Bills to Pay

Lots of bills to pay for this month.

First there is road tax. If I renew it for a 6 month period, it will cost me $367.00

Next is housing installment which I need to pay in cash. That is close to another $500.

Then there is my upcoming car insurance which I need to renew. That will set me back by a good $1000 plus.

Credit card bills also add up to over $1300.

Lots of bills to pay for this month. Less my usual contributions to my investment linked plans, I have very little savings for this month.

10,000 Hours To Be An Expert

Everyday I try to draw some lessons from the books that I read or the things that I experience.

I have been reading Outliers by Malcolm Gladwell. In one of the chapters, it mentions that 10,000 hours is what it takes to make a person good at a particular field. That is roughly 10 years. The most gifted person or the most talented person still needs to practice 10,000 hours before they get really good.

Come to think of it, I have never really truly put in 10,000 hours into any particular field. Even during my university days, I don't think I managed to study 10,000 hours. And that perhaps explains why I am neither talented in any sport or in any musical instruments.

10,000 hours is all it takes. Of course, there needs to be some talent involve. But even with talent, you still need 10,000 hours.

Where should you devote 10,000 hours to?

Funny Incident at MRT

Memories often fail me and so I thought I should record down some of the funny incidents that I go through in my life as well.

While I was taking the MRT today, I wanted to know the time. As the MRT was packed, I looked at the watch of another passenger who was holding the handrail next to me. I got a shock to realise that I might actually be late as the time on his watch showed 845am. To be certain, I peeked at another passenger's watch and her watch showed 842am. At this point in time, I was wondering whether my own watch was behind time.

However, after looking a round at other watches, I realised that the time was actually much earlier at 825-830am.

What a funny incident! I peeked at 2 separate watches of 2 different passengers and somehow, they both had watches that were 15mins ahead of time. 10 mins I can understand. But isn't 15 mins a bit too much?

Girl Made to Sign Pre-Nup Agreement

Apparently, some girl was about to get married when her in-laws and husband-to-be sat her down and wanted her to sign a pre-nup. They also wanted the marriage registered in the US so that the pre-nup will be enforceable as pre-nups are not recognised for marriages registered in Singapore.

The forum thread is attached below:

Read this : http://forums.asiaone.com/showthread.php?t=33015

Do you think pre-nups are necessary? Is it wrong for the rich to try to protect their assets?

SIA Bonds and SGS Bonds

I read today's news article that SIA was issuing $300 million of 5 years bonds with $50 million to be placed out to retail investors. The minimum subscription is $10,000 with coupon rate of 2.15% per annum.

Yet in the same newspapers, I also saw a notice by MAS on the Singapore Government issuing Singapore Gvt Bonds at a minimum subscription of $1000 with a coupon rate of 2.875% per annum.

What is interesting is that the Singapore Government Bond is actually paying a higher coupon rate than the SIA bond. In addition, the minimum subscription amount is also less at $1000 compared to SIA's $10,000. From the investor's point of view, it seems to make more sense to invest in SGS bonds over the SIA bond since the coupon rate is higher.

Another interesting thing that blew my mind away was the coupon rate. From what I gather ( I could be mistaken), I always thought that governments (not Singapore in particular) are able to acquire debt more cheaply than private entities. This is because a Government can simply raise taxes or print more money to pay back its investors. As such, a government when compared to a private entity should be able to issue bonds at a LOWER coupon rate than a private entity. It makes sense since the institutional investors will view government bonds as being less risky than bonds that are being issued by private entities.

However, for the case here of 2 similar 5 year bonds, what I observe is that the private entity (SIA) is actually able to borrow money (through the issuing of bonds) at a cheaper rate than the Government! That is 2.15% coupon rate versus SGS bond's 2.875%! That is a pretty significant difference!

How a private entity can actually borrow money at a cheaper rate than the Singapore Government (which has an excellent credit rating) totally baffles me. I don't understand.. Maybe there is something I don't understand about bonds yet. Or maybe I could be badly mistaken. Can someone correct me on where I have gone wrong in my thinking?

[After note (23 Sept): In this post, I compared SIA bonds and SGS bonds and was wondering how could a private entity offer coupon rate that was lower than the Government. I asked readers to correct me on where I have gone wrong in my thinking. After all, I was utterly baffled from my supposed assumption that this was a scenario where a private entity was able to borrow at a cheaper rate than the government.

Thankfully, a reader (named Sen) corrected my mistake. The SGS bond had a coupon rate of 2.875% but that did not translate into yield as the pricing of the bond was still not known. That means the yield of the SGS bond will most probably end up being lower than the yield of SIA’s equivalent 5 year bond.

Morale of the story: When you think that you have found an anomaly, it is most probably not an anomaly.]

SMRA 4% Interest

So the news has reported that the SMRA interest rate will remain at 4% for another year till Dec 2011. That is good news for all to hear!

After pegging it to the SGS yield plus 1 per cent, interest rates seemed to have drop significantly such that the Government has to keep extending the 4% interest rate. The last time I blog about this was almost a year back! That is how fast time flies.

Now a new year is almost upon us.

Recently, I conducted a survey on how much money people have in their CPF Ordinary Account. Only 27% of the respondents had more than $100,000. Considering that the readers of this blogs span a wide age range, it is certainly not surprising that some people have accumulated more than $100,000 in their Ordinary Accounts.

For me, I belong to those who have hardly any money in my CPF-OA. Afterall, most of my contributions to CPF OA goes to paying off my monthly housing installments. Considering that there are more than 20 years of payment left, I wonder when my CPF OA will start to rise to that kind of amount.

Canadian Income Trusts

It has been a long time since I last wrote on Canadian Income Trusts or Canroys.

I did a check to see what the situation was on these investment instruments after they fell out of grace because of the planned tax by the Canadian government which will effectively lower the distributions of these income trusts by 2011.

It seems that nothing much has changed since I last read the news. The finance minister is still coming under strong criticism from opposition parties because of the new tax ruling. The reason why the tax ruling was changed was due to a white paper released by the Department of Finance that estimated 300million Canadian dollars in tax money was being leaked away because corporations were using the income trusts structure to avoid taxes. When news of the new tax ruling broke out, billions of dollars were wiped out as the income trusts tanked.

Nothing has changed thus far and it is best that investors wait at the sidelines.

Online University

Crazy ideas often come into my head. And this is one crazy idea that just slipped into my mind when I was reading a book.

What if I can turn my blog into some kind of online university?

Well, we all know that people go to university to gain knowledge and to share knowledge and to discuss with peers about what you have learnt. Basically, the quest for knowledge actually involves lots of discussion. And what better way to accomplish this discussion then through a blog with people giving their comments on topics that I or a guest blogger has posted.

There are lots of insights from all my readers and I must admit that certain comments are even better than my blog posts itself! How cool will it be if this blog could turn into some kind of knowledge repository where people can turn to and look for information regarding a certain topic to know that it has been thoroughly thought through by various individuals?

What if I could turn blogging into something that is much larger than itself? Something that actually helps to transmit ideas and educate people?

Of course, I am not sure how wide the topics should cover. But I was thinking that anything interesting and related to finance will do. The problem with being too specific in topics is that it alienates some readers while at the same time, being too general can cause certain readers to become frustrated that they are unable to find the information that they are looking for.

But I am seriously toying with the idea and think that it will be really good. Essentially, I or somebody could come up with an interesting topic. Everyone can then feel free to do their own research and participate. But of course, most people I believe are not that keen into doing research and spending so much time talking about a particular topic especially if they are not interested in it.

Any takers? We can take it at a very slow pace =)

Hidden Gems in Singapore

Finding a gem is like finding a precious stone or digging for gold. When I was younger, I was always mesmerized by the fact that gold came from the ground and that people literally just dug them out. I always dreamed that some day, I would come upon a field unknown to anybody and where the gold and diamonds were all mine to find. I guess the reason why I imagined of such stuff was the mysterious way in which people actually valued these precious stones. These were literally stones that are actually worth nothing but can be sold for such a fortune. There is always these mysterious charm about finding a pot of gold or finding some hidden gems.

As I grew older, I realize that this dream of mine will probably not be fulfilled. After all, Singapore has hardly any natural resources and it will be impossible for me to dig things up without actually owning the land. Nevertheless, the idea of being an archaeologist did strike me once or twice before I signed up for university.

Today, gem finding for me means a whole new thing. It means looking for that place of inner solitude, a place of rest, a place where I can just be by myself and marvel at the things that go by. A place where I find peace and lay my burdens far far away. These places are the hidden gems in Singapore. I retreat to these places by myself to find the solitude that I desire. They are public places where I enjoy my privacy. They are the hidden gems in Singapore. Places where I can look at nature and admire them for their beauty. Places where I feel at rest and at peace. Places where I can just recollect my thoughts and be with myself.

I am glad to have found one of those places. It is a quiet little cafe where I can recollect my thoughts. It is a nice place where I can read my newspaper.

These are my hidden gems. And I will never share them with anyone.

Run Your Own Race

If you could turn back the hands of time, go back a year in time and meet yourself, what would you say to that person? What advice will you give him/her? What words of encouragement will you have?

IF I could travel back in time, this is probably what I will tell myself:

1. Run your own race. Don't be bothered about what others think about you. More importantly, don't be bothered about the successes you hear about other people. You are you. Treasure each day of your life. Run your own race. Don't try to compete with others.

2. Have faith. Many times, things might not go the way you want it to go. Have faith. Keep on trusting and hoping. Things will get better. Don't give up on yourself. Don't give up on God.

3. Live in the present. Stop thinking about how beautiful the past was and how you hope the future will be like. Live in the PRESENT and enjoy each moment now while you still can. Be there for your family and friends. Don't let your mind wander to things that are unknown, uncontrollable and unpredictable. Focus on what you have now and where you are right now. Stop worrying and start living.

What will you say to yourself?

My Thoughts on Retirement

Retirement was a word that crept into my dictionary when I was around Secondary School. It was during that time that I heard that certain teachers were retiring. It was also during that time when I started to ask myself what I wanted to do with my life and when I intended to retire. It seemed like retirement was the norm and I was aghast to find out that retirement as a concept probably was seeded only recently.

In fact, I would like to think that most of the people who lived before our time never did retire. They simply took on a slower pace of life but continued to remain actively involved in running their own businesses be it food stalls, shops, etc, etc. I think our ancestors would give us an incredulous look when they find out that people actually get to enjoy retirement right now.

For me, I have many thoughts on retirement. Earlier thoughts revolved around saving enough money so that I could retire when I was 60 and then travel around the world. However, lately, my thinking about retirement has taken a 180 degree turn. I now feel that I never want to retire. If possible, I will like to be able to work for the rest of my life. However, I am uncertain which employer would be willing to hire me after I am 65 or 70.

So a lot of thoughts nowadays revolve around how I can possibly find a path for myself after that age where I will still be able to contribute back to society. Of course, I am assuming that I will still be alive then. Who knows, I might be 6 feet under by then =)

What jobs can one do after 65? How can I continue to work even after I am 65? What knowledge, skills and expertise must I build up from now till I am 65 so that I will still be relevant to society then?

Double Dip Fears

I guess we have been hearing this for the longest time but it seems that fears of a double dip recession is still there. Just recently, President Obama announced plans to pump in another $50b into the economy through infrastructure works, hoping to ease unemployment rates and boost recovery.

Interest rates have also fallen sharply and it seems that the double dip fears are indeed real.

On the other hand, the economy has been supported by increased corporate spending and strong profit growth and healthy cash flows indicate a certain legitimacy to the overall recovery. Nevertheless, it seems that US GDP forecasts will continue to slide in the near term.

At the same time, it is worrying that policymakers in the EU are already focusing on austerity measures to cut budget deficits. Historical evidence has often shown that increased state spending has a correlation in helping economies emerge from recession. Joseph Stiglitz has warned that such austerity measures could have systemic consequences for Europe and the rest of the world.

Beware of this Insurance Agent

There are many insurance agents that we ought to be afraid of. After all, the typical insurance agent has a glib tongue that can probably out talk most of us. But the worst kind of insurance agent isn't the talkative one. It is the one who masquerades as a financial planner and yet is always trying to get client's to cancel their old policies to buy a new policy from them.

This is an especially common situation in Singapore where insurance agents change companies the way they change shoes. Because of buyout clauses, failure to hit sales quota, or some other kind of reason, insurance agents often change from one company to another over the years. This is nothing common and we should not blame them. After all, who really sticks with one company for more than 5 years in today's job market? Where people are encouraged to gain as much job experience in as wide a variety of roles possible, it is not surprising that people change companies.

But what happens when an insurance agent changes to another insurance company is probably the worst thing that can happen to his clients. It might be better if the insurance agent had left the industry altogether. For the insurance agent who changes company will soon try to convince his existing clients to switch over their policies to his new company. It is not a new trick. It is an old trick that has happened time and time again.

True. There are instances when an apple to apple comparison is done, the consumer can clearly see the benefits of a certain policy over another policy. However, the worst kind of comparison is the kind that tries to compare an apple to an egg. With this kind of insurance agent, one must beware.

This insurance agent will take a whole life policy and compare it with an ILP. And from there he will show you all the benefits the ILP has over your whole life policy.

If you have an ILP, he will take a term insurance and compare it to your ILP!!

If you have a term insurance, he will take an ILP or Whole life policy and show you the benefits of it over your term insurance!!!!!

With this kind of apple to egg comparison, it is impossible to refuse the "benefits" that are proposed by the agent.

Rule of thumb: Always do an apple to apple comparison. When you try to compare an apple to egg, it is impossible.

Don't say you have not been warned.

Gross Monthly Salary Poll Results

I conducted a poll on this site to find out the gross monthly salary of readers.

56% earn less than $5000 per month.
30% earn between $5000 and $10,000 per month.
13% earn more than $10,000 per month.

Interesting results. It shows me that some of my readers are earning $10,000 per month but they still find my site interesting/relevant enough even though I earn less than them.

Perhaps I should get them to share how they managed to earn such a high monthly income and what jobs or industries they are in.

City of Possibilities

I fell in love with the song Empire State of Mind by Alicia Keys and Jay Z. The song speaks about New York City - "concrete jungles where dreams are made of, there's nothing you can't do"

Living in Singapore, I can only sigh at dismay that none of our song writers have written a wonderful song about our country that is as passionate as Empire State of Mind.

After all, Singapore is indeed the City of Possibilities. In recent polls, Singapore is one of the top destinations for people who are thinking of migrating. It is also one of the most liveable cities in the world. The recent congestion on our trains and the skyrocketing population of over 5 million people is also testament to the fact that Singapore is a city where dreams can also come true. It is indeed useful to be reminded that the reason why there is an influx of foreigners to our country is because people WANT to come to our country. This ought to make us proud.

Mercer's Quality of Living Survey:

Singapore is ranked 28th. No other asian country ranked above it.

221 cities were evaluated based on 39 factors including economic, education, transportation, etc.

Cities ranked above Singapore in the region include Sydney (ranked 9th) and Melbourne (ranked 18th)

It is not surprising then that the National Day Rally recently focused quite a lot on the crowding situation that is taking place in Singapore and how the Government is taking action to combat it. Being an attractive city to live in, Singaporeans have to embrace foreigners. The key here is integration and not assimilation. With integration, we recognise that certain groups will remain distinct from us but in a certain sense, we will have to find common ground that will bind us all together.

It is never easy and it remains a challenge. But this is what Singapore has to contend with. I think the measures that the Government has taken is sufficient to see us through in the long run.

Life and Its Funny Turns

Life takes funny turns now and then. Ten years ago, I would never have imagined that I will be where I am today, doing the work I am doing and living the life that I am living. It is funny how far separated dreams or wishes are separated from reality.

Don't get me wrong, I am not saying that life isn't good now. It is superbly great. I just did not imagine all the twists and turns it brought me through.

Reading my old journal entries, I am amazed at my lack of maturity and also my naiveness and sense of idealism.

I am older and hopefully wiser.