Crowd lending or crowd funding is something very new in Singapore. In the past few months, there are more and more reports on the mainstream media on crowd lending in Singapore which resulted in more people investing their money through these crowd lending platforms. I have written on crowd lending and also on stock trading before. I mentioned before that many young people started out trading in the stock market partly because of the lure of quick money. Both crowd lending and stock trading has its risks and I'll explore the differences between these two. Let's see which is a better choice for most people to start with.
Is it that easy to make money through stock trading?
Trading is a psychology game. Buying and selling stocks in the short term while betting on price movement requires a lot of hard work too. We've heard traders who earn tens of thousands in a very short time and we see these advertisements very frequently on those trading workshops. Some of these workshops even have software to help you trade and make money automatically. It was said this eliminates the psychology aspect and doesn't require much effort on our part. Is it really that easy to make money?
I heard a real life story of a lady who was retrenched during the 2007/08 financial crisis. She was a futures broker in a financial institution for 17 years. She worked mostly from 6pm in the evening to 5am in the morning trading futures market.
After being retrenched, she thought she would be able to trade at home and have time to look after her son. But, within 10 months into trading at home, she lost quite a lot of money and stopped. Why did she lose money? She said trading in a financial institution allowed her to have tips and instant news to make decisions fast. Trading at home is different as most of the time the news is delayed. The second reason is trading an institution money's is different from trading your own money. The emotional and psychological aspect is completely different. Even with the experience and knowledge of trading, it is still highly possible to lose money.
After hearing this story, it made me realise trading is not easy. Firstly, I've heard that most people lose money in trading and it is said that only 5% of the traders in the world can make money consistently. Secondly, I've heard that trading is a psychological and emotional game. If you can't control your emotions, you can't be successful in trading. This point is also confirmed.
So is it still possible to make money through trading? I think it is still possible to make money from trading but it will not be a lot of money. In actual fact, very few people are full time traders. Most trade on the sideline occasionally. You may not agree with me but I've traded before and know what it is like to lose money. It is really an emotional game. Want to make a lot of money through trading? Think again.
What about investing through Crowd lending platforms?
Investing through crowd lending platforms can yield you more than 10% a year. That is a pretty decent return on investment. Wait... some of you may be thinking this sound too good to be true? How can there be such thing as a more than 10% yield on investment? Let's pause for awhile and take a look at how crowd lending works to understand it better.
Crowd-funding is the practice of funding a project or venture by raising monetary contributions from a large number of people, typically via the internet. One of the crowd-funding platform for businesses in Singapore is Moolahsense. MoolahSense, as quoted on their website, is “a trusted P2B lending platform that empowers investors to stimulate economic growth by providing finance directly to growth SMEs, in exchange for an attractive rate of interest.”
MoolahSense co-founded by the CEO Mr Lawrence Yong, who has been a practitioner in the financial sector for the past 12 years, with experiences spanning private wealth management and investment banking. MoolahSense has opened up a whole new avenue for us ordinary investors who want a part to play in investing in SMEs in Singapore.
The investment opportunity provided by MoolahSense is essentially a bond-like program where one can lend money to the SMEs and get interest in return on a certain time period – either on a monthly or one-time basis. Only 1 in 20 SMEs get funding from banks even though they contribute greatly in the economy of Singapore. Crowdfunding is a win-win situation for both SMEs and investors. SMEs get the funding they want and investors get the interest in return.
In simple layman terms, when we crowd fund a company, we are lending money to that company in exchange of some interest. We become lenders just like when the bank lends money to individuals, they charge an interest in exchange for the loan.
Crowd Lending VS Stock Trading
Limited Losses
Every investment has its own risks. Stock trading can make you a lot of money but can also make you lose a lot of money. I've heard of people who lost hundreds of thousands of dollars through stock trading. Stock trading like Forex, options or futures is highly risky as we can lose more than the amount we have.
For crowd lending, your losses are limited to the amount you invest in. For example if you invest $1000 and the company defaults on its payment, you will only lose a maximum of $1000. Moolahsense, a crowd lending platform, limits the risks for investors by meeting up with the management of the company, engaging them in investors sessions and in the case of default, they have directors of the individual companies as guarantors and also debt collectors agencies to recover the money.
Timing the market and volatility
As mentioned earlier, trading is a psychology game. Why so few traders are profitable in the long run is because the market is always changing. The market is volatile and is definitely not for the weak hearted. Nevertheless, there are still some successful traders who manage to make money from trading the markets.
For crowd lending, we are essentially just lending to a corporation. The returns are in the form of interest payable to us as we lend to these corporations. In crowd lending particularly, we are lending to SMEs. The returns are predictable so there is no need to time the market or be subjected to the volatility like the stock market.
Fees for buying/selling
For stock trading, there are always fees for each buying and selling transaction. If we only trade with a small sum of money, it wouldn't make sense at all as the fees would have eaten up most of our profits. For crowd lending with Moolahsense, there are no fees charged at all. This is certainly beneficial to investors who just want to invest a small amount of money. You can invest from as little as $1000 in each company.
Crowd lending vs stock trading, which do you think suits you more? There are many different investment products and different ways to grow our money. Diversifying and knowing the risk in investment will help us go a long way.
Check out Moolahsense website to find out more about the opportunities for SMEs funding and investments.
Friday, November 6, 2015
Monday, November 2, 2015
The New Young Working Adult and Baby Insurance Package
How many of you would think that buying insurance is a hassle? With so many insurance products to choose from, how do we know which is more suitable for us? Did you know that most people actually end up overpaying for insurance and under cover themselves?
Most of us young people when we just enter the workforce, we will be clueless on which insurance to buy to protect ourselves. A lot of us later realised that we bought the wrong insurance and could not change it any more because there would be penalties imposed.
How about when you have a new born baby? We know that insurance is important for our child's future but do we really know which one to buy for them? Even if we do know a bit, most of us would not have the time to look through every package that's available in the market and choose the best insurance policy out there. Is there an easier way to this?
Yes there is an easier way. In this era of information technology, everything is going online. This includes insurance. We can go online to shop and compare the best prices for our clothes and even services, we can go online to compare housing prices, car prices, air ticket prices and tour packages. Did you know we can also go online to compare insurance products and their prices?
When I was just entering the workforce, I somehow knew that insurance was important but didn't know which insurance is more suitable for me. When I was approached by a financial advisor from a particular company, I always didn't buy any insurance products even after hearing them talk for the past few hours. In my mind, I always think there would be better and more value for money insurance policies from other insurance companies. I wanted to compare the prices and see which is better.
Comparing Insurance Online
Thankfully, the Monetary Authority of Singapore (MAS) launched its own insurance comparison portal called compareFIRST which allows us to compare the different insurance products of different companies. It is similar to DIYInsurance web portal which also offers comparison features. DIYInsurance is the 1st Life Insurance comparison web portal in Singapore.
Previously, I wrote a post on Do You Really Need A Financial Advisor?. This post attracted quite a lot of views where I wrote about my experiences with financial advisers. Some were good while some not so good. It is really hard to know which advisers are good thus insurance comparison portals does help in this.
The Young Working Adult and Baby Package
DIYInsurance is not only a comparison web portal but they are genuine in providing the best service to the consumers. They recently launched 2 new insurance packages namely the Young Working Adult and Baby Package.
Now listen carefully, here's what they did which makes these packages so unique. Firstly, they understand the needs of what we need as a young working adult or when we have a newborn child. They put together a combination of policies, compared against different insurance companies, to bring us the best price we can get. Now, we don't have to think hard on what insurance policies or even compare which policy from which company is better. All these has been done for us. Its easy, just pick one package and go. We can buy different insurance policies from different companies all through them without having to approach individual advisor of different companies.
I went to their website, took a good look at the packages and can't help but feel that they really put in a lot of work in putting together the packages. Let's start with the Baby Package.
DIYInsurance Baby Package
They have 2 different packages in the baby package category. One is the Child protection plan and the other is the education savings plan.
The child protection plan includes a life insurance cover of $175,000, a critical illness cover of $30,000 and also a hospitalisation plan. 3 different coverage all for an annual premium of only slightly above $1K.
Here's the screenshot of the child protection plan I took from their website:
For the education plan, it is a customizable plan to give your child cash payouts at different stages of their lives in the future. Total payouts are as high as $56,921 when your child is age 18-22. This is quite a good sum of money for your child's education in the future. They are also giving commission rebates and $50 worth of shopping vouchers when you purchase a baby package from them.
You can refer to this link, Baby package, for more information.
DIYInsurance Young Working Adult Package
In the Young Working Adult package category, they put together a comprehensive package which covers 5 different areas of our lives. I was actually quite amazed when I see the coverage vs the premiums payable. I've researched on insurance products and prices for quite awhile now and this package that they put together is definitely at its best value.
The package includes:
Most of us young people when we just enter the workforce, we will be clueless on which insurance to buy to protect ourselves. A lot of us later realised that we bought the wrong insurance and could not change it any more because there would be penalties imposed.
How about when you have a new born baby? We know that insurance is important for our child's future but do we really know which one to buy for them? Even if we do know a bit, most of us would not have the time to look through every package that's available in the market and choose the best insurance policy out there. Is there an easier way to this?
Yes there is an easier way. In this era of information technology, everything is going online. This includes insurance. We can go online to shop and compare the best prices for our clothes and even services, we can go online to compare housing prices, car prices, air ticket prices and tour packages. Did you know we can also go online to compare insurance products and their prices?
When I was just entering the workforce, I somehow knew that insurance was important but didn't know which insurance is more suitable for me. When I was approached by a financial advisor from a particular company, I always didn't buy any insurance products even after hearing them talk for the past few hours. In my mind, I always think there would be better and more value for money insurance policies from other insurance companies. I wanted to compare the prices and see which is better.
Comparing Insurance Online
Thankfully, the Monetary Authority of Singapore (MAS) launched its own insurance comparison portal called compareFIRST which allows us to compare the different insurance products of different companies. It is similar to DIYInsurance web portal which also offers comparison features. DIYInsurance is the 1st Life Insurance comparison web portal in Singapore.
Previously, I wrote a post on Do You Really Need A Financial Advisor?. This post attracted quite a lot of views where I wrote about my experiences with financial advisers. Some were good while some not so good. It is really hard to know which advisers are good thus insurance comparison portals does help in this.
The Young Working Adult and Baby Package
DIYInsurance is not only a comparison web portal but they are genuine in providing the best service to the consumers. They recently launched 2 new insurance packages namely the Young Working Adult and Baby Package.
Now listen carefully, here's what they did which makes these packages so unique. Firstly, they understand the needs of what we need as a young working adult or when we have a newborn child. They put together a combination of policies, compared against different insurance companies, to bring us the best price we can get. Now, we don't have to think hard on what insurance policies or even compare which policy from which company is better. All these has been done for us. Its easy, just pick one package and go. We can buy different insurance policies from different companies all through them without having to approach individual advisor of different companies.
I went to their website, took a good look at the packages and can't help but feel that they really put in a lot of work in putting together the packages. Let's start with the Baby Package.
DIYInsurance Baby Package
They have 2 different packages in the baby package category. One is the Child protection plan and the other is the education savings plan.
The child protection plan includes a life insurance cover of $175,000, a critical illness cover of $30,000 and also a hospitalisation plan. 3 different coverage all for an annual premium of only slightly above $1K.
Here's the screenshot of the child protection plan I took from their website:
(Click on photo to enlarge)
For the education plan, it is a customizable plan to give your child cash payouts at different stages of their lives in the future. Total payouts are as high as $56,921 when your child is age 18-22. This is quite a good sum of money for your child's education in the future. They are also giving commission rebates and $50 worth of shopping vouchers when you purchase a baby package from them.
You can refer to this link, Baby package, for more information.
DIYInsurance Young Working Adult Package
In the Young Working Adult package category, they put together a comprehensive package which covers 5 different areas of our lives. I was actually quite amazed when I see the coverage vs the premiums payable. I've researched on insurance products and prices for quite awhile now and this package that they put together is definitely at its best value.
(Click to enlarge)
The package includes:
- Death/TPD coverage of $1 Million
- Critical Illness coverage of $150,000
- Early critical illness of $50,000
- Hospitalisation coverage at private hospitals
- Occupational disability income of $3000 monthly with 3% increase
All these for a premium of only $220 per month if you're 25 years old currently. What's more, you'll receive $350 from them upon taking up this package as a form of commission rebate which DIYInsurance has been giving to its clients for the longest time now.
You can refer to this link, Young Working Adult Package, for more information.
You can refer to this link, Young Working Adult Package, for more information.
DIYInsurance Price Beater
Have you heard of price beat guarantee from other companies before? DIYInsurance launched its very own price beater to offer you a lower price than what you were offered out there. Now, we don't have to worry about over paying for insurance. DIYInsurance will help you review the insurance policy quotes you receive from other insurance companies and offer you a better one.
You just have to email them the quote and benefit illustration you were offered, then they will verify the comparison and offer you a quote within 3 working days and give you up to $50 in shopping vouchers and 30% commission rebates. Refer to this link for more details: http://www.diyinsurance.com.sg/portal/home/price-beater
This is definitely beneficial to consumers like us. We get the best price for our insurance needs.
Check out their website and get the best value for your insurance policies today!
Sunday, November 1, 2015
Saizen REIT entire portfolio is bought by Lone Star for an offer price of S$1.172
Just after less than 1 week of posting on the possibility of Saizen Reit being acquired by another firm on my blog, the news is confirmed!! Existing shareholders of Saizen Reit would be happy hearing this news. Saizen Reit has been a good investment for me for the past 2 years. It is sad to bid goodbye to this stable income producing investment.
This is the confirmed news:
"Japan Residential Assets Manager Limited, in its capacity as manager of Saizen Real Estate
Investment Trust (“Saizen REIT”, and as manager of Saizen REIT, the “Manager”) wishes to
announce that HSBC Institutional Trust Services (Singapore) Limited, in its capacity as trustee of
Saizen REIT, has on 31 October 2015 accepted an offer (the “Offer”) for the acquisition of all the real estate assets (the “Properties”) in Saizen REIT’s portfolio in Japan by Triangle TMK for an agreed purchase consideration of JPY44,660.0 million (S$517.3 million) Triangle TMK is a Japanese affiliate of Lone Star Real Estate Fund IV and Lone Star Funds.
The Purchase Consideration is at a 3.4% premium to the appraised value of the Properties.
The Purchase Consideration is estimated to translate into an implied net offer price of S$1.172 per unit of Saizen REIT (“Unit”), or a slight premium to Saizen REIT’s adjusted net asset value (“NAV”) per Unit based on audited figures as at 30 June 2015, after taking into account estimated transaction-related costs and expenses
.
The estimated implied net offer price of S$1.17 per Unit represents a 36.9% premium above the
closing price of S$0.855 per Unit on 22 October 2015, being the day immediately prior to the
Manager’s announcement of the Offer on 23 October 2015, and a 40.9% premium above the 1-month
volume-weighted average price per Unit as of 22 October 2015."
The offer price to me is quite reasonable at $1.172 as its a premium to its NAV. I think this exceeds the expectation of many existing shareholders. Its a 30% rise above the closing price of 92 cents last week before trading halted.
Looking back, I've written a series of articles on Saizen Reit which affirmed my decision to invest in the Japanese real estate market. Saizen Reit is the largest investment I have in my portfolio. With this gone, I'll have more cash to deploy to the next best investment in search for better dividend income.
Congratulations to all existing shareholders of Saizen Reit!
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