General updates

Wow, been sometime since i blogged. Lots of things happening in real life that got me sidelined from blogging.

Addition to the family:
Welcomed my daughter to the family in November. A bundle of joy. To make this post remotely finance-related, i shall classify her as a 21 year endowment plan. Returns on investment, unknown, and no projection available as well.

Cost of investment: Very high.

I think it's not an investment you will go into based on the numbers alone. I mean, the initial outlay into this is quiteeee high.

Giving a rough breakdown of the costs associated, and i give only approximate figures here:

(1) Regular gynae check-ups: 250- 350 a visit. Roughly 12 visits (monthly, then moving to shorter intervals as the due date approaches)

Total for check ups: $3,600

(2) Miscellaneous medical costs associated: Pre-natal check-ups. There used to be an oscar test to test for Down Syndrome, which costs about $300-500 and have a 75% accuracy ration, we decided to go for the Harmony test. It costs $1,500, but have 99% accuracy reading. That plus other supplements/tests/scans that needs to be undertaken.

Total miscellaneous medical: $2,000

(3) Nursery room: Outfitting a room for the new member costs money. Baby cots, dressers, clothes, strollers. These things do not come cheap

Total for nursery: $5,000

(4) Food expenses/supplements: Grocery bills went up. Went marketing every week to buy cod fish for the wife to eat. And that is like.... premium. Bird's nest, Chicken Essence become par for the norm. I did not track this expense though.

(5) Cost of delivery: Went for delivery at a private hospital (Thomson Medical). Apparently it is one of the more affordable private hospital compared to the others. Cost of delivery varies depending on the complexity of the procedure, i.e., if you are going for a caesarean operation, normal delivery, with or without epidural (anesthetist required)

Total for delivery: $9,000*

*Note: Medisave could be used to help defray the costs up to $3,000 for normal deliveries. More could be used for Caesarean-section deliveries.

You would have noted that i did not exactly scrimp and went for the lowest cost option. Decision was not made on cost as i think being pregnant is not easy, and paying (quite a bit more) for comfort would help go a long way to making the process for the wife much better.

There are ways to save on this: going to a public hospital (delivery and gynae check up costs would be much lower), but weighing between the 2 i consciously went for the more expensive option. Sure, it could have helped purchase a few lots of STI ETFs perhaps... maybe 20 years later i would rue the choice, but i guess some decisions have to be made.

So what's the total cost i incurred for this 'investment'?

A whooping $19,600.

And going forward, there would be monthly 'cost averaging into this', and who knows the potential payout 21 years later?

Economically, i think the maths don't work out. ;)

To balance this out a little, the government does help out a little.

(1) Baby Bonus: $8,000 for the first born, spread over several tranches disbursed
(2) Child Development Account - $3,000 first step incentive into the child's account, plus up to another $3,000 dollar for dollar matching

There are tax incentives given for parents with babies, which will help out a little

Square 1

Haven't been blogging much, and i actually missed the Brexit drama, as I exited all my holdings prior to that.

I don't profess to have good foresight. I simply needed the money for the down-payment of my new home, so basically I have to sell off everything to come up with the cash requirements.

I got to say, it means i am starting all over again... no retirement portfolio, starting from scratch again. I consoled myself thinking that it's like giving up everything to be an entrepreneur, like Dividend Warrior selling off everything to open a tuition center, and rebuilding his portfolio from scratch.

At this time of uncertainty, why did i enter the property market? A lot of people are still very cautious, am i being foolish to be overweight on property?

(edit: and just nice one of my long time friend just posted about property http://investmentmoats.com/wealth-building-2/singapore-home-condo-landed-and-hdb-property-prices-grow-over-time/ and i quote "I came out of this exercise reinforced why wealth building through properties will always be a better option for many because of the low probability of people losing money.")

Prices have slightly cooled (though definitely nowhere near a crash have happened). It is a brand-new unit as it was unsold by the developer when it TOP 2 years back. To push sales this year, discount was given to buyers this year for them (or us) to bite. Effectively, I got it cheaper than those who purchased it earlier.

Also, I did not view it purely from an investment perspective as I am buying a home to live in. It really does check the boxes we are looking for for a home, being near good schools, quiet residential environment and being near MRT.

On the positive side, I am glad for this chance to clean up my portfolio as well. Going forward, i will be building up a pure ETF portfolio.

Starting from last month, I placed $300 into STI ETF (100 shares, with some leftover), and would be doing that every time I get my pay.
I did not choose to pay off the loan with the extra 300 as it would really not reduce it all that much, and building up some portfolio provides me with flexibility for liquidation next time.

In any case, it's back to square 1 from now on! After being debt free for some time, it's back to having a mountain of debt on my buttocks!

Up, up, up and away

Been a furry of news these 2 weeks:

Singapore car park rates up $0.10 to $0.20, season parking up $15 to $25

Malls, office buildings set to charge higher parking fees

Cab firms hit by higher operating licence fees

Electricity tariffs to rise by 4.3%

Found a picture that adequately describes this:

I guess the most direct impact would be those driving cars (3 of the news pertains to car park charges). However, there would definitely knock-on effect to businesses - transportation costs etc. Rising costs would eventually be passed on back to the end-consumers.

There's a limit to how much expenses we can save (short of being a hermit) - look to ways to increase income to cope with the rising costs.

(1) Increase salary (easier stated than done sometimes)

(2) Start a 2nd line of income (part-time tuition maybe?)

(3) Passive income (what I am trying to do) - dividends, rental etc

Investors are speculating on Brexit

Did you get the oxymoron on my title?

I was engaged in a conversation recently with a financial advisor, and was asked if I am making bets on Brexit. The advisor said that a lot of investors are speculating on Brexit, and hoping to make a quick win over it.
I was scratching my head. Investors speculate?
Benjamin Graham in his book, 'The Intelligent Investor' defines an investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative. Betting on Brexit does not promise safety of principal. It's like going to casino, betting big or small. Same logic.

The financial advisor goes on to say, all the investors talked to also make decisions the same way. After doing research, the decisions are also made on gut-feel.

By definition, investors invest, and speculators speculate. It is worrying when people start listening to speculators thinking that they are investors. How can it be? The decisions made are based on 'gut-feel' - to me it is like gambling. How can we say someone who makes decision based on gut-feel as an investor, or a speculator as an investor?

Calling a speculator an investor is misleading, and if we listen to speculators thinking they are investors, I think we will be in for a surprise.

Lend me money?

So recently I managed to get a free copy of my credit bureau report. (if you don't know, if you apply for a new credit card, or have your credit limit re-assessed by your bank, you have a 30 days window period to log in and retrieve a free copy of your report)

So what does mine says?

So I was rated AA, with a 0.15% probability for default and a score of 1953. I was thinking, why was I not rated the maximum score of 2000?

So I read on, looks like one of the factors is that frequent/recent enquiries (in addition to default or slow payment) will affect the credit score.

I was never late on payment (always on Giro) so I wonder if it's the case if I applied for too many credit cards. I admit, I have a lot of cards, mostly for freebies + various discounts at various establishments. So let's see

23 enquiries, and 17 accounts. I guess that must be why.

With a good credit bureau rating, would you be willing to lend me money? Remember, there is only a 0.15% of me not paying you back :)

In any case, the Bureau also helpfully added that 1 way to improve credit score is to reduce unnecessary new credit card application. If you don't need, then don't apply, although I DO still keep apply for shiny new cards.

Waiting for my next pay (muses while showering)

No, it's not my pay day yet, although in all honesty, I AM indeed waiting for it. My current company bought out my notice period with my previous company - and in such cases, I need to pay my previous company compensation first (of 1 month + of my salary), and wait for the next payroll cycle in my current company before I get reimbursed.

In practical terms, it would mean I am out of 2 months of salary until this month end. So I do need to give myself a pat on my back that I managed to set aside emergency cash (as part of my resolution to get my finances back on track earlier) to sustain me for 2 months.

This also means I would get a bumper amount at the end of this month, definitely something to look forward to.

What about you? Do you look forward to pay day every month?

Any thoughts on how long you can sustain if you are without pay for 2 months?

New job, new beginning

So I started with another company at the start of the month. Given the uncertainty surrounding my previous company, I decided to take the plunge and hunt around for a more secure job for my career. I did not wait for a severance package, because I think I would not be asked to go anytime soon, and I wasn't there for very long in the first place - hence my package (if any) won't be that large.

In any case, it gave me a good story to hop out, and I took the opportunity for an increment in base pay (I think it would take a few years in my ex-company for my pay to rise to my current now - I guess that's why they say if employees stay in the same company for too long, their pay would be below market value).

In all, it was pretty good, and I do hope I can stay sometime in my current company. I do not like unfamiliar environments, getting to know new people and trying to establish myself all over again.

A few things that struck me:
1. It's not good to be a job hopper, and there are certainly risks involved in changing jobs. On the flip side, there are opportunities involved. Always have a good story/rationale for what you do, and why a job switched is needed..
I was always told at my ex-company which was undergoing down-sizing to focus on what you can control. (I think they meant to focus on your work - but I took it to mean focus on getting another job which is within my control!) I rather be employed at my own terms, than be asked to leave at another's term!

2. I got my current job through my network (of course, I did go through interviews), so this highlights the importance of networking. Never burn bridges - you do not know when you will need to leverage on connections.

3. Have an adequate back-up cash reserves. I saw a few colleagues being let go over the past couple of months. Not too sure about their financial reserves - but I know some have a young family, some with mortgage commitments. It's important to have a buffer in case the severance package is not sufficient to tide over till the next job comes around.

So, with this new job and company, I hope to be here for good with them. :)

12 million Hong bao draw

Would you be buying a dream by 'investing' in a lottery ticket for the $12 million Hong bao draw?

*correction - should be $13.9 million instead!

Some financially savvy folks are saying that they might as well save the money and invest it for the long term, since that is a more sure-win bet.

Me? I won't hesitate to admit that i would be one of those buying a hope and a dream. To me, that amount won't cost me my financial freedom, at the most, it's only the cost of a lunch.

And are the odds really stacked against me? 

We can say it is 50/50, since there is only 2 outcome - either we strike, or we don't. [Just kidding!]

Singapore pools kindly disclaimed that  the odds of winning the jackpot is 1 in 13,983,816.

Odds of winning Toto 

Given the winning prize is $13.9 million, what's the payoff? 

The payoff for a $1 dollar bet would be is [1/13986,816]*13,900,000, which is approximately close to 1!

Why wouldn't i buy a dream with $1?

Of course, assumption is that there is a sole winner (although in such cases, there are usually multiple winners, and the prize money are split a couple ways)

This is a post made in jest - no way am i encouraging people to gamble!

Happy New Year!

Wishing everyone a prosperous new year!

May the year of the Monkey bring great health and wealth to you.

What is the monkey's abilities?

Monkeys are agile, quick and very nimble. My wishes for us is to be as agile and nimble as the monkey. When the opportunity comes (or we are already in a time of opportunity), be agile and nimble to take advantage of it to have many prosperous years ahead.

And of course, stay healthy! For health is indeed wealth.

Save more for a rainy day

Had a lot of uncertainty as my company was finalizing the corporate strategy over the last few months, and it was finalized a few days back.

The result? A retrenchment exercise a few days earlier. It's my first experience of seeing colleagues just disappearing from office. A call from a conference room, a chat with the line manager and HR, and off you go. Sounds cold and harsh but that's the way it is. Office appears colder and quieter in the aftermath.

Supposedly the package offered is reasonable. Not very sure, as the 'chopped' workers did not return to their desk to speak with us after the conversation with HR.

Had a couple of thoughts going through that day.

(1) Wonder how those foreigners on employment pass cope - without a job, they need to leave the country in a month's time.
(2) Grateful that I wasn't on the redundant list
(3) If i was made redundant, how long would i need to get another job in these economic climate?

Guess it was at thought (3) that it really strikes home that you really need to have a buffer of emergency cash in case an unfortunate incident happens (even though there's a redundancy package). Also, multiple source of income is crucial. We should not be overly reliant on 1 source of income, or an employer, and having adequate reserves is most important.

Ultimately, my wealth is my business. No one cares about my personal finances more than myself.

The handy man can

My house has been breaking down in bits and pieces recently. So the bulbs has been going off one by one. I'm not usually a very technical person (admittedly i was a technician in the Singapore Army), but the wires and stuff usually escapes me.

Hired a contractor to remove the mould and repainted the toilet ceiling. (it was really in a disastrous condition, like those dilapidated haunted house), so when the toilet lights went kaput, i got the handyman to do everything at 1 go. That costed me $280.

The bulbs in my ceiling was off too, and lazy me also asked for the price. Seems like changing the bulb cost me $30. I asked how it was to be done, and seems simple enough. I got myself a bulb at $4.60, and saved myself the labour cost and mark-up of the rest.

Moral of the story - get enough life skills to handle minor repairs in the house.

NB: I had a plumber come once to unchoke my toilet. THAT set me back by $120. Since then, i got a plunger and been a part time plumber for my house ever since.

Happy Birthday Singapore!!!

50 years of independence - and i am thankful that i am born and bred in Singapore. This is a land of opportunities, and though there are tougher times ahead, i think being in this country, it is easier to earn, save and invest for our future, than some other countries around the world.

*photocredits - Channelnewsasia

May we have more good times ahead!
Majulah Singapura! Onward Singapore!