Financial Freedom SG

Portfolio After Property Sales Proceeds

noreply@blogger.com (Lemizeraq) — Wed, 26 Apr 2017 13:28:00 +0000

This is how the porfolio looks like in 2017 after rebuilding it in 2016 with the sales proceeds from property sales of our previous flat.

The main aim of this portfolio is to target dividends so that it will help to offset the new higher housing loan that we have. We hope to eventually have enough dividends to help cover more than 50% of the monthly housing loan payment each month.

At the same time, I am using a small part of the salary to divert to the Supplementary Retirement Scheme (SRS) for tax-savings and use it for the monthly dollar cost averaging into the STI ETF, a unit trust- Schroder Asian Equity Yield and a REI- Capita Mall Trust. Hopefully, this will help build up to another substantial part of the portfolio.

The bulk of the portfolio is leaning to bank stocks, with DBS and OCBC taking up 25.3% of the total. The other key part is REITs, with the total REITS in the portfolio at 21%. Index funds on S&P500 and Singapore ETFs takes up another major part with 13.6%. Bonds offered on the STI take up another 8.56%. The rest of the portfolio are a mix of industrial, telco, consumer, grocery, electronics, financial, medical etc.

Within it are some that don't pay dividends out like the Infinity S&P 500 (dividends are reinvested) and of course Berkshire Hathaway. We are building our war chest slowly again using bonuses, dividends gained while using dollar averaging of $700 each month while my wife does about half of that I think. I strongly feel that it is important to invest first so this is automated mostly while I have been channeling part of that to the SRS account every half yearly (seems that you can only automate maximum 6 months using OCBC, after which you have to remember to set it up again).

Meanwhile, costs are up as we have to pay income taxes again after all the tax benefits a new child brings are all used up. At the same time, we have to pay the management fees that condos have which are much higher than those from HDB conservancy fees. Then you have the higher tariffs that water and electricity will charge soon. So it shows even more that it is essential to invest if you want to stay ahead of inflation.

Looking at a few interesting counters which can invest into, one of which is Thai Beverage. But maybe I have to start to trim off some of the existing stocks in the portfolio first. Starting to look like a unit trust fund already :)

Rebuilding Portfolio After Partial Sell-off For Property Purchase

noreply@blogger.com (Lemizeraq) — Tue, 10 Mar 2015 13:41:00 +0000

Took a while to rebuild my portfolio of stocks and shares after selling a big chunk of it to finance my property purchase nearly two years ago.

It currently looks something like the pie chart you see on your left.

I took the opportunity to take profit for the index stock that I have been buying for a few years and also sell off stocks which made some money and those with losses.

So the ones left were mostly money making. Right now after almost two years, Elec & Eltek and Hyflux are the loss making counters while the rest show gains.

The portfolio as a whole, including the loss making counters, is showing a profit of more than 30%, excluding dividends earned, which isn’t too shabby but nothing to shout from the rooftops either.

The strategy going forward for me is to continue with the monthly dollar cost averaging into the STI ETF and the Infinity US 500. I’d be looking at stocks specifically when there is a bonus or when funds materialises. There should be a sum coming when we sell off our current flat which will be invested back to stocks and shares. This will help earn dividends which can be reinvested or used to pay the housing loan for the new property. The focus for new stocks purchases will be on dividend paying stocks which will be in the local telcos, REITs or bank stocks.

When the new funds comes after the sale of our current property, I’d probably sell off the loss making counters and look to add one or two company/ETF/index fund to the portfolio while keeping the list at about 10 different positions.

In a way, my portfolio is a aggressive because we don’t have bonds in there, but my focus is very much to build up the portfolio without the drag of bonds which I’d only add later when I’m about 10 years from retirement. The only worry is I am over invested in one counter, OCBC, as more than 1/3 of my portfolio is there. Once additional funds come in, I’d probably rebalance the mix by investing more in other counters or the newer counters.

Nothing much else has been going on as I’ve not been monitoring the investments very closely, except adding to the OCBC position when there was a rights issue last year which has since appreciated.

When the Government Intervenes Too Much….

noreply@blogger.com (Lemizeraq) — Wed, 16 Jul 2014 14:49:00 +0000

I saw a HDB infographic at the MRT station at Boon Keng today and thought about whether the change in policy was thought through thoroughly enough by the policy makers.

I refer to the change in rules governing purchases of HDB flats from maximum 30 years to 25 years loan tenure.

On one hand the government seemed to have taken some of the messages of the last election in 2011 to heart and communicate its policies more, witness the infographics, the ads of the pioneer generation package in the form of TV advertisement using soccer analogy instead of its usual mailer with cartoons.

However, when policies are rammed through without consultation, feedback and proper studies, their overall effect is to make the ordinary Singaporean less well off.

If you refer to the two scenarios below, you will understand why:

Scenario A
housing loan int	2.60%
index funds	5%
term	25
no. of mths	300
loan amount	420,000


housing loan payment each month	-1,905.41
Investment term no. of months	60
Investment from 25-30 years	129,579.60

Scenario B
housing loan int	2.60%
index funds	5%
term	30
no. of mths	360
loan amount	420,000


housing loan payment each month	-1,681.43
Use difference for investment	-223.99
Investment from 1 to 30 years	186,413.57

Scenario A is the one the government has changed to, where the tenure of loans cannot exceed 25 years. The rationale is to force people to buy flats within their means and then use the money that they will have saved from year 25 to 30 years into their retirement.

If we assume that,

1. The people taking the loan are rational and does what the government wants and will not use it for other purposes like fund their children’s education etc instead of funding their retirement.

2. The rate of return for investment is conservatively estimated at 5% with the assumption that the people will chose an index fund or exchange traded fund like the STI ETF which has yielded above 9% as at 16 Jul 2014.

In Scenario A, the family who finished their loan at year 25 and immediately invested the same housing loan amount to an index fund yielding 5% will have gotten about $129,579.

Which is not too bad.

What about Scenario B?

The folks who was under the old policy of a housing loan tenure of 30 years will have fared better by getting $56,833 more, if they had invested the difference of $223.99 each month to the same index fund earning 5% per annum.

The folks who was under the old policy will have fare better. Anyone who studies economics or finance will understand the effect of compounding interest.

So when the government forces the loan tenure to be shorter, it is in effect reducing the incomes of couples starting their families and reducing their ability to invest and finance their own retirements at the very start, when it matters THE MOST as early compounding means that the money pile at the end is much bigger,

Source:

1. http://www.spdrs.com.sg/etf/fund/fund_detail_STTF.html as at 16 Jul 2014 at 9.05%

Putting ‘Rocket Boosters’ to CPF

noreply@blogger.com (Lemizeraq) — Thu, 29 May 2014 13:56:00 +0000

There has been a lot of consternation and anger about the CPF scheme and the minimum sum recently.

While the CPF scheme in general works well, it is perhaps a little too conservative and benefits the government of the day rather than the general public in terms of the benefits gained from investments using the CPF monies.

This does allow the government the benefit of spending this money as it sees fit and helps fund infrastructure developments, social programmes, education and others.

I will argue that it is better to put it into the hands of the general public. At least a portion of it. A bit of a half-measure.

I propose a rather drastic amendment to the CPF scheme.

Let me explain further.

1. For the first few years of one’s working life, the entire CPF contribution of 36% should go to one account, let us call it OA-R (as it Ordinary Account- Retirement/Rocket Booster or OAR for short). And this account earns 3.5% (the present rate of 2.5% with 1% for amounts up till $60,000 in either OA or SA currently)

2. After this account reaches $21,000 (which should be about 4 years if you earn $1,100 or 3 years if you earn $1,500), this amount is transferred to an account that invests in an index fund like STI (or a mix of STI and S&P 500 or a mix of some other index funds/ETFs). The benefits of index funds/ETFs are the low cost and annual fees, which means that this $21,000 works harder for you in what Albert Einstein termed as the 8th Wonder of the World- the magic of compounding.

3. Assuming this person who reached this $21,000 milestone is now 28 years old (earning $1500 a month), and this entire amount of $21,000 is kept in the index fund with dividends reinvested, when he or she reaches 65 years old, this is what this $21,000 will look like under the different investment return rates:

Rate of Return	Amt @ 65 years old
3.50%	$74,576.93
4.50%	$107,834.97
5.50%	$155,876.93
6.50%	$225,253.40
7.50%	$325,408.14
8.50%	$469,951.68
9.50%	$678,493.95

4. As the STI returned about 8.5% for the past 10 years while a literature search of any good financial books will tell you, the returns from stock investment in the whole of the stock market can be pretty decent, so a range of 6.5% to 7.5% is doable. After all, didn’t Temasek Holdings and GIC claimed to have investment returns in excess of 10% over many years? The interesting thing here is that anything above a 5.5% return will have met the minimum sum. And that is with just the first $21,000. After investing this $21,000, the CPF reverts to the current model. For the purpose of comparison, the current 3.5% and 4.5% is illustrated here to show the returns possible even with current rates earned through CPF.

5. So assuming that we take the amount when you reached 65 years of age and invest the amount in an annuity. And now this annuity has more bonds, let’s say 80% government bonds and 20% equities(ie index funds) for a conservative return of 3.5% for each of the rows in the table in point 3 for 20 years till the age of 85. What will be the monthly amount a retiree will get?

Rate of Return	Mthly Payout
3.5%	$432.52
4.5%	$625.40
5.5%	$904.02
6.5%	$1,306.38
7.5%	$1,887.24
8.5%	$2,725.53
9.5%	$3,934.99

Now that monthly payment doesn’t look too shabby right? And this is just with $21,000 invested when you are 28 years old.

6. So after the age of 28 years old, the CPF reverts to its original form with different amounts going to OA, SA and Medisave for the respective needs.

7. There could be people arguing that one will need medical insurance in case something should happen between the years when you are 25 to 28 years old.

i. There could be an alternative where the current 29% goes to this OAR account and 7% to the Medisave while the young person saves a while more to hit the $21,000.

ii. There could be also be people arguing that the first initial $21,000 should immediately go into this index fund and roll away the compounding interest earlier.

iii. Also, for illustration, I have kept the transition from investment in index fund to annuity to be a direct one, however, in real life, an annuity like the current one transits from 55 years of age to payout when you reach 65 years of age. However, if the annuity is managed through the government and invested in government bonds, this can be made a seamless transfer of monies between different entities that are linked.

iv. The other downside could be that young people will be wary of buying their first home and delay their marriage. This can be reduced with the existing government grant for buying HDB flats being expanded further or for a scheme whereby CPF loans the initial house loan deposit ( the first 10% or 20%) on top of the HDB or bank loan. After which the person pays back both the intial loan and the HDB/bank loan.

8. The government still get to benefit from the CPF amounts invested after a person hits the $21k mark with funding still available for excess returns after paying off the government securities used to pay off the CPF interest rates for the public.

9. People still get to pay houses using their CPF OA account after they have prepared for their retirement using the first $21,000. And their risks are hedged as they will still accumulate SA amount after they are 28 years old which will be additional money for their retirement.

10. This may even allow more flexibility to how SA account can be used, for example, appeals through their Members of Parliament for partial amounts in the SA account to be used in the cases of long term unemployment, sickness in family etc as OAR is already being set aside for retirement.

11. The government still have money from investment returns from reserves to fund all the programmes that they feel is needed. In fact, by keeping 80% of the annuities in government bonds, the money there could replace that of the $21,000 OAR invested in index funds.

12. And more importantly, the people don’t have to worry about ever fulfilling the ‘minimum’ sum or retirement, while their retirement is more assured as the risks of managing the retirement is spread between the private index funds and public linked bodies which manage the reserves in the government, namely the MAS,GIC and Temasek Holdings.

13. Thus, we can consign the word “minimum sum” to history.

What do you think?

Why Don't We Get 8.4% on Our CPF?

noreply@blogger.com (Lemizeraq) — Wed, 26 Mar 2014 14:00:00 +0000

Read this article from Motley Fool about the Straits Times Index EFTs getting an annualised 8.4% over the past 10 years.

While our CPF ordinary account is getting a miserly 2.5% that is getting beat by inflation.

Although we can invest amounts above $20,000 in the CPF ordinary account into approved stocks and unit trust, this rule puts a damper on everyone's CPF accounts, especially those who are starting to work, or those whose pay is low and those who are not investment inclined.

More important is the fact that just the average dividends given by the STI ETF alone will have beat the 2.5% given by the CPF.

The reply by our government that the interest rate is low because our currency is strong is pure hogwash. If you are using the CPF funds to invest all over the world and boasting that you are getting investment returns that is on par or beat that of Warren Buffett's Berkshire Hathaway, that explanation is laughable.

So why not just put all the CPF funds into STI ETFs, get dividends higher than 2.5%, have a more than even chance of getting capital returns with dividend as high as the 8.4% achieve over the last 10 years?

At one stroke, everyone with CPF account is better off, you don't need to hire all those money managers to try to beat the market, avoid fiascos like buying Citibank, Merrill Lynch and dumping their stocks at a huge multi-billion losses.

This is one example of the nanny state trying to be too clever.

Warren Buffett Ideas on Retirement Investment

noreply@blogger.com (Lemizeraq) — Thu, 20 Mar 2014 13:30:00 +0000

Read this article in Yahoo Finance about Warren Buffett's guide to retirement investment.

This was said during his annual letter to the shareholders of Berkshire Hathaway which is becoming something that people in the finance industry takes note of.

It was even collated to form the basis of a book on its own. Hard to imagine any other annual report statement by the Chairperson or CEO being made to a book.

Anyway, back to the article, there was four main themes that the article mentioned that relates to retirement investing.

1. Index funds beats stock pickers

2. Domestic funds beats foreign funds

3. Stocks beats bonds

4. Short term bonds beats long term.

While I tend to agree with all of the above, I believe that even Warren Buffett hedges his bets, for example, he would buy foreign stocks too, even from China. So I'd want to buy foreign index funds to hedge. So I have both S&P500 and STI index funds and dollar average both.

And for him, he doesn't invest in index funds, because he is the best stock picker there is for the last 40-50 years.

So this describes what he views the rest of us should do and what he wants the trustee of his will to do for his wife.

Simple advise that all of us will do well to follow.

Which Stock Markets Are Cheap Now?

noreply@blogger.com (Lemizeraq) — Thu, 27 Feb 2014 12:50:00 +0000

If you take a look at the Financial Times data which list the PE ratios of the stock markets around the world, you will see that the major markets are relatively cheap compared to say the historical PE ratios which averages around 20.

The major surprise for me is that the Chinese stock markets have fallen to such depths. I remember that they were trending above 30+ just about 2 years ago. Now they are below 10. While Singapore is in the low 10s, indicating that there is room for the market to move up based on historical trends.

I don't look at PE ratios very often, but it provides a good way to gauge if markets are expensive or cheap now.

Time to look at getting into those markets that are undervalued now.

ETFs for the US, Chinese or Singapore stock market anyone?

Financial Scam and The Simple Con

noreply@blogger.com (Lemizeraq) — Tue, 03 Sep 2013 13:30:00 +0000

Mr Tan Kin Lian shared on his blog about victims who have approached him for help with regards to being cheated by con artist.

The victims are afraid of telling their loved ones as money is involved and suffer in silence as their spouse may not be forgiving that they have lost hard earned money.

He asked that the authorities take action on these scammers who will change their guise and companies/products but use the same method to prey on the those who are gullible.

While we think that we live in the information age and that these types of scams and con artists should not be able to survive, the fact is that some of these scammers are highly intelligent and they find different ways to appeal to your greed.

Naming the companies or them may stop the scams for a while, but the better solution is heavier punitive action on those whose product is out to cheat and those schemes that are outright scams. Education of people in financial literacy and basic common sense for financial products can help too.

Bernie Madoff operated his scam lasting decades and lost more money that most people can earn in their life time x 100. the estimated size of fraud is $64.8 billion. He was put to jail for 150 years when his scheme was exposed as the financial markets tottered on the brink of an abyss.

What are the signs that it is a fraud?

1. Promise of a high return with low risk. Anyone promising sky high returns and low risk to you and asking for your investment is likely to be a fraud. The best investor in the world may get 15-18% per annum over more than 30 years, but anyone who promise more than 10% returns is likely to be a scam artist.

2. The method is a trade secret. You can make 10% guaranteed, but if I tell you how it is made, it is either too complex for you to understand or it’s a trade secret, if I tell you, I’d have to shoot you.

3. It’s too good to be true. If it sounds wonderful, it is probably too good to be true. True investment is a roller coaster ride, there are ups and downs. So if it is guaranteed, secret and everyone is investing in it, steer clear.

4. There is no external audit or custodian of your assets. If the product is not audited, and the assets/product that you get does not have an external, independent and preferably large financial institution as a custodian, run far far away.

The best way to invest is directly in the stock market.

Buy the whole market if you can which you could actually by buying the index like the ETFs for Straits Times or S&P500 and the only thing to look for is low cost.

The logic behind the market is out there everyday when the companies are making products, doing a service and earning profits or if they don’t do well, losses.

They are audited (which sometimes, doesn’t prove anything if you look at Enron and Lehman Brothers), your assets are in custody (shares parked at CDP even though you buy with a securities firm) and you know how the company is doing through its annual reports.

What is good to buy in the stock market?

noreply@blogger.com (Lemizeraq) — Wed, 28 Aug 2013 13:21:00 +0000

It is like going to the supermarket and asking what to stock up on.

You end up buying things you don’t need at a higher price than if you have done some basic homework to find out what are the prices of some of the items like.

The same applies for the stock market if not more so.

It is a lot more expensive to buy something in the stock market for one.

Also, it is amazing how people can scrimp and try to save a few cents on purchase in the supermarket and haggle over prices but when it comes to the stock market, buy at high prices and then sell at a loss later.

If you are in the stock market for long enough, you will make mistakes and get lemons among those stocks that you buy. But you want to get more multi baggers (stocks that return multiple times more than your purchase price, like a 200% increase) than lemons.

So what are good buys?

A checklist/guide of sorts may be useful.

In no order, these are good companies’ characteristics to look out for to add to your portfolio if they have a lot or all of these characteristics.

Companies that

sell below their book value because of negative news
have a long history of paying good dividends (these are stocks that you can retire with which will pay you money every year)
have good cash flow/ cash on hand
are price setters (ie they are monopolies and the buyers have to take their prices and still stay with them)
have increasing sales/ decreasing costs, ie profitability
are not on an acquisition binge and buying companies left, right and centre, as this will mean murky accounting and costing later
are buying their own stocks back
are different from the companies you have in your portfolio
you can understand what their business is, better yet if you can participate and see, ie going to Suntec to see if their properties are all rented out, and whether there are crowds there before deciding to get the Suntec REIT.
have good financial ratios (which you can quickly grasp with a Dummy’s guide or just google it) comparable or better than their competitors in the same field. Good stock websites like POEMS even calculate them for you so that you don’t have to have a degree in Accountancy or CPA to do the math.

So what are you buying and what have you bought?

Your credit cards determines your housing loan

noreply@blogger.com (Lemizeraq) — Tue, 27 Aug 2013 13:18:00 +0000

We submitted our documents for housing loan to one of the bank on the Sunday after we bought the executive condo, Lush Acres. One of the documents, the latest payslips, were submitted on the Monday as we could only get access to it in office. However, we had submitted our earlier payslips all on Sunday.

How long did the approval process take?

To our surprise, by Thursday late afternoon, in just 4 working days later, I had a call from my banker who told me that our loan was approved.

I asked her if the fact that we had an approval in principle with two other banks prior to getting our EC played a part in the fast approval. She said that it doesn’t and that all banks have different processes which does not care if other banks have or have not granted the loans in principle or otherwise.

So how does the bank determine who to loan?

One method that banks use is the Credit Bureau of Singapore(CBS). The CBS was set up by the Association of Banks in Singapore (ABS) to manage credit risk. It collates the credit cards, the loans that you have to calculate a credit score.

The scary (or wonderful, if you are the banks) part of it is that all banks return your credit history to this central repository. So if you are one of those that are slack in repaying the credit card bill and allow it to go 1 month past due, this blemish on your record is there for at least a year.

Then you are graded from HH to AA in your credit worthiness. They also even assign you a credit default risk and how likely you are to default on your loan and credit card payments.

And all the credit card applications, loan applications are logged, so that if you have many applications, it could cause your credit score to go down.

For the banks, it gives them a safer way to decide if they want to give you the credit facility, the credit card and a big sum of money for the housing loan.

Being a nosy parker, I went to check my credit worthiness a few times before, but both times it failed at processing. For some reason, today was alright and I managed to see my credit rating was a commendable AA.

I found that they even tracked if you have made full payment for the month for the past 12 cycle. And also if you have made a balance transfer of your credit balance you owe the bank to another bank or credit line.

It is just $6 and GST, which means $6.42 to check.

So that was why my banker said that some of her clients have really a lot of credit cards, so I guess for them, it takes a while for the bank to check and come up with their home loan approval.

The total personal loans/credit facility, car loans and even minimum payment for your credit card goes to the calculation for the Total Debt Servicing Ratio (TDSR) which is pegged at 60% so this determines how much the banks can lend for the housing loan.

So the more credit cards you have, the lower the bank can lend for the housing loan especially if you are also saddled with a car loan.

If you are going to apply for a housing loan or buying a house or car, it will be a good thing to check all this on your credit score before you commit yourself.

The Search for a Bank Loan and Lawyer

noreply@blogger.com (Lemizeraq) — Fri, 23 Aug 2013 13:20:00 +0000

With the property purchased, there comes the search for a bank loan with good rates and a lawyer that will not muck it up and follow through with the dates set by the developer.

My long time friend from secondary school days who had bought an EC in 2004 had asked me then to buy one together with him and his colleague back then. But I had reservations about my ability to finance the purchase then and the financial burden it will have on my and my wife. Those reservations have eased somewhat, so that is why we committed to buy now.

I had asked him about what bank he took his loan from and he asked about my purchase price and which EC i bought. I guess it is a tribute to the length of our friendship that he did not once said “I told you so” to buy EC then and now the prices have almost doubled.

Now that I am clearer about what type of loan and what we should do after TOP, we know that we should look for a bank that offers fixed rates after TOP to that we can have some sort of protection against rising interest rates. Which my good friend is already protected by as his loan is on fixed rates.

So we consider a few and decided to take up ANZ in the end. There may be better initial rates, but we are more concerned that the +0.95% will last for the entire duration of the loan. Even if we should decide not to take up the fixed loan in the end.

The search for a law firm to represent us was more straightforward as there was a law firm representative there at the show flat and after a search online to check if there was any negative reviews about them turn up nothing, we were reassured and decided to use them as their services for the price quote was nett and included all the fees.

The bank was super fast and was ready with the bank offer in four working days. Guess that us having our credit card with them and our AIP process earlier with other banks may have hasten the approval process.

The funds that we needed for the 5% and 15% were earmarked by us selling our unit trust and shares over the May and June period almost three months earlier. Our CPF funds may not be able to pay the entire 15% as we are still servicing our HDB loan so we will have to foot cash for part of the 15% and also for the stamp fees and the legal fees.

However, as mentioned in earlier post, our remaining investments remains on track for our retirement target.

In fact, without our earlier investments using CPF and cash, it is doubtful that we will even be in the position to consider buying an EC. We are definitely not highly paid or even in the bracket of the upper middle income. So for us, investing has made it possible for us to be able to buy this EC.

Why buy the EC Lush Acres?

noreply@blogger.com (Lemizeraq) — Mon, 19 Aug 2013 14:26:00 +0000

Besides the financial calculations in deciding to buy the property at near the peak if not the peak of the property market, we thought that the development was located at a good place for our toddler to grow up in when it is completed in the year 2016.

The location is near to the Sengkang park connector, the Sengkang west park where we heard that kite flying is popular. It is also near to basic amenities like supermarket, a newly build mall that is within walking distance to be completed before the property goes to TOP.

At the same time, we also considered the fact that the Sengkang location is serviced by school buses which travels to the primary school that we are considering enrolling our kid in. So that was a prime consideration.

Through reading online on the discussion at Hardware zone on the pluses and minuses of the new development and from blogs like that of property agent Ong Poh Lin and H88, one can get a better view of what some of the more thoughtful people in the property market think about it. The CDL website also has good details on the development.

There is a lot of comments, reviews that will be useful in your decision making process.

Of course, sometimes you could fall into a trap of being too caught up by it and blinded to the negatives.

There are downsides to getting this as we are in a quite a convenient location being within a leisurely 7 minute walk to the Serangoon MRT and the NEX with the transport hub of a bus interchange, the NEL and Circle line. This was exchanged for a location that is serviced only by LRT which is within a 5 minute walk when the station north of the Lush Acres opens.

Also, our current flat is near to my parents place. However, this is exchanged by the fact that we are near to where my younger brother will be moving to the same area and this may be more convenient later if my parents were to take care of both set of kids.

Then the fact that the developer for Lush Acres is CDL and the design and layout of the property and interiors appealed to us more compared to the other property that we also considered in Punggol, the Ecopolitan.

The price of the units in comparison for the stacks that we were considering were more reasonable in Lush Acres compared to Ecopolitan, for example, one stack facing the TPE was more expensive than the one facing the Twin Waterfalls, but another stack of another room type facing the TPE was less expensive than the one facing the Twin Waterfalls, which was illogical to me. The CDL prices made more sense, with the units facing inwards and the pool commanding higher premiums compared to the one facing the roads.

The one negative for the development is that there is a petrol station next to the development which i thought that the designer for the development did well to put the tennis court, the changing rooms, the bin centre, plus lots of trees etc next to the petrol station. And there is a lot of trees and greenery in the development. There are trees lining the pool and they even put some trees in the cascading waterfall at the entrance.

Also, the soon to be released ECs in the pipeline have all higher psf land sales prices than the Lush Acres which will mean that the future EC units will all be priced at over $800 psf.

And we are exchanging a flat which has reached one short of 25 years this year for one that is reset to 99 years from 2013.

If you are interested in the development, there is less than 80 units left as 300 has been taken up. So you need to hurry if your are considering an EC. Good luck in getting a unit you want.

Considerations in buying EC in 2013

noreply@blogger.com (Lemizeraq) — Sat, 17 Aug 2013 17:03:00 +0000

My wife and I just bought an EC launched on the 17th of August called for some strange reason, Lush Acres. They must be running out of names to call condos pretty soon. Luckily, it isn’t named something like H2O which is the sister development by the same developer just a stone throw away.

We know that the property market is hot and near its height of frenzy and it has umpteenth round of cooling measure.

We know that the next few years that there will be a bumper release of flats which will be completed and built as well as private condos whose owners can finally sell without the punitive stamp duties imposed as part of the cooling measures.

Also, interest rates are likely to go up soon when the Fed finally weans the US economy off its long dose of quantitative easing measures of pumping money to a stuttered economy still bruised by its excessive housing loan binge.

So why did we still take the plunge?

As part of the scenarios exercise, I have done up some calculations of our ability to foot the first 23 percent (including stamp fees, legal fees and what have you), to finance the housing loan up to kinda of nearly doomsday type of interest rates. Also projected sale amounts of what we will get if we were to sell our current HDB flat 3 years hence on the open market. We took a sale figure that is more than 20 percent below current prices.

And we calculated the cash amount we have to foot, on top of using our cpf, in such a worse case scenario based on the maximum price we jointly thought we could afford.

Then for good measure, we estimated the reserves that we will have left after buying the EC, and tallied our best guess of our expenses and income with the EC and the new housing loan to project what could be our retirement kitty come the time we hit the age of our freedom from servitude. It met our target number for retirement.

We sort of had a plan in place. Guess that all the studying for economics, statistics and accounting plus the basic grounding in the financial industry helped with the projections. It made it easier to go in and not have nightmares later on.

Being lined up with a horrible ballot number as the 1017th to choose in a condo development with only 380 units, we thought that our chances will be slim. And what is left would be those out of our tight budget which we are not prepared to deviate from.

Thus we bought the unit we could.

If you need a good property agent, I can recommend you our agent who we thought was professional and good to work with. She’s Wallis from ERA and you can get her contact by emailing me directly at lemizeraq at gmail.com

Weird Ballot Day at Developer Office

noreply@blogger.com (Lemizeraq) — Fri, 26 Jul 2013 15:53:00 +0000

My wife and me went to ballot for a returned unit at a developer’s office today. I took leave and my wife asked her boss to be excused one and a half hour earlier which she will have to pay back the hours.

I had to stay back in office however because a scheduled meeting for a project was to take place. The meeting ran late to nearly two hours and I had to excuse myself and tell the chairperson I needed to run off.

As I was running late, I took a taxi instead of a bus. I met my wife at the MRT station and reached the developer’s office with half an hour to spare before ballot. Our agent arrived before time too and we stepped into the office 15 minutes before ballot time at 5pm.

At this point in time, we thought that we were the only party to the ballot as there was no one.

However, the developer representative there said that there was another party who is on the way. So we waited as we were early.

At 5.10pm or so, the other party arrived. Sort of anyway, as only the agent turned up.

So after waiting for 5 more minutes, the developer representative finally said to start the ballot.

I think you know what happened here. The other party got the ticket and get to buy the returned condo unit.

As we were leaving the conference room where the ballot took place, we heard the agent saying that she did not have the cheque as the client is on the way. Maybe the client was snorkeling at Timbuktu and on his way.

What peeved my wife and me was that they were late by 15 minutes, and they didn’t even have the cheque ready, so doesn’t that disqualify them?

Also, my agent was very professional and stated that if either my wife or myself is not there, we have to sign a proxy form to authorise the other party to sign on the absent party’s behalf.

So being well prepared for all eventualities, I had printed two copies of the proxy form and got my wife to endorse both forms and we kept a copy each authorising the other party to act on the other’s behalf in case for whatever reason we could not make it to the ballot in time.

But we weren’t prepared for what happened today at the developer’s office. I guess it was not meant to be. Our opinion of the developer went down quite a bit after this strange ballot.

Who’s in Your Network?

noreply@blogger.com (Lemizeraq) — Tue, 09 Jul 2013 15:15:00 +0000

I recently wrote back to two different HR people following up on two ex-colleagues who worked with and reported to me in my past job as they were applying for new jobs. It seems that more companies are following up on the referees and references to check about the potential recruits that they are hiring.

Some of them follow up on the telephone, while others prefer a written short report covering areas that they are interested to know more about the incoming recruit.
I hope that I have given a fair and objective reference check and that they land the jobs.

In my past two employment opportunities, I did not seek the job, it actually came to me via people that I know from my previous job. The previous job I landed in was because an ex-colleague recommended me. The current job is because one of the manager in a vendor company who worked with me on a project recommended me.

I read an article which argues that as you become more experienced, it is your contacts and people who have worked with you that helps you progress and land you a new job. So when working, it is important to be professional, not play one party against another and also to lend help when necessary.

I believe in the mantra that you praise publicly and scold privately. The recently retired football manager, Sir Alex Ferguson, is a master of keeping dirty linen private. He can throw teacups and kick soccer boots at people (ask David Beckham) behind closed doors, but in public, he doesn’t slam or put down his own players.

It makes people realise that it is okay to make genuine mistakes and get berated behind closed doors but you don’t get humiliated in public.

In the different jobs that I have done, I think I can count on one hand the number of people that I will really NOT like to work with again. The majority are people that have strengths that overcomes any weaknesses that they may have.

I hope the same applies to me, so that is why some of these people recommended me when they have a position vacant.

It is these contacts that you make in your career that is more important, I think, than the salary that you are earning.

So go update your Linkedin to make sure that you have all your colleagues, friends and acquaintances that you have made in your job linked to your profile as you never know if one of them will give you an offer you cannot refuse.

Are you buying property near the peak?

noreply@blogger.com (Lemizeraq) — Thu, 04 Jul 2013 13:26:00 +0000

Read an article, What total debt servicing ratio meant to kill, commenting on the new property measures by the government recently to cool down the market and make sure that individuals do not over commit to property on Yahoo! news recently.

From there, went to read the author’s blog posts and found it illuminating as it seems that the author is still young but has already bought four properties. In her posts, one can draw the conclusion that she thinks that the property market is near its peak and is poised to go down soon.

Her blog posts about property is worth reading and gives the reader a lot of thinking to do about what her key thoughts about the property market.

I had been selling my shares and unit trusts furiously over the past couple of weeks. Think the stocks that my wife and me have is down to about 6 or 7 stocks that is making money and we have closed some of the loss making counters with those that have profits. This is in preparation for buying a condominium (that’s a condo by the way).

My good friend bought his condo for less than half a million at $440,000 nine years ago which is worth at least a million now I think. With the prices of property reaching all time high, this could be the peak of the market like 1996 was for some of those who bought property at the time.

My wife and I have been thinking of getting a condo and raising money for the purchase. There are two that we have been looking at which we may want to consider buying.

However, I’ve been doing the calculations and we have an upper limit to what we will consider and also be comfortably be able to pay off the housing loan. Plus have enough reserves to be on target to retire and continue with our investments. No need and no urge to keep up with the Jones if it is out of budget.

Have been kept up to date with all the machinations that is happening in US with the Federal Reserve that is thinking of taking away their money printing machine (what is termed as the bond buying/quantitative easing) and putting it away sometime next year. That will mean interest rates will increase which will translate to falling property prices in Singapore as we are linked very much to it.

While the prices of condo have increased in the years, inflation has also kept up so we should also accept that the property prices will have increased.

If the prices of the two condos that are being launched are beyond our budgeted price for the size that we are looking for, we are prepared to walk away and not buy.

After all, we are living in a pretty good location near to Serangoon NEX within 5 minutes of the MRT here with two MRT lines (NEL and Circle line) plus the fact that if we moved, it will to be a property with a smaller area.

Decisions, decisions, decisions.

Are you also thinking of buying property or if you are a property agent, are you advising your clients to buy or not to buy?

Contingency Planning

noreply@blogger.com (Lemizeraq) — Thu, 20 Jun 2013 22:46:00 +0000

Encountered an MRT breakdown in the NEL line yesterday evening. The end result was complete chaos as the bus stops were crowded, buses were jam packed, there was non-existent signs of breakdown, no public address at NEL, no free shuttle bus.

I didn’t wait to find out what happen or for instructions on what to do when there was a crowd of people waiting outside the NEL turnstiles. i immediately headed for the bus stop to take a bus ride home. What took less than 10 minutes ride became a stressful 35 minutes journey on a packed bus in a breakdown induced jam as people drove to pick up their loved ones who were trapped because of the breakdown.

It seems that after numerous breakdowns, the transportation companies are still at a loss about what to do in a breakdown.

I’d like to suggest that they take a leaf out of the Tokyo management of such an event.

I was caught in such a situation while travelling in Japan with my wife. What stood out for me was that the staff were well prepared for such emergencies and the stress of such event was taken out as standby or actual station staff were prepared with free tickets to other train and bus systems to take you to the station or near to where you want to go to.

It is possible if the transportation network is as dense, as duplicated and as complex as the Tokyo network. Their trains are on time, every time and the delay is at most 18 seconds on average unless there is a breakdown or major disaster like an earthquake.

Singapore’s train network while good is far from the world class standards of the Tokyo network.

In the event of a train disruption, I will like to suggest the below, with D being the moment a train or the system is being disrupted.

D+5 min- Driver or staff has tried emergency SOPs to revive or restart the system and train with no success.

i. Company central HQ is informed (if they were yet to know).

ii. Message is sent out for train disruption to all public channels (apps, facebook, radio, tv stations, sms etc). Staff on leave or standby staff are activated to stations affected.

iii. Staff at all stations is informed of the disruption and where it occurs regardless of whether they are the ones affected so that this is made known to all commuters and they can plan for alternate routes.

iv. Signage is place at all turnstiles with the information of the disruption.

v. Standard message is played at all MRT station of the disruption.

vi. Shuttle bus companies are activated by HQ. Buses do not go to every station but from one station to one or two stations along the affected line. The buses loop around and carry on for the opposite direction. This will mean that the queues are dispersed.

vii. Staff at affected stations hands out free tickets for commuters to take alternate routes to destinations.

viii. Taxi companies are activated to send their taxis to pick up stranded commuters and encourage commuters to share the cab for common destinations. Taxi drivers pick up these free tickets to exchange for cash or free rental for the day.

ix. Buses on affected routes are made free for commuters and more buses are channelled to affected routes.

x. Radio and mass media communications advise commuters not to arrange for pick ups from family as this will jam roads. But if they do insist on picking up, to also pick other stranded commuters in exchange for the tickets which can be exchanged for cashcard top up.

xi. Pre appointed areas designated for pick up from free shuttle bus and taxis.

D+30 minutes, the standby staff should have started to arrive to ease the load of the existing staff. Additional tickets for issuance may have to be delivered from HQ to affected stations. If situation is worsened or widespread, more private buses may be activated to cope with the breakdown.

Depending on the number of stations down, the breakdown is coded yellow, orange and red and the level of resources and activation of public resources is levelled for accordingly to the state of breakdown.

Cost for all the above measures to be borne by the transport company who had the breakdown.

The crux will be the free tickets given out which should be valid only for the day of the breakdown and only exchanged for cash card top up or rental for taxis which should go somewhat to prevent people from lining up just to get the free tickets.

If there are redundancies planned to the transit systems like bypass lines for trains to go past stranded trains, alternative transportation lines like what you see for the Tokyo subway, that will also help commuters plan a more roundabout to skirt around the breakdown area. That will also help in easing the transport load that the transport companies are facing too.

Just some thoughts for contingency planning for breakdown.

What is Your Experience with Property Agents

noreply@blogger.com (Lemizeraq) — Wed, 19 Jun 2013 13:59:00 +0000

Had quite an experience with property agent from one company recently.

1. First, the agent was late for 20 minutes.

2. Then the other agent who was with her who sounded more senior told me that one of the selling point of EC is that the 5 years Minimum Occupation Period (MOP) starts from the time you place the deposit unlike for new HDB flats.

3. The property is near the expressway but the agent brushed off the fear of noise from expressway saying that the property is 100m away from the expressway.

4. I asked about getting bulk discount for introducing my wife’s colleague on the condition that both buys and get units there. The agent brushed it off saying that the commission they get is 0.03% (which translates to $210 for a property worth $700,000). I bought a flat 9 years ago paying 2% commission for my agent who pocketed about $6,000 for a few days worth of work. She said that i will get a token of appreciation. Maybe a stuffed ‘Hello Kitty’?

You mean after a few years of property market booming, the property agent fees has declined so much?

Because of the whole experience, my wife and I will probably not go for the EC despite the homework that we have done to check the background of the information for the development.

I went to read about the details of what is needed for EC transaction, Googled the property to check the location vis-a-vis the property and found that there is a slip road in between the expressway and the development, plus the fact that there is a large embankment and the expressway is below this, which will go some way to minimise the noise.

I even read a academic paper by someone who went to measure the noise level at different heights of a HDB flat next to two different expressway to find out the conditions at which the noise from expressway affects the decibels level at different levels and at different times of the day.

All the basic things which a property agent should have done proper homework on? Or am I an ass for expecting basic correct information and the plain truth plus common sense.

A Professional Relationship Manager at DBS Raffles Place

noreply@blogger.com (Lemizeraq) — Thu, 06 Jun 2013 13:07:00 +0000

My wife and me went to 2 banks, 1 brokerage and 1 insurance firm to sell off our unit trusts and index fund on Tuesday afternoon.

We went to OCBC which was quick and professional and the whole episode took less than 10 minutes including waiting time. That was how fast it was. There was no question asked and no sales pitch to buy something else or invest in another product.

The brokerage firm didn’t know how to liquidate the funds, which was funny considering we bought it from them. So we ended up waiting for about 15 minutes while the staff went about looking for answers. In the end, he called the insurance broker and directed us there to sell the funds. So we went there and it took us again, about 10 minutes plus to sell off everything.

In between the two experiences, we went to the Raffles Place DBS branch and waited for while a quite to meet the DBS bank relationship manager. About 20 minutes in fact just for one customer to finish his business with the bank.

And we found out just why it took a while to do business there.

The relationship manager there is a Ms Valerie Wee who patiently explained how much the funds were selling now, how many units there were and when the money from the funds could expect to be banked into my wife’s account. Along the way, she heard us conversing in Mandarin so she switched language to explain to us in Mandarin.

In the end, as she was patient and friendly throughout the experience, we actually blurted out that we were liquidating our investments because we are looking at buying a new home.

However, as we did not place the downpayment yet, we did not need the loan yet.

And my wife and me went through quite a telling experience trying to obtain an approval in principle from a few different banks last Saturday. From the downright plain rude experience in both Standard Chartered bank and OCBC to a pleasant one at Maybank and UOB. The UOB mortgage officer bothered to call back to contact us on Monday although she was not around that Saturday afternoon.

Valerie told us that the DBS approval in principle last for one week like UOB and explained to us the different loans available from the bank as the property we were looking at is being constructed and not yet completed. She also calculated the ball park figure that we could look at based on our joint income and age.

Valerie attended to our queries with patience even though the sum total of our visit to her yielded nothing for her in commissions as we were selling the funds. The pressure of getting commissions and sales targets can make these visits to relationship managers quite a pain.

She was so professional and friendly throughout that my wife stated that we should do up our mortgage with her if we really bought the property. Ehm, even without looking at interest rates?

But then, that is how being friendly and professional can win you more clients and bouquets.

So if we ever needed financial advice and the next mortgage, we know who to go for help.

10 Reasons Investing is like playing Candy Crush

noreply@blogger.com (Lemizeraq) — Fri, 17 May 2013 13:14:00 +0000

1. The rush from clearing each level is like when your investment amount increases after some time.

2. You need some logic to do both well.

3. As well as some luck.

4. You need some willpower to finish both as evident by the amount of friends that have given up along the way for Candy Crush and the people that quit investment after losing lots of money. ( I’d probably quit playing Candy Crush after a while too, hopefully this is not my own famous last words that I’ve to end up eating them. Most online games are not sustainable and dies off after a while, at least for all those I’ve played so far.)

5. You have some levels you do well and end up in the top 3 while some levels, you are scraping at the bottom to just clear the level. In investing, it is the same, you win some, others you just lose. You hope that investing, you win a lot more than those you lose.

6. At some levels, you just want to give up. Some investment do that to you too, especially if they have been continuously in the red.

7. If you are serious about both, you need to consider what happens when you execute your next step.Uhm, it’s hard to be serious about Candy Crush though. Seriously.

8. Always have reserves. Savings for investment and more lives for Candy Crush by sending it to friends playing it actively without them asking preferably.

9. You are always looking over the shoulders at who’s doing it better.

10. You need time to do it well.

Are you prepared for retirement?

noreply@blogger.com (Lemizeraq) — Mon, 22 Apr 2013 13:53:00 +0000

Read an article on Yahoo Singapore this evening about the people needing to prepare more for retirement as the retirees are living longer with better healthcare and lifestyles.

According to the article reposted from Bloomberg, “Longest retirements fuel pressure for remodel”, Singaporean retirees are living longer like in most places in the world and this causes stress for the retirees as they probably had not saved enough for this.

In the same article, there is a quoted survey by Friends Provident International of 556 people who had at least $80,000 to invest found that only about 57% felt that they are saving enough for their retirement. I went to look at the survey that they provided and there were some interesting things there too like some felt that they need at least $800,000 for retirement while others have figures of $2.5 million.

Being a bit of a busybody, i went to Google Friends Provident International, read a bit of their website and went to one of their funds that they advertise and suffice to say that i baulked at the fees that they are charging for their investment advice. This high fees charged besides other things is also mentioned at this website by Andrew Hallam that was part of the first page of the Google search results that I found.

The one thing you can control in investment is fees.

High fees are not indicative of expert knowledge. Nor do they indicate that there is a modicum of safety or stability in the high fees charged.

Back to the topic of being prepared for retirement, I will say that quite a lot of people think that investment is hard. It isn’t, but it is not that easy either. In fact, I’d say that it takes more willpower than IQ.

In my second job working for a bank’s call centre, I remembered the trainer who showed us a newspaper clipping about a clerk who invested a fixed monthly sum to her Singapore unit trust fund. She retired as a millionaire.

All you need to do is to spend less than you earn each month (some months may be a bit of a challenge, what with insurance dues, credit card payments etc, but the key is that you have to spend less than you earn).

So no car, no LV bags, no Tag Heur watches, no frivolous expenses.

The author of the book, “The millionaire Next Door”, found firemen, teachers as people who managed to find themselves with a million. So there isn’t an excuse for not being prepared for retirement.

It’d be helpful if you can actually save a million, but that is doubtful unless you are earning millions each year. So for us mere mortals, we have to invest.

My abiding faith in the power of investment is because i was a beneficiary in that too as my father’s investment in stocks and shares all through his life was key to his being able to send me overseas for my university studies.

So I bought stocks and IPOs in my very first job right from the first year.

I’ve stopped making stock purchases in the past two years as my baby boy came along with my busy job and a master’s course (funded this time by the stock purchases I’ve made). But i have two monthly dollar cost averaging plans that are moving along without any input from me. And I plan to start again pretty soon, China looks inviting as it has fallen to below 10x in its PE ratio from sky high levels just about a year ago or so.

Meanwhile, time to relook at my estimates for how much we need for retirement based on the Bloomberg news article and Singapore’s new high levels of inflation.

Source:
1. Bloomberg article: http://www.bloomberg.com/news/2013-04-18/world-s-longest-retirements-fuel-pressure-for-singapore-remodel.html
2. Friends Provident International survey: http://www.fpinternational.com/common/layouts/subSectionLayout.jhtml?pageId=fpint/SitePageSimple%3Ainvestor_attitudes#
3. http://andrewhallam.com/2011/04/weve-just-been-scammed-by-friends-provident-so-what-now/

Spending and Expenses- Taking Stock in March

noreply@blogger.com (Lemizeraq) — Fri, 22 Mar 2013 13:30:00 +0000

For the past three years, I have had a busy job that zapped my energy that all I wanted when I reached home was to rest and not do much. On top of that, I am taking a part time master program and one and a half year ago, my little kid came to the world.

So investing and the blog took a back seat as I did not have the time or the energy to put as much effort into it.

With a new job, there are new things to learn and the handphone isn’t ringing off the hook and I don’t have to run around to meet clients or suppliers. So there is time to recharge and take stock.

Through much of that which had happened, the investment income my wife and me have has gone to a higher level and we have enjoyed the dividends that came into our savings account which was sucked into expenses as a baby isn’t cheap in Singapore’s context.

We tried to save money when we could, buying 15 tins of milk power at one go as it was on offer. People were pointing and staring , but we didn’t care. We bought them late last year and my baby just finished eating the last 15th tin no long ago. We finally have a 32 inch LCD TV, courtesy of my parents who got a gleaming 39 inch LED TV free. Sure, there are scratches and it looks bulky for an LCD but it works. We could have bought one for sure, but my spouse will refuse as our CRT TV in the living room still works perfectly more than 7 years later. So it still takes pride of place in the living room as it works better than the LCD anyway which cannot be viewed clearly from the sides. So the LCD went to the bedroom.

The point is that in order to have enough to invest, your salary has to be more than your expenses.

So no frivolous and unnecessary spending.

No car, no LV handbag, no ibook (but an ipad, as the little one magically stays still during feeding session when one appears) etc.

We could afford them (at least I think so, but my wife thinks not and you must always agree if you want your ears to be free), but rather have that in OCBC shares, Berkshire shares, REITS, ETFs, index fund etc.

So we go on the daily ritual to squeeze with the rest of the Singapore population and much of the rest of the world on the MRT and buses. When it is less crowded, you can play Sugar Crush, read the free daily, read news on your handphone or do emails.

My wife prefers looking at photos of the little one, but sometimes, all you see is the back of another person’s head or armpit, depending on your relative heights.

Thanks to the new job, my aim for this month for me is to convert more of my CPF money to pay for the housing loan, so that we can free up more cash for investment.

More Money For Investment

noreply@blogger.com (Lemizeraq) — Thu, 07 Mar 2013 00:33:00 +0000

One of the best way to increase your investment is to have more money to make your investment increase.

If you have an alternative source of income, an increase in your pay, or dividends come in, you can substantially increase your investment.

It sounds simple or common sense, but we are always looking at investment returns and not enough on making more to help increase this return.

For me, I had taken on giving tuition, writing an assessment book with ex-colleagues, giving investment lectures to increase the side income. Also writing this blog, although the income from this is minimal and more coffee money than anything.

However, all of these stopped with the birth of my child one and a half years ago. I just changed job two weeks ago after being in a stressful one managing a multi million project. There was a substantial increase in pay although my job title sounds less prestigious now than before.

The more comforting thing was that I was given a raise in pay even though I had not been more than one week on the job as there was an organisation wide adjustment in pay. It applied to me even with less than one week's worth of work.

It made losing more than two months plus of bonuses more palatable when I forgo that which my ex-colleagues will take this month. And the thing is that this increment is actually worth more than I had in my previous job. I had stayed in my ex company for two and a half years.

It gives a sense of perspective to changing your job for better prospects. Then again, without the pressures and achievements from my prevoius job plus the contacts made I may not have landed this job.

Both my last two jobs were referrals from ex colleagues or contacts made in the course of my job. It makes perfect sense to be professionally and conduct yourself ethically always as you never know whether your subcontractor or supplier or business contact may end up offering you a job.

What about you? Have you made anything to cause your investment made to increase?

Did You Get A Good Dividend Last Year?

noreply@blogger.com (Lemizeraq) — Wed, 16 Jan 2013 08:53:00 +0000

Got the dividend statement from CDP last month and it was as usual great to read the amount you get being put to your bank account.

This dividend collected over time can be your own multiplier to increase your net worth. Imagine 3% to 8% you get from all the dividends which you reinvest. If you have $100,000 in investment, that is $3000 to $4000 in extra income each year. This can go towards your investment to roll it forward.

Each $100,000 making $3000 to $8000 can mean that if you have a million, you can retire and just live off your dividends. It is said that the first 10,000 in investment is the most difficult, followed by the first 100,000 and the first 1,000,000.

Have you made the first step towards financial freedom by taking the first step towards making an investment?

Have You Experienced Credit Card Fraud?

noreply@blogger.com (Lemizeraq) — Wed, 17 Oct 2012 13:51:00 +0000

Saw an interesting article from Channelnewsasia about 1 in 4 Singaporeans experiencing credit card fraud.

According to the article, 23% experienced some form of credit card fraud in the past 5 years.

That is a rather large number.

From my experience, when you have an overseas transaction or large transaction, the credit card company will normally send you an SMS to alert you on the transaction.

So if it is no authorised, then you can just call the bank to notify them of the illegal transaction.

Also, I remember in the days when SMS were not so popular yet, they will also bother to call you if you have overseas transaction. So there are some safeguards for these credit card transactions.

At the same time, the banks have introduced measures like having your photos on the credit card so that this will make it harder for unauthorised persons to use your card illegally.

However, this requires that the person taking your credit card, be it a waiter or cashier, and using it to process the payment check against the signature or against the photo. I had once received a credit card and forgot to sign it. The first few retail transaction went through but there was an alert cashier who pointed out and told me that the card is not signed, so she cannot accept the card.

The onus is also on the credit card user to be careful of when and how you use the credit card. When you use it for online transactions, do you check that the page is secure? Is it encrypted so that it protects your credit card details better? Is it a reputable merchant?