our assets are our hands and legs and our mind and skills which we can invest in to generate active income.

I have created 3 diagrams below which sums up my strategy and which also explains the path to financial independence and retirement.

The first chart below will be where most of us are at. In fact, most people do not have the side hustles part where you have created additional income. Side hustles is a word very well known in the west where many of them leverage on technology and freelancing to create more income. This accelerates the path to financial independence if we can save more from the additional income.

Path to financial independence - Diagram 1 (Normal Life)

If you manage to get a high main income and can still save quite a sum of money at a young age, then side hustles will be optional for you. However, there is a problem with relying on main income only which brings me to the second diagram.

The second diagram is where we can depend on our side hustle to continue living our life. The main income is removed in this case as we no longer need it. Most of the time, we will be doing side hustles which we like and there is always the freedom from office politics and all sorts of nonsense in the corporate world and the rat race. This is the gig economy which I wrote about in a previous article. There are about 9% of the workforce in Singapore who are in the gig economy as compared to 30% in the US.

Path to financial independence - Diagram 2 (Out of Rat Race)
When we do not need to depend on a salary to continue living our life, then we would have effectively gotten out of the rat race. The real financial independence will be on diagram 3 below.

In diagram 3 below, this is how financial independence will look like. We are able to generate enough passive income through out investments to cover our expenses. At this stage, we can choose not to do any work or continue with the side hustles we like to do. The main benefit here is the freedom from the work which we do not like.
Path to financial independence - Diagram 3 (Financial Independence)

The maths behind early retirement

It is not difficult to chart the path to early retirement. The maths shows that it can be done and how it can be done. The maths shows that just by saving 75% of your income, you can retire in 7 years base on a 4% withdrawal rate and assuming your expenses stays the same.

In Singapore, many people do retire in their 40s. It is achievable as what has been done by various financial bloggers. What they do is they save and invest early in their lives and also try to earn a decent high income. Most generate additional income through other means as well including investing in stocks, properties or freelance.

As for myself, I have the option to call it quits for my job and still be able to continue living my life but I'm not going to do that anytime soon. There's still a lot more work to be done to stabilise the foundation. One thing for sure is I'm looking to do more meaningful work instead of just working for money. Many things have happened in 2017 which changed my perspective of life. Seeing my loved ones falling ill one by one is not an easy thing to go through. Life is definitely more than working. The stress and burdens that creates the illness is not worth it at all.

Many people see the dramatic positive effect to their health when they stop working in the corporate world and have the freedom to do things they like. High blood pressure, back pain, headaches, gastric disappear when people stop working. Those are health problems that comes with stress and can cause even serious life threatening illnesses. We should know when to stop but its easier said then done when you have no choice but to continue working. When you have a choice, then you can choose your health over the work. We can all aim to be financially independent one day.

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Wednesday, December 6, 2017

The Dangers of Credit Cards And How To Use It Smartly?

All of us know that credit cards can be dangerous if we overspend and end up not being able to pay the bills on time. The interest on credit cards is extraordinary high because it is an unsecured debt, different from home loans which are considered secured debt. Interest on credit cards are around 24% which is 2% a month if we could not pay the full sum. There are also advantages of credit card which we will explore in the later part of this post as well.

Dangers of Not Paying Your Credit Card bills in Full

There is always a minimum sum we have to pay on the credit card bill. It is always important to pay your credit card bills in full and NOT just the minimum sum. Paying just the minimum sum will incur the interest on your outstanding amount.

For example, if you have a credit card bill of $1000 and you just pay the minimum sum of $50, the interest will still be charged on the $1000 which is:

2% x $1000 = $20 (assuming 24% annual interest)

The minimum payment will be used to pay the interest charge first before reducing the outstanding balance. So, out of the minimum sum of $50, after deducting $20 to pay interest, there is $30 left to pay down the outstanding balance.

The outstanding balance is now = $1,000 - $30 = $970

Moneysense has a good illustration on how long it takes to pay off your bills if you just pay the minimum sum:
As we can see, even just $3000 outstanding credit card bills can take as long as 5 years to pay up if we just pay the minimum sum only. It is not advisable to delay any of your credit card bill payments as the interest is unbelievably high. If you do not even pay the minimum sum, your credit rating will be affected and it will affect your eligibility to get any other loans later. Legal action will also be taken against you if you continuously fail to pay the bills.

Advantages and benefits of credit cards - How To Use it smartly?

However, credit cards can also be beneficial for those who know how to use it to your advantage. I've heard and said a lot about the different cards out there (cash back, miles card, discounted items etc) which all helps us to be smarter in our spending. I also have some of the cards myself and it has given me lots of cashback and benefits.

In this post, I will specifically look at which card is the best for each of our life stages.

Before we get into the specific cards, I would like to offer a deal to all readers here. If at the end of this post you do not need any credit card or even if you applied for a card yourself, you can consider signing up as a referral and refer any friends whom you think will need any credit cards. You will get $25 choice of vouchers and your friend will also get extra $25 choice of his/her vouchers as well (choice of vouchers include NTUC fairprice, Grab, Lazada or Qoo10). Click here to be a referral.

Here are the cards for different life stages:

1) Fresh Graduate who just started working or adults who love cash back

For fresh graduates who just started earning a decent pay above $30,000 annually, a basic cash back card is a good one to start with. Both Standard Chartered and American Express provides good cash back cards with no minimum spend and no limit to the cash back you can get. Its a simple card with no strings attached. You just get cash back on everything you pay with your card including student loans or any other bills etc.

The cards to consider is the Standard Chartered Unlimited and the American Express True Cash back credit card. Both cards give 1.5% cash back on all spend without any minimum spend. For the AMEX card, they even give you 3% cashback on the first 6 months.

If you want to up your cash back even further, you can consider the Standard Chartered Spree card which was just launched recently. This gives you 2% cash back on all online and contactless transactions. Its what most young people will be doing nowadays.

Deals available for each card:
  • Standard Chartered Unlimited card is giving away $138 instant cash back which will be credited into your card upon approval
  • American Express True Cashback card application entitles you to $50 choice of vouchers (NTUC fairprice, Grab evouchers, Lazada or Qoo10)
  • Standard Chartered Spree card is giving away $138 instant cash back which will be credited into your card upon approval
  • In addition, if you are not referred by your friend through his or her referral code, you can use this code 1963671 to get extra $25 choice of vouchers
* Instant cash back is given and fulfilled by the bank subjected to terms and conditions. Please refer to the bank's page for more detailed information

Apply for any of the above cards here

2) Couples getting married or individuals and families who love to travel

For couples getting married, there is sure to be some big expenses for the photo shoot, the booking of the banquet and so on. These big expenses can be greatly taken advantage of using the right credit card. Apart from the above cash back cards, miles card are the best for couples getting married.

How attractive is the miles card for couples getting married? Do you believe you can get free tickets for your honeymoon to places like Europe, Maldives, New Zealand, Tokyo or even San Francisco or New York? Yes this is possible. It may be complicated but let me explain below:

The Citibank Premier Miles card has the best miles offer now. It is especially good for couples getting married as they give bonus miles upon $10,000 spending in the first 3 months. Paying for the wedding expenses easily goes above $10,000 in this case. For the Citi Premier miles card, they give 15,000 miles on your first spend (any amount) and additional 27,000 miles upon $10,000 spending in the first 3 months. This is already 42,000 miles which you get as a bonus. For wedding expenses especially the banquet, it can easily cost more than $40,000 for the banquet alone ($1200 per table x 35 tables=$42,000). As the Citi Premier miles card earns 1.2 Miles for every dollar spent, this is additional 50,400 miles earned.

Does the miles calculation sound confusing to you? Let me summarise below:

ItemCostMiles Earned
First spend (Any amount)$xx15,000 (bonus)
$10,000 spend within first 3 months$10,000 27,000 (bonus)
Wedding Banquet$42,000 50,400 (42000x1.2 miles)
Miscellaneous (photoshoot, wedding gown etc)$10,000 12,000 (10000x1.2 miles)

Just like that, we can get 104,400 miles. Where can 104,400 miles fly you to? I went to Citibank website and found the air tickets which we can exchange for to which destination:

For economy class, the miles can bring you to almost all countries across the globe. You can easily get free tickets for both you and your spouse on a honeymoon to Maldives or even New Zealand.

You can even fly for free in business class to some of the countries below.

The miles card doesn't just apply to couples getting married but also individuals and families who likes to travel. Share this with your friends who are getting married or who love travelling.

Deals available for each card:
  • Citi Premier Miles card entitles you to get $100 choice of your vouchers (NTUC fairprice, Grab evouchers, Lazada or Qoo10) on top of the up to 42,000 free miles given
  • In addition, if you are not referred by your friend through his or her referral code, you can use this code 1963671 to get extra $25 choice of vouchers
To sign up for any of the cards, click on the card names below:

Many more cards available with vouchers up for grabs here.
The voucher deal ends on 31st December 2017

How To Be A Referral And Earn $25 Vouchers for each friend you refer?

Not interested in any cards but want to earn vouchers? Be a referral and refer your friends to sign up. You and your friend can each get $25 choice of vouchers (NTUC fairprice, Grab evouchers, Lazada or Qoo10) for each successful sign up. Sign up to be a referral here.

After you get your referral code, simply refer them to my blog post for them to apply for the cards above or just send them this link to apply for any cards they need.

Get The Benefits, Pay Off Your Bills On Time - The Smarter Way To Spend

Nowadays, I seldom have much cash in my wallet. Wherever I go, as long as credit cards are accepted, I'll just use paywave to make the payment. Its easy to use and I get the benefits by spending smartly as well. I even pay all my credit card bills through my OCBC 360 account to get the higher interest.

However, always remember never pay just the minimum sum for your credit card bills. Make the payment in full and on time to avoid interest charges and late payment fees. This is the smarter way to spend.

PS: I have both the AMEX True cashback card and Standard Chartered Unlimited card for cash back. Will be looking at miles card soon to fulfill my travelling dreams

SG Young Investment is an affiliate partner of so I get a referral fee for every sign up.

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Monday, December 4, 2017

Summary of My Investment For 2017

How time flies, its near the end of 2017 already. We are now in the month of December which is just less than one month away from the Christmas and new year celebrations again. In this post, I will do a summary of my investments and what has happened in 2017. Nearer to the end of the year or early start of next year, I'll write another post on the investment strategies for 2018.

For 2017, it has been an extraordinary year for investments. You may ask how extraordinary is it? Using the Straits Times Index as a benchmark, if we have invested at the start of the year and did nothing, it would have gained about 18% return on investment by now.

The STI ETF started at 2.95 at the beginning of the year. It is now at 3.48. I did invest some of my money into the STI ETF back when it was $2.80 last year. To date, it has gained over 30% inclusive of dividends.

For this year, I only had 14 buy and sell transactions. Most of the stocks were bought near the end of last year where I thought valuations were attractive back then. Some of my stocks were acquired, especially the Japanese Reits, which had been a good income investment (7%-9% dividends) and also capital gain (more than 80%). For 2017, I invested more into the hospitality sector namely Far East Htrust. I also subscribed to the rights of CDL Htrust. Both investments have been good especially CDL HTrust which has seen its value went up close to 30%. I also invested into Comfort Delgro seeing the distress in the taxi industry. It has yet to be proven whether this investment will work out so there's still much monitoring to do.

There was another rights issue by Capital Commercial Trust (CCT) which I also subscribed to it. I manage to get quite a lot of excess rights which was a bonus. The investment in CCT has gained over 50% (inclusive of dividends) to date. Office Reits are performing quite well currently where there are expectations that office rents and occupancy will continue to do well. Another investment I have in office Reits is Suntec Reit which also provides stable dividend income for me.

All in all, the average dividend yield of my investment portfolio is about 5.14% and the XIRR this year is around 21.17%. My portfolio value is slightly above $60K now. The next plan will be to increase my investments to $100K whenever opportunities to invest comes my way. There remains a few weeks left to the end of 2017. I may still have some other transactions in December and also there is one more dividend from Singtel where there will be a special dividend paid out.

We shall see how the market performs for the rest of the year. Elsewhere on the news, Bitcoin has been really hot these days where I see people everywhere talking about it. This is a sign of a bubble which we do not want to see. I'm not into this investment and will stay away from it as far as I know. It is never a good thing to have greed in investments.

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Thursday, November 23, 2017

Planning For Unfortunate Events In Life

It has been a tough week for me as some unfortunate events happened. I shall not go into the details of what happened but rather focus on the planning aspects before any unfortunate events happen in our lives.

The following is what I think will help at least alleviate some of the problems which we will encounter if something unfortunate happen to us or our loved ones:

Lasting Power of Attorney (LPA)

The lasting power of attorney or LPA in short is a legal document which allows a person to voluntarily appoint one or more persons ('donee(s)') to make decisions and act on his behalf should he lose mental capacity one day. A donee can be appointed to act in the two broad areas of personal welfare and property & affairs matters.

I first heard of LPA a few years back from a colleague but didn't really understand how important it was. A point to note is LPA is only useful if someone is still alive but cannot make decisions himself. If he passes away, only a will drafted by legal representatives can be used.

LPA is getting more and more important that the government actually waived the application fees since 2014. The waiver is stipulated to end next year. If you're interested to find out more about LPA, you can click here. To apply for LPA, click here. I will be doing this for my parents immediately.

If you do not have LPA at that time when something happens, you'll have to apply to the court for a deputy to act on behalf of a family member and it can be a tiring and long process at that time. So its better to get an LPA ready now.

Hospitalisation Insurance - Medishield Life and Integrated Shield Plans

Another very important thing we must have is hospitalisation insurance. Hospital bills are not cheap at all and it can be stressful to handle the bills while having to take care of your loved ones. All Singaporeans including permanent residents are protected automatically under a basic healthcare insurance called Medishield Life. This insurance covers for life even for those with serious medical conditions currently up to B2 ward in the hospital. For the detailed benefits, you can refer here.

Medishield life is indeed just basic. If we want to have better healthcare coverage, we can get it from a private insurer. I'm sure many of us know about this. We can cover up to private hospital and even cover fully such that we don't have to pay a single cent for the hospital bills. Something to take note when buying hospitalisation insurance is the deductible and the co-insurance. We can cover these 2 through riders where the premiums have to be paid in cash. You can consult a financial consultant for the various hospitalisation plans out there.

Eldershield - Basic Disability Income

Besides hospitalisation insurance, all Singaporeans above the age of 40 are also covered under Eldershield. This is an insurance which pays out a monthly sum of money should we be severely disabled.  “Severe disability” is the inability of an individual to perform at least three of the six Activities of Daily Living (ADLs) independently, with or without mobility aids (e.g. walking aids, wheelchair). This means that the individual will require the physical assistance of another person for the ADL. Under the Eldershield, we can receive $300 or $400 up to 6 years.

Be sure to check if you or your loved ones is covered under Eldershield as they may have opted out unknowingly. Log on to the Central Provident Fund (CPF) Board website with your SingPass. After logging in, please select “My Messages” and check under the “Healthcare” section. If you are covered under ElderShield, this section will also let you know the ElderShield insurer you are covered under*.

* If you are not covered under ElderShield, the CPF website will not reflect any infomation on ElderShield.

I checked my father's Eldershield and was surprised that he was not covered under it. He had no recollection of opting out also so its good if we check.

If you are looking for higher disability income, the eldershield can be upgraded or you can get a seperate disability income insurance.

Home Protection Scheme - Protection for Home Mortgage

If you lose the ability to earn an income, paying for outstanding home mortgages can be really stressful. All HDB properties are protected under the home protection scheme (HPS) under CPF board. The HPS is a mortgage-reducing insurance that protects members and their families against losing their HDB flat in the event of death, terminal illness or total permanent disability. HPS insures members up to age 65 or until the housing loans are paid up, whichever is earlier.​

For HDB, you can also get a private mortgage reducing term insurance and opt out of the HPS. But, it would not be that wise of a choice as I think HPS will be easier to claim in the event anything happens. HPS will just offset all the outstanding loans while for private mortgage insurance, they will pay out in cash and it may take some time. For private properties, it would also be wise to take up a mortgage term insurance. Private properties mortgage amounts will be even higher than HDB so it is better to cover ourselves.

Term Life Insurance - Lumpsum payout for future use

After an unfortunate event be it death or critical illness or disability, there will be a lost of income where your dependants may have some financial difficulties thereafter.

A basic term insurance pays out a lumpsum amount upon death. Riders can be added to increase the coverage to pay upon critical illness or total permanent disability.

The younger we get the term insurance, the more affordable the premiums will be. It can be as low as $100+ per month for a 1 Million coverage. Of course, being a term insurance, we will not get anything back vs if we have bought a whole life insurance. For myself, I go for the term insurance because it would be impossible to pay the premiums for high coverage with a whole life insurance.

Are you prepared?

No matter how much planning we do, staying healthy is still the most important. Regular health check ups also help in detecting problems early. For Singaporeans age 40 and above, there is a government scheme which allows for health screening at $5. You can refer here for the information. You will get a letter on it too so do look out for it. Most people would have already received the letter. For us who are younger than 40, we can encourage our parents to go for it and for ourselves, it is also important to go for health check ups too.

Eat healthy, exercise and stay healthy. Having a balance life with lesser stress also helps too. Hope the above planning tips are useful for your future.

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Tuesday, November 14, 2017

Where To Put Your Money To Save For Better Returns?

Interest rates are so low in our bank accounts that it virtually earns close to zero interest. Gone are the days where we see higher interest in the bank account where it was once as high as  9.5% as offered by POSB in the 1980s. Now, there are other higher interest/savings account which offers 1%-3% interest but there are various criteria to meet such as paying bills, buying investment products and meeting the minimum credit card spend.

During my school days, someone approached me to do a survey and subsequently told me of a higher interest product which is known as an endowment plan. Being young that time, I was convinced that this was the better option than just putting my money in the bank account. Little did I know after 10 years, the plan is not even halfway through as it takes 25 years to mature.

I'm sure many of us have bought into similar plans in one way or another and still paying for it after many years. It seems like it’s never ending.

Saving for life goals. The Shorter Way.

While there are many savings plan out there which many people put their money in to achieve certain savings goals and at the same time compound it, 25-year term for most endowment plans is too long for short term goals such as marriage, buying a house or even saving for a child's education.

There are other guaranteed returns investment tools such as the Singapore Savings Bonds (SSB) which are capital guaranteed and pay out a fixed rate coupon to us. However, it can be hard to plan for our savings with this as we need to buy and sell the bonds and there will always be the desire to sell it for a profit. Nevertheless, it is a safe and guaranteed low risk investment option.

Apart from the SSB, I recently found out a new savings plan by the Maybank Group's Etiqa Insurance which provides relative short term plans with guaranteed interest rates. The shortest term is 6 years with 2.02% p.a. guaranteed return. They also have longer term plans which offer higher interest. The good thing about it is that it is capital guaranteed so no matter what, you will get your initial savings back and will not lose a single cent. At this point, maybe some of you may have questions on how does it work, is it risky and does it seem too good to be true? I went on to probe further and got more information as much as possible.

Before we go deeper into the details, let's take a look at the 2 plans which are offered:

eEasy Save - Guaranteed 2.02% pa for 6 years

This is the simplest of all plans which pays out guaranteed 112% upon maturity after 6 years. We only need to pay for the premiums for 2 years though. There is also death protection of 105% of total premium paid throughout policy term and additional accidental death protection at 100% of premiums paid throughout premium term.

There are other similar plans such as the one from FWD insurance which also gives 2.02% p.a. Even though the term is shorter at 3 years, it is important to note that FWD’s credit rating is BAA3 which is lower than Etiqa’s A- rating.

eEasy Savepro - Capital guaranteed and up to 4.02% pa

This seems like an enhanced version of the eEASY save with higher interest for those who want to grow their money further. To get 4.02% p,a,, we will have to go for the 15-year plan. The capital is still guaranteed for eEASY savepro plan so we are assured that we will not lose our money. The lowest is still the 6-year plan which gives 2.65% p.a., slightly higher than the eEASY save although interest is projected. The same death protection and additional accidental death protection apply.

For a summary and more details of the plans, you can refer to their websit.

Who is Etiqa?

Before putting our money into any place, it is important that we know more about the company. Some of us may know Etiqa when we buy our fire insurance for our HDB flats. They are the (only) HDB-approved Fire Insurer and have been protecting more than 300,000 homes since 2009. They also have competitive travel insurance which some of you may have bought before. Their travel insurance even has automatic flight delay notification which will send us a sms text if our flight is delayed and once we qualify for a claim, it will also be automatically be processed without the hassle of making the claims ourselves. Etiqa is 69% owned by Maybank and AGEAS, a multinational insurance company, and is regulated by MAS.

In view of the above, Etiqa is credible and is a safe place to put our money. Let's take a look at some of the life goals we can save up for.

 Life Goal 1 - Saving for Wedding

Getting married requires some savings to begin with. Maybe you're in your 20s and thinking of getting married in the near future. A 6-year savings plan can come in handy with guaranteed return and guaranteed capital. Maybe we can look at eEASY save’s $45,000, 6 year plan which will pay out a guaranteed $50,404 at maturity.

Here's the benefit illustration which I managed to get from Etiqa:

It's that simple, just pay the premiums for 2 years and get 2.02% p.a. guaranteed return on your money in 6 years’ time. The premiums will be $30,000 for first year and $15,000 (half of first year premium) for second year. It may be quite hard though if you do not have that much savings in the first place. If you have some savings already, it will be good to park it somewhere to use for your marriage later. At the same time, you can earn some guaranteed interest on your money.

Some may say the returns are quite low which I agree to a certain extent. However, I will think it is good to save our money which is critical for future use. This will be a good financial planning consideration where our money is assured to be safe and is not left in the bank earning close to no interest. A normal savings account only earn us about 0.05% interest which is exceptionally low.

Life Goal 2 - Saving For Child's Education

Another important life goal is saving for your child's education. Some of us may have bought endowment plans for this purpose as well. However, we will realise by now that endowment plans are not capital guaranteed and the investment returns are not high too.

Many times, we will be locking our money for 25 years and getting only about 3% projected returns. I've checked Etiqa's eEASY savepro 15-year plan, which we can get 4.02% p.a.. The investment return is projected only but your capital will be guaranteed.

Looking at the $50,000 plan, here's the benefit illustration:

This can be slightly complicated so let me summarise. For the plan, we will pay $5,000 every year for 10 years. The plan will mature at the end of 15 years. The maturity yield is listed on their website as 4.02% p.a. which is a projected value. The maturity value is the amount we see under the "projected at 4.75% investment return", S$76,091. 4.75% investment return here refers to the investment return on the participating fund while 4.02% p.a. is the projected return to the customer.  The maturity value is also calculated using compound interest of the projected 4.02% p.a. interest.

They have other plans with policy terms of 6, 7, 9, 11, 13 and 15 years and premium sizes of $5,000, $10,000, $30,000, $50,000, $80,000 and $100,000. It is quite flexible to plan for our life goals with some certainty that we will not lose our money.

How are returns generated?

By now, some of us may be concerned of whether the plans can deliver its projected returns. This applies for the eEASY savepro plan. I managed to get some information on Etiqa’s overall participating fund's asset mix where 65.6% is invested in bonds, 21.4% in equities, 11.3% in cash & deposits and 1.7% in loans and others. While eEASY savepro is part of this participating fund, this asset mix is not representative of eEASY savepro’s specific portfolio as premiums paid are pooled with those of other participating policies offered by Etiqa.

The top 5 equity holdings is in OCBC (12%), DBS (10.6%), UOB (10.1%), Singtel (5.8%) and Keppel Corporation (4%). For bonds, the top few are the Singapore Government bond, Australia & New Zealand bank bonds and also Dai-ichi Life. In 2016, the fund generated a return of 3.97%.  

Guaranteed savings for life goals

I am still a firm believer in investing my own money but at the same time a portion of it should also be in a safe place for any future goals. Better returns with capital protection is a safe way to save for our life goals. We do not want to end up losing money and jeopardising our future and the future of the people around us.

Currently, for eEASY savepro, they are giving out vouchers based on 1.5%  of the 1st year premium size, and up to $1,500 worth of Takashimaya vouchers. While, for eEASY save, the deal involves up to $1,300 worth of Takashimaya vouchers which will increase the interest rate to 2.18% p.a. from 2.02% p.a. instantly.. Each of these deals are limited to 5 coupons per day. Just head over to their website to grab the coupons.

If you like to take a closer look at the plans above, you can refer to their website . The good thing is you can do everything online and get immediate approval so it saves the time and hassle of meeting an agent and possibly overbuying on plans which you do not really need.

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This article is written in collaboration with Etiqa Insurance. All ideas portrayed are independent by SG Young Investment. 

Wednesday, November 8, 2017

A New High Interest Savings Account To Multiply Your Money – The New DBS Multiplier Account

I've been constantly sourcing for a high interest savings account to park my savings as I always believe in making my money work harder for me. Many of my friends have done it too and transferred their savings to OCBC 360, UOB One, Standard Chartered or even CIMB. I opened a few accounts too just to ensure my savings earn a higher interest.

Where did I transfer my savings from? The answer is POSB/DBS. I have been using a POSB/DBS savings account for a very long time since I was a child. As they have the most ATM machines in Singapore, most people have a POSB/DBS account as their basic savings account. And for the longest time, I've been trying to find out if POSB/DBS has a high interest savings account so that I could consolidate all my money in one bank.

Finally, the time has come!

They have joined the competition to provide a high interest account in the market right now with the revamp of the DBS Multiplier account. This is definitely a game-changer! It is attractive, flexible, easy to use and most important of all, many of us would already have a DBS/POSB savings account which makes it easier to integrate.

The much awaited higher interest account - New DBS Multiplier Account (up to 3.5% pa)

Removing the pain points to get higher interest

The new DBS multiplier account is quite different from the other banks as they have removed most of the pain points to getting higher interest. This is also different from their previous multiplier account which is not that attractive.

Most of us would know that you need a minimum salary credit of at least $2000, pay 3 different bills, meet a minimum credit card spend just to get higher interest from banks such as OCBC, UOB etc. Now, all these will change with the new DBS multiplier account.

DBS allows you to earn higher interest with NO minimum salary credit, NO requirement to pay any bills and NO minimum credit card spend. The minimum interest you can get is 1.55% p.a. just by fulfilling 2 simple requirements with total eligible transactions at $2000 or more per month. You can get up to 3.50% p.a. too by fulfilling more conditions.

Let's see how it works:

1) Basic Requirement - Salary Credit

The first thing you need to do is to have your salary credited into any DBS or POSB savings account. This means if you already have your salary credited to your existing DBS/POSB savings account, you don't have to make additional changes to it.

Remember there is no minimum salary credit to enjoy higher interest.

2) Salary Credit + Additional 1 Other Requirement - Enjoy min 1.55% p.a. and up to 2.08% p.a.

Once you have your salary credited to any DBS or POSB savings account, you just have to meet any one of the following additional requirement:

  • Credit card spend
  • Investments
  • Insurance
  • Housing loan

As long as your salary credit and 1 other requirement meets a minimum of $2000, you will enjoy higher bonus interest on the first $50,000 balance.

  • For credit card spend, it is applicable to any DBS/POSB credit cards (not applicable to debit cards).
  • For investments, it is applicable to unit trusts (including POSB invest saver), online equity trades etc.
  • For insurance, it is applicable to any purchase of insurance with DBS/POSB.
  • For housing loan, it is applicable to any monthly instalment payment for housing loan with DBS/POSB.

*For insurance and investments (unit trusts lump sum/RSP/invest saver only), it is only applicable to new purchase after opening of DBS multiplier account

These are the different tiers for you to enjoy higher interest for salary credit + additional 1 other requirement:

For example, if you have a salary credit of S$2400 with any DBS/POSB savings account and you have some spending on your DBS/POSB credit card, you'll be eligible for the 1.55% p.a. interest. Even a $1 credit card spend will allow you to earn that higher interest.

If you have a higher salary credit plus credit card spend adding up to S$2,500 and above, you will get even higher interest at 1.85% p.a.

3) Salary Credit + Additional 2 Other Requirements - Enjoy min 1.80% p.a. and up to 3.50% p.a.

If you have salary credit + additional any 2 other requirements (as above), this will be the different tiers for you to earn higher interest:
For example, if you have a salary credit on any POSB/DBS savings account and some spending on any DBS/POSB credit cards plus you have either monthly investments on POSB invest saver or monthly home loan instalments with DBS/POSB, you will get at least 1.80% p.a. For this segment, I believe if we have a salary credit + additional 2 other requirements, we can easily get more than 2% p.a. Not too difficult to have a total transactions above S$2,500 for this.

How Much Interest Can You Typically Earn?

I think this new multiplier account from DBS really makes it easier to earn higher interest. Its easier and more flexible than the other existing products out there in the market. Let's do some scenarios and see how much interest can one typically earn?

Scenario 1 - Fresh Graduate with $2000 salary credit + credit card spend

Most fresh graduates are likely to have at least a $2,000 salary credited into their bank. Some might even earn more. For an additional 1 other requirement, the easiest will be the credit card spend. As the new DBS multiplier account doesn't require any minimum salary credit or spending, once you have $2,000 salary credited, you've already fulfilled the minimum criteria.

For the credit card spend, there is no pressure to spend a minimum just to meet the criteria to get a higher interest. Let's just assume that the spending is just $100 and total eligible transactions will be $2,100 which enables one to earn an interest of 1.55% p.a. For a savings of $10,000, total interest earned will be S$153.30 annually.

If this fresh graduate spends more and chalks up $500 in credit card spending per month, total eligible transactions will be $2500, which enables one to earn an interest of 1.85% p.a. For the same savings of $10,000, the interest earned will be S$182.50 annually.

*Note: Most credit cards application require annual gross income of $30,000. If you still hold a student credit card, it is eligible for higher interest criteria as well. 

Scenario 2 - Young Working Adult with $4900 salary credit + credit card spend

For a young working adult, he would have rose up the corporate ladder and gotten a higher salary by now. Assuming he has a salary credit with DBS of $4900 and $500 credit card spend, total eligible transactions will be $5400,  which translates to an interest of 1.90% p.a. For savings of $30,000, the interest earned will be S$569.40 annually.

Scenario 3 - Fresh Graduate with $2500 salary credit + credit card spend + Investment

Now, if a fresh graduate also makes monthly investments with either DBS or POSB apart from salary credit and credit card spend, he or she will be able to get min 1.80% p.a. For investments, it includes any trading/purchase of stocks done on DBS vickers account or any monthly investments with POSB Invest Saver.

If this fresh graduate has a salary credit of $2500, a credit card spend of $200 and an investment of $100 with DBS/POSB, he or she will get 2.00% p.a. This is higher than most other bank accounts out there currently.

Comparing to other high interest bank accounts

Now, the most important thing is whether the new DBS multiplier account is the best in the market?

I've looked through the account and various interest rate tiers which they have and concluded that they offer the highest interest in the market currently. Just 2 criteria and you will get a minimum of 1.55% p.a.

Let's look at some scenarios to compare against what they would get from other bank accounts such as the OCBC 360, UOB one, BOC smart saver, SCB bonus saver and Maybank SaveUp account:

Scenario 1 - First Jobber with S$2,700 salary credit + $500 credit card spend

For scenario 1, the interest earned on DBS multiplier account is 1.85%. The only bank that match up to this rate is BOC. However, for BOC, the minimum salary credit is $2000 and minimum credit card spend is $500 which is quite restrictive. For DBS, there is no minimum salary credit or credit card spend. Only need to meet above $2000 to get higher interest.

It seems like even the more popular ones like OCBC and UOB does not match up.

Account balanceDBSOCBCUOBBOCSCBMaybank

Scenario 2 - Young working adult with S$4,900 salary credit + $550 credit card spend

For scenario 2, the interest earned on the DBS multiplier account is 1.90%. All the other banks fall behind with only SCB being the closest at 1.88%. 

Account balanceDBSOCBCUOBBOCSCBMaybank

Scenario 3 - Lower waged worker with S$1,800 salary credit + $200 credit card spend

For scenario 3, the other bank accounts clearly does not benefit anyone with less than $2000 salary credit but for DBS, they still give higher interest as long as you can meet a combined eligible transactions of S$2,000 per month. This is a life saver for those who could not qualify for higher interest from other banks due to their salary. 

Account balanceDBSOCBCUOBBOCSCBMaybank


The new DBS multiplier account clearly distinct itself among the competition of higher interest bank accounts. This will cater to new groups of people who prefer flexibility and avoid the trouble of having to meet minimum credit card spending or pay 3 bills etc.

This will also cater to those who have not been able to meet the minimum salary credit or the pay 3 bills or minimum credit card spending requirements from other banks. Its time to let this group of people earn higher interest too.

For existing POSB/DBS account holders, you just need to open a new multiplier account and put your savings into it to start earning higher interest. You do not have to change your salary crediting arrangements if your salary is already credited to any of your existing POSB/DBS account. It will automatically be detected subjected to T&Cs of eligible salary credit.

To find out more about the new DBS multiplier account click here.

This article is written in collaboration with DBS. All ideas portrayed are independent by SG Young Investment. 

Monday, October 30, 2017

Earnings Season - CMT and FCT Financial Results

Its earnings season again which means time for more dividends. I've owned Reits for a long time now where I can get stable and recurring income from these investments. Shopping mall Reits are attractive in Singapore and 2 of the most popular ones are Capitaland Mall Trust (CMT) and Frasers Centrepoint Trust (FCT).

CMT and FCT both reported their financial results just a few days ago and I must say shopping malls in Singapore are still quite resilient. The management of the malls is quite important as I personally saw a few malls become dead because of incompetent management. CMT and FCT are not the incompetent ones.

CMT financial results

For CMT, its 3Q financial results is nothing spectacular. DPU came in flat at only +0.3% year on year. The closure of Funan for redevelopment has affected its DPU as rental income decreased without Funan in its portfolio. Fo other malls, net property income remain largely unchanged.

Its NAV is currently at $1.95 and share price trading at $2.03. Its still a stable Reit to hold for the long term where I bought it back at $1.88-$1.90. I will still be holding this stock for its dividends. Dividend yield is about 5.5% base on current price.

FCT financial results

Frasers centrepoint trust is another resilient shopping mall reit which I have in my portfolio. It reported strong 4Q17 results where DPU rose 5.5% as compared to last FY quarter. Its portfolio occupancy rose to 92% from 89.4% and rental reversion was +8.3%. FCT has delivered 11 years of consecutive DPU growth. It is quite impressive to be so resilient and still has some steady growth.

Artist impression of the new Northpoint city.
Adapted from

For its portfolio, the higher income came mainly from the following:

Causeway Point
This is the shopping mall at Woodlands. There were renewed and new leases signed which contributed to a 2.5% increase in rental rate.

Northpoint City
The shopping mall at Yishun has been going through AEI works for quite some time now. The enhancements are progressively completed so there is higher occupancy and rent from the new tenants. There is also additional revenue from Yishun 10 retail podium which was acquired on 16 November 2016. This improved the revenue by 27.4% year on year

Changi City Point
The shopping mall right beside Expo MRT is doing well too. Higher rental rate from renewed and new leases signed, and improved occupancy contributed to an increase of 13.6% in revenue.

The only lagging mall in FCT portfolio is Bedok point which saw a drop of 26.4% in revenue. However, it is only 2.8% of all of FCT's NPI so it isn't much of a concern. The largest contributor comes from causeway point at 50.6% of FCT's NPI. Causeway point occupancy rate is still impressive at 99.5%. Northpoint city will be the next major contributor as AEI works are progressively completed. Occupancy rate stands at 81.6% currently so there is lots of room to continue growing.

FCT has provided me dividend income of about 6% p.a. Dividend yield is about 5.4% at current prices. It is trading at a price to book ratio of 1.08x which is slightly above its net asset value. I wouldn't consider accumulating more at this point but will continue to hold this for dividend income.

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