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Friday, March 8, 2019

Giving your parents allowance the smart way

I believe most of you gives monthly allowance to your parent after you all start working. I do so myself too. I am currently giving my parent a monthly allowance in cash. Recently, I have found a smarter way to give my Mom monthly allowance.


My mom is currently 67 years old and already has her CPF Retirement Account setup. She can actually start her monthly payout under the retirement sum scheme already, but we are delaying it till she’s 70 to give more time for compounding to work its magic.

Recently, I have started to top up her account via CPF transfer. I am transferring my CPF OA money to my Mom's Retirement Account. Although doing CPF transfer top up does not attract any tax rebate, the money transferred will attract a much higher interest than having them sit in my CPF OA. Instead of the 2.5% I am getting, it will get 5% in my Mom's RA since she has less than $60k inside.

In a way, I am using my putting my mom’s future monthly allowance in her CPF account and let the government help me beef up that allowance for my Mom. One thing to note is that to use your CPF OA to top up for your parents CPF, you need to set aside the current BRS, with sufficient CPF property charge to make up the current FRS. The BRS can be set aside using your OA and SA savings, including net amounts withdrawn for investments (you can go here for more information)

So are you making full use of CPF to fund your allowance?

Happy Value Investing

Thursday, February 7, 2019

Happy Chinese New Year and an Ang Bao for you!


Happy Chinese New Year and I wish all of you a prosperous Piggy year ahead.
Been a busy week preparing for the new year and going around giving red packets.
Sure feels different when I was the one receiving the red packets rather than giving them.

Fortunately, soCash has decided to give out some "red packets" of their own. soCash is a handphone application that allows you to withdraw money with your handphone at many participating retail outlets. They are giving out $5 for new sign up and this offer is only valid until 13 February 2019. 

Full disclosure: If you sign up to soCash via this link, I will get a referral fee of $3, an Ang Bao for my Chinese New Year! 

Thanks and Happy Value Investing

Tuesday, January 22, 2019

What will I do if I win the TOTO?

Inspired by the post "What will you do with 9 million?" on Singaporean Talks Money, I start to wonder what I would do if I really win the TOTO. I do buy TOTO occasionally especially during special draw when the prize money is much more. Who knows, lady luck might shin on me someday, so I'd better be ready 😉.

After some thoughts, here's a list of what I would do with the winnings, in some sorts of order depending on how much I win.

1)     Not tell anyone except on a need to know basis.

2)     Keep current job and maintain at my comfort zone or change to a less demanding job.

3)     Donate about 5 to 10% of winnings to charity.

4)     Pay back CPF housing loan.

5)     Max out Singapore Savings Bond

6)     Spend $2 million on a 2nd property and rent out the current HDB.

7)     Build a $5 million bond portfolio with 2% return. With the high quantum, I can afford to take less risk and go for safer and lower return investment. $5 million @ 2% returns give about $8000 per month payout, more than enough to cover my monthly expenses.

8)     Any excess goes to my kids saving account.

The recurring income that I will be getting from rent and interest will be used to fund my monthly expenses. Any excess will then be used to fund other extravagant expenses like travel, cars, etc....

So, have you thought of what you would do with your winnings?


Happy Value Investing

Friday, January 11, 2019

Enough in CPF for Retirement?

Recently, I had a conversation with my friend on how we can use our CPF to help us prepare for our retirement. As we were discussing, it made me realize that I am not aware of how much I need to retire and how much I would need in my CPF in order to fund that retirement. So after that conversation, I went back to take a closer look at my retirement needs and below is the result.

To start, I need to determine how much I will need monthly when I retire. I had come up with a rough estimate below based on today's dollar.  

Category
SGD$/Month
Meal
900
Transport
200
Medical Insurance
500 (based on AIA)
Utilities/internet Bills
200
Misc
200
Total
2000

  
With this figure, I used CPF retirement estimator  to see how much I will need to have to fund a equivalent of $2000 monthly payout (in today's dollar) for 20 years when I retire. 

Based on the calculator, I will need about $1 million (future dollar) to receive about $4443 (future dollar) per month when I retire. This translate to about $450,000 in today's dollar. Unfortunately, I am still very far away from $450,000 in my CPF today. 

So I went on to calculate how long I need to work in order to accumulate $1 million in my CPF in the future. It seems like an impossible task to hit that magic $1 million figure. However after working through the numbers, I am able to save $1 million in my CPF when I hit 55.

The assumptions in my calculation are listed below
1) Interest policy from CPF remains unchanged
2) No gap in my employment with same pay and 1 month fixed bonus
3) Transfer of OA to SA until SA reached Full Retirement Sum
4) Full Retirement Sum and Basic Healthcare Sum did not change.
5) No major withdrawal from CPF except for Medishield Plan


Hopefully my Investment portfolio can supplement the monthly payout in the future to cater for other additional entertainment expenses.

Happy Value Investing

Tuesday, January 1, 2019

Reflecting on 2018



Happy 2019 everyone!

It seems always customary to have a look back at how your year went at the end of the year. So with no exception, here is a reflection of What Went Well and What Went Hell for me in 2018.

What Went Well

1)    Topped up my CPF and my Mom’s CPF again to get tax relief for 2018. I did that in 2017 as well and I will most likely be doing it again in 2019.

2)    Transferred my OA to SA to get that extra 1.5% interest for 2018. That interest was deposited on New Year’s Eve. Best New Year’s gift ever to start my 2019.

3)    Continue to collected dividends for 2018. However, I did not manage to hit my target of 120K investment @ 5% dividend. In fact, the dividend I had received had dropped from 2017. I really need to focus and build up my portfolio in 2019.

4)    Working on a Start-up with my friends. Not sure how that will pan out but I'm definitely learning a lot from it. Will continue to work on it in 2019

What Went Hell

1)    2018 was a pretty bad year for Cryptocurrency. Okay, "pretty bad" is an understatement, Crypto had done VERY BAD for 2018. Needless to say, my crypto portfolio was badly affected as well. I haven't been really keeping track but I think I am about 80% down. I had blogged about this a few months back here and it had since then headed further south with ETH ending 2018 at around USD$130.

2)    The stock market took a hit as well during the 2nd half of 2018. Of course my portfolio was not spared. Most of my gains were erased at the end of 2018. Well despite that, I see this as a good opportunity to get my war chest ready and do some bargain hunting in the New Year.

Moving forward, I hope 2019 will be a year of focus and clarity for me. Focus on what I want to do and achieve and chart out a clear way to do that. 

Happy Value Investing and Happy 2019 again.

Monday, December 24, 2018

Merry Xmas

Valuewarrior wished all of you a Merry Christmas and a Happy New 2019.

I have been quite inactive here in the past months as there is not much action for me in the stocks market.

There have been quite a dip in STI in the last quarter of 2018. I have been preparing my warchest and putting in orders to some of the stocks in my watchlist. Unfortunately I couldn't get them fulfilled.

I am expecting more volatility and further dip in the market. Hopefully i can get some orders fulfilled in 2019. Fingers crossed.

Happy Value Investing

Monday, October 8, 2018

Entrepreneurship VS Investing

I have been trying to start something of my own for a while now and I am beginning to see that the journey in Entrepreneurship and Investing is not that different.

I came across quite a nice video on how to take your idea to a startup below.


Essentially, what it takes to grow your idea to a startup company is to come up with a business model, test it out, tweak/modify/change and repeat until you get traction and grow it into a company.

This is not too different from investing where we come up with an investing idea/strategy. Be it value investing, factor investing, technical investing or the Permanent portfolio strategy. After we come up with an investing idea/strategy, we test it out in the market. We tweak, modify and change depending on how it works for us until we see satisfactory returns.


From this perspective, I see that the Monk (financial blogger) is not too different from the Warrior (Entrepreneur). I would say both would require extreme self-discipline, self-awareness and mental tenacity to eventually get results and succeed. Perhaps Jes from SimplyJesMe and Co-founder of Snackfirst can attest to that.

Happy Value Investing