Wastage In Your Life

Most of us, including myself, have plenty of wastage throughout our lifetime. What do I mean by wastage? For example, you bought that 10 sets of chopsticks in a bundle sale. However, you know clearly in your heart that your family members can only use 4 sets of them. Yes, you may argue that you can replace the extra sets of chopsticks when the existing ones are spoilt. Seriously, how long do you think it will take your chopsticks to spoil?


If you think I am exaggerating, why not you try going through your entire house, items by items, and chances are, you will start to realised that you have accumulated many things that you have no chance of using. There are things that you think you will be using "one day". Trust me, most things that you have not used for past 1 year, will remained unused for another 1 decade or more. Likely, you would have forgotten that you have those things. I suspect there are expired food/condiments/herbs/ingredients somewhere in your kitchen too!

If you respect your space, each unused item is a cost. Yes, you can classified these under logistic and mental cost. That is how warehousing charge you! By mental cost, I was referring to the memory space that you used to remind yourself that you have those things in your...don't know where! Of course, if you are very sure that you need it "one day" and it will still be in good quality, then by all mean keep it.

So, am I advocating you to throw most excessive items away? Definitely not. Memories are worth keeping. Don't throw away your memories and only to realise you have lost your life.

There are other form of wastage too. If you have paid a premium for extra quality that you will never use, that is also a wastage too. For example, you spent $10 buying that "branded" chicken rice where you can get another similar taste nearby for just $3. The $7 is a waste.

If I may anyhow estimate that 50% of our things and expenses are wastage, you may need a lot lesser than you think. That means, if you are spending $30,000 a year, you actually only need $15,000 to live the same lifestyle that you are enjoying now!

By being a minimalist, I have kept my cost low. I reminded myself that whatever i am going to buy, it must add value to my family. Simplicity and clean space are the combination for the most wonderful design. Look at how iphone is created. Clean, with only minimal buttons. Every aspect is being considered to the most simple form. (Anyway, I used Samsung rather than iphone). I simply cannot stand cluttering. I enjoy looking at clean space. It gives me inner peace and the belief that I have more rooms for more awesome things to come.

(Not my house, just giving you a visual reference)

I am proud to be a minimalist, but I am sure I have not yet fully optimised my resources. There are still "room" for improvement!

Cut Travel Expenses by 50% - 7 Practical Ways you Shouldn't Miss

 

Paying for unnecessary stuff is not cool. Additional service fees and charges add up in your travel expenses if you settle on what is already laid on the table. Here are easy tweaks that will help you cut your travel expenses by up to 50%.

1. Be alert on seat sales (save 30-50%)

Simple. You'll be one of the first few people who gets notified for any promotions, seat sales and discounts.

Social media is not even enough. You have to subscribe via email so that you will receive all updates straight to your inbox. And yes, check your emails frequently and book in advance.

Here's the membership page for Philippine Airlines, (aka Mabuhay Miles), CebuPacific (aka GetGo) and AirAsia. On top of the newsletters, you can also earn points/miles for every flight that you can redeem later on.

But take note, in some occasions discounted round-trip tickets doesn't even save you since they are just playing the numbers.

Here's the scenario: destination trip is 70% off but the return trip is 170% more expensive which makes it a break even. Crazy but true. You are not saving a dime.

In this case, you can search other return flights from other airline to avoid the sale scam. I have done this many times already and it saved me reasonable amount of money.

I don't normally buy tickets at regular prices. Why would I when I can have it 30-50% off?

2. Be flexible on your travel dates (save 30-50%)

Most of the time you are not really particular on your travel dates unless it is intended for honeymoon, birthday or spur-of-the-moment trips. I do not personally recommend the latter, by the way.

Major airlines are targeting promotions during off-peak season to major destinations. Hence you are leaving money on the table if you really wish to go to Boracay on Labor Day to catch the #LaBoracay party.

April and May is when ticket prices skyrocket caused by excessive desire of wanderlusts to go out during summer.

3. Skip all the travel package deals (save 20%)

Travel agencies sprout like mushrooms in social media nowadays. Countless travel deals are thrown away every single day and man, they are enticing.

If you want to save on your travel expenses, by all means, avoid them.

Travel packages are unreasonably expensive and less customized. You pay more for less and the service is at par with normal.

Since they also exist for business, they are charging stellar prices for added service of organizing air and land transfer, food and accommodation. Why pay when you can do it anyway?

But don’t get me wrong. Travel packages are still great if you want a hassle-free travel.

4. Call the hostel directly (save 20%)

Another item often overlooked is the accommodation. In the past year I was solely using travel apps like AirBnb and Expedia for booking hostels. It saved me a lot rather than staying on expensive hotels.

But lately I just found out I could even save more by calling the hostel directly via landline or cellular number and it saved me even more.

Here’s how:

1. Search for cheap accommodations through Expedia app.
2. Once you find the name of the hostel, Google it and get the contact number.
3. Most of the hostels have cellular numbers so call them directly and boom, you're booked instantly!

I have tried this already when I went to Davao. I found out that Expedia is charging 20% more on the room rates! That is how much I saved times the number of days I stayed. Big savings.

5. Ditch the taxi (save 80%)

Transportation is one of the challenges while traveling. Sometimes when you are lost there is no other way but to ride a cab and tell the driver to go to the nearest SM. I know, I tried this already. Emergency is an exception.

In normal conditions, avoid riding a taxi for not only it is expensive but most drivers exploit the opportunity of overcharging you - either through scammy taxi meters or stellar flat rates.

Ride the public transportation (used by locals) instead - jeepney, tricycle or pedicab. Don't act like a tourist but a local.

And for any questions you have in mind, ask a local. 90% of the time they will help you.

It also pays to be bargaining all the time. Few bucks saved when accumulated is worth a hundred.

6. Eat where the locals go (save 40-60%)

You can stretch your travel budget by simply choosing where to eat. If you want to go to a famous resto you've been dying to go to, do it just once for the sake of experience but not on your entire 3 days 2 nights stay.

Take note that travel isn't food alone and not all delicious foods are expensive.

When I went to El Nido it was really one of my itinerary to go to Altrove Restaurant - an Italian restaurant famous for its brick oven pizza.

It was a bit expensive but it was really worth it. Just one dinner (for experience sake) and I never went there again.

7. Be safe (priceless)

Accidents are more expensive than being safe. Should have put this on top of the list but I didn’t because you would think this is very obvious.

It is but not really when you're high and stoked. Think again.

Although accidents are inevitable, we can decrease (or even eliminate) the likelihood to happen. One of the best ways to do this is to be mindful on your surroundings.

You can't expect to be safe if you go alone 1 AM in the morning in the outskirts with lots of drunk locals. Not a good idea.

Likewise, it doesn't make sense if you wear jewelries and show it off publicly. You might not be wearing it again.

Mindfulness is being aware in the present with yourself and with other people. Of course this shouldn't interfere with your activities. You should know it yourself if it is not safe (then you need to avoid) so it won't cause you any harm.

Bonus: Do you have a Life Insurance? (priceless)

This is not to exaggerate. We will never know when a serious incident hits us - maybe not at this time (who wants to?) but eventually it will.

Life insurance should be one of your priorities. Yes, on top of your future business and travel plans. Here's why.

Life insurance will save you and your children from any unlikely incidents that will affect your family financially.

Think about being laid off from work, health conditions or accidents (from travel or by other means) that may affect your income. Life insurance can help you on that.

If you want to know more, hit me an email and I can give you a free quote.

Conclusion

Travel is part of life. We go into places and immerse onto experiences to rejuvenate us from the daily grind. Travel, however, is expensive and requires ample budget and preparation.

If we all just go travel right away without proper planning (and saving), we might be spending on unnecessary things that will blow up the travel budget and will affect our nest egg.

Proper planning and saving is a "must" for a worry-free travel.

Do you have any other tips not mentioned in this post? Please leave a comment below.

The Brexit Effect -What’s next for Markets

Britain’s Vote – European Union Likely to Disturb British/European Economies

Mentioning that Brexit vote on June 23 which had taken the financial market unaware could be an understatement and the pound, British stocks as well as the Gilt yields had mounted sharply in the week which lead up to the vote but crashed once the results began coming in.

Generally speaking, strategists on Credit Suisse’s Global Markets and Investment Solutions and Products (IS&P) teams anticipate markets to stay volatile in the forthcoming days and for the investors to favour safe assets to the uncertain ones.

 Some of the views have been highlighted from across the bank on how Britain’s referendum vote leaving the European Union is likely to disturb the British as well as the European economies and a broad range of financial resources.

The Economic Impact

The Credit Suisse’s Global Markets and IS&P team are of the belief that the Brexit vote would be creating a considerable amount of uncertainty for British businesses which would eventually lead to a weakening in GDP. Both the teams also tend to believe that the Bank of England would step in with cuts in rate.

Moreover, the Global Markets team believes that the Bank of England to cut rates from 0.5% to 0.05% and had another round of measurable easing to the tune of £ 75 billion which would not be later than August 2016.

Credit Suisse’s Chief Investment Officer for International Wealth Management, Michael O’Sullivan, pointed out that the central banks all over the work seems to be on alert to step in, ensuring that their own banking systems tend to have sufficient liquidity. Besides weak corporate spending, Global Markets economists anticipate growing inflation as well as the decline of the British pound to squeeze household expenditure.

Accordingly, they predicted that GDP would fall 1% between the third quarter of 2016 and the first quarter of 2016 which would have lessened their growth predictions for 2016 from 1.8% to 1% and the 2017 growth predictions from 2.3% to 1%.

Significant Slowdown in Growth

The analysts of Credit Suisse’ IS&P also expect a significant slowdown in growth and the teams contemplate it possible that the deteriorating value of the pound would be causing a front-page inflation to spike. The Global Markets team also seem to anticipate an impediment to the recent pickup in corporate spending especially in Europe together with the tightening of financial conditions.

The economists of the team had dropped their European GDP growth expectations from 1.7% to 1.5% in 2016 and from 2% to 1% in 2017. Credit Suisse’s IS&P team are of the belief that the Eurozone would not be following the U.K. into depression unless the Brexit vote ends in severe financial infection to peripheral economies like Italy. However, the analysts on the team envisage this as a tail risk. The IS&P team are of the belief that the European

Central Bank would lengthen its quantitative easing program whereas the Global Markets team consider that there is a possibility with added easing through the prevailing TLTRO program offering low-interest funding to commercial banks.Credit Suisse’s Investment Committee has downgraded European stocks to neutral as well as British stocks to drift whereas the U.S. stocks to neutral. Moreover strategists of Credit Suisse’s Global Markets had shifted their year-end goals from 6,600 to 6,200 on the FTSE 100, 2,150 to 2,000 on the S&P 500 and on the Eurostoxx 50, from 3,350 to 2,950.

Doing investment using CPF Ordinary Account and Special Account

Hi Folks! I believe you have heard or went for seminars in teaching you on how to make use of your CPF money? As you may have know, we can do some investment using our ordinary account and special account but it has some restriction in using the money in it. It does make sense for the government to impose some limitation to prevent the CPF members from gambling their money to invest on all sorts of investment. All form of investment has risk and government do not want to bear the full responsibility if things went ugly. The subprime mortgage that happened in 2008 is a good example of how the investors reaction when their investment collapse and they could not take the loss. Therefore, certain level of control is needed. After all, we are not welfare state country. We have to do something extra to get more funding for ourselves. Having those restriction, it helps to meet the purpose of CPF, to fund for purchasing hdb flats and have money at retirement age.

Restriction:
1) Ordinary Account - As you all know, this account is more flexible to be use for your house, education or even transfer the funds to special account or to family members account. First $20k cannot be use to do any form of investment. The amount from then on can be used to purchase any stocks, unit trust, singapore bond and etc. Please take note that not all investment product can be purchased even though you can purchase almost all type of product. Most of the investment product will have a label to indicate it can be use with CPF money.

2) Special Account - Since this account is less flexible in their usage in the early stage of our life, it has higher amount that is mandatory to be kept in the account. For the first 40k, it cannot be use for any form of investment. It has also some limitation in the investment product that you can purchase.

For more comprehensive details, please click here.

When or Why use it?

Many of us may not be so lucky to earn a high income that literally capped on their ordinary account each month. If you are one of them, it may not bring any impact to you as you are able to fund almost anything. This is more applicable for those low or middle income earner who wish to enhance their CPF money through achieving more than the interest given every year. It is also can be use as a "emergency fund" since it is quite flexible to sell off the unit you own. Ordinary account is given at 2.5% each year and if you follow up with the economy, it may not in favor to us at all. Similar to you putting your money in the bank that give a very small interest every year.

If you are currently or aiming to purchase your first house in three years time, it would be good if you can consider placing some of your CPF money through an investment that provides you a good dividend. It could help you to supplement the monthly payment of your house. You would know that once you are able to stay in your new house, they would wipe out the money inside your CPF Ordinary Account. But please before you do any form of investment, seek advise once again from your insurance agent or your personal banker. They are one of the best people to give you advice on it. Putting some of the money in an investment is like setting aside some money for future use. This money would be use to fund for future needs. It really can help you in a long run. Trust me.

For those that have pass this stage, you can still consider doing this. You just need to do some homework with your partner or yourself to see if you can do so. Check your CPF account and do some calculation. You cannot depend too much on one source of income, SALARY. You need to constantly and strategically find an alternative way of how you can earn more income other than getting promoted in your organisation. This is very important so that you can keep up with the changes. Investment seems to be apart of our life now if we want to have a little bit of comfort in our life. Unless, you own a business and able to sustain the operation. I am sure you will be better off than the average people. To add on, investment using your CPF could also help to meet the retirement sum. If you look at the list, it is constantly increase to be able to meet up with the current standard of living. Based on the amount of $161,000. The payout would be roughly around $1,300. This amount may no longer be the same in the future. Below is an extraction from the CPF website:

5th birthday on or after	Full Retirement Sum
1 July 2003	$80,000
1 July 2004	$84,500
1 July 2005	$90,000
1 July 2006	$94,600
1 July 2007	$99,600
1 July 2008	$106,000
1 July 2009	$117,000
1 July 2010	$123,000
1 July 2011	$131,​000
1 July 2012	$139,000
1 July 2013	$148,000
1 July 2014	$155,000
1 July 2015	$161,000

credit: https://www.cpf.gov.sg/Members/Schemes/schemes/retirement/retirement-sum-scheme

It is time for you to do some consideration and restructure your finances so that you will take more ownership of your life. Remember, do not depend heavily on the government to supplement you till old age. You got to make it happen. There is a reason why skillsfuture is being created. To get yourself equip with new skills set or be updated with the latest technology that are related to your current career path.

So stay hungry always people! Always think positive and you will see the reward thereafter! Cheers!

Perspective of Insurance Policies

Hi Folks! Insurance policy anyone? I am sure you may have came across an insurance agent on the streets asking you to do up a mini survey regarding your finance. Majority of us especially the young ones may not really find it of any purpose to be insured or see it as a waste of money to own it at a young age. Personally, i am one of those people back then until i study further on insurance products and how it can benefit an individual. I own several insurance policies including investment related insurance.

Firstly, to simplify the purpose of having an insurance is to give you a peace of mind be it for protection or wealth accumulation. We have to face the reality of life living in Singapore. Cost of living will eventually increase due to inflation. Insurance policy is now more practical for every individual to own irregardless of their age. I would suggest having the minimum insurance policy for yourself and that is Medical insurance. It is the kickstart for any individual to start having the policy before proceeding to have other type of insurance coverage. It would really helps alot in your medical bills. With that in mind, please read the coverage of the policy that you are purchasing. They normally have several package to cater to your needs. I personally encounter several of those people that i know feel disappointed as they could not use their insurance policy to cover their cost. If you face some issue on your personal finance, start with the minimum coverage for yourself and slowly increase your coverage as you feel more comfortable. It would be essential to have good insurance agent to assist you on this. Personally, a good insurance agent would follow up with you the minimum of every 2 years. BUT! I strongly advise you to monitor it yourself as well! It is really really really important to know what you are buying! =). You should know best of your health!=)

Just a brief highlight of the different type of insurance policy based on protection and wealth accumulation.

Type	Protection	Wealth accumulation
Term	100%	0%
Life	60%	40%
Endowment	30%	70%

To me, certain type of policy varies according to an individual finance capability. I will tell you briefly on each type of insurance policy.

Term insurance which is purely on personal protection against injury or permanent disability. It is the cheapest form of protection for an individual due to low monthly premium which is also translate to a low disbursement upon making claim by the policy owner.

Life insurance which is very popular among the middle and high income earners, the policy premium is relatively high. It is normally being used to inherit some monetary to their children or spouse to overcome their daily financial means if anything happen to the policyowner.

Endowment policy is popular among low risk policyowner who prefer to put aside some money for rainy days and have some protection as well. The policy often offer higher interest rate return as compare to fixed deposit in the bank. As usual, please read the term and condition on it. There is always underlying reason why they are willing to give you the perks.

Once again, PLEASE do not be lazy to read any policy that you are planning to purchase be it for yourself or for your loved ones.

Benefits of having an insurance agent

Having an insurance agent is just like having your own personal secretary that would help you to do up the necessary paper for your insurance policy. You should be thankful if your insurance agent would keep in contact with you. This shows their interest in your well-being. It is essential to get a sincere insurance agent to manage your policy and your family.
Some brief pointers on the benefits of having an insurance agent:

1) Policy expert as they should know best.
2) Will provide you any update on changes of the policy or new product that best suits the policyowner.
3)  They will do the necessary follow up if you happen to make a claim or do some amendments on your policy.
4) Can be your family personal insurance agent under one roof.
5) They will visit you at your convenient time and location.

Hope this helps you to be more receptive and be more open on insurance product whenever your current insurance agent or any of insurance agent approach you. It may be useful for you so it is worth listening. FYI, I am no relation or get any incentive from any insurance company on writing this as this is all based on my opnion and insights. Cheers!

Passive Income is a Myth

Many so-called passive incomes are not entirely passive. If you happen to see how most people invest, you will know where I am coming from. Most of them are not guaranteed returns and we shouldn't expect to receive it on a regular basis, nor the capital preservation. Here is the definition of Passive Income by Wikipedia: Passive income is an income received on a regular basis, with little effort required to maintain it.
Here are common "passive income" people talked about:

1. Dividends
2. Property rental
3. Bank saving interest
4. Bonds/fixed deposits

Dividends
I will not assume my dividends will come in on a regular basis. Dividends are declared by the company yearly and it is not guaranteed. There is no capital preservation too. I know, some hard nuts will say buying good companies is a natural process for dividends or/and capital growth. I love their convictions. We are just playing with probabilities. Watch your numbers.

Property Rental
Can you guarantee your investment property will be fully occupied 6 months down the road? How about the capital preservation? Many of the investors benefited from rocketing properties prices, decades after decades. Most people will think buying properties is a natural process to exponentially grow your wealth, especially with the leverage. Well, it has been really good, but there is still no guarantee. Again, we are just playing with probabilities. Watch your numbers, again.

Bank Saving Interest
Enough said? Bank saving interest will fluctuate (Anyway, most of the rates are quite pathetic already).

Bonds/fixed deposits
This type is definitely most passive and guarantee, unless the owners go burst. Just don't expect high yield. 3-4% per year is already considered good. There are negative rates in a few countries. You may lose out to inflation along the way.

So, all dreams shattered? Financial independence is nothing but a gimmick sold by the financial experts (at least the so-called experts)?

If you have enough money and cash flow, you have achieved financial independence. For example, if your household expenses is $30,000 per year and you have yearly income of more than $30,000, you are somehow there.
If you are solely depending on the so-called passive income, please put in some buffer. How much buffer? I wouldn't know. It is your comfort level. Maybe, 50% more? Expenses of $30,000 will need income of $45,000, in case of rate cut. If you still cannot sleep in peace, maybe living on passive income is not your cup of tea.

Another method will be using the capital draw-down style. Try calling Mr Bill Gates and ask whether he need passive income to be financially independent? If your capital is huge enough to last you a lifetime, there is no need for you to be so fixated at "passive income". For example, if you only need $1 million of cash, lifetime, you know that the $2 millions in your bank account is somehow sufficient.
If you coupled with the "passive income", it will work as your capital preservation, hoping you will never need to draw down the $2 millions by living on the interest earned. Again, who will eventually spent the $2 millions? Pass down generations by generations? Are you so sure that your descendants will be a better person with the inheritances? Will it deprives their survival instincts? Leave it to you to think about imparting the right values to your beneficiaries. Having inheritances are definitely a bonus, but values are more important. Maybe there are no correlation between the two. In my opinion, excessive wealth is useless. You may ask, Frugal Daddy, are you on your right mind?

Do remember to do personal hedging. In a more familiar term, it is called insurance. How much is enough? Only you will know. Maybe an amount that can last your family for >10 years, but a premium of <10% of your income will be a good estimate. Not all events can be covered by insurance, so you need more money for self hedging.

I am surprised by people chasing after money as if it is a life goal. Don't end up chasing after the moon in the river, after 50 years, realised you have wasted your life. If money can solve the problem, it is not a big problem. I know, if there is no money (it is a big problem!), we may not be able to focus on the essentials in life. However, It should never be the main focus, it is a commodity. If you crack your head harder, maybe, the money problem you think you have, need not be resolved by money. You may ask again, Frugal Daddy, are you on your right mind again?

Passive income is a good concept, it makes your money works for you, but it is not entirely passive for most instances. Make sure you strike a balance, because time is a more important resource that you have, and you can't have excessive time. I can guarantee you there are plenty of richer people out there hoping they can have more time than money, and they wish for a different youthfulness if there is a restart button.

There is no restart button, stop looking for it. Live your life now.

Opening an Investment account

Hi Folks! I will be sharing with you today on the procedures of opening an investment account. I will try to make it idiot proof so that you can literally go on your own to get started.

Before you start investing, you must be mentally and financially prepared for the risk that you will be taking. Generally, I use it to keep up with the inflation. I would recommend that new investors to start off with blue chip companies before you progress to more highly volatile investment products.

As addressed in my previous post, you need to open an account from any of the local banks securities or private securities companies. It is strongly advisable to open in person at their store as they can assist you to fill up the long and exhaustive list on the form. I will list the available securities companies for you to open an account.

1) DBS Vickers
2) OCBC securities
3) UOB Kay Hian
4) Lim and Tan
5) POEMS

Each of them has its own perks and promotion when you open an account and you are not limit to open only one account. For me, i would open two account that suits me best. Please note that it is free of charge when opening an account. They would help you to open an account with them as well as CDP account. CDP account is just to safeguard all your investment that you are currently holding. It is acting like a bank that you store your assets. Once you open an account, you will receive a letter from them within 2-3 weeks. The letter will guide you in your registration to their platform and you can start trading! They will give you a capping limit in the amount that you can invest and it varies for each individual according to the declaration of your monthly income.

CPF & SRS investment account

I will add this portion as well just in case you may prefer to use your intangible money from cpf to trade or SRS money for retirement. You can only open the account in the local bank and you can only open one account. Unlike the securities account which you can open multiple account from different companies. Once your account is open, you can only purchase certain stocks and unit trust. You cannot trade on your first $20,000 in your ordinary account. Please note that if the investment that you have purchased issued dividend payment, it maybe reinvested or credit back to your account.

I hope it helps you to have some understanding!

See you again!

Dollar Cost Averaging Vs Lump Sum investment

Hi viewers, I understand that you may have read some post from other bloggers or forums indicating on the topic that i would like to share with you guys. As far as concern, i would try to simplified the understanding of how investment works and from here, you would be able to get more ideas what your future personal banker or insurance agent would share with you. So i would just share two forms of investment and mode of payments to keep it short and sweet! It is also based on my own findings as well. But please bear in mind, your investment decision is solely on your own discretion. =)

Let me start by simplifying on the understanding of the two mode of payment: Dollar Cost Averaging & Lump Sum 

Dollar Cost Averaging

It seems to be popular among the young ones who do not have strong purchasing power or earnings. The purpose of this mode is to allow the investors to pump in a specific amount of money every month to the investment product. It also allows to appreciate the volatility of the price of the investment product. This mode of payment would come with a price. It normally charge a fee that is rather high.

Pros: 

1) Consistent purchase of the units every month.

2) Allows the investor to understand the product they purchase due to the volatility of the price every month.

3) May potentially break even.

4) Monthly minimum amount of $100.

5) Do not need constant monitoring.

Cons:

1) High fees.

2) Fixed date to purchase the units.

3) Monthly amount of atleast $400 and above to find it worthy on paying the fees(varies according to the person)

Lump Sum

Lump Sum has been the normal mode of payment. It is much in favor for those experience investors as it allows them to bid for the best price. This is of course requires the investor to have a better understanding on the movement of the price or the company nature of business

Pros: 

1) Able to purchase at your preferred price.

2) Fees are affordable based on the quantity of unit.

Cons:

1) More Monitoring required from the investor.

2) Requires a big sum of money.

Next! I will share with you two of the investment products that offers both mode of payment as it maybe lengthy for someone to read through everything if i were to add more products.=P

The two form of investment product would be: Unit Trust & Singapore Stocks

Singapore Stocks & ETF

Since January last year, SGX has decided to reduce the shares purchases from one lot(1000 shares) to 100 shares per transaction. It helps alot of new investors to enter the market and increase the current investor portfolio. Interestingly, two of the local banks have came out with an interesting approach to garner more young investor(inclusive myself) on investing through dollar cost averaging since 2013 even though there are private companies that offer similar service. The local banks are quite successful in their publicity in creating awareness on the importance of investing at the early age. It seems quite catchy for some people as the stocks or ETF that are offer are based on blue chip companies. Personally, i have use both banks service since the start of their launch. I choose to diversify not only my portfolio but also my mode of purchasing so that i would be able to appreciate on the various services given by companies. Purchasing stocks on a lump sum would require to open through their securities such as DBS Vickers, Maybank Kim Eng, OCBC Securities, Lim and Tan, POEMS and UOB Kay Hian. Each of the securities has its own promotion. Choose based on your comfortability and they will assign you with a remisier to assist you.

Unit Trust

I have used services from banks and online platform to purchase unit trust. I would not dictate any of the unit trust that i currently holding as it would definitely bring no benefits at all on my initial purpose of this blog. Unit trust is a portfolio of assets of a different risk level that cater to different appetite of investors. Personally, i would recommend you to approach by the professionals be it insurance agent or personal banker to perform the risk assessment test before you start any form of investment. I hear alot of horror stories of those who invested and could not swallow the risk of losing some of their money. It is strongly advisable to know your risk appetite. Always try to diversify your unit trust product and not stuck to one product throughout your investment. In my future post, i will share more details.

As promise to keep it short and hope it is simplified for you to understand. I will write more items from Initial Public Offering(IPO) stocks, insurance product and daily personal finance. Will also give some updates on interesting workshops.

So stay tune and have a good weekend!

Bank of England Warns Property is a Key Risk to Economy

Bank of England Cautions – Commercial Property Main Key to Economy

The Bank of England has cautioned that commercial property would be the main key to the economy after the Brexit vote. The main concern is that the market from warehouses to office space to retail parks with regards to commercial property is deep distress. Foreign investors, who have purchased commercial property, have made around 45% of all commercial property bought and sold since 2009. The inflow of money to UK seemed to slow down, even before the Brexit vote and dropped by 50% during the first quarter of 2016.

A warning had been given by The Financial Policy Committee that `valuations in some sections of the market, particularly the prime London market had become stretched’. The Financial Stability Report of the Bank points that the real estate investment trust share prices had dropped severely and cautioned about the risk of `future marked adjustment in commercial real estate prices’. According to the translation from Bank of England, there is a risk that commercial property prices may crash.

Considerable amount of most of the valuable prime London commercial property is said to be in the City where some of the foreign investors like banks and investment manager have a

ssisted in financing a powerful and constant session of construction, which have been symbolised by iconic buildings with nicknames like the Gherkin, the Cheese-grater or the Walkie Talkie

Inflows of Foreign Investment in British Companies – Slowed Down

Since 1980, the UK had earned abroad, extremely less selling goods and services than it had spent on imports thus developing a current account deficit. Roughly there was more money going out than coming in. For years it was compensated by attracting money to the UK in two ways.

The first way was that foreign investors had been willing to buy shares in UK companies and lending money to their government. The second was, the foreign companies had been ready in investing directly for instance, constructing new buildings in the City of London or in investing in business such as Jaguar Land Rover in order to turn it into success.

The report of the FPC had stated that all inflows of foreign investment in British companies had slowed down in the approach to the referendum.

Investors’ Belief – Risk in Investing in UK Companies

Investors are now of the belief that they will be taking a risk in investing in UK companies, that are reproduced in share prices, the biggest two-day slip in the value of sterling in more than forty years.There have been some reassuring words in the report. The banks for instance have been stress examined against scenario where the commercial property drops by 30% and residential by 35% with severe recession.Banks tend to have high quality liquid assets of £600bn like shares in top companies, government cash and bonds.

They could endure losses which were double as those undergone in the 2008 crisis without falling short of money. With that security, the Bank of England ruled on that the banks did not need to build up £150bn as a `counter-cyclical capital buffer’. The counter-cyclical buffer is just cash that is kept aside in good times so that it can be made available when the down-swing occurs