SG Web Reviews

The truth about money

2012-03-05T10:00:00.002-08:00

Last month, our Education Minister commented that employers believe Singapore students lack drive and the willingness to try new things to succeed. I chuckled when I finished reading the article. Look, it doesn’t take a Singaporean genius to figure out that our education system has been result-driven and highly competitive for the past three decades. Everyone in Singapore knows for a long time that the education system is all about ranking, examination results and streaming. Obviously, to excel academically in such merciless system, one has to put in tremendous amount of effort and study real hard (unless of course if you are a genius). Henceforth, there is a lack of drive among our students to explore new ideas and new things.

So what is the point of telling Singaporean an obvious fact that has been happening for the past decades? What is the Ministry of Education going to do? Just like many Singaporean in their thirties, I went through the education system and was taught to get a job, buy a house and save money for my retirement fund. At the end of the day, I have been asking myself, has the Singapore education provided me adequate knowledge to succeed in life?

My answer to that is a definite no. The Singapore education is good at forcing students to memorize information and poor at imparting critical knowledge and skills that are of relevant to our present society. I studied at a SAP secondary school and graduated from a top 5 junior college. I remember having to memorize countless Chinese, Geography, Chemistry and History textbooks in order to achieve respectable results. After working for so many years, I didn’t even put any of what I learnt in school into practice and I realized they were not useful to me at all. Important life skills like how to budget, how to do financial planning, how to invest and how to do business plan were not taught at school. I was brought up to be a good employee destined to be trapped in a rat race. In a nutshell, schools train me to be an employee, not rich.

If I have my way, I would design the education system to impart Financial Knowledge, Professional Knowledge and General Knowledge to our students. Students are the future of our nation and they are never too young to learn the hard truth of money. The concept of saving and making money should be inculcated in them during secondary school. In this new economy, we have to train our youth to think innovatively, encourage them to start up their business and impart basic financial knowledge.

Magically yours.

Learn how to sell

2012-03-04T08:49:00.001-08:00

When I just started working as a manufacturing engineer in the aerospace sector, I always thought that my department (operations) was the most important department in my company. This was because I felt that without engineers solving problems in the production lines, the company would not be able to function as per normal. It was only years later that I realized that my thinking was flawed. The most important department in every private organization has to be the sales department. Every profit-driven company exists because of sales. Without sales, there will be no company.

The problem with sales is that most people view it in a derogatory context, like a pushy insurance salesman or a telemarketer who interrupts your meetings. Most of us do not want to appear like those people, so we either sell passively (inform family members and hope they spread the word) or skip the selling exercise entirely. The result is half-baked effort and wasted time and money put toward building a business concept that will not come to fruition.

It is extremely hard for an inventor or entrepreneur to succeed if you do not change this mind-set because every type of business requires sales. Whether its selling an insurance policy or pitching your business ideas to potential investors, you must be able to talk confidently about what you are offering in order to get people interested in your product or ideas. So if you want to be successful in your business, you have to overcome the sales stigma and learn how to sell.

Magically yours.

The one million dollar question

2012-03-02T23:36:00.001-08:00

If you were given a choice between having $1 million and gaining the ability to make multi-millions, which one would you choose? Many people, including me, would normally choose the former. After all, its human nature to dream of being rich, not having to work and to indulge ourselves. But look, how long can the million dollar lasts? Especially in Singapore, where the cost of living is so high. With a million dollar, you can probably pay off your car loan, housing loan and afford not to work for about 5 years. The million dollar probably would not be able to last you a lifetime. At least not in Singapore.

Many years ago, when I was studying in NUS, one of my school mate confided in me how much hated his father, who had struck the lottery big time TWICE. I wondered why and he told me that his father quitted his job, spent all his prize money within a couple of years and became a drunkard. His mother, who used to be a housewife, ironically has to look for a job to support the family. This lesson made me realized that even if you are blessed with a lot of money, if you don't have the financial discipline and knowledge, you will still be financially defeated at the end of the day.

So always make sure you have good financial discipline. Otherwise, even if you have lots of money, it will be gone in a matter of time.

Entrepreneurship Insights: Ten habits of highly effective inventors

2012-02-24T21:36:00.002-08:00

1. They note down their ideas in a notebook (just like my Investment Notebook!). Every idea is worth considering.

2.They think through their ideas over and over again before applying for patent.

3. They do their homework and invest a lot of their time doing extensive research (through internet, malls and prior patents for similar ideas).

4. They are good salespeople and can make good sale pitches.

5. Passionate about their ideas.

6. They constant improvise their concept to solve existing problem. They have no qualms seeking inputs and making revisions to their first prototype.

7. They are fiercely persistent and do not give up easily. When one experiment fails, they recover from the initial setbacks and try again.

8. They work well with partners. Good ideas are often turned into great ideas when shared with like-minded inventors or partners.

9. They are versatile and will not hesitate to let go. They experiment, learn and improve and know when to let go.

10. They enjoy the process of inventing and creating a business. Only very small percentage of ideas ultimately makes money. But effective inventors often thrive on the challenge of making money out of creative ideas.

Magically yours

Investment Notebook 2011: Gold ETF

2012-02-14T00:01:00.000-08:00

Below is an article on gold ETF extracted from SGX published in 2011:

1) SPDR Gold Shares® (GLD) ETF participation has increased in August on account of the volatility that has coincided with Standard & Poor’s downgrading the credit rating of the United States to AA+ from AAA.

2) Unlike Gold Futures, the GLD ETFs do not extend leverage to the ETF buyer and sellers.

3) In Asia, the GLD ETF is cross-listed in SGX, Hong Kong and Japan. SGX maintains the largest market share of GLD with over 53% of Asia volume transacted on SGX.

4) Spread-wise, the GLD ETF has the most competitive average spread of 9.487 bps where the average spread of GLD in HK and Japan are 12 bps and 11 bps over the past one week.

SGX currently lists 84 Exchange Traded Funds (ETFs) that cater for a number of assets, investment strategies and risk appetites. The events of August have seen participation growth in the SPDR Gold Shares® (GLD) ETF that has coincided with the rising price of gold that reached a new high as measured by the London Gold AM Fix closure of US$1786 on 11 August.

The GLD ETF is a cash-based ETF, implying that the ETF is investing into the actual basket of constituent stocks that the ETF is tracking against the benchmark index. In its thematic research paper entitled “Gold: hedging against tail risk”, the World Gold Council WGC) argues that Gold can be used to manage risk in a portfolio in certain circumstances. In the report, tail risk is defined as infrequent or unlikely events that have consequential negative effects on an investor’s portfolio when they occur.

While the study is of interest, markets are dynamic and characteristics can change. Investors should appreciate that the price of gold can be subject to sudden upside and downside moves, and that past results do not guarantee future performance. Investors must be comfortable with market risks before participating in this market.

Magically yours

Entrepreneurship Insight: Five reasons you should not quit your job to start up your own business

2012-02-13T21:40:00.000-08:00

Starting up a business is not easy and very often, it can really take over a person’s life due to the huge efforts and financial commitments required. Therefore normally I would not advise anyone to quit their job and start a business because that could be a recipe for disaster. Do it right and your life changes drastically for the better. Do it wrong and your life goes spirally downhill. So always plot your move carefully and make sure you do your homework before making the big escape from the rat race. Below are five reasons why you must never quit your job and start up your business.

Starting up a business needs time
Starting a successful business takes time. Do not be fooled by media reports of young entrepreneurs achieving overnight success and becoming incredibly rich. Founders of Microsoft, Google and Facebook actually went through a lot of hardship, trial and errors before attaining wild success at international platform. They had made a lot of mistakes and setbacks before achieving business successes. Henceforth, learn from others mistake and avoid the potential pitfalls. It could be a long time before your business makes any profit, so make sure you hold a job while going through the phase of starting up a business.

Bills, bills and bills
Unless you are born with a silver spoon, we all have bills to pay and worry about. Quitting your job would hurt your pocket especially if your business has not started to earn sustainable revenue. Your relationship with your spouse or family members could also be strained if you are the sole breadwinner. So make sure your household finance is in order and in shape before you made the plunge.

Do it for the Passion, not for the Money
Not everyone starts a business for the sake of money, but for an entrepreneur to be successful, he must have the passion. If you are creating a business primarily to get rich, your focus will only be on money, sales growth and on expansion for the sake of expansion. You will lose sight on refining your business ideas, improve your product, increase product variety and enhance your customer service skills. So always ask yourself the reasons for starting your own business. Is it because you feel it is your calling and something you feel so passionate doing it over and over again every day? Or do you want to quit and start up a business because of the freedom? Quitting your job and starting a business might be a tempting but risky option, especially if you are doing for the sake of money and freedom.

Networking
We all live in a connected society. At some points in our lives, we all need some form of help from friends, colleagues, associates and schoolmates. Being in a job allows you to build up your network in your industry and could prove helpful in future when you start up your business. So before you quit, ask yourself what sort of reputation you think you have built up over the years and can your current network help you in your business empire?

People’s skills
Many entrepreneurs failed to realize that starting a business consists of a business idea and sales. You can have the best product in the world but if you can’t sell, the business will not make it. Period. And in order to sell, you need to have people skills. You need to have persuasive skill to convince buyers and investors. You must have good presentation skills to get investors to buy in your ideas. The best platform to gain these skills and experiences is through your job. Always observe the best performers in your office. Learn from them how they negotiate, how they present and how they market their products. So before you resign from your job, ask yourself whether you have acquired these people skills and if not, my advice is to stay on and keep learning!

Magically yours.

Investment Notebook: Opportunity Fund Part II

2012-02-05T00:42:00.000-08:00

In my previous posting, “Investment Notebook: Opportunity Fund”, one of my readers posed this question to me “how many percentage of my net worth coming from the return of my stock investment, would I consider it has made me rich”. This is a very interesting question and it has set me pondering hard for several days. One thing for sure is that I did not have a clear cut answer to that question but nevertheless, I shall try my best to reply.

Rate of returns VS net worth yield
When I invest in anything, normally I look at the potential rate of return on my investment capital. For example, if I rent out a HDB flat I would set a yield target of 10 -15%. Likewise, when I invest in stock, my target is value appreciation of 10-20%. For example, when I activated my “Opportunity Fund” in 2008, I made a return of about 17% from my stock investments of S$20,000. Setting return target based on personal net worth is another matter altogether. It requires one to consider their personal income, fixed assets (housing, CPF,etc), insurance policies, investments (gold, shares, property,etc) at that point of time. Furthermore, one’s net worth changes all the time, subjected to economic situation. For example, we may get retrenched and lost our sole incomes due to downturn. So I would say it is not easy to determine one’s net worth.

My best investment
If I have to consider the percentage of net worth coming from my stock investments that I think will make me become “rich”, I would say it has to be at least 1000%. When I obtained my degree in 2005, my father helped to pay the student loan of $22,000. I had since repaid him back several years ago and “recouped” the investment. I must say my education was my best form of investments as it had opened many doors for me, allowing me to be gainfully employed for the last 7 years.

Investment Notebook: Opportunity Fund

2012-01-31T07:00:00.001-08:00

In September 2008, the collapse of Lehman Brothers (an investment firm in the United States.) triggered off the world financial crisis. Before the collapse of Lehman Brothers, fear of a “big bang” recession has been lingering around for months due to the festering subprime mortgages mess in United States. But no one would have predicted the magnitude of the economic crisis. But then, I remember the President of the United States announcing no bail-out for Lehman Brothers as it was considered not “too big to fail” (unlike other megabanks like Citibank, Bank of America, etc). The next day, there were blood-letting carnages in stock markets throughout the world. Dow Jones saw a record drop of more than 770 points overnight. Singapore’s stock exchange (SGX) was not spared either. In the six months following the collapse of Lehman Brothers, from September 2008 to March 2009, stock markets worldwide fell by almost 40%, wiping off about US16 trillion in capitalization. Singapore’s stock exchange also fell by close to 35%.

On looking back, the 2007-2009 financial crisis was indeed a “once in a generation” defining event in the financial sector. Personally for me, it had been both an eye opener and rewarding experience for me. Back then, I had accumulated S$20,000 of “Opportunity Fund” and waiting for the right opportunity to invest in several stocks I had been researching for 6 months. So when this crisis came along and there was so much fear and panic, I knew it was the correct time to enter the market. I pumped in my Opportunity Fund and bought 100 lots of Mercator Lines and subsequently sold off my investments several days later, making about S$3500 of profits. It wasn’t a spectacular profit but then again, I made this amount of money within a few days of trading and it was more than my monthly salary (back then I just started working for only a few years). On looking back, Mercator Lines had been my champion stock so far.

The reason why I am reflecting on this investment episode is that like many people, I had always thought that investing in the stock market can make you rich. I have realized that this was a form of flawed thinking. It is true that you can make extra income from stock investment, but it ultimate won’t make you rich. To make substantial amount of money from the stock market and propel your wealth status to another level, you need a minimum investment amount of S$400,000 to $500,000. But then again, if I have this amount of disposable money, I would most likely invest in real estate, not stocks.

Henceforth, I considered investing in stocks as a form of potential side income to supplement my salary. I don’t see it as an opportunity to become mega-rich overnight.

Three ways to become rich in Singapore Part II

2012-01-30T01:32:00.000-08:00

In my previous post "Three ways to become rich in Singapore", I have some readers providing feed-backs and comments. I appreciate readers for taking precious time to read my blog postings and provide their valuable comments.

One of my readers commented that "dividend investing" can also make you rich. Whilst I agree that investing in fixed income, be it stocks or unit trusts, is considered a source of side income, it does not really make you "rich". In my personal context, being rich means to enhance one's wealth substantially. Dividend investing may provide additional fixed income but it also have its risk - decreasing stock prices and liquidity problem.

I still believe that the best three ways to become rich in Singapore is to invest in property, do business and work in the sales line.

Magically Yours

Three ways to become rich in Singapore

2012-01-27T10:14:00.000-08:00

Many Singaporeans would agree that the cost of living is very high in Singapore. This is especially so during the few years in view of the rising inflation. In spite of the global economic downturn, unemployment rate remains low in Singapore. But most Singaporeans struggle with the rising costs, as their salaries remain stagnant. Henceforth, most of us are concerned whether we would make enough money to retire comfortably in our twilight years.

Recently, me and my good friend were lamenting on the rising cost of living in Singapore and pointed out that the same bowl of $2.00 noodle selling in the hawker stall now costs $2.50 or more. That would represent a 20% increase in prices and we were left wondering how an average salaried Singaporean can cope with this sort of inflation. We came to the conclusion that to beat the inflation and get out of the rat race, we need to be rich. And there are mainly three ways to get rich in Singapore:

Doing business
Risk is high as an entrepreneur and there are no monthly fixed pay checks, CPF and bonuses. On top of that, there is no guaranteed success, and any setbacks can be financially fatal. But as the saying goes, high risk, high return, no pain no gain! To me, being a real estate agent, stockbroker and insurance agent can also be considered as a form of business as you are essentially “minding your own business” – commissions is based solely on your hard work. Other good business opportunities include setting up online shops and mobile apps.

Investing in property
Surely the best way to make money in Singapore due to the scarcity of land in Singapore. You can make passive income from your investment property through rental or you may opt to sell the property for capital appreciation. But the cons of property investing are that it usually requires large amount of capital and is very illiquid. Unlike stocks and gold, you usually need 6 months to 1 year to liquidate your investments. In addition, government measures and policies may also affect property outlook and affect prices and demand.

Sales job
Every business needs sales, period. Sales executive and managers who delivers can earn good money, especially those in the financial sector. However, the art of selling is a skill which not many people possessed.

Magically yours

Investment Notebook: Investment Principles

2012-01-23T08:34:00.000-08:00

For the past few days I have been doing spring cleaning and happened to flip through my investment notebook. I went through some of the interesting lessons learnt during the period 2007-2009. The collapse of the Lehman Brothers really changed the investment world forever and the old strategy of holding stocks for the long term for capital appreciation no longer works. In view of this, all of us need to equip ourselves with well-planned strategies to protect and grow our investments. In 2009, I had made three guiding principles for investment:

Invest in myself
Many people, myself included, tends to chase the money and invest in everything under sun (stocks, ETF, property,gold, unit trust, etc). Everything, except themselves. We all failed to realize that our knowledge, ability and skills are the most important asset that help us to generate recurring income through jobs, sales, investment and business activities. Henceforth, most of us tend to neglect investments on acquiring new knowledge or skill. I had told myself that I must acquire or gain new mastery of knowledge in niche area.

Invest in health
As cliche as it might sound, health is really wealth, this is especially so in an expensive society like Singapore. Many Singaporeans slogged hard in their 20s and 30s, neglecting their health and ended up suffering in poor health in their 40s and 50s. Most of them relied on their family members to help them cope with the hefty hospitalization bills and medical fees. I made a resolution to eat more healthier food and jog at least twice a week.

Invest in family and friends
Making money is important but what is the point of winning the world but losing your soul? Family and friend supports are the most important thing that can pull you through times of crisis. I told myself to spend more quality times with my family and touch base with my friends more often. In addition, I hope to settle down and set up my own family in a few years.

Looking back, I am glad that I am going to achieve my last resolution soon.
I am expecting my first baby girl in two months time. So excited.
I wish all my readers a haapy chinese new year. Gong Xi Fa Cai!!

Magically Yours

ACE Startups

2012-01-19T08:30:00.001-08:00

The Action Community for Entrepreneurship announced on 19 Jan 2012 that it will be providing funding, networks and mentorship to 500 startups in an effort to promote entrepreneurship in Singapore.

Under this new programme called Ace Startups, Singaporeans and permanent residents who are first time entrepreneurs can receive up to $50,000 in a one-off grant for their startups. One interesting aspect of Ace Startups is that applicants older than 26 years old are eligible for this funding.

The grant will be disbursed in a co-matching basis – 70% provided by ACE Startups and the remaining to be committed by the applicants. Approval process takes about 6 weeks and applications will be evaluated by a panel team of venture capitalists, angel investors and entrepreneurs.

The aim of this fund, estimated to be $25million, is expected to help startups become sustainable businesses.

My Investment Notebook

2012-01-12T02:02:00.000-08:00

I started my investment journey more than 10 years ago when I was serving my National Service. By then, I had bought 2 lots of Unisteel using my brother's account and I remember I had invested about SGD2000. Unisteel is a company specialized in producing fasteners and screws for computer hard-disk drives. By and large, it was a successful investment as the stock price increased substantially throughout the years. I sold my shares in Unisteel before it was de-listed and had went on to invest several other shares in the SGX.

Throughout the years, I had also kept a little blue notebook to capture down my various "victories" and "defeats". To me, investing in stock is like being engaged in a war. You have to prepare and research well; devise strategies and tactics to win the battle. Of course, choosing the right generals (stocks) is crucial as well. Nothing beats the thrill of finding a multi-bagger and the anguish of owning a "falling knife".

It is through all these battles, through all these ups and downs, that I became a better and wiser investor. The little notebook contains my various thoughts and reflections made throughout the process of investing. It has served me well and honed my investment experience. Do you keep a investment notebook as well?

Magically Yours

Funding options

2012-01-10T00:42:00.000-08:00

I was doing some research on funding options for entrepreneurs in Singapore and decided to blog down some of my newly-acquired knowledge. We have often heard about angel investors, venture capitalists, seed funding and incubators. Many question and wonder the roles, involvement and motives of these various categories of investors with regards to the development of enterprises. Hope this article can bring some form of clarity.

Basically there are two ways an entrepreneur can obtain funding: either through debt financing or equity financing. Debt financing is usually secured against certain assets and the creditor has the power or rights to demand repayment of any money owed, should the company be forced to close down. On the other hand, an equity capital involves the exchange of shares in the company for funds. The equity investors bear the risk of losing their investment should the company failed or benefit through participation in profits. Below are some common form of equity financing:

Angel investors
Angel investors are private investors who are wealthy individuals looking to park their excess wealth into new ventures. They usually provide capital for commercial start-ups, in exchange for equity or convertible debt and they typically invest between $25,000 to $500,000. Angel investors are usually very experienced investors with a lot of contacts and business experience and majority of them look to benefit from tax relief, which varies in different countries.

Venture Capitalists
Venture capitalists (VCs) are usually corporate firms looking to invest in start-ups, in exchange for equity in the company. VCs invest from $500,000 upwards and usually demand greater control of the company, as compared to angel investors. This is because VCs invest with the end-point in mind and they expect quicker and higher return on investment; henceforth, they are often more demanding and aggressive in order to grow or expand the business.

Seed funding
Seed funds usually support cash required for pre-start research or prototype development. Seed funds are usually for technology invention and innovation companies, for example, companies developing mobile apps and social networks. Risks involved are usually higher but the returns can also be potentially great.

Incubator funding
Incubator funding are usually focused on early stage companies which have a few or no revenues yet but looking at equity financing for marketing and operation needs. Business incubation usually provides a nurture and supportive environment for entrepreneurs during the early stage so that the commercial entity can succeed. The objective of incubation funding is to shorten the lead-time and reduce the cost of establishing the business.

Stock Markets
Of course, the ultimate vision of most entrepreneurs is to have their companies listed on the stock market. The potential rewards, in exchange for shareholding in the companies, can be millions. In Singapore, the local stock market operator and regulator is SGX. To qualify for listing in the local bourse, applicants need to meet a stringent set of requirements.

Investment 2012: Wrap fee for CPF Investments to be capped at 1% per annum from 1st July 2012

2012-01-02T22:26:00.003-08:00

From 1st July 2012, the CPF Board will subject wrap fee charged for CPF Investment Scheme investments to a maximum of 1% per annum. A wrap fee is an ongoing fee charged by financial advisors for providing bundled services such as advisory, brokerage and administrative fees. It is typically levied monthly or quarterly by liquidating a small portion of the investment. Currently, CPF members who maintain wrap accounts for their CPFIS accounts are charged up to 1.5% per annum by their advisors.

Since 2006, CPF board has been progressively implementing new measures to lower the cost of investment and enhance the quality of funds under CPF Investment Scheme. This new measure should bring cheers to retail investors as high costs may potentially erode investment returns over the long term. Such development is in the right direction and will go a long way to encourage more Singaporean to invest responsibly using their CPF funds.

Guidelines for Writing a Business Plan

2012-01-01T07:40:00.000-08:00

Before you take the leap into the path of entrepreneurship, it is essential that you done the homework and write a business plan. As cliché as it might sound, if you fail to plan, plan to fail. Having a good business plan will provide you a clear business objective and an organized way of looking at all the important aspects of your business. Most importantly, it will provide you a crystallized view on whether your business idea can be successfully implemented. A well written business plan will also come in handy, when you are looking for funding from potential investors (venture capitalists or angel investors). Key elements of it should focus on:

Stating/defining the problem
Your plan must define the problem which your business is addressing and not just stating your business idea. Nobody will be interested in a business idea if it is not solving a problem and is impractical. The plan has to be precise and easy to understand for layman (nobody likes to read a long-winded business plan filled with technical jargon, especially bankers and venture capitalists). Focus on how and why your business can deliver and solve the problem.

Market size and industry trend
Define the estimated market size and industry trends, dynamics and customer landscape. Describe and list your competitors, including substitutes. Highlight your competitive strength and the barriers to entry which will help to reduce competition.

Commercial viability
Explain in details how the business is going to make money, revenue source, volume growth and gross margins. This section is also a good place for forecasting both revenues and expense totals for the next five years. A good business opportunity with scalability should show double digit positive growth per year, and revenues projected to $20million or more within the next 5 years.

Marketing, sales, and partners
In your plan, you should have a strategy for marketing so as to penetrate the market. You should define the sales channels, pricing and plans for strategic alliance with partners.

Goals and milestones
Besides listing the milestones you want to achieve, identify the potential show-stoppers and obstacles that can impede the growth of your business. In addition, the milestone dates and goals have to be specific and realistic.

Funding assessment
If you intend to use your business plan to seek funding from investors, explain how the funding requirement is derived and provide details on the planned usage of the funds.

A good business plan must include all the necessary elements, though requirements of a business plan vary from case to case. If the business plan’s objective is to satisfy both venture capitalists and angel investors for funding purposes, you have to prepare the plan from the investors’ perspectives. Remember, the best plans are the longest with impressive charts, but rather one that answer every question your investors might ask.

Investment 2011: A Volatile Year for the Stock Market

2011-12-30T08:59:00.000-08:00

On the last trading day of the year, the local stock market, STI, ended with a drop of 1%(-26pts). Volume was low,with 437 million shares traded. The anemic action showed that investors were staying on the sidelines on what was typically the lowest volume sessions of the year. This could be because many brokers were still away for the Christmas and New Year holidays. It could also be due to the fact that most investors are trading cautiously nowadays and adopted wait-and-see investment positions for the coming year. After all, 2011 had been such a incredibly volatile year and most investors can't wait for it to be over.

Due to the relative small market size, STI's performance has always been affected by global stock market's condition. As a result, there were much volatlity this year caused by the Europe debt crisis, upheaval in the Middle East (Arab Spring), a devastating Japanese earthquake and a struggling United States economy (high unemployment). Stock markets throughout the world were battered by negative news weeks after weeks and investors were made to seek safety in other forms od investments such as dividend stocks, blue chips, gold and Treasuries.

As we look back 2011, most of the problems seemed to be contained or resolved. However, there is a possibility that the Europe debt crisis might escalate into a Euro dollar crisis. Coupled with a potential hard economic landing in China, volatility in the stock markets might continue into 2012.

Be prepared for a roller coaster ride in 2012.

Ideas Inc. Business Challenge

2011-12-28T23:50:00.000-08:00

Many aspiring entrepreneurs face challenges in finding helpful mentorship and the essential funding to support their venture. To address this problem, NTU’s Nanyang Technopreneurship Center has recently launched the Ideas Inc. Business Challenge
Ideas Inc.

Business Challenge is a competition by NTU’s Nanyang Technopreneurship Center to help budding entrepreneurs turn their business ideas into successful and sustainable start-ups. This competition is slightly different from typical business plan competitions as there are a series of workshops conducted by venture capitalists and industry experts. Applicants can find out how they can market their product, develop professional network and protect their ideas. Applicants can also pick up financial and administrative skills needed to make their ventures a success.

This challenge is sponsored by various government agencies, such as Spring Singapore and National Library Board and private companies like Microsoft and Canon. The aim of the game is to promote entrepreneurship in Singapore and assist them to become sustainable, create new jobs and increase the economic diversity.

To be eligible, you need to be a Singapore Citizen or PR, 26 years old or younger, a first time entrepreneur and holds majority stake in the company. To submit your application, log on to http://ideasincsg.com. Do check out the schedule and important dates in the website. Semi-finalists will be awarded $15,000 for completion of Proof of Concept and six Grand finalists will be awarded $50,000 each to grow their technology, begin early commercialization and gain market entry over the next three months.

Investment article: What you may not know about stocks?

2011-12-27T22:47:00.000-08:00

Below is an investment article by Jeff Augen, extracted from my favorite blog "CreateWealth8888", dated 4 Feb 2011. I like the blog because many of the articles are sensible, informative and educational. Hope readers can benefit from the article:

" Most investors who buy a stock believe that they are investing in a company. That view, while technically correct, is also misleading. A stock investment is really nothing more than a bet on the direction that money will take as it flows through the financial markets. A stock can rise only if market forces align to aggressively drive up the bid price causing new money to flow into the stock.

Many different factors are involved including economic news, announcements from other companies in the same industry, political events, the actions of large institutional investors, analysts' forecast, and a variety of global economic forces such as changes to currency exchange rates and interest rates. the long-term performance of a stock represents nothing more than the compound effect of these forces over time.

It is important to recognize that the financial markets are zero sum game with competition at all levels. the stock market competes for money against the bond and currency markets; industries compete for money with each other; and money flows between stocks within a particular industry. An individual stock can fall because money is flowing into the bond market. It can also fall because money is flowing into another stock in the same industry. Conversely, the stock of a poorly performing company can rise if market forces are properly aligned. All factors considered, the price of a stock is often loosely connected to the performance of the underlying company.

There was a time, not long ago, when individual investors were the dominant force in the market. Buying a stock was equivalent to betting on the behaviour of other market participants. Those days have passed. Today's markets react to economic news in fraction of a second. Heavily traded stocks in the S&P 100 or DOW rise and fall for reasons that are nearly impossible to understand at the individual stock level.

Investors who recognise these complex dynamics can gain advantage because they have a balanced, realized view of the problem. They spend most of their time identifying the underlying forces driving the markets, and they always try to invest with those forces instead of against them. In this regard, the most important attribute an investor can have is humbleness because successful investing is a never-ending struggle"

Guide on starting up a business in Singapore

2011-12-27T22:14:00.000-08:00

To help aspiring entrepreneurs up to speed on Singapore laws, regulations, taxes and government assistance schemes, Enterprise One (a government agency tasked to promote local business)has prepared a simple checklist:

1) Sign up for EnterpriseOne Digest, a monthly newsletter tracking the latest updates on the laws and regulations. You can log on to Enterprise One website to sign up.

2) Ensure your business premises (office, shop, factory) can be used to carry out your business. For example, applicants who wish to use their HDB residential flats for home office are required to seek prior approval from HDB.

3) Apply for all licenses and permits needed for your business.

4) Familiarize yourself with various tax incentives and Government assistance schemes.

5) Register your business with Central Provident Fund (CPF) before hiring your first worker.

6) Register your business with Accounting and Corporate Regulatory Authority (ACRA) and comply with post-registration requirements.

Business Proposals for Funding

2011-12-27T18:48:00.001-08:00

One of the major obstacles faced by entrepreneurs is the lack of available funding in Singapore to help them kick-start or sustain their business ideas. Even if there are government schemes to provide grants or funds to assist business owners, many of them are clueless on how to obtain these grants. In many cases, investors and entrepreneurs found themselves having to navigate through layers of bureaucratic red tapes and micromanagement when seeking grants. That is probably why entrepreneurs are more attracted to venture capitalists and angel investors for business opportunities.

To obtain that all-important pot of gold, there are several fundamentals that business owners need to highlight or observe in their business proposals:

1) Financial factors: Track records speak a lot and obviously no one likes to invest in a sinking ship. In your plan, you have to be honest and state the financial health of your company. In addition, has your company allocated adequate manpower and equipment for the project?

2) Strategic Factors: Does the outcome of your project match the objectives of the organization providing the funding? You have to provide compelling reasons for the donors to support your cause.

3) Economic Factors: Highlight the differentiating factors and economic spin-off of your project. Mention the market demands and competing market threats in your report. Most importantly, highlight the scalability aspect of your project (the potential impact to the rest of the industry and whether it can be implemented across the sector.

4) Risk Factors: The plan should cover the risk management aspect, taking into account buffers for possible delays and points of failure. You should also provide strategies to mitigate potential failures.

5) Management Factors: Does your company have what it takes to successfully implement this project? Does your project teams and managers have the relevant expertise and experience?

Hope the above helps.
Good luck!

Magically Yours

Online Karang Guni

2011-12-24T10:01:00.000-08:00

In Singapore, "Karang Guni" is a Malay phrase for gunny sack, which was used in the past to hold stacks of newspaper. It is often used to refer to those who work in the rag-and-bone trade, visiting residents door-to-door to collect old newspapers and clothing to sell.

Karang Guni can be a lucrative and highly profitable business in Singapore, with reported stories of Karang Guni men becoming millionaires from their Karang Guni businesses. Yet most Singaporeans shunned this trade because they considered it unglamorous.

However, not many realized that Karang Guni is a business that doesn't require any start-up cost. You just need to have a van to ferry the unwanted goods from HDB flats to the vendors. A lot of residents would love to rid their unwanted stuff(newspapers, eletronic goods,etc) to you, sometimes for free. In turn, you can sell these unwanted products to flea market vendors, who would purchase the goods for recycling or shipment to other countries. You can even resell these unwanted items online through auctioning. Win-win situation.

In recent years, the Karang Guni trade has seen intense competition in Singapore. There are even online Karang Guni providing doorstep services collection of unwanted electronic products, metal recycling, clothing and newspapers.

Funding opportunites for start-up enterprises

2011-12-22T20:58:00.001-08:00

Innovative and small-medium enterprises (SMEs) have a key role in spurring Singapore's economic growth. Many of them are developing capabilities to create a competitive edge but very often, they lack funding to sustain. SPRING Singapore, a government agency set up to cater to the growth of local companies, has various funding schemes to help them grow faster.

1) Angel Investors Tax Deduction Scheme is a tax incentive for business angles to invest in local start-ups

2) Business Angel Funds co-invests with business angels in local early-stage companies with innovative products/or services for up to $1.5million

3) Incubator Development Fund co-funds incubators and venture accelerators to mentor and develop local start-ups.

4) Spring Start-up Enterprise Development Scheme co-invests with third party investors in local innovative start-ups for up to $1.5million.

5) Technology Enterprise Commercialization Scheme co-funds early stage companies to develop and commercialize innovative technology ideas.

6) Young Entrepreneurs Scheme for Start-ups co-funds youths under 26 to set up their first businesses for up to $50,000.

There are several factors that enterprises should highlight in their business proposals to Spring Singapore, namely financial factors, strategic factors, economic factors, risks factors and management factors. I would further elaborate the details in my next posting. Stay tune.

**Note: The above statements does not represent Spring Singapore's views and are solely based on my own opinions.

Magically yours

2011 In Review

2011-12-21T23:16:00.000-08:00

The year 2011 is coming to an end. On reflection, I realized that I had deviated a lot from my resolution set earlier in the year and found that my savings is depleting fast. This is in part due to the fact that I got married, bought my 1st resale HDB flat, bought my 1st pre-owned car, sold my car and then bought my 2nd pre-owned car. All of these took a toll on my savings and affects my financial planning. My only consolation now is I am still holding on to my job. Not sure what 2012 may bring.

Magically Yours

2011 Investment Resolutions

2011-01-01T09:26:00.000-08:00

Its the start of the new year and I have made some investment resolutions. Firstly, I have decided to set aside a small amount of cash every month to invest in stocks. My objective is to beat the inflation that has been eroding the cash value in my bank account. In order to reduce the costs, I have decided to purchase stock through POEMS online rather than call up my broker.

Secondly, I have decided to shift my focus from value stocks to defensive stocks that pay divident regularly. Defensive companies are those whose future earnings are able to withstand and economic downturn. Typical they would have relatively low business and financial risks. Examples are Suntec Reit and Singtel.

I believe 2011 would be a boom year for Singapore's stock market. Given the tight labour market and increasing business revenues, this year could well be a good year for employees and investors.