Tuesday, November 6, 2018

The Class Divide In Singapore - Does Having More Money Makes Us More High Class?

Many of us would have seen a video by Channel news Asia about a few students from different backgrounds voicing out their views on class divide issues in Singapore. This video went viral and was debated widely even by Ministers.

The class divide - Education tracks & Money

Besides the different education tracks which cause class divides (eg express, normal academic, normal technical stream), another apparent issue which emerged out is the class divide regarding money. I was surprised that kids as young as 10 years old are comparing who has the more expensive school bags and pencil boxes with their classmates.

You can watch a snippet of the video below:



"If you've the most expensive things, you're the most popular also". This was commented by a young primary school girl. The class difference only gets worse and worse as students are divided into different streams in secondary school and it even continues in adult working life. 

Our society has gotten use to this kind of segregating people in life. In schools, the better students are put into special or express streams while the weaker ones are put into normal academic and normal technical streams. This makes the students who are in the normal streams feel less inferior to their peers in the express and special stream while the express stream people tend to look down on the normal stream people too. 

Then, as we proceed to the higher education level, there are some people who get into Junior college,  some into Polytechnic and some to the Institute of Technical Education (ITE). Thereafter, some proceed to local university such as NUS, NTU and some choose to go private universities. The difference is again apparent as even employers sees the degrees differently. 

It doesn't stop here. In the workplace, we continue to segregate people into different class through the management associate program where it is a fast track program for employees to advance their career faster. People in this program tend to be treated differently at workplace and also get promotion up to twice as fast as another employee who is not in this program. The starting salary and future salary adjustments may be different too. 

The above are just some of the examples of how we as a society contribute to class divide unknowingly. While in this society nothing is fair, those who make misinformed choices in life at an early stage will inevitably lag behind in life.


How would you describe the expectations your parents have of you?

In the video, it is apparent that those who end up in the normal stream have thoughts which are different from the students in the express or even integrated program. Parents of these students have different expectations of them too which is quite distinctive. 

For students of integrated program, their parents expect them to pursue education such as law. They also expect them to get at least an A for their exams. 

For students in the normal stream, when asked what's their parents expectation of them, they say they just expect them to just pass. They don't expect very high grades


Does Having More Money Makes Us More High Class? 

In the same full 48 mins video about class divide, it goes on to discuss on how higher class people look down on people such as security guards, cleaners and so on. A condominium security guard who was interviewed said he has been shouted at by residents and called names such as stupid security guard. This shows the great disrespect these people have and think they are high class living in a luxurious condominium. 

You can watch the full video here

Ultimately, I always believe that having more money does not make us a bad person but it amplifies whatever character we have no matter if we are poor or rich. Having more money does make us feel better about ourselves especially when our income power increases. But, we should always remember not to look down or show disrespect for those who are worse off in life. At the end of life, we are actually only just a normal human being no matter which social class we belong to. 

Some of us may have made misinformed choices when we were younger and regretted the choices we made back then such as not studying harder and in the end didn't manage to get a good job to earn higher income. In any case, there are people who still manage to become successful even though they came from a lower class background. With some knowledge of financial planning, it helps along the way to become more financially secure for our lives. 

Feel free to join in an AMA session which I have on DBS NAV website. Just ask any questions you have at this link on any issues or topics, no restriction. You can help answer some questions too in the community. 


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Monday, October 29, 2018

Working harder for higher pay in new job and another AMA session this time with DBS

How time flies, I've been in my new job for more than a month now. To be honest, it was a struggle getting used to new work environment as well as different job scope again and time just flew past in an instance. In fact, I was shock when I look at the date today and realised that I've been busy working without much rest for the past 1 month plus.

This is my 3rd job now and every change of job, the work somehow becomes tougher. Of course, the pay is higher as well and with ever career move, more responsibilities comes with the higher pay. I had some catch up with my ex colleagues as well as some friends recently and everyone feels the same way. At least I'm not alone in this.

A few years ago, I set my goals to aim for higher income. When goals are set, somehow we work towards it and it becomes a reality. Then, we reflect on the goals we set and think through whether its the right goals for us? While seeking higher income was the right thing to do, there are sacrifices to be made as well. I definitely have lesser time for other things in life and feel totally burnt out on some days. For now, I'm quite used to my new lifestyle already and then the question is what's next?

With higher pay, finances are definitely not so tight anymore. Saving more money also becomes easier even though I spend more. Budgeting becomes less of a hassle as I don't need to count every single cent I spend anymore and still manage to save some money every month.

Throughout the past 5 years since I started this blog, I've explored various ways to optimise savings, increase income, learn about insurance, housing, CPF and also invest my money. There are hits and misses in everything that I've learnt and tried and I share this on my blog as much as I can. I started out learning from other peoples' blogs as well and through this got to know quite a few like minded friends in the community.

In recent times, Ask Me Anything (AMA) session has been getting popular. I'm doing one of the sessions on DBS NAV platform this time. You get to ask any questions you have and I will answer them on 7th Nov 8pm-9pm. Click on the image below and start asking your questions anytime from today.


There are many other questions that has been asked on the DBS NAV platform where we can learn from others as well. Check it out here today!

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Sunday, October 21, 2018

New Temasek 2.7% bond for retail investors - Should you invest in it?

It has been awhile since I blog as I've been quite busy with my new job as well as other things in life. I didn't really have much time to look at investments lately and have not made any new investment decisions for the past 1 month. However, there are new developments in the investment world which I thought is a good time for me to write about this new bond in the market which will surely be quite popular.

Temasek has just launched a new bond which offers 2.7% fixed interest and matures in 5 years. This is fairly attractive as Temasek is known to be rated AAA where the default risk is low. When buying bonds, it is always important to evaluate the risk even though in this case the risk is low. I will evaluate who can consider and who should not be buying this bond in this article.
Who can consider to buy this bond?

This bond is guaranteed by Temasek which in a way we can safely say it is default free. Just imagine if Temasek is not able to pay back the bond when it matures, then I think Singapore as a nation is also suffering a lot by that time so it is very unlikely that the bond defaults.

The interest offered is 2.7% which is not too much and not too little also. For those who have lower investment risk appetite and willing to invest in the bond till it matures in 5 years, then I would say you can safely invest in this bond with a peace of mind. Bond price will rise and fall according to market conditions but when it matures, the face value of the bond will be paid back. This means that you will definitely get back your initial invested capital at the end of 5 years (the mature date of this bond) as long as Temasek does not go bankrupt.

Let's say if you invest $20,000 into this bond, you will be able to get $540/year in interest payment and will get back $20,000 at the end of 5 years when it matures. This is good for those who can hold the bond all the way.


Who should not buy this bond?

Even though the risk of default is low for this Temasek bond, for those who are not intending to hold the bond all the way till it matures in 5 years should reconsider before investing in the bond. Bond price rise and fall according to market conditions and bond price and interest rates has an inverse relationship. This means when interest rates goes up in the general economy, bond price will normally fall as well. Temasek has said they only guarantee the interest rate and not the price of the bond.

Interest rates has been rising and I would think will continue going up. For those of us who can't hold the bond till the end of 5 years, its not a very wise choice to invest in bonds now. When the bond price drop and we need the money, we will most likely have to sell it as a lower price resulting in a loss. This is not what we want.


How it is different from the Singapore savings bond (SSB)?

I think there is some confusion on the Singapore savings bond which I will address this as well. What exactly is the difference between the SSB and the new Temasek Bond?

While both the SSB and the Temasek bond offers guaranteed fixed interest rates, Temasek's bond price are not guaranteed while the SSB price is guaranteed. We can sell the Temasek bond anytime but the price may be lower than when we first invested in it and therefore we suffer a loss while for the SSB, we can sell it every month and we will always get back the initial capital which we invested in. In essence, the price of the Temasek bond will change while the price of the SSB will not change at all.

For those who are looking at shorter term low risk investment of less than 5 years, the SSB is still a good choice to consider. This months SSB has interest of 1.80% for first year and 1.94% for second year. It still offers quite good interest for zero risk investment. You can refer to SSB rates here.

For the new Temasek bond, you can find out more about it here. The offer has already started and will end on Tue 23 Oct 2018. You can apply through ATM, internet banking or through mobile apps of certain banks.

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