kidsRich

Road Map to Financial Freedom

noreply@blogger.com (PanzerGrenadier) — Sat, 06 Jun 2009 02:36:00 +0000

Dear friends

I’ve completed writing my next book, Panzer’s Road Map to Financial Freedom and am pleased to pre-launch it here for a limited period (until end of June 2009 at the price of SGD 18.95!).

The concise 28 page book provides value that includes:

Simplifying your financial life by using Panzer’s 5 step approach to helping you achieve financial freedom
Saving you money
from using the value-packed Excel worksheet to manage your cash holdings
Clarifying your goal of achieving financial freedom
Motivating you towards being in control of your finances and your life

On top of the benefits listed above, I’ll be supporting those who invest in Panzer’s Road Map with Six months of email support in terms of questions, queries and tips on how you can develop your own unique strategies towards your own version of financial freedom.

The price of all these is only S$18.95 (less than two movie tickets)!

I guarantee that you will immediately save more than $18.95 if you practice at least one of the techniques in this book.

I look forward to seeing you be equipped with the tools to drive yourself towards your very own financial freedom by buying it now.

Are you spending too much on toys for your children?

noreply@blogger.com (PanzerGrenadier) — Mon, 21 Jul 2008 01:43:00 +0000

Image by 4-6 via FlickrEvery child is precious
Children are becoming a precious commodity in Singapore as the fertility rate has dipped below the replacement level of 2.1 for many years.

Small families of 1-2 children are becoming quite common due to increasing educational levels, attitudinal changes towards family size and in some respects, the dollars and cents of having children.

As a result, many parents love to dote on their one or two children and buy toys, clothes and all manners of material ways to show their love for their children.

But are we spending too much on toys and stuff?
I also want to provide the best for my four-month old daughter, and expose her to books and to develop a lifelong love for reading. Instead of spending money on buying new books, I realised that the public libraries provide a wealth of good quality children's books. With a premier membership costing slightly over $20 a year, you can borrow up to 8 books to entertain your child. Your membership allows you to borrow the books for up to 3 weeks.

I remember as a child myself, I didn't have LEGO but shared a set of PLAYMOBIL with my brother and sister and played a lot with the household furniture and simple thing found at home. The most powerful plaything is actually the child's imagination as I often played cowboys, spaceships, fighter planes all using the re-arranged home furniture. Frugal Hacks shares how even simple everyday items presented many opportunities for play in children.

Children need our time and energy. Beyond a certain level of material comfort and well-being, it is really up to parents to be creative to encourage play using whatever resources is available instead of spending money on toys.

It's about quality or play, not quantity!

Can you afford to send your child to university?

noreply@blogger.com (PanzerGrenadier) — Tue, 15 Jul 2008 09:08:00 +0000

Image via Wikipedia

Congratulations! It's a boy/girl!

Parents receive congratulatory messages when your child or children are born into this world. That adorable little boy and girl will soon grow up and help to fulfil their (and maybe YOUR) hopes, dreams and aspirations.

But wait, pause, can you afford to send your child to university when ah-boy turns 21 (after 2 years of full-time national service) or when ah-girl turns 19?

Financial Planning for University Education
Bringing up a child in Singapore is expensive as most parents will attest seeing their hard-earned dollars being spent on doctors' fees, infant formula, groceries and clothing their beloved ah-boy and ah-girl. In order for you to plan for your child's university education, you need to get your finances in order and to save consistently towards a college fund.

How much is enough?

It really depends on whether you want to send junior to one of the local universities or to an overseas one or none at all! The current annual costs of local university are currently (for Singaporean Citizens, Permanent Residents/Non-residents pay more):

Nanyang Technological University (NTU) : $6,360 a year.
National University of Singapore (NUS) : $6,360 to $7,880, $18,230 (Dentistry/Medicine)
Singapore Management University (SMU): $9,130 to $10,050

Note these fees exclude other miscellaneous administrative fees and charges such as examination fees, registration fees, student fees, hostel accommodation, living expenses etc.

Looking ahead, if inflation continues at 7% per annum over the next 18 years, a four year $6,360 / year today for will require $85,958.48 in 18 years time. Assuming you can invest at 3.5% (CPF ordinary account interest at 2.5% + 1% additon) returns, you will have to set aside about $287 a month for the next 18 years to save up for that amount.

Of course, if you have intentions for ah-boy or ah-girl to be a MBBS (i.e. doctor), then he or she would need to go through 5 years of medical school at $18,230 a year or $308,080.83 in 18 years' time. You will need to set aside about $1,026 a month for the next 18 years or else ah-boy or ah-girl will need to borrow or be smart enough to get a scholarship to get funded.

There is a third alternative, that is to avoid University altogether but this is unpalatable to most parents and even for my own parents, even though they didn't go through university themselves, they were prepared to send all their 3 children through it.

As parents, you may not want to consider yet one more possibility, which is to allow ah-boy or ah-girl to self-finance their education by working for a few years and then studying as is the route for a number of polytechnic graduates I know or to basically self-finance by taking up student loans as is the norm for US residents.

At the end of the day, you have to decide based on your own circumstances, situation and ah-boy and ah-girls capability.

So do you think you can afford to send ah-boy or ah-girl to the university in the future?

How to teach your children about money

noreply@blogger.com (PanzerGrenadier) — Wed, 18 Jun 2008 00:43:00 +0000

Image via WikipediaSingapore has one of the world's highest literacy rates in writing, arithmetic and reading (3Rs - reading, 'riting, 'rithmetic), but we also have one of the highest financial illiteracy rates.

Why are most Singaporeans financially illiterate?
Financial literacy in my days of schooling was not taught in any formal way. About 50% of my financial literacy knowledge was gained from getting educated through reading personal financ e books in the public libraries and in the last couple of years through financial blogs and websites. So where does the other 50% of financial literacy come from?

It comes from my parents. :-)

Now that I am a father myself, I realise that besides providing the basic necessities and love for my daughter to thrive in this world. I also need to impart to her financial literacy skills even as I teach her the 3Rs. So how can you as a parent or concerned relative teach your child, nephew, niece or student financial literacy?

You can of course borrow books from the library about financial literacy and personal finance and a good starting point is this article on the MoneySense website which is sponsored by the Monetary Authority of Singapore. I will review their article titled, "Getting Your Kids Started on Money Management."

Summary of Article
The crux of the article is to incalculate good financial habits in your child early. The authors suggest that we let our children know where money comes from, i.e. from working and not "magically" from the ATM which is what my friend's son told him when asked the same question. Savings should also be a habit that we train in our children from young by getting them to set aside their hong-bao (new year red packet) money or unspend allowances into a piggy bank or children's savings accounts. I remember the old POSB Squirrel Savers programme using stamps was a fun way to teach savings using stamps as the "currency".

Other ways in which the article explores how we can teach our children to “save some, invest some, share some and spend some” by setting aside money from allowances for spending, for savings, for investment etc. The article encourages experiential learning, i.e. for the children to learn from interacting with money and seeing it explained in context of groceries shopping etc. as the means to inculcating in them the money sense.

Panzer's Commentary
This article is relatively straightforward and useful about how we can teach our children simple lessons on savings and handling money. However, it does not address a key component which is parents behaviour. Children learn from their parents whether the parents are conscious of it or not. Thus, in order to foster positive money management skills in your child, you have to lead by example. My own financial literacy came from my own parents sense of frugality and especially my mother's focus on simplicity. She believes in living within your means, savings and in NOT keeping up with your neighbours.

Because of her beliefs and more importantly -- actions, she was able to retire comfortably and now is busy with her own activities whilst lending a helping hand in the bringing up of 4 grand-daughters. She never sat me down to teach me Financial Literacy 101 but her own lifestyle habits and behaviour rubbed off onto me even as I have managed to achieve a positive net worth with my residential home fully paid-up before I hit my 40s.

You want the best for your child as a parent. You want to teach them well. You can give them the gift of financial literacy.

Be well and prosper.

Investing in your own financial education for your children

noreply@blogger.com (PanzerGrenadier) — Thu, 20 Mar 2008 03:09:00 +0000

I am currently reading the book, "A Random Walk Down Wall Street" by Burton G. Malkiel and I must say his writing style is relatively easy to follow and very folksy! I've just started on his book and will post a book review when I have completed it.

Investing in your financial education by reading
The reason why I am introducing this book is to emphasise the importance of reading and getting ourselves equipped with the experiences of people who have been there and done that. In order to better prepare ourselves for our investing present and future, we must learn the mistakes of the past vicariously through the recorded experiences of smart players who have survived the investment boom and bust cycles. We can try share with our children the lessons of the economic cycles as well as the need for financial knowledge and skills.

Visit a library now and start reading about investments
When I visit investment forums, there are many people who ask "noob" or newbie questions about investments. That is to be expected as there is a sucker born every minute! I was one of those suckers once too and had my share of losing money. However, if you are serious about developing a realistic roadmap towards financial freedom, you must invest in educating yourself in investments. While the best things in life tend to cost a lot, knowledge can be gained if one is willing to invest time and effort in it. Our tax dollars pay to run the public libraries located conveniently across Singapore and really there is no excuse not to make a trip down during evenings or even weekends to avail ourselves to the wealth of knowledge that resides in the libraries.

Bringing your child down to the public libraries are also a way to start them first with the life-long love for reading and over time, to teach them how to search for information themselves.

The book I am reading comes from the Central Lending Library located along Bras Basah road. You can find this and similar books scattered all over the business or investment sections of the public libraries. Simply wander around the business section, hop on to the online catalogue and search for books on investment or ask the nearest librarian staff for help, they will direct you to where true riches first exist...In your mind as ideas and thoughts supported by a strong desire to grow your financial literacy and education.

Some of the books that you can consider reading include, "The Richest Man in Babylon", "Think and Grow Rich" and "One Up on Wall Street". All of these and more are available in our public libraries.

Financial freedom is a long journey, equip yourself with the ideas of the best brains in the business by spending a couple of hours a week reading. On the train/bus, in the loo, on a lazy weekend morning or just before bed. This small investment in your own personal development will reap rich rewards as you grow in your financial quotient!

Give your children the gift of financial literacy by being equipped first yourself!

Financial Literacy for Kids!

noreply@blogger.com (PanzerGrenadier) — Mon, 17 Mar 2008 07:40:00 +0000

Some of you may know that I taught in the National Library Board's kidsREAD programme that was conducted by the Chinese Development Assistance Council (CDAC) Jurong Student Services Centre in Jurong West. I taught children from low income families aged from six to eight years in reading and literacy skills and to develop in them a life-long love for reading of English books.

Our children are not grounded in financial literacy
My own journey in discovering the path towards financial freedom has led me to one startling discovery! Our children are not grounded in financial literacy!

It is indeed a scary fact that our mainstream education system does not cater to sufficiently develop in our young the capacity for financial literacy. Even as I studied and developed within Singapore's mainstream education system from primary all the way to the University, I never did encounter any lesson that taught me financial literacy. Yes, I studied all the math I needed up to "A" level mathematics "C" as well as did modules in Statistics in the University but no where did I learn about financial literacy except from the school of hard knocks.

I realised through writing this blog "Fivecentstencents" that I am able to express certain ideas about personal finance in a relatively easy-to-follow fashion and would like to develop this skill further by starting another blog called "KidsRich"! Don't worry, this new blog is not about selling "koyok" or "snake-oil" about making children millionnaires by the age of eighteen! It is more about exploring different ways we can teach our children financial literacy in simple exercises and articles that touch on the why, what, who, when and hows of allowing our children to become more financially literate in this globalised world where one needs to not only be equipped with the 3Rs of Reading, wRiting, aRithmetic but also to be grounded in sound financial skills to be able to know the difference between an asset and a liability and to inculcate in the young the spirit of saving.

The power of compound interest
The power of compound interest is possibly one of the most powerful forces in the financial universe. By leveraging on a sound understanding of compound interest, we can give our children a legacy of financial skills and competencies that will allow them to make their own informed financial decisions when they come to the age of majority and when they ultimately have to take responsibility for their financial decisions both good and bad and have the wisdom to discern between what saving, spending and living within their means affects their lives.

Start them young towards financial freedom
Those of you who are parents or uncles and aunts or who come into contact with children. Consider how you are imparting them the skills of financial literacy even as you develop your own financial quotient and understand more about your choices in savings, spending and investing.

We all need to start somewhere, why not start them young on the path towards financial freedom?

Be well and prosper.

Stingy boy!

noreply@blogger.com (PanzerGrenadier) — Mon, 17 Mar 2008 07:00:00 +0000

When I was a child, I was a very stingy child. Stingy in that I would generally save my pocket money and drink tap water and usually didn't buy drinks if I was going out around the neighbourhood cycling. Stingy in not buying a lot of snacks and knick-knacks for myself.

How did I get this thriftiness within me? Was it born inside of me or was it something I learnt along the way as I was growing up?

Modelling after my father
Parents exert one of the most powerful influences on their children consciously or unconsciously. In today's era of active parenting, most parents will do a lot for their children, teaching them to survive in our competitive academic environment, fighting to get their children into the best schools, the best enrichment programmes, the best of everything that they can get their hands on.

When I was growing up, my parents were slightly more hands-off as there were three of us siblings as I was the youngest of the lot. Hence, so long as I kept up my grades and was doing okay in school, they didn't hassle me much and allowed me time to play and be a child. ;-)

However, one thing that did rub off was my father's thriftiness. My father is in some respects the quintessential asian father. Generally, he didn't talk much and performed the role of the disciplinarian in the house as we were afraid to make our father angry but we were not so worried about our mother. However, he was pretty thrifty in not spending a lot of money on clothes and cars and stuff.

Banana Split vs. Single Scoop
I remember once my parents took the whole family to an ice-cream place, where my dad said we could order anything. So my sister and brother ordered big sundaes and banana-splits while I just ordered a scoop of raspberry ripple ice cream. When I saw my siblings having such big ice creams, sibling rivalry took over and I threw a tantrum! My father was a bit miffed and scolded me for throwing the tantrum. I was upset because I knew my father is a thrifty person so in my 7 year old brain then, I thought it would be good if I ordered the most modest ice cream on the menu, and didn't appreciate the fact that he was prepared to treat the whole family that day. However, my experience modelling after my father taught me to take the thrifty choice because it appeared to be the one that he would take.

It is your destiny
This approach to life has stuck with me even as I prepare to embark into the next phase of life, to start my own family. :-) I am still generally thrifty and don't have to think too much. Most decisions are made in terms of cost-effectiveness but I have tempered my stinginess with making choices based on value rather than the cheapest you can get.

I still hardly buy clothes for myself except for the occasional visit to Robinsons for the annual great Singapore Sale and before the Lunar New Year. My most expensive watch that I bought for myself cost all of $109 for a good quality Seiko and generally, my current wallet has been with me for the past 3-4 years. :-)

Some of you might think I live a pathetic life being so stingy with myself but I choose to see it as life choice. To me, it doesn't matter if my watch is a Philip Patek, Tag-Hauer or Casio. So long as it tells time and fits the dressing style, I will wear it. My current watch is a Hamiliton Khaki that was given to me by Mindef for completion of my 10 years reservist. It looks decent and is a small refund of my tax dollars so I am not complaining. :-)

We are moist robots
I read about this term, "moist robots" in Scott Adams (cartoonist of Dilbert) blog and agree that to a certain extent, we have been programmed to behave in certain ways unconsciously because of our parents. For me, my father's imprint has been strong even though he didn't formally lecture me about saving money and being thrifty. I could observe his behaviour as I grew up and picked up on some of those habits as I matured into an adult.

What type of programming have you received in your life? Consider the people who impacted you when you were growing up. Does you behaviour now reflect their conscious or subconscious influence on the way you approach money and finances?

Enjoy your weekend and as always, be well and prosper!

Like father like son, like mother like daughter

noreply@blogger.com (PanzerGrenadier) — Mon, 17 Mar 2008 06:49:00 +0000

How many of us realise that our financial habits are a reflection of our parents' own habits?

Follow daddy and mommy, okie?
Our parents are arguably one of the most influential people in shaping our behaviour towards money. Some of your parents may adopt a frugal and prudent approach towards money. Some of your parents may adopt a let's get the lifestyle we want based on instalments, deferred payment or credit. Whatever is our parents' attitude towards savings, spending and investment somehow trickles down towards our very own ways that we manage our own finances.

My own parents
My own parents gave me one of the greatest gifts without realising what they did: the gift of frugality. Both of them grew up in very modest backgrounds where the father was the sole breadwinner while the mother was a home-maker. In the case of my mother, her childhood was even more harsh as her mother (my maternal grandmother) passed away when she was young and she had to take on the household chores of cleaning, cooking and washing when she was all of twelve years old. This instilled in her a fierce determination and discipline to make a better life for herself by working hard for the same employer for 30+ years and retiring.

My father who was originally from Malaysia, came to Singapore to build a better life and also worked hard with the same employer for almost 40 years before retiring. Both of them saved and scrimped for our family to have a better life and we did thanks to their sacrifice and love.

Thrifty habits
I remember when I was young, my mother would say she doesn't like to eat this or that when the dishes for the family meal was not sufficient as she had cooked just about right for our family dinner. She would willingly go a bit hungrier so that I could eat more instead of cooking another dish that would use up water, gas and meat/veggies. My parents both kept very frugal habits, for most of their lives, they lived without a car and our family homes were always well within the affordable limits of their combined salaries.

Now that I am all grown up with a family of my own, their frugality has filtered down to me. Relatively speaking while my lifestyle habits would be considered lavish by their standards e.g. a cup of coffeebean coffee on occasion while they would do with the simple kopitiam kopi-O for their caffeine fix.

Enduring good financial habits
I have adopted many of their frugal habits such as not spending beyond my means. Always saving a portion of my income and a more conservative approach to investments in my early years through fixed deposits and savings. This had allowed me to protect my investment capital although it did not fetch me spectacular returns early on in my career. The dividends from this approach paid off when I bought my own home as I could afford to invest more of my savings into home equity rather than borrow 80% from the bank. As a result, I am very lowly geared and am overall in a positive networth position after working for a decade plus.

In addition, I eschew consumer debt and pay off my credit card bills in full at the end of the credit terms. I reward myself with little luxuries in life when I make realised gains from my time deposits or stock market capital gains. I typically allow myself to spend 10% of the gains and lock in the rest for other investments such as treasury bills and equities.

A living legacy
My parents also taught me never to keep up with the Lims, Alis and Rajahs in our community as that was the quickest way to financial difficulties. While now I am better educated and well-versed in finance and investments than they ever were, my parents (especially my mother's) wisdom in money is a living legacy I will carry on with me and pass it on to my future generation. What they have given me is immeasurable and I am thankful for their wisdom, patience and love.

What is your own legacy?
What is the legacy that your own parents are leaving you in terms of your attitude towards money. As you examine your own approach and behaviour in managing your own finances, do you realise you are doing the right things which they did or are you repeating the mistakes that they did. We can all learn from the past and begin to take control of our financial destinies because it is not cast in stone.

My approach to ultimate financial freedom has been to:

1) Live within my means
2) Save and invest
3) Grow my means
4) Repeat 1

It can be achieved, one realistic step at a time.

Be well and prosper.

Does Singapore educate its young enough about personal finance?

noreply@blogger.com (PanzerGrenadier) — Sun, 16 Mar 2008 05:09:00 +0000

There are literally hundreds (and perhaps thousands) of questions to personal finance on some of the forums that I monitor and it reveals the abysmal lack of foundations built for our future generations when it comes to financial literacy. I too was ignorant about personal finance until I started working and I learnt some painful lessons the hard way, through losing some of my hard earned savings through investments in unit trusts that I didn't really understand.

Common financial questions

Some of the common questions posed by forummers are simple ones that can be answered by googling or searching for the right websites.

Take for example, this common question:

Q: "Where can I find the best interest rates for savings and fixed deposits"?
A: You can visit Singapore Fixed Deposits or check out the money section under Hardwarezone forums

Another similar question about loans:

Q: "Where can I find the best loan rates?"
A: You need to shop around different banks as loan packages can be customised to the requirements on the customers. You can also visit Dollardex or banks websites for some indicative rates.

Others who have just started working begin to think about their insurance needs. While there are a plethora of independent financial advisors, financial planners representing the big life insurers etc. There appears to be a relative lack of resources in our mainstream schools, polytechnics and universities to teach our young about personal finance. How can we be truly building up a nation of knowledge workers who know where to search for information if we do not equip them with the foundational financial literacy skills to chose between the bewildering range of financial products both suitable and unsuitable for them?

Are we leaving our young to the financial wolves?

Is it because we want to feed them to the ravenous financial planning industry, the fund management industry, the financial service sector that will sell and sell and sell them the financial products they think they need?

When I started this blog to share what I knew about treasury bills, I am amazed that virtually everyone I talk to in the physical world (including financial planners themselves!) are not aware about how they work and how retail consumers can invest in them either direct with the primary dealers or through poems. This scares me as it shows how a low cost and safe instrument that yields at fixed deposit rates for low minimum sums of SGD 1,000 is given so low publicity while financial institutions hawk credit linked notes and other derivative products to the unsuspecting investing public while relying on fine print and brandishing the famous latin phrase "caveat emptor" (let the buyer beware!).

I do not think this is a satisfactory state of affairs. Do you think that we should continue to allow our youth to find their ways into debt, not learn about personal finance until they unwittingly get into trouble with banks, financial institutions, credit bureaus and be declared bankrupts until we are satisfied?

Let me know your views by leaving a comment! I'd love to hear what you have to say be it as a consumer, a professional in the financial planning world or staffer in a bank, financial institution or even the regulator!

Be well and prosper!

How to apply and get your baby bonus

noreply@blogger.com (PanzerGrenadier) — Sat, 15 Mar 2008 04:35:00 +0000

In order for your children to receive the gift of financial freedom, you as the parents of your beautiful child must first take advantage of all the various windfalls, bonuses and gifts that the Government is giving to your child.

Singapore is experiencing a shortage of births as our society moves from third world to first world in all economic growth, immigration growth and ever rising costs of living.

Your child when born will face a tough, competitive and challenging world. Make no mistake about that. But you can better prepare yourself and your child financially to take on Singapore Inc by availing yourself to the BABY BONUS SCHEME.

How much is the Baby Bonus?

The Ministry of Community, Youth and Sports administers this scheme which essentially is a cash grant for your first child, and a cash gift plus matching grant for your second to fourth children.

This scheme is available to the first to fourth child born after 1 August 2004.

Cash Gift

You as the parents will receive Singapore Dollars $3,000 for the first and second child paid over 4 instalments of $750 each. For the 3rd and 4th child, you will receive cash gift $6,000 over 4 instalments of $1,500 each. The table below shows the cash gift schedule for 1st to 4th child.

Child Development Account

For your second child onwards, the Government provides a matching contribution of up to $6,000 for your second child and up to $12,000 for your third and fourth children. This is done by contributions to your child's Children Development Account (CDA). Please note that there is NO CDA for the first child.

You may use the CDA for the following purposes as specificed in the Baby Bonus website:

"1) Fees at Approved Institutions which have registered with MCYS under the Baby Bonus Scheme:

- Child care centres;
- Kindergartens and special education schools registered with the Ministry of Education (MOE);
- Early intervention programmes registered with the National Council Social Service (NCSS); and
- Healthcare institutions licensed under the Private Hospitals and Medical Clinics (PHMC) Act.

2) MediShield or Medisave-approved private integrated plans. "

The matching by the Government also takes place up to 31 December in the year your child turns 6 years of age.

Should your child not have unused balance in his or her CDA account, the Government says that,

"this will be transferred to his or her Post-Secondary Education Account (PSEA) in the year your child turns 7 years of age. You may continue to contribute to the PSEA until your child turns 18 years of age and receive the Government's matching contributions subject to the combined CDA/PSEA matching contribution cap of up to $6,000 for the second child and up to $12,000 each for the third and fourth child. The funds in the PSEA can be used to pay fees for post-secondary education in Singapore for your child and his or her siblings. The PSEA is under the purview of the Ministry of Education (MOE). More information on MOE can be found at MOE's website at http://www.moe.gov.sg/"

That means you can do the matching up to age 18 for your child.

You will receive the forms and instructions at the hospital where your child was delivered or you can read the FAQs given in the Baby Bonus website.

Do your sums before having a baby!

Singapore's high costs of living mean that having a baby shouldn't be decided purely on the amount available for baby bonus! You should consider the lifetime costs over 20 years as a minimum. In addition, having a baby requires enormous support mechanisms available from parents, parents-in-laws, domestic helpers etc besides the parents. It is not easy to bring up a child in Singapore.

A child is a gift. Cherish your gift. ;-)

The curse of prosperity: Obesity

noreply@blogger.com (PanzerGrenadier) — Mon, 26 Nov 2007 02:39:00 +0000

Children today are getting bigger. I remember a newspaper article that talked about how children of today are growing physically bigger than their parents. Whenever I take public transport, I encounter teenagers who are my height and some of them are teenage girls. Not only are children nowadays taller, they are also fatter. We have Trim and Fit (TAF) or now renamed "Fitness Clubs" where obese children have to attend additional physical activities to counteract the evil effects of obesity.

Even during my national service days going through basic military training (BMT) in Pulau Tekong, the concept of obese company for recruits was starting to be implemented to help condition recruits whose body mass indexes were on the wrong side of the scale.

Prosperity's curse: obesity
Increasing prosperity brings increasing obesity. Even in my own life, there was a period of time when my weight continued to grow each year despite the annual requirement to take the individual physical proficiency test (IPPT) required by the army. Eventually, I embarked on a diet of rolled-oats from Mondays to Fridays for breakfast complemented with a regular exercise regime of running at least once a week and some tennis. This has helped me shed about 1.5 kg over the past 1 year and has allowed me to slim down so that my pants do not feel so tight around the waist.

How can we invest in our children's health?
Our young generation today grows up in an environment of books, studies, computer games, console games and a relatively sedentary lifestyle. Coupled with easy availability of fast-food and with more families eating out as opposed to cooking at home, childhood obesity is also becoming a challenge. To prosper your child, investing in his or her health should be one of your foremost priorities. So how can you, as a parent, do this?

Avoid fast food
Eat home cooked meals
Exercise together as a family
Sleep early

1. Avoid fast food
Fast food is one of the worst contributors to childhood obesity. Watch "Supersize Me" if you are not convinced of the ills of fast food. In general, fast food is highly processed, contains very little nutrients and is high in fat content and sugar in soft drinks. Eating less fast food (recommended not more than once every 2 weeks) would help battle obesity.

2. Eat home cooked meals
Cooking for a family can be more economical and more importantly it allows the family to control the amount of oil, salt and the quality of the food used in the meals. Furthermore, eating together as a family helps the family to bond over the meal, to know about each other's lives.

3. Exercise together as a family
The government has provided many excellent facilities in terms of parks and park connectors that allow families to exercise together near canals, lakes and gardens. Make use of these free facilities to get some family exercise going during weekends and even weekdays. Exercise builds up our bodies immune systems, is an excellent destresser and is fun for the entire family!

4. Sleep early
Sleepling early allows our bodies to recharge and rejuvenate. If our children have been exercising, then even when they are sleeping their metabolic rates increase and will be helping them to burn fats even at rest. Sleeping early also gives children sufficient rest for the next day's activities!

To help our children prosper, we must make sure they first achieve prosperity in their health. For without health, wealth is useless.

Financial literacy in mainstream Singapore education system

noreply@blogger.com (PanzerGrenadier) — Wed, 31 Oct 2007 04:56:00 +0000

The Straits Times Online
Oct 31, 2007
500 teachers to be trained to teach financial literacy

Finally, financial literacy makes it to the mainstream education system. While this is a good start, I am not sure about the nature and extent of this initiative and whether it goes far enough.

During my own school days in the mainstream education system, the Post Office Savings Bank (POSB) squirrel savers was the only tangible thing which I learnt about savings at a young age. My own financial literacy came about through the school of hard knocks as well as through my own parents' approach towards financial literacy.

My mother especially, despite being a non-finance trained person imparted to me indirectly the principles of thrift, frugality and savings.

Financial literacy through families
I believe the next frontier must be teaching financial literacy to parents. You can teach 101 good things in school but your child spends most of his time outside school in the presence of care givers and parents. If parents themselves do not understand financial literacy, chances are their children will consciously or subconsciously model their spending, saving and investing behaviour after their parents.

Parents and children are getting smarter
The wealth of knowledge about financial literacy available in public libraries and on the internet is growing exponentially. There is no lack of knowledge and information. However, how such information is being delivered to families will determine whether financial literacy takes root. I am not sanguine about the prospects because I feel that the vested interests of the financial industry are at odds, to some extent, with the interests of the individuals and families.

For example, Peter Lynch openly says that a low cost index fund that tracks the index e.g. S&P 500 in the long run beats most managed mutual funds or unit trusts. So from a financial literacy perspective, it is better to invest in the long term in such vehicles as compared to managed funds which even Mercer and CPF says regularly underperforms their benchmarks.

Would the fund management industry advocate this position? Buy low costs index funds because most of us can't beat the market anyway in the long run?

They would be shooting themselves in the foot and breaking their own rice-bowls. Why would they do that? Instead, they will point out the advantages of investing in unit trusts e.g. investing in markets not open to individual investors, diversification etc. which are valid. But they downplay how MOST of them CANNOT consistently beat their benchmarks over the long term. Even those who are top funds in any given 1-5 year period will find it difficult to maintain their performance CONSISTENTLY.

When they perform, they earn their management and performance fee. When they under-perform, they earn their management fee. Heads they win, tails they win.

So what can I do it as a parent?
First of all, get yourself educated about financial literacy. Visit Yahoo, Forbes, Fortune websites to learn about personal finance. Read blogs about personal finance and savings.

Secondly, walk the talk. If your lifestyle is that of hedonistic spending because you want to live life to the fullest, it will be challenging for your children to live frugally as they will model after you whether you like it or not. If you want your children to be frugal, thrifty and go for value-for-money. You may have to change your own lifestyle habits.

Thirdly, financial literacy is a journey and not a destination. I have been investing and managing my own money seriously since 2003 and will continue to do so until the day I die. I continue to read, write and explore this area of personal finance and financial freedom. Learning never stops!

So start your children on their own journey of financial literacy and be well and prosper!

Learning to save by starting young

noreply@blogger.com (PanzerGrenadier) — Wed, 05 Sep 2007 07:19:00 +0000

Savings schemes for children in my past
I recall during the good old days of the late 1970s and early 1980s when I was still in primary school, the then Post Office Savings Bank (POSB) had the squirrel savers scheme. This was a scheme where school children could purchase stamps from the teacher, paste them on colour savings sheets issued by POSB and that was how we learned to save money by buying stamps and pasting on it. Of course, at that time I was too young to really appreciate that this was about savings. All I remember is that it was quite fun to paste the stamps since the money came from our parents anyway! :)

Another scheme I remember vividly was by Standard Chartered Bank (SCB). SCB had piggy banks made of heavy metal and secured by a key that only the bank could open. Hence, the piggy bank allowed me to save my coins from my allowance and once in a while my parents would bring me to SCB where the coins could be deposited into my account. I recall the use of snow white characters in my SCB passbook then but I cannot find the old passbook anymore to verify if my memory serves me correctly!

How do we teach our children to save early in life?
These two examples show us how even back then, banks had innovative ways to help parents inculcate in children the habit of saving. How can you then now use some of these methods to teach your own children or nephews and nieces?

First of all, you should make sure you yourself are setting a good example to your children by saving! Then you have the moral authority to tell them that they should be saving their surplus allowances! :-) I am not sure if POSB/DBS still has the squirrel savers equivalent, but you can definitely start out by making sure your child has a piggy bank or a container where he or she can put his spare coins and notes from his allowance savings.

Encourage him/her to save and bring him to the bank when you want to make deposits into your child's account. Nowdays, I noted that POSB provides machines that accept coin deposits. So you can consider making it a fun family activity by involving your child in depositing the coins and to see his balance grow. He may be too young to appreciate it but he will start to associate putting money in the bank as a good thing as he/she had a good time with daddy/mommy when he went to the bank to "play" the deposit game.

You can also celebrate with your child with a simple meal outside or an ice-cream treat after each deposit, to further reinforce the good vibes your child gets from saving money! :-)

Some of you may have even more innovative ways of inculcating the savings habit among your own children. Do share as we go along this journey for our children's benefit to grow up, kidsRich!

What your school teachers never taught you

noreply@blogger.com (PanzerGrenadier) — Mon, 03 Sep 2007 08:04:00 +0000

Financial literacy is one subject that is not only critical but essential for you to be able to navigate this dangerous world filled with financial charlatans, con-artists and consumer debt pushers.

Many of you are parents, many of you are uncles and aunts and many of you have younger brothers and sisters who are still schooling. Think back about your own school experience. Think back to their school experience. Think back... Did you ever receive an education in financial literacy? I believe for many of you and for many of us, the answer is a resounding NO!

But I was taught mathematics and statistics in school!
Mathematics is a useful subject to learn as the very foundations of compound interest computations and simple interest computations plus future values and present values are grounded on mathematics. However, while our school curriculum taught us, teaches our children and will teach our children's children the ABCs and 123s, it misses out completely on equipping our children with the sound financial literacy to be able to know if they are spending more than they earn. To know that consumer debt compounded leads to financial devastation and destruction. To know that if you spend your whole life mired in chasing a consumerist lifestyle funded by debt and credit, your life is not yours but belongs to the financial institutions that provided the noose of easy credit for which to hang yourself with!

If you think Harry Potter was scary, wait till you see the state of financial literacy in our young
Pardon my strong language and expression but it is indeed scary how we are teaching our children to be academic smart but not street-smart in the world of globalised financial markets and where the knowledge of how to use the power of compound interest to grow our financial investments is important in order for one to be able to survive the increasing volatile world of moving interest rates, fast changing business cycles and never-ending sales pitch by advertisers, the media and financial institutions to make us consume, consume and consume to sustain this beast we called economic growth.

Why do I say that financial literacy is sorely lacking
In general, there is a lack of a structured curriculum in our mainstream education to cater for financial literacy. I have never come across any syllabus or lesson that focussed on teaching our children to understand basic cashflow concepts, differences between assets and liabilities, between saving and spending and between how money invested grows and if money owed will grow too.

Perhaps it is being taught in some school, somewhere, sometime. But not during my time. I am an accountant by training, and even as an accountant I can say nowhere in my NTU accountancy course did I learn about financial literacy. Sure I did modules in Corporate Finance and Statistics modules on present value, future value, present and future value of annuities, compounded annual growth rates etc, but I never did come across any module that taught me personal finance and how to manage my own money. And this coming from a Certified Public Accountant (Non-Practising) kind of scares me. It should scare you!

This is not unique to Singapore
The only consolation that we have is that Singapore is not the only country in this boat. Even in the US financial literacy is not something commonly taught in US schools. However, if you are serious about leaving a living legacy to your children, your nephew, your niece or the young people you come into contact with, you should first educate yourself in financial literacy. Read about personal finance. Borrow books such as "The Richest Man in Babylon" or "Bogleheads Guide to Investing" or any of the Personal Finance for dummies book and start your own literacy program right here and right now.

That was how I started, by reading books found in the public library. By surfing internet blogs and personal finance websites, by watching Suzy Orman on CBNC on Starhub Cable. I slowly build up my approach towards financial literacy by learning about savings, about investments, about risk-return trade-offs, about power of compounding, about deferring present consumption in order to grow my investments that will fund my future consumption.

Start Today
So get off all our collective behinds and start to educate ourselves, our children in order to benefit them and our children's children.

The greatest legacy you can leave your children is the ability to think for themselves and make sound financial decisions based on a foundation of financial literacy.

Be well and prosper!

kidsRich: Financial literacy for children and teens

noreply@blogger.com (PanzerGrenadier) — Mon, 27 Aug 2007 03:02:00 +0000

This blog was set up to help impart the timeless principles of financial literacy to our children and young people. The Singapore education system gives our children a sound grounding in reading, writing and arithmetic but fails abysmally in educating them on financial literacy.

The ideas and thoughts on this blog are but a small effort in helping to educate our young today in order to help them achieve their financial goals for tomorrow.

Be well and be rich, kidsRich!