Wednesday, July 2, 2014

Simple secrets to building wealth

There are probably tons of books written on how one can get rich or become wealthy. Yet, the secret to building wealth is probably much simpler than most people can imagine. If I could choose three words to describe it, I think the appropriate words would probably be "income", "invest" and "persistence".

Firstly, without income, it is very difficult to become wealthy. The only instances one does not require income is probably if you have a large inheritance or you are starting a business (when you have the intention of selling it). At the end of the day, one cannot accumulate assets if one does not have income.

Secondly, one will need to invest.This can be in any instrument. But the idea is that you are only able to invest if you have money left over from your income after taking into account all your expenditure. In most instances, one is able to invest only when spare cash is available.

Lastly, it boils down to persistence. spending money today always seems more tempting and rewarding then saving it for a rainy day. This is especially so when instant gratification seems to be a large part of our culture today. We rather be seen with a Starbucks coffee in hand rather than saving that money and investing it. This is an everyday battle where our heart will tell us to spend when we really ought to be saving. In addition, one also needs persistence to continue saving and investing even when the markets are bad. This is probably very hard since we are all probably wired to try to avoid risk and danger. But the best time to buy is probably when the market is in its doldrums.

Sunday, June 29, 2014

Dividends for June 2014

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It is the end of the June school holidays in Singapore and July is almost upon us.  Have compiled my dividends for this month.  As most readers do know, I receive cash in my mailbox every month.

Almost $100+ in distributions from unit trusts, $100+ in dividends from stocks and $60+ from various deposit accounts [Check out on the details for the various bank deposit accounts I am using right now in the postings found here and here].

The total amount collected for June 2014 is $282.

Not enough to do anything with it really.  Will just have to reinvest into other instruments to keep the monthly income flowing in.

I am quite pleased that I actually had the discipline to compile my monthly dividends for the past few months.  It has at least made me more aware of where my dividends have been coming from and how much I have been getting.  It sure beats having just a blurry guess-estimate of how much I have been getting.  It also serves as a good check on whether I am hitting the goals that I have set for myself.

Please see dividends for other months compiled below:

For those who are interested, do check out the following links:

Articles on retirement, savings, financial planning and investing:
Real Estate Investment Trusts (REITs)

Popular Reads

Friday, June 20, 2014

How Long Singaporeans Are Going To Spend in Retirement & Why Women May Be In Trouble

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According to survey findings released by Manulife Asset Management's Aging Asia Research Series, many people in Singapore are underestimating the length of time that they will actually be spending in retirement.

Many Singapore individuals are expecting the retirement period as a married couple to be 19 years when it is actually closer to 24 years.  The projected retirement duration was estimated by analysing the mortality rates from Singapore' Department of Statistics.

Elsewhere, other surveys done by other companies have also shown that 4 in 10 Singaporeans want to retire at 55.  Four in 10 Singaporeans also have not started saving for retirement.  These are all worrying figures.  It shows that there is probably a general lack of good retirement planning amongst Singaporeans.

Expected length of Retirement 

Retirement and life expectancy is something that is closely linked.  Given the longer lifespan of women, women are also likely to outlive their male counterparts by another 11 years.  That brings the typical male retirement length to be 24 years and females to 35 years.  This assumes a retirement age of 62 years old.

This seems to be a worrying figure as it probably means that most people will have far less than sufficient money to afford an early retirement or even a comfortable retirement.

It also spells trouble for women as they will be spending a considerable portion of their retirement alone, as the sole survivor.  And this has deeper implications as women often exit the workforce much earlier to their male counterparts and would thus have accumulated much less for their retirement spending.

The long life expectancy and the inflation rate is also probably some reasons why the CPF Minimum Sum needs to increase to cater for the changing needs of an ageing population.

Retirement Period Longer than Working Life?

Assuming an individual starts work at age 25 and retires at say age 55, they would have only worked a grand total of 30 years.  For a male, it would mean he would have to save up enough money to spend for another 24 years while for a female, it would mean she would have to save up enough money to spend for another 35 years (which is even longer than the period of time she has spent in employment).

Many people are probably making all kinds of retirement planning mistakes by making wrong assumptions about their retirement age and the amount they need to save up.  If the time spent in retirement is going to be almost as long as your entire working life, one better start planning early and carefully.

Basically, should not wait until they are only 40 or 50 years old before they start saving for retirement. They better start saving for retirement at age 30 or even much earlier. In my opinion, it is good that people start thinking about their desired retirement age and retirement planning as soon as they start working.

Time to Re-think Retirement?

So is it time to re-think retirement? My thoughts on retirement have changed over the years.  When I first started working, I thought retirement was something to be desired.  But after thinking about it, I have come to view retirement differently.  Given the long life expectancy, it is perhaps one remains employed and continue to contribute to society.  After all, spending 20 over years in retirement is not going to be fun when you have nothing to do.

For those who are interested, do check out the following links

Articles on retirement, savings, financial planning and investing:
Real Estate Investment Trusts (REITs)



Popular Reads

The Road to Financial Freedom:

Tuesday, June 17, 2014

How Much to Give for Baby Shower

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Often, I get questions on how much one should give for baby shower (e.g. colleague's baby first month celebration, etc).  Well, this is both an easy question and hard question to answer.

The reason why it is easy or hard depends really on the type of person who is inviting you for the baby shower.  It can be hard to tell what kind of person is it.  Some people don't give two hoots about how much you give or what presents you buy for their baby.  The only reason they invite you there is because you belong to their closest circle of friends.  Your presence is all that matters.  In fact, the only reason why they want you there is so that they will actually have somebody to talk to during the baby shower or party itself.  In fact, you could turn up empty handed and they will probably not even realise it.  After all, they are not bothered about gifts or the amount of ang bao one gives.

On the other hand, there ARE people who actually might take offence if you do not turn up with a respectable present.  And it is extremely hard to tell which category your friend/colleague/spouse's friend might fall into.  If they fall under this category, you BETTER show up with something in hand or face the consequences for the rest of your life (okay, just kidding......but then again, maybe not). And the situation gets trickier.  What if that person is a colleague whom you will see day in day out?  Or what happens if it is your boss?

Well, there is really no good guide on how much to give for a baby shower.  In terms of red packet (or ang bao), I figure that the following should serve as a guide:

Acquaintance/Colleague - $20 to $30
Friend/Relative - $30 to $80

Well, the above rates are just a guide.  And only you will perhaps know what is the correct amount to give.  Of course, if your entire family (4 or 5 pax) is invited to a baby shower with buffet served, you might want to give a little more to cover the costs of the food/drinks/venue.  But this is not a Chinese Wedding and the amount probably does not matter.

Another way to simplify things is to just simply buy a gift for the baby (using the above rates as a benchmark for the cost of the gift).  But this gets tricky as you never know what are the gifts that parents like.  The parents might be fussy about the brand of the gift (only ABC brand), country of manufacture (no toys made in XYZ country), colour (e.g. no purple) , etc.  So it is extremely difficult to get a gift.  Unless you are certain that the gift is of a reasonable quality and will be well-received by the parents.  Books are quite safe presents but then again, some judgement needs to be exercised.  After all, a 1 month or 1 year old baby can't possibly read that much.

The best way if you are still clueless is to actually suggest gift sharing with a few other people who are attending the baby shower.  This sorts of ensures that you are giving the equivalent of what others are giving (especially useful if it is a colleague's baby shower that you are attending).  But there is of course the operational hassle of who chooses the gift, what gift to buy and how expensive it should cost.

Nevertheless, all these should not deter one from attending any baby shower.  After all, it is the heart that matters.  And I am sure your presence at the baby shower will be much more appreciated than any gift or red packets (ang bao).

Tuesday, June 10, 2014

Favourite Video of the Week - Emma Stone Lip Sync Battle with Jimmy Fallon

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Here is my fav video of the week showing Emma Stone in a lip sync battle with Jimmy Fallon.  Both of them are great entertainers but I think Emma's final performance of All I Do is Win nails it.  Enjoy.

Saturday, June 7, 2014

Singapore's Andy Chua Wins Right to Dine with Warren Buffett

A certain Mr Andy Chua from Singapore has won the bid to dine with Mr Warren Buffett.  Mr Chua together with seven other guests will get to dine with the world's 3rd richest man in Manhattan for lunch at Smith & Wollensky.  At the restaurant, a typical mains costs only around US$70.  His single bid of S$2.71 million is not the highest bid in history.  The auction proceeds will benefit a San Francisco charity (Glide Foundation) that provides meals, etc to the poor and homeless.

Little is known about Andy Chua who has said that he was not interested in interviews right now.  

So who is this mystery man Andy Chua?

I did a quick google and came across a few people named Andy Chua.  

Out of all the people, it seems that there is this Director, Head Asia Pacific Financial Advisory Centre at Merrill Lynch that seems like a possible fit (though I can't confirm for sure).   

There is also a Mr Andy Chua who was at a Montblanc event: 

Not sure whether these two are the same person or different people altogether.  Also not certain whether any of them was the one who won the bid to dine with Mr Buffett.

In any case, congratulations to Mr Andy Chua (whoever he is).  Hopefully, he will share details about the lunch with the media soon.

Update 10 Jun 2014:

It has been revealed by CNA that the winner is the owner of YunNam and not the said Andy Chua mentioned above.

Sunday, June 1, 2014

Dividends for May 2014

End of May 2014.  Once again, I have taken some time to compute all the dividends received over the past one month including all the cheques that I have been receiving in my mailbox. This month's collection was much better than previous months because many of the shares I have gave out dividends.

Collected a total of $842.82 in dividends for May 2014.  Majority of the dividends came from holdings in Singapore stocks.

Quite glad that I have been receiving a regular stream of dividends each month.  It also helps that I have been compiling my monthly dividends so that I at least know how much I have received each month.  I am also glad that I now collect dividends every month instead of quarterly.

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