Why it is hard for most Singaporeans to retire early?

I was about to publish some of the post on early retirement which I wrote over the weekends until I saw an article by business times today which shows how much Singaporeans are saving? These statistics was from the recent household expenditure survey which was published last week. Most of us would already have read that average monthly household income increased to $10,500. This number was met with many sarcastic remarks on social media. We would think how can this be true when most of us do not have that kind of household income? Is their average really average?

The purpose of my post today is not to debate on whether the income figures were correct or not. Rather, it is all about the report by business times which showed another angle of that report. How much are Singaporeans saving?

Here are the saving figures:

• The 41st-60th percentile, who are essentially the middle class, are saving about 44%. 

This 44% seems to be a good savings rate but if we look closer, this savings include employer and employee CPF contributions. This is essentially not cash savings which we have in our bank. If we deduct away those CPF savings, we're left with about 9% to 15% cash savings since most of our CPF contributions is around 30%-36%. 9% savings is quite a low amount. If you calculate, saving just 10% of your income will probably take you 51 years to retire.

Furthermore, the figures do not include non consumption expenditure such as income taxes and house purchases. We know that house purchases make up a big chunk of our expenditure. This makes the figures rather distorted.

It is no wonder Singaporeans find it hard to retire in Singapore. Most still rely on their CPF savings but the problem is most of us also use the CPF for housing purposes. If we continue to do that, we'll always realise that we can't meet the minimum sum and can't retire comfortably.

If we want to retire early at age 55 or even earlier, then we need to have more cash savings. It is no use depending on the CPF for savings and then realise you can't take most of your money out at retirement age. CPF was structured as a social security or safety net. It is not for us to take the money out in lump sum for enjoyment in old age. If we want some enjoyment and not having to worry about not enough money, then we need to plan and save up in cash.

In the next few posts that I'll be publishing, I'll show you how most of us can retire early. Early retirement means in 10 years and possibly within 7 years. I've done up some calculations which will show you how exactly it is done. Watch out for the next posts soon.

Once you reach that stage, you can continue working but you don't have to work for money any more. You can start to work on the stuffs you love, spend more time with your family and kids and even contribute more to society. People who have enough money to retire don't usually sit there idling around. In fact, they become more motivated to produce things which are beneficial to the society as compared to when they are just working for money.

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Life simulation app WhyMoolah for Singapore’s youth to face big life decisions

Previously i blog about PlayMoolah, a company based out of Singapore that designs authentic experiences for children and young adults to learn about how to handle money. I also said that they will be launching something called WhyMoolah and i was looking forward to it. Now its here!

Credits: WhyMoolah

Today, they have launched a new app called WhyMoolah. This is an app for young adults who want to learn how to manage their finances. I have just tried this app and there is only one word to describe it: AMAZING!!

What is WhyMoolah?

In their media release:

Mobile app WhyMoolah helps Singapore youth face big life decisions through the power of play
PlayMoolah partners DBS Remix to launch innovative application simulating life on the Little Red Dot

DBS Remix, Singapore’s first bank by day, financial playground by night, has partnered PlayMoolah, a start-up company which leverages technology to design new and fun ways to learn about important financial management skills and make smarter money decisions, , to  educate and empower young working professionals in Singapore to make informed life decisions. This partnership has resulted in PlayMoolah’s latest mobile application, WhyMoolah, backed by DBS Remix.

“Learning about all the different elements that go into becoming financially independent is something everyone goes through, and WhyMoolah helps map the way there,” says Audrey Tan, PlayMoolah CEO and Co-founder. “We want to show everyone that it doesn't have to be overwhelming to make informed decisions, and engage in open and meaningful conversations about money with their families and peers.”


More about WhyMoolah?

WhyMoolah is an entertaining simulation that will take you through life in Singapore! Proudly backed by DBS Remix, and created by PlayMoolah, WhyMoolah will show you how each and every dollar truly adds up at the end of it all.

WhyMoolah is a simulation that enables young adults to experience, explore and discover wealth, health and career options. Set in Singapore, the app simulates a person’s professional life after graduation, with recognisable backdrops from the heartlands to the Central Business District in Raffles Place.

The app comes at a crucial time, as many young Singaporeans are not sufficiently aware of their financial situation. According to a survey by national financial education programme, MONEYSENSE, more than half of Singaporeans do not have enough insurance to protect their dependants if something were to happen to them, and there are also people who over-spend and over-borrow. WhyMoolah will introduce important financial management skills to young adults through key events in their life journeys and help them make smarter money decisions.

Credits: WhyMoolah

After trying out the app, here's my review: 

The graphics are good. The life simulation really matches closely to major life decisions you have to make in real life after you start working. Every detail is considered in it. Stuff like parent's allowance, mobile and internet bills, wedding cost, getting a credit card, buying a house etc. They have the POSB everyday card and other DBS cards inside the game. When you apply for the card, there will be guidance on how the interest on the credit card works. You can actually use the credit card in the game to pay for expenses. The card also comes with rebates similar to how the actual card works.

Credits: WhyMoolah

Your salary inside even has CPF contributions and when you buy a house, the loan package and housing prices are closely matched to what we have in the market now. The housing price is as expensive as what we're seeing now. Even in the game i can feel the stress of buying a house. This stimulation will greatly help young adults see the consequences of not saving enough and prepare them for life's major expenses ahead. You can get married and have children in the stimulation game. Hospitalisation cost, insurance, baby bonus, baby's necessities are all included. You'll feel like you're living a real Singapore life inside.

Try out the app today. It is available on Apple's app store and Google's Android play store. Download the app free today!

Credits: WhyMoolah

Here's the official trailer of the WhyMoolah App:

LINKS

WhyMoolah (iOS) on the Apple App Store: 

• https://itunes.apple.com/us/app/whymoolah/id714042264?ls=1&mt=8

WhyMoolah (Android) on the Google Play Store:

• https://play.google.com/store/apps/details?id=air.com.playmoolah.whymoolah

WhyMoolah Main Product Page: 

• http://www.whymoolah.com

WhyMoolah social media pages:

• https://www.facebook.com/whymoolah
• https://twitter.com/WhyMoolah

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1. Teach your kids financial literacy this school holidays with PlayMoolah

Teach your kids financial literacy this school holidays with PlayMoolah

PlayMoolah is a company in Singapore founded by 2 young Singaporean Women, Audrey Tan and Min Xuan Lee, both aged 25. They have an online platform for kids to learn financial literacy in a fun and enriching way. They focus on five key activities which is Earn, Spend, Save, Invest and Give. Parents can effectively teach their kids on how to manage money through the online game platform.

Credits: Image adapted from http://playmoolah.com/blog/

Co-founder Min Xuan Lee on why Playmoolah was started:

“PlayMoolah was started in response to the global financial crisis a few years back. We noticed that in spite of the financial turmoil surrounding us, most people were still unaware of the personal finance issues affecting them. We soon realised that these problems originated from families that were struggling to develop this core life skill. That’s when we started Playmoolah to address this critical need.”

I'm really impressed with the passion that the founders have to make an impact in young people's lives in terms of money management. I'm glad that there are more and more people out there doing a part to improve financial literacy in the world. PlayMoolah is a social enterprise in Singapore. The founders' were recently honoured as young women innovators at the 2013 Asia Pacific Economic Cooperation (APEC) Women and the Economy Forum(WEF) held on 6-8 September 2013 inBali, Indonesia.

So if you have young children at home, why not teach them financial literacy with PlayMoolah. You can try it free at their website here: http://www.playmoolah.com/. Check it out and have fun with your kids.

P.S: PlayMoolah is starting another segment called WhyMoolah which is targeted at young adults. I'm looking forward to this when it is launched. In the meantime, you can check out their facebook page: https://www.facebook.com/whymoolah

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Aftermath of super typhoon Haiyan in the Philippines

As we all know, Philippines was hit by a typhoon just a few days ago. I have some colleagues from there where i got to know how serious the disaster was. The coastal areas had a storm surge which was similar to a tsunami. Waves just came crashing in and many houses were swept away. Most people died from the flooding. Yesterday there was a broadcast on Channel 8 where they interviewed 3 Singaporeans who was in Philippines when the typhoon strike. The things they shared made me realise even more how serious the situation was there. On the first few days, they had no electricity and not enough water. The 3 of them had to share a bottle of 500ml water for 2 days.

In Singapore, many non-profit organisations are sending teams in for the relief work as well as to provide essential supplies to the victims of this disaster. We can do our part to help out too. One of the organisations that is helping out is our Singapore red cross society. For more information on how you can donate to the relief efforts, please refer to the Singapore red cross website here. A little bit of help by each person goes a long way.

Here's a video of the aftermath of this typhoon:

My condolences goes out to the victims and all those who were affected by the Typhoon. 

Race the dead Singapore 2013 - Singapore's first 5K zombie run

This post has nothing to do with finance or investment. I'm doing this post to showcase the creativity of young people in Singapore. This is for the young and also the young at heart. The run was successfully completed last weekend 26 & 27 Oct 2013 at Sentosa.

An introduction of what Race the dead is all about?
Race the dead is Singapore's first 5km zombie run. Runners will cross obstacles and have zombies at every corner of the race track. This reminds me of the series walking dead which i watch every Saturday on channel 5. When i first saw this series on tv, i thought the story line was really interesting. I do like all these action/thriller themed shows.

There are similar themed movies for example the recent World War Z and the older 28 days later. The storyline was that the whole earth was infected by a virus which turned humans into zombies. The zombies will continue to attack humans and when they get bitten, they will turn into zombies too. There were only a few humans left in the world. They have to survive the virus.

In case you haven't watch World War Z, here's the trailer of it:

Back to Race the dead Singapore. As far as i know, this event was organized by a group of young people in their 20s. I do admire their courage to organize such a race as its not easy to put everything together. From their website, they had Singtel as their main sponsor and other sponsors too. 

This is the official trailer:

So how did the run go? The video below shows the highlights of the race. The make up is really good which made the zombies look really real. The obstacles were quite interesting. 

Watch the video to find out more:

Post by Unique-Colours Creative Media.

Overall, Singapore has quite a number of creative races this year. Another one that i can recall is the colour race where racers were sprayed different colours during the run. At the end, many of them were painted in different colours.

Race the dead is definitely one of the most creative races ever organized in Singapore.

P.S: This is a side track to my usual heavy finance and investment posts. Hope you enjoyed it! :p


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Lower secondary students to learn about financial literacy from next year

Financial education is coming to schools in Singapore!!

From year 2014 onwards, secondary 1 and 2 students will be taught money management skills to help them form the right attitudes towards spending and saving early in life, said Deputy Prime Minister Tharman Shanmugaratnam. -As reported on The Straits Times

This is an encouraging move by our government. MOE has made a bold step to introduce financial literacy classes for our students. I've always thought how good it would be if our education system will have financial education courses. Now it's becoming a reality. Many financially savvy people, including financial bloggers, have over the years step up to write on topics such as financial management and investing etc. There are articles proposing that financial education should be introduced to schools and taught to students at a young age. Introducing this to Secondary 1 and 2 students would be a good age to start.

I'm happy that financial education is finally introduced to our mainstream education system :)

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Singapore girl, 17, confesses to selling body for cash to party

This news really caught my attention and i'm sad that our society has become like that. Young people are willing to do anything to get the money they want. This young girl sells her body for cash to buy alcohol and the things she want. Has our society become one which focus on material things only? 

Recently, there has been court cases of men who were being charged because they had underage commercial sex with a minor. Most of the time the girl is a willing party. They just want the money. 

For this particular news, the reporter posed as a potential customer in online chat rooms and met up with the 17 year old girl. After which, they conducted a closed door behind the scenes interview with her in which she opened up and told the reporter about her life. Some things caught my attention. 

Firstly, the girl comes from a poor family. Her parents worked as cleaners and only earn $1200 a month. This was quoted from the interview from the news: 

"My parents earn only about $1,200 each and they rarely give me any extra cash to buy clothes or whatever else I need," she said. "It can be frustrating to not have money. I am young and I want to have fun." 

Secondly, she has an expensive lifestyle. She needs the money for parties and she said she spends $200 each time she parties. Is it the parents fault that they did not teach her properly or its the society fault that influenced young people to be like that? Some kids grow up well while others grow up waywardly. I will not comment further on this.

Thirdly, the reporter said she is not the only girl who's doing that. They chanced upon a few other girls in their early 20s who are doing the same thing for money also. This is becoming a lot more common now. It's all about the money.

This is certainly a news that sets me thinking. I guess this post has little to do with finance but more to do with values and spending habits. Having money and achieving financial freedom is important but don't forget about life values. It will be good if we can balance both.

Read the full news here

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China Minzhong acquired by PT Indofood. Share price shoots up by 112%

China Minzhong has gotten out of its pit. Its trading halt was lifted today and from a low of 0.53, it shot up to 1.12. Reason was because it got an offer from PT Indofood to acquired its shares at 1.12. China Minzhong has offered its shareholders a mandatory cash offer at an offer price of 1.12.

Previously, a negative report by Glaucus Research caused it share price to drop by more than 50%. This caused fear to investors who own China Minzhong shares as they see their portfolio value plummet. There were rumours that China Minzhong could be forever suspended and shareholders could never get back their money. There were many S-chips or so called china stocks which suffered that fate so its understandable that a fear is there.

So what does a mandatory cash offer means? It means all shareholders have to sell their shares and the company will buy it at a price of 1.12. You can sell it now or wait for the mandatory cash offer letter to be mailed to you and accept the offer.

I've received one mandatory cash offer before and it was by the company sakari. It was known as straits asia trading beforehand. It does feel good to see your stocks jump up in value. How to know if a company will be acquired? I have to say there is no sure way to tell but investing in undervalued companies increases the probability by a lot.

Learning how to pick stocks is the best knowledge that you can acquire. In fact, by learning how to analyze a company, i've picked up skills in business management and economics. I've also learnt the skills of accounting. There is so much to learn in the investing world. One can never get bored of learning and lifelong learning is one of the keys to success. It is not just about making money but its about a journey towards financial freedom.

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What is happening to the market?

I'm back from my holidays and time for me to start writing again. It has been a good trip and Taiwan was really fun. Every country i go to, i'll notice that each has its own culture and national identity. You could recognise who are the resident people there. Apparently, it is most obvious from the way they talk. Taiwan people have their own style and tone of chinese. China people have their own different set of style and tone of chinese. Even Singaporeans have their own style of chinese. One common language but different identity.

Just only one week of my holidays and the stock market has declined so much. Today the STI is dropping more than 50 points. Am i worried about my current stocks position? I would say i am not. I could still enjoy my holidays even though i saw the markets declining (well, i still checked the stock market when i'm overseas). This year, i've not invested a lot of my capital in the markets. I still have money to buy in when the opportunity arise. Thus, if it keeps on dropping, i can still accumulate more.

Yesterday, the most talked about stock was china minzhong. It dropped 50% and caused trading to halt on the counter itself. What is happening to this stock? There is a report by Glaucus Research accusing china minzhong of financial irregularities. How true is this report? I have no idea and i'm sure every investor will be clueless as well. We'll have to wait for the official explanation by china minzhong themselves. I do not have any shares in china minzhong as of now. Will i risk to accumulate shares of it? If i calculate my risk appetite, it could be worth it to risk a small amount of money to buy into it. This is money that i would be willing to lose. China Minzhong has been a good company thus far so if the report is not true, the stock price will recover quickly.

The current weakness in the stock market presents an opportunity to buy good companies at lower prices. Value investors do like the stock market to decline. When is a good time to buy? As an investor, i would say there is no perfect time to buy. Nobody can predict the bottom perfectly. You could learn some technical analysis which is chart reading to determine better entry points. But however, technical analysis has its shortfalls too. Losing money is part of investing. But you have to know why you're losing money. If you don't know why, then most likely you're investing blindly.

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Replica of Paris in China becomes ghost town

China property prices have skyrocket in the past few years. Developers who want a part of this action build up massive towns with impressive buildings in china hoping to earn some profits. However, it looks like the towns that are built are becoming vacant and now known as ghost towns. Is this the start of a property market crash?

One example is this impressive town developed by Zhejiang Guangsha Co. Ltd. It was started in 2007 and one of the major construction is a replica of the Eiffel Tower and parisan houses. It is designed to accommodate at least 10000 people but remains sparsely populated until now. (Source: Yahoo news sg)

*Photos by Reuters

Rising household debts in Singapore worrying

The monetary authority of Singapore(MAS) has released statistics which shows a worrying trend of household debts in Singapore. There is also a separate report released by the ASEAN property pulse which showed that up to 9000 Singapore property owners could be forced to sell their homes if interest rates rise.

Here are some of the statistics from the reports:

1) 5%-10% of borrowers in Singapore has loans more than 60% of their income

2) A majority of mortgage loans are on floating rate packages which means households will face higher monthly repayments when interest rates goes up

3) Only 70% of the existing loans are for owner occupied homes meaning investor demand for private homes is running quite high.

Once interest rates rise, some owners will have problems paying their mortgages and will have to sell their house. Coupled with the bump up of new housing units in the market expected to be completed within the next 3 years, this will cause imbalances in the economy where supply is more than demand. We should expect a correction in property prices within the next 2 years.

The government has sounded warning signals over the past 1 year. MAS has stepped in to impose stricter rules on loans. All these are signs that we should take note and not ignore.

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NTU graduates in demand - Finding job so easy?

Read the news today and saw this news about NTU graduates in demand. 7 in 10 secured a job before graduation. It was stated some were SPOILT for choice as they had multiple jobs offer. 

Now the job market so good? Finding job so easy?

Another thing is the top 10% of these students drew an average monthly salary of $8000. Really amazing!!!

Some work so hard to climb the corporate ladder and never reach $8000/mth. Fresh graduates so good life now. Haha

Read it here: http://www.channelnewsasia.com/news/singapore/ntu-graduates-in-demand/756470.html

Volatile shipping market shows signs of recovery

It was reported in channel news asia today that the shipping market is showing signs of recovery. However, China's economy is still showing signs of slow growth therefore the recovery should be more gradual instead of a sharp recovery.

The Baltic Dry index is an indicator of the state of the shipping industry.  

Investopedia explains Baltic Dry index as:

A shipping and trade index created by the London-based Baltic Exchange that measures changes in the cost to transport raw materials such as metals, grains and fossil fuels by sea. The Baltic Exchange directly contacts shipping brokers to assess price levels for a given route, product to transport and time to delivery (speed). 

The Baltic Dry Index is a composite of three sub-indexes that measure different sizes of dry bulk carriers (merchant ships) - Capesize, Supramax and Panamax. Multiple geographic routes are evaluated for each index to give depth to the index's composite measurement.

It is also known as the "Dry Bulk Index".


The index has jumped 68% during the first half of the year. This will benefit dry bulk shippers as they see an increase rate for each trip. 

Select Group secures land to accommodate food business expansion

Saw this news on the straits times. Looks like this company is expanding. Building a new HQ with its central kitchen and R&D centres under one roof just like breadtalk.

Qutoed from the straits times on July 12, 2013:

"Select Group has accepted an offer of direct land allocation from Jurong Town Corporation of a piece of vacant leasehold site of about 64,434 square feet at Senoko South Road.

The company said it would need more space to accommodate its increased production capacity, logistic and office support functions, in anticipation of future business expansion.

Select intends to build a multi-storey building on the site, which will house its central kitchen facility, together with a research and development centre, training test kitchens, storage facilities, cold room facilities and the company's operations and corporate headquarters.

The cost of construction will be financed through internal resources and bank borrowings."

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