Financial Freedom SG

A Good Month For Stocks

noreply@blogger.com (Lemizeraq) — Tue, 07 Feb 2012 04:24:00 PST

The last month till today has been good for equities. Those people whose stock portfolios have fallen last year would have seen their stock value move higher.

For myself, January and February is good to take stock of and decide what to do for the new year.

I have been buying into the S&P 500 each month doing dollar cost averaging. And it is a nice surprise to see how big this effect can be. At the moment it is already 20% of our stock portfolio. And that is while the US dollar and economy still very much in recovery phase. Small money dripped away does make a difference over time.

I am thinking of getting my wife started into Greater China fund as the China funds have fallen quite a bit from its high. There is a risk that there will be a recession or slow down in the Chinese economy with the uncertainities evident in the world economies. But we are looking at a longer timeline.

Time for a visit to the bank? Or maybe contact her broker who was very nice to send us a copy of The Edge which had a series of interesting readings while i am bored on public transport.

What about you? What do you intend to do this year?

DBS & POSB Accounts Being Illegally Withdrawn

noreply@blogger.com (Lemizeraq) — Thu, 05 Jan 2012 08:04:00 PST

Read a Yahoo news post about DBS and POSB accounts being illegally withdrawn by a total amount of $200,000.

Some of the victims had $2000 withdrawn from their accounts from ATMs located in Malaysia. Somehow, the details of the accounts and their pins were skimmed by these fraudsters.

A few of the victims interviewed said that they did not have internet bank accounts nor Paypal accounts from which these fraudsters could have gained their bank account information from.

So please check your bank accounts to see if there are any unauthorised withdrawals and approach the bank officers or call 1800-220-1111 as stated in the Yahoo article for help.

Have a Happy New Year and may you have an interesting and fruitful year in 2012, the year of the Dragon.

How’s Your Portfolio Doing?

noreply@blogger.com (Lemizeraq) — Tue, 29 Nov 2011 03:55:00 PST

Markets have been going the way it should the past few weeks. Up some days and down by more. Its likely I’d end the year down with a decline in the portfolio value of 7%.

However, I did take profit just a while before all the market churning action was taking place. I am not a market sage, it just happened that my baby boy was about to be born and I was just keeping to more cash out of prudency.

One of my friends sent me a link to this interesting New York Times post about “How a Market Pro Lost His House.” Which hits home more than anything that even professionals in finance are liable to get it wrong. So when experts can be wrong, and they do this for a living, what hope have mere mortals like you and me?

The answer is quite simplistic and borne out from a decade of investing and learning about it first as a professional in the field and then as a hobby now.

It is to hold on and do your buying and selling in parts and not in whole. After selling some of my positions, I felt silly for not selling more. Even if you feel smug that you have done the right thing, Mr. Market will still smack you in the face and make you look like a fool.

I am sure that you have encountered situations where when you buy a stock, a few days or weeks later, the stock goes south. Or when your sell it, it goes up later. Since we can never sell at the absolute highest or buy at the deepest bottom, the only way we can help ourselves is to buy in parts and never commit your entire reserves. Nor sell everything.

The only vow I have is to in future make the parts a bit bigger, so that I have less of a seller’s or buyer’s remorse for not selling more or buying more.

After all, markets move up and move down. If you can catch it right a few times and have the holding power when you did not catch it, you will have done well by any standard.

Mr Bogle Says Buy

noreply@blogger.com (Lemizeraq) — Wed, 19 Oct 2011 23:56:00 PDT

Saw this article on Wall Street Journal by Jason Zweig, “Why a Legendary Market Skeptic is Upbeat About Stocks. ” that talks about John Bogle being optimistic about stock market returns being better than many people expect..

John Bogle if you don’t know, is the founder Vanguard, which can be said to have started the whole craze into index funds as he kept the fund costs very low and helped to popularize this type of investment type.

At the moment, according to the Vanguard site, they are managing $1.6 trillion worth of mutual funds at an average expense ratio of 0.21%. Yes, it is that LOW.

I had read books about Bogle from the local library and his philosophy to indexing and investment is worth looking into.

So when he says something, people will listen. Especially since he is right most of the time also according to Jason Zweig.

In the article he blasted ETFs which are narrowly focused and utilize leverage to speculate. But I think he is talking about selected ETFs and not every ETF. There are those that are similar in nature to index funds. And there are narrowly focus index funds too.

His own portfolio is 80% bonds and 20% stocks which doesn’t really tally with his buoyant outlook. A matter of not doing as what you are saying?

Buying Stocks When Market is Down- Crazy or Smart?

noreply@blogger.com (Lemizeraq) — Wed, 05 Oct 2011 02:08:00 PDT

The past month was eventful for me. My baby boy was born at the end of last month.

Perhaps it was a good thing it happened during a market crash as I was not paying attention to the market and portfolio. I was studying the lines and features of my new born more so than the market.

So when I saw the market indices today and the prices of stocks that I have and are monitoring I just had to buy some lots.

Those were the same stocks I sold for a tidy profit just a while back after holding onto them from 2007 when the market was crashing.

Will the market drop further? Probably. But then no one can claim to know when the inflexion point will be. So I rather buy on the way up and down.

What are you doing this market correction?

Credit Cards- Do You Believe The Hype?

noreply@blogger.com (Lemizeraq) — Tue, 30 Aug 2011 09:25:00 PDT

Received my credit card bills and noted the dates for payment. If you had worked before in the bank you will know that credit card payment and processing has their own cycle. So the banks expects and knows that a flood of customers may call after the latest bills are posted.

I have a Maybank credit card which i signed on for recently. It promised a watch after spending a certain amount. So when the time came it ran out of stocks and it promised another date. Suffice to say the date has come and gone with no action the second time. Maybe 'it' forgot. But you can be sure that they won't forget any late payment or interest fees.

When I last worked in the bank I saw my share of people who were living on the edge and maximising their credit limit to the tilt. And these people were calling in to ask for increases to the credit limit so that they can continue with the spending binge.

Coming back to the Maybank story, I wanted to speak to their call centre officer, but even request for waivers were automated and they said that if successful, this will be credited in the next card statement. What if it wasn't?

Seems to me that banks have gone overboard with the cost 'efficiency' at the expense of the customer. You can bet that they'd lose some customers because of this. At the moment, I'd just stick to them. What's your experience like with the banks regarding credit cards?

Dividends- Surest Sign Of Financial Freedom

noreply@blogger.com (Lemizeraq) — Wed, 24 Aug 2011 01:33:00 PDT

Recently, a colleague of mine was remarking that she had obtained dividends from a local telco. This was the first time that she had bought shares.

For me, it is sort of a triumph because I had talked to her about buying and selling of shares and after thinking about what was said, she acted on the advice.

With the market bringing turmoil to the market, it is imperative for investors to realise that markets goes up and also down. Her timing may not be very good as she bought just before the market went south. But with patience and the steady collection of dividends from shares, she will learn to be an investor from this experience.

I had recently collected dividends from Valuetronics and another counter. I can't remember offhand which counter- another sign that age is catching up on me. And the reason why I invest is because of the dividends gain from investment.

The reason why I can go to Australia for my studies is because my dad is an investor. I remember vividly him talking about his experiences collecting dividends from a now defunct counter- Rothmans. They are a cigarette making company which issued high dividends but our government policies made them unable to list in Singapore anymore. Funny how they punish for the sin of smoking but allow two casinos in Singapore and one is even listed.

I get a rush from looking at the dividend statement for the previous year when the CDP collates a report for all of us each year.

It doesn't matter how the market moves as long as you have your regular dividends. If it is enough, you have your financial freedom to do what you will. One day, I hope that it will happen and I can blog full time :)

Swimming Naked = Using Margin to Buy/Sell Stocks

noreply@blogger.com (Lemizeraq) — Fri, 19 Aug 2011 07:00:00 PDT

The recent news has been filled with topics of investors getting burnt by the falling markets.

I will like to think that these people who are getting burnt are primarily those who are buying on margin and using leverage to maximise their positions.

While the market is doing well, things are fine and dandy and they make enough to actually be able to make a living out of it.

However, as one of the Buffett quotes is good to describe this scenario when the market sinks.

"You only find out who is swimming naked when the tide goes out."

Thus, these investors have been caught with their pants down when the market sinks.

The best way to invest is with your own money so that your holding period is longer and you are able to ride out the bear period as the bull will always appear next. When it next appears is the million dollar question and answer.

Sources:

1. Burnt by the Markets.

2. Singaporeans feeling blue over the stock market turmoil.

Stocks Are Getting Cheaper- According to Buffett's Ratio

noreply@blogger.com (Lemizeraq) — Tue, 16 Aug 2011 05:30:00 PDT

Saw this interesting article from Motley Fool which states that a ratio that Warren Buffett uses says that stocks are cheap now.

In the article, it states that Buffett calls this "probably the best single measure of where valuations stand at any given moment." It goes on to present in table form the returns 2 years after the ratio hits below 80% or more.

And the returns from investment is 20% or more when this ratio goes south of 80%.

What is the ratio now? 79%.

So according to the ratio which Buffett champions, it is time to look at buying.

If you look closely at the chart in the same article, it shows the last time it went below 80%. It was around the 2007-2008 period when it went all the way to 60%. You never know when the market will start to turn, so this is a good time to go in. I would too, if not for the fact that my wife is due to give birth soon and need more emergency funds :)

Thus, if you need another reason to seriously look at buying stocks, this is a good time to start looking at them now.

S&P Downgrade- What it means for Investors?

noreply@blogger.com (Lemizeraq) — Tue, 09 Aug 2011 21:55:00 PDT

Today's Yahoo Finance talks about the 7 Common Mistakes that Investors Make.

The last week has been very turbulent, with markets going down after the debt troubles in USA and Europe. Then at the end of the week, S&P downgraded the US government securities from triple A to AA+.

This basically makes US government securities, one of the safest in the world, more risky. It also makes it more expensive as investor will demand higher interest with higher risk.

In the short term, it could force the US treasury to increase interest rates while the US markets and unemployment are still mired in all sorts of trouble.

While the 7 mistakes that the Yahoo Finance article points out that we shouldn't pay too much attention to financial news, it doesn't mean that you should know it at all. Being able to filter out what is crux of the issue and what you should do as an investor is more important.

The last few days and most of the past few weeks, markets have been tumbling down. It's fascinating and scary at the same time. Start of a new government related debt crisis?

For this period, I would sit tight and wait for buying opportunity to go into the stock market for companies whose stock prices have fallen below their fair values. What are you looking to buy?

Source:

1. The US Credit downgrade

Mr Tan Kin Lian Running For President of Singapore

noreply@blogger.com (Lemizeraq) — Thu, 07 Jul 2011 08:03:00 PDT

I would like to ask blog readers to support Mr Tan Kin Lian in his bid to get elected for the post of President of Singapore.

I got to know of Mr Tan for just over a year and he has impressed me during this short time with his idealism, enthusiasm, courage to stand up for what is right and honesty.

Through the year long contact with him, I saw how he was willing to help out Singaporeans from all walks of life. From the taxi driver who got into an accident to the housewife who is proficient only in Mandarin and needed help to draft a letter to appeal to financial institutions. He did it not for any monetary benefit, only to help and ask the beneficiaries of his help to contribute to FISCA where he is the President.

He is honest when you aren’t up to mark. Scrutinizing my slides and giving valid comments to improve my presentation. During meals with him, what comes through is the fact that he is always looking out for things that can help people. He showed us how to SMS for booking which he piloted with one of the taxi companies. So if you have ever booked a cab using SMS, he is one of those people who made it happen.

Also I witness first hand him questioning and listening to an engineer by training on Mr Tan’s idea to have a sound system at all bus stops to announce which buses are coming along as this will help old folks. The idea has yet to take off, but don’t be surprised if it does when he becomes President. Some may call the idea hare brained, but I prefer someone is trying to help and improve than one who is constantly throwing stones instead.

Last month, he was contemplating if he should withdraw and not run for president. He took a straw vote around the table to listen to the opinions of everyone. I gave my piece on why he should still run while some gave their honest opinion that he should withdraw after all the flak about how the president has limited powers and no role in policy making.

If the same Mr Tan that I saw for the past year runs for President, I am very sure that at the end of his presidency term, Singapore will be a better place because we will have someone at the highest level who is listening, constantly exploring on how to make things better and questioning, scrutinizing items and looking after things critically with the ordinary Singaporean in mind.

I support Mr Tan’s bid for Presidency and would like to humbly ask all blog readers to support him and spread the message to your family and friends. Please go to Mr Tan’s blog for more information on his ideas and learn more about the man he is.

Apps For Financial Freedom

noreply@blogger.com (Lemizeraq) — Wed, 06 Jul 2011 08:24:00 PDT

My wife got herself an iphone 4 and pass me her old iphone 3 recently. So have been exploring the different functions of the new phone.

The key thing is that with the iphone it really allows you to carry the internet with you in a pocket. Something that the rest of the iphone imitators have been quick to ape and mimic.

So what is the another thing that makes the experience useful?

I will say that it is the apps that you can download from the many makers of the apps. So it has been a good experience downloading and trying out the various finance related apps.

These are whaf i have downloaded and found useful:

1. Bloomberg. This app allows you to read snippets of the financial news happening around the world. Also gives you updates on the various indices and stock prices.

2. Piggie. A useful app that allows you to key in what you spend to keep track of your expenses and income. Great for budgeting.

3. POEMS. I use the POEMS site to buy and sell shares and ETFs so I downloaded their app to check out its features. Haven't use it as yet to buy or sell anything, but it looks easy to use and intuitive enough.

4. OCBC. The banks are into apps in a big way and one of the world's safest bank is also into it. Went in to check out what they offered and see the bank account. Not like it is rolling in with interest but banks are into mobile platforms and embracing technology.

That were some of the more useful apps which are free. I have checked other apps but some like the Economist takes ages to load.

What about you? Found any interesting apps to share?

Singaporeans Worried About Retirement Savings

noreply@blogger.com (Lemizeraq) — Thu, 23 Jun 2011 07:21:00 PDT

Saw this article in Yahoo about “Many Singaporeans Worried about retirement savings: Survey.” In the article, it mentioned that a survey by the financial firm Aviva found that the majority of the respondents, 44 per cent, thought that they will still have to work beyond retirement age to fund their retirement.

Only 32 percent feel that they have enough savings to cope with emergencies.

In the same article it mentioned that the Singaporeans survey viewed investments as their preferred financial products, with 27 percent choosing savings as their preferred financial product.The actual survey results by Aviva can be found here at ‘Aviva in the News.’

Disturbingly for me, 37% wish someone else will sort out their financial affairs. This decreased to 29% when the people surveyed got older. Guess with experience, people realised that the only person who can sort out the financial affairs is the one staring back at them in the mirror.

And also in the survey was the nugget that the majority of people preferred a guaranteed return over a higher yield. Guess this reinforces the famous psychological tests done by Israeli academics Amos Tversky and Daniel Kahneman who showed the bias that humans towards decision making involving risks and returns.

What about you? Are you worried about not having enough for retirement? Or are you one who has sufficient reserves and furiously saving and investing to attain financial freedom?

On Security Analysis and Amazon

noreply@blogger.com (Lemizeraq) — Wed, 15 Jun 2011 07:29:00 PDT

I was considering if it is was worth getting the book “Security Analysis” from Amazon. Its listed price is much cheaper than if you get it from a Singapore local bookstore, even after postage.

With the increase of the Singapore dollar versus the US dollar, the prices of books should have come down. But it didn’t. When the Singapore dollar weakened against the US dollar the bookstores took the opportunity to increase prices, but with the reverse, it didn’t happen. So the online bookstores are looking to be a better bet to get a good deal.

Being a cheapskate, I googled for ways to ship via Amazon to Singapore and found this website, Parka Blogs which provides good information on buying stuff from US. I had done it before and didn’t like the Singpost because of rather poor service from them. So looking for alternative ways to get it, even if it is direct from Amazon.

I have bought stuff from US before, books, dvds and even a digital camera. Think the world is becoming ever more interconnected as more people explore direct shopping and shipping the item straight to their homes.

Source:

1. Parka Blogs- Guide to Buying and Shipping From Amazon To Singapore.

An Angel Sings “Nella Fantasia”

noreply@blogger.com (Lemizeraq) — Tue, 07 Jun 2011 06:55:00 PDT

If you have not heard of Jackie Evancho, play this youtube video and listen to her sing this theme song from the movie “The Mission” in her own unique style. In case you cannot view this embedded video, the youtube link to this song “Nella Fantasia.”

Buying a HDB Flat in Singapore. Part 3 of 3

noreply@blogger.com (Lemizeraq) — Wed, 01 Jun 2011 17:00:00 PDT

For this part, we shall look at how the we pay the housing loan using the Ordinary Account (OA) and other financial matters. With the constant increase in the minimum sum to be kept in your CPF account, with the latest increase to be $131,000, this balancing act to keep monies in the CPF account becomes even more important.

CPF OA

The key part here is that if you use OA to pay your housing loan, you may end up with the situation where you end up unable to use OA to pay your housing loan for the last few years because the limit for using CPF to pay the housing loan has been reached.

The rule for this is because the government doesn’t want you to end up in the situation where you retire and have a nice big house, but no savings in the CPF OA. Meaning you are not prepared for retirement. And that the government will be saddled with giving you money to maintain you. So they make a host of rules to make sure that your CPF has a minimum sum that increases as inflation goes up.

Think by the time I retire, maybe the minimum sum will be half a million.

In the CPF website, they put these valuable nuggets of advice:

1. Ensure that the CPF used is not way above the value of the property.

2. Instill financial prudence so that members will not over-commit to property at the expense of retirement savings.

Valuation Limit

The important part is to look at the limits of using CPF for the housing loan. It basically allows you to loan up to 100% of the valuation. So if your flat is valued at $300,000 and you paid over the odds for it and cough up $350,000 for the flat, you will find out that a few years before the flat is fully paid up what you cannot use CPF to pay for the flat anymore and have to cough up cold hard cash to service the housing loan.

Even if you have been prudent and bought one within the valuation or below it, this still means that you are still likely to have to pay cash at some point as part of the payment for housing loans goes to service the interest payments for the loan. Especially the first few years. However, if your CPF OA has the minimum sum, which is $131,000 at this point in time, then the amounts above it can be used to pay the housing loan even if you have reached the 100% limit.

Is your head swimming with the financial details and nitty gritty of all these?

Think the folks at CPF and HDB needs to hire those fine fellows at OCBC who went through an exercise to simplify the the very legalistic product terms at OCBC to make it easy for us ordinary mere mortals to understand. Their mandate will be to make cut terms where possible and if not make it easy and not multi-layered and so difficult to comprehend and understand.

Suffice to say, do your homework thoroughly before buying the flat.

The way I go about it is to pay part cash and CPF even though the combined incomes of my wife and myself will be able to service the loans with no problems. I treat it as sort of forced savings which makes me save at least part of my salary to the CPF OA. My wife’s OA is not touched by the housing loan so her account is really climbing and becoming like a retirement account.

Housing Grants for Resale Flat

The other topic we are touching on is a bit more pleasant. In this case, the government gives you a grant. Really.

The funny thing was that when I got the grant a few years back, the housing agent said that he has not done a housing grant for a long while. So I wonder if people who buy it knows about it. But I am sure the HDB housing loan officers will be sure to ask if you are applying for one if they see that you are eligible for it. It makes sense to know about it and what they entail so that you have better options.

The housing grant gives $30,000 for first time buyers of HDB flats who are buying resale flats. If you are getting a flat near your parents either for the husband or wife, then it is another $10,000 grant so you can get a grand total of $40,000.

The premise for the grant is that you don’t get to enjoy the ‘subsidy’ provided for first time buyers of new HDB flats so if you get the resale flats, the government subsidies it directly and pays this amount to the seller, while you get a nice deduction on your purchase.

If your household earnings is $2,250 and below, you can now get a special housing grant on top of the normal housing grant. This ranges for another $20,000 for a 2 room flat to $5000 for a 3 room flat.

As with all things, there is a flip side to it- the Housing Grant Levy where they take it back.

Housing Grant Resale Levy

If you decide to sell your resale flat after staying in it for the minimum 5 years to get a new subsidized flat, you must pay HDB a fixed amount ranging form $15,000 for a two room flat to $50,000 for an executive flat. The logic is that you have already enjoyed the subsidy and they have to penalise you somehow so that you don’t get to enjoy a subsidy twice.

The funny thing or unfair part of it is that if you get $40,000 or $30,000 for the subsidy, why then are you paying $50,000 back to the government if you are selling an executive flat?

Other Costs

On top of all these, there is still the small matter of the legal fees, stamp fees, insurance, payment to the property agents, valuation fees, etc. You can check the details of all these costs by clicking on the links to the source.

I hope that you are thoroughly confused by now with all the terms and conditions. I guess that is why the property agent is needed to make sense of it all. Just make sure that you also know the key important points as listed so that you will not get the bad end of a deal.

Source:

1. CPF website on Using CPF for Housing.

2. HDB Housing Grants

3. Conditions after purchase for HDB flats

4. Other costs associated with buying HDB flats

Buying a HDB Flat in Singapore- Part 2 of 3

noreply@blogger.com (Lemizeraq) — Wed, 18 May 2011 17:00:00 PDT

In the last article, we looked at how to look at the most expensive flat you can afford on your combined salary. The rule of thumb for that to recap is around the 30% to 35% mark.

This part we will look at the part that most people will think through properly.

The number of years that you need for the housing loan.

For most people, including myself, the thought of paying off a loan as fast as possible is intuitive and prudent. This plus the thought of paying a staggering amount as interest payment. In the previous article we looked at, if we take a loan of $300,000, this will mean that a loan stretched to the maximum will mean that you have to pay more than one third of the total amount as interest payment.

So we should pay it off as soon as possible right?

The answer for many financial problems is, “It depends.”

Factors to consider when paying off housing loan earlier or to stretch it

The key issue to compare is the present housing loan interest rate versus the returns you can get in investment returns.

To put it simplistically, we can have these three scenarios:

Present housing loan interest rate < Rate of return for investment returns
Present housing loan interest rate = Rate of return for investment returns
Present housing loan interest rates > Rate of return for investment returns

If you are in scenario 2 and 3 and you are risk adverse, it is better to aim for paying off the housing loan as soon as you can.

If you are faced with scenario 1, and you have a diversified portfolio of investments, it is better to stretch the housing loan as soon as you can and aim to beat the housing loan interest rate of 2.6% for the HDB housing loan.

In case you like to look at the math behind this and learn about how the interest rates figures can be varied, you can look at an another article I have written on “Early House Payment or Invest the Sum?” In this article, I came to the conclusion that if you can get 5% investment returns or above, you should stretch the housing loan as long as possible and invest the sum you would have used to pay off the loan.

The other factors to consider for stretching the housing loan are:

Liquidity of assets- If you have money all sunk into your flat to repay the mortgage, your money is illiquid and all stuck in the flat. But if it is in your investment portfolio, you have the added flexibility to sell it down to meet any unforeseen needs.
Death of main or either of the breadwinners- If you have a HDB loan, it is compulsory to get the housing insurance which pays out the full outstanding housing loan upon the death of the breadwinner. Making it fully paid for by insurance money. Very bluntly, do you want your family to have a fully paid off flat but little to speak of in savings because you have been squirrelling away to pay the housing loan versus someone who has substantial savings Plus a fully paid off flat upon a sudden death?
Inflation- While inflation works against you, for the housing loan, it helps actually. The $100 you have now, is worth less 20 and 30 years from now. So by not paying off early, you benefit from inflation.

To balance this, the other factors for paying off housing loan earlier are:

No debt- a lot of people don’t like debt and think it is as dirty as your normal four letter word. Paying off debt makes you financial free, which is always good to have, especially if you have a fat bank account and investment portfolio to boot.
Pay less interest- for me this was the key factor to consider paying off the loan as soon as possible, but I turned to paying off my housing loan by stretching it after considering all factors.
Less risk- if you don’t have a $300,000 housing loan, it can be very liberating. You have a less fat bill to worry about on top of the electricity bill, the phone bill, the credit card bills etc.

In the next article next week, we will look at using the CPF OA to pay off your housing loan and some of the things you should consider financially when getting your first flat.

Source:

1. Don’t rush to pay off that mortgage

2. Should I pay off my home mortgage early or invest?

3. HDB Infoweb

Buying a HDB Flat in Singapore- Part 1 of 3

noreply@blogger.com (Lemizeraq) — Wed, 11 May 2011 10:10:00 PDT

One of the biggest purchases that most people will have in life is to buy their own home.

In Singapore, one of the ways to propose is to say “Give me your IC, I’d go and apply for a flat together.”

That’s likely to get a knock on your head by your significant other. I didn’t propose that way, but I’ve heard that engineers are guilty of that. So what do the engineers out there think?

Choices, Choices and More Choices

Coming back to the HDB flat, once you have decided to buy one, there are myriad options available to you. Do you buy a 3-room, 4-room, 5-room, Executive flat? Just enough for the two of you or the bigger the better?

Cost considerations would be a factor here. The bigger it is, the more expensive. And down the years, you will also be hit by higher taxes, less subsidies, less money given to you for any “Growth Package” that is given by the government.

And we wonder why people don’t have babies. Guess some of the couples who got married bought the cheapest and smallest acceptable flat that they could find.

The sum total of HDB flat that I’ve bought is one. In case you wonder how much of an expert I am.

But before getting the HDB flat, I trough through the HDB website almost religiously, looking at all the different schemes, the regulations, to understand the nuances of what it means to be a flat owner.

Factors to Consider when Buying

What were the things I considered when buying my present flat?

convenience	proximity to parents	environment
neighbours	amenities	public transport
cost	size of flat	state of the flat
availability of loans	years to pay off loan	sum in CPF OA

As this is a financial blog, my focus here will be to look at cost, availability of housing loans, years to pay off the loan and sum in CPF OA. Anyway, the others are pretty much self explanatory anyway.

In this housing series, we will look at different items in turn when you want to buy a flat. We shall cover cost in this first part.

Cost of the HDB Flat

To look at this, it is important to understand that to buy or foot the installment payments for buying the flat, your spouse and your salary needs to be able to sustain the payment.

It is foolhardy to buy a humongous flat, stretch it to the max, pay $2000 a month when your combined income is say $3500. That is a recipe for disaster.

In financial websites, a common percentage figures for the housing loan installment that you can afford ranges from 30%-35% of your monthly combined pay.

The CPF Website has a nice page, Housing Loan Interactive Calculator, where you can key in all these details to find out exactly how much of a housing loan you can afford.

So for example, if your combined income is $3500, the maximum you are looking for a housing loan installment should be $3500 x 0.35 = $1225.

In this example, this works out to be a housing loan of around $310,000 which you can afford to pay, assuming that you stretch your housing loan to the maximum of 30 years.

You would be paying in total $441,000. With $130,968 as interest, almost 30% as the interest paid to CPF for them lending the money to you as a HDB loan.

In the next part to be covered next week, we will look at why you should stretch your loan to 30 years and still pay this interest. A bit counter-intuitive, but it is an exercise in logical thinking.

Source:

1. HDB Website

2. CPF Website

3. Temasek Review Article, “Mah Bow Tan- Longer Housing Loan Helps People to Pay Less”

Singapore General Elections 2011 & the Stock Market

noreply@blogger.com (Lemizeraq) — Tue, 03 May 2011 08:48:00 PDT

Just a few more days left before the nearly the whole of Singapore gets to vote except for the poor folks at Tanjong Pagar GRC who didn’t get to vote because of the make shift opposition team were late by 35 seconds.

I wonder if the guy timing the lateness or punctuality is using a Rolex and his time is according to the standard time?

Anyway, back to the elections.

This is the election that is going to define if Singaporeans deserve a working democracy or if the citizens here have been cowed into submission to accept a quasi democracy.

I have sold off quite a bit of my stock holdings last week as I anticipate that there could be a negative reaction from fund managers if or when they discover on the 7th that the PAP has lost quite a few seats or even lost the majority. They will withdraw the funds back overseas and the market could dip quite a bit.

Then again the scenario that the PAP wins all the seats and there is no opposition could also pan out as the two opposition members, bravely or foolishly, gave up their relatively safe seats to venture to unchartered territory to try to win a GRC or two. For the people who don’t know the Singapore political scene, Singapore must be the only place on earth where it isn’t a one man one vote system but when you vote, you vote a team of 4, 5 or even 6 people in the team. Even if one is a free rider or you absolutely don’t like one, they still get in.

So I have pre-empted the “sell in May and go away” saying by one week. I will be waiting for an opportunity to go back into the market when things have calmed itself down.

What about you? What do you feel about Singapore’s election and how it will affect the market?

Do We Need Alternative Voices in Singapore?

noreply@blogger.com (Lemizeraq) — Tue, 26 Apr 2011 08:04:00 PDT

Not the type that talks to you like Golem’s alter ego in LOTR, but referring more to the politics kind.

Unless you have been living under a rock, you will have known that Singapore is facing elections. And also that there is a breath of fresh air in the tepid political scene in Singapore by the name of Nicole Seah. Check out her video here:

If you can’t see the video, you can click on the link posted at the end of this post. If you like what you see, check out the other videos about her on Youtube. Also, she is currently the second most popular Singapore politician after Lee Kuan Yew on Facebook. Nicole Seah’s Facebook public figure account has about 24,000 likes at the moment. You can go and click “like” if you think she’s a good candidate to represent Singaporeans.

For the first time, I can get to vote. I was wondering if I will die without having the chance to vote and choose who my representative will be. Guess it is pretty obvious who I will be rooting for.

Source:

1. Nicole Seah’s Interview- 21 April

2. Nicole Seah Introduced as NSP candidate

3. Nicole Seah’s interview by the foreign press at Aljunied

When Great Minds in Investing/ Finance Cannot Agree

noreply@blogger.com (Lemizeraq) — Tue, 12 Apr 2011 08:23:00 PDT

Saw this article from Wall Street Journal titled “Is the Market Overvalued?” which presents it from two different perspectives.

One says that based on the indicators he has, the market is expensive.

The other, says that based on his alternative methods using different indicator, that the market is cheap.

It’s typical of the kind of struggles that every ordinary investor like you and me go through each time we think to buy or sell.

At the end of the article, the academic, Prof Shiller, who says markets are expensive concludes aptly that “I think I should just keep it simple.”

We, or at least I, tend to over-complicate things sometimes.

We need to know that:

1. No one knows for sure where the market is going, we can guess, but anyone that says they know with a 100% probability based on his or her ‘system’ or ‘indicators.’ Run far, far away from them.

2. Even so called ‘experts’ disagree, so how do you know who is correct?

My conclusion is to ignore them. And think for myself. At least if I got it wrong, there is no one to blame but myself.

I tend to agree on the fact to keep things simple. So I buy with both eyes open, don’t monitor my stocks prices on a daily basis and try to do the more important things. Like to be on top of things in my job and focus on my part time education doing my Masters.

Right now, my guess is that the Singapore stock market could be in for a surprise soon as elections are approaching and there is always a chance of a seismic change like what happened in Taiwan, Malaysia and Japan. So keep your powder keg dry and accumulate some moolah. And if you believe every word I say, you haven’t been reading it carefully.

Are You Being Paid What You Are Worth?

noreply@blogger.com (Lemizeraq) — Mon, 04 Apr 2011 09:11:00 PDT

Saw this interesting article about “10 Signs It’s Time to Quit Your Job” and it made me smile.

There are a lot of reasons why people leave their jobs and I left mine about half a year ago. Some of the signs are there, but not others like “You don’t like most of your coworkers.”

I’ve been blessed with good co-workers so far. Touch wood.

And looking at the signs, there are some that I think are more important to me than others. Like a bad boss, not making enough, and feeling stressed.

While it is stressful looking for a job, one of the perks of it is that you get to choose your new boss also. Most people forget that the interview is a two way process. Your potential boss choose or may not choose you. You can do the same.

Being paid better is often a reason for people to jump ship and move, while it isn’t the be all and end all, our dear friend Maslow did come up with the hierarchy of needs.

At the bottom is your physical needs of food, water, safety etc. That is where the moolah comes in useful to pay for all of that too.

The thing is that once that need is fulfilled, people look for other things. You can have all the money, but if the job stressed you out, make you feel like a loser, where you don’t learn anything new, you probably won’t stay for long.

So are you paid what you are worth? If you are, you are probably one of the lucky few who are on their way to financial freedom.

If not, what are doing about it?

Insider Trading- $900,000 Copy Buffett- $9.6 million

noreply@blogger.com (Lemizeraq) — Tue, 15 Mar 2011 08:25:00 PDT

Saw this article by WSJ online “Common Sense: How to Copy Warren Buffett,” which in essence was saying that:

Insider Trading- BAD
Warren Buffett- GOOD

This guy Rajat Gupta is accused of insider trading by passing on information that he obtained as a director in Goldman Sachs and P&G.

So this guy he passed the information on to acted on it and made a cool $900,00 from this inside news.

Problem is that it is illegal and they could have done better and just ape Warren Buffett the day after the news was released that he bought the preference shares and held it, he would have been making $9.6 million instead.

Better yet, its legal.

So what you can do as an investor is to ape what someone else who is recognized as probably the greatest investor is doing. And just hold on for the ride.

Apology for not posting regularly, but doing my masters which is making me eat dinner at 10pm and doing assignments till 2am and no time to update this blog.

But to put things in perspective are the thousands who have lost their lives in the earthquake and tsunami in Japan. Plus the many more who have lost their homes, their cars and are without food and water.

If you want to, please donate to the Japanese Red Cross if you haven’t done so here:

2011 Japanese Earthquake and Tsunami

Are You Buying During Market Corrections?

noreply@blogger.com (Lemizeraq) — Mon, 28 Feb 2011 18:19:00 PST

Saw this interesting article about people who sold near the bottom of the market in 2008 getting back into the market during the recent and current correction.

The author, Jason Zweig, puts to us that these investors are the 'sheepish bulls.' And there is a cartoon there to boot. I enjoy reading his articles as they illuminate and points to us areas where we probably did not consider.

For example, your risk tolerance as an investor. If you cannot bear the thought of a 40%-50% correction, maybe you should reconsider and think hard about why you are in the market. It is fine to think that a stop loss order should help you limit your loss. But are you disciplined enough to put one stop order each day?

Come think of it, maybe one way for a brokerage to win more customers is to have a weekly or even monthly stop loss order which is in effect until it is lapsed or executed. At the moment, you have to put one each day.

For me, I realised that there is no way for me to predict huge market decrease with any accuracy. So the thing I must do is to make sure that the buy price is good for me.

But sadly for me, this time round, money not enough :) As I am already fully vested.

Moral of the story for me- always have bullets ready. What about you, are you buying?

The Cost of Taking a Taxi at 6.30 am

noreply@blogger.com (Lemizeraq) — Mon, 14 Feb 2011 05:19:00 PST

Did something which the normal man on the street will encounter if you don't have a car. Like try taking a taxi early morning at 6.30 am.

Maybe I was stupid or naive.

I was trying taking the cab after the midnight surcharge had ended, but just before the peak hour surcharges kicked in.

What happened? I couldn't get a single cab. Those that were on the road were doing their own admin. Like ferrying their own kids to school, taking a leak, going for breakfast. Whatever.

So I tried calling the cab by dialing their hot-line. Which was really hot. It was so hot that i couldn't get through for 15 minutes.

By that time it was 7am, 30 minutes later. I had started calling only 15 minutes into my wait.

Suffice to say that it took me one complete hour to finally get a cab from a driver who heard what I had to say and drove out of the way to pick me up.

So in one day, there was utter frustration and also daylight for me. Cost of taxi ride? Almost $40 for the surcharge, call booking and a long journey on roads with heavy traffic.

Moral of the story for me?

Not to buy a car :) But to take the MRT if i could to the nearer location, so that I have more options. And to start out a journey early. Also the taxi driver advised that I can use the sms next time and bypass the phone operator.

Sorry to whine, but I remember just a few years ago when I had to go back for reservist and never had to face such problems as what I have encountered today. Guess Singapore is changing and in some ways, not for better.

Links for 2009-11-24 [del.icio.us]

Wed, 25 Nov 2009 00:00:00 PST

The New York Times Owes an Apology

Links for 2009-10-26 [del.icio.us]

Tue, 27 Oct 2009 00:00:00 PDT

Some Tech Bubble Stocks Finally Breaking Even after a 10 Year Wait
charts with tech stocks comparison with 1999s till 2009

Links for 2009-09-01 [del.icio.us]

Wed, 02 Sep 2009 00:00:00 PDT

Why Investors Need to See the Light and Slow Down *
investing, jason zweig

Links for 2009-08-19 [del.icio.us]

Thu, 20 Aug 2009 00:00:00 PDT

48 Links To Investment Sites/ Finance News/ Saving Tips/ Economy/ Finance Blogs

Links for 2009-07-27 [del.icio.us]

Tue, 28 Jul 2009 00:00:00 PDT

A Tale of Two Cities- Response to Structured Deposit Fiasco by Singapore and Hong Kong

Links for 2009-05-27 [del.icio.us]

Thu, 28 May 2009 00:00:00 PDT

Investing 101: Average is NOT Normal

Links for 2009-05-20 [del.icio.us]

Thu, 21 May 2009 00:00:00 PDT

Suze’s Surprising Credit Card Controversy
Normally, I have the criticizing personal financial gurus business all to myself. I like to think this is because I am the only one who sees the faults in
American Idol Winner: Can Google Predict the Results?
if only google can predict which stock is going off the charts a few days, 1 year, 10 years down :)