Financial Freedom: 2014

Economics Explained in Thirty Minutes by Billionaire Ray Dalio - Time Well Spent Watching this Video

This 30 minute video by Ray Dalio explains how the economic machine actually works. Spend the next 30 minutes watching it and I assure you that you won't regret it. Beats any Economics module offered in the universities.

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.

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

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)

Commodities/Gold/Silver

Insurance

Popular Reads

The Road to Financial Freedom:

Singapore's Best Chirashi-Don

Bara Chirashi Don @ Sushi Tei Vivocity

Chirashi Don or chirashizushi. Some call it diced or slivered sushi scattered in a bowl of vinegared short grain Japanese rice. Others call it "happiness in a bowl".

Basically, this is a dish that comprises slices or sometimes diced up cubes of the freshest raw seafood and which is served on vinegared rice.

To me, freshness is probably the key. The proportion of the various kinds of seafood as well as the portion (neither too big nor too small) also plays a crucial role. My personal preference is to have the seafood diced rather than sliced as it is much easier to eat with the rice. One also cannot help but make mention that the temperature that it is served at also plays a part in the enjoyment of the dish. Too warm and it doesn't really feel right. The rice is also another important factor. When all these come together nicely, what you get is an awesome bowl of indescribable goodness.

If you ask me, the best chirashi-don that I have tasted is probably at Sushi Tei@Vivocity. I have tried the one at Teppei before but I will like to think that I prefer the one at Sushi Tei. At $16 a bowl (see picture above), it is really good value for money.

Do You Earn More Than Singapore's Median Monthly Household Income?

A frequent topic of discussion amongst people in Singapore is whether their household income is more than the median household income.

The Department of Statistics in Singapore publishes a report that is titled "Key Household Income Trends" every year. The latest report is dated 2013.

Some points to note first. The paper only highlights income from work received by all working members of the household from employment and business. This means that it does not include income from dividends, etc.

Some people often mistakenly assume that the figures are the median income of a worker employed in Singapore. It is not. It refers to the household income.

So here are the numbers:

Among resident employed households, median monthly household income increased from $7570 in 2012 to $7870 in 2013. This represents a 4.0% growth in nominal terms, or 1.6% in real terms (where the Consumer Price Index) is used as a deflator to compute real income changes.
Taking household size, median monthly household income from work per household member rose by 5.6 per cent in nominal terms, or 3.2 per cent in real terms.

I make three observations on the median monthly household income figures:

Firstly, we can see that the median household income amongst resident employed households is almost reaching $8,000. However, we also note that resident employed households does not equal to the resident households in Singapore. As many as 9.4% of the resident households in Singapore have no working persons with 6.1% of these considered as "Retiree" households. That means that the data on the median monthly household income is only representative of 90.6% of the resident households in Singapore. Granted that some of these households might be really poor, 6.1% of these households probably have accumulated more assets/wealth/passive income compared to a household that is earning $7870.

Secondly, the survey only relates to roughly 70% of the population in Singapore since the focus is only on households that are headed by Singaporeans and PRs (granted that some of the non-Singapore citizens or PRs might actually be under a household headed by a Singapore citizen or PR). This is because the analysis is only based on households headed by Singaporean and permanent resident (PR). In 2014, the total Singapore population was 5.469 million. The resident population (Singaporean and PR) was 3.87million. This means that t

Thirdly, we should also take note that the source of data is from a sample of households surveyed in the June Comprehensive Labour Force Surveys conducted by the Ministry of Manpower. Based on what I googled, it appears that 30,000 households were surveyed. So this is only a sample of survey results and might not indicate or depict the true picture of the state of affairs.

So if you think that having a household income of greater than $7870 puts you in the top 50% of the Singapore population, think again.

Dividends for October 2014

Another month has passed. Dividends collected for October 2014 was $513.

Main contributors were:
(i) distributions from bond fund
(ii) distribution from ETFs
(iii) OCBC 360 Account (which offers a neat 3%).

Besides that it was the usual from other monthly dividend paying stocks that I hold in my portfolio.

Is the bull market coming to an end?

Lately, after seeing the various stock indices hit their historical highs even amidst the news that the Fed's QE was coming to and end, I started wondering whether the bull market might possibly be coming to an end. One certain sign is the number of people who are probably interested in the stock markets again. We all know for a fact too that this bull run has gone on for some time now. So is this bull market coming to and end?

Some points I consider:

Unemployment rate in US has improved but is still worrying in Europe.
Federal Reserve stopping QE but ECB and BoJ are maintaining low interest rates.
China growth story seems intact.
Stock market still trading around historical P/E ratios.
Oil prices are low which ought to be good for businesses, no?
Investors' interest in stock market and their sentiments.
Low gold prices indicates fear of inflation or hyperinflation is probably low.
"THIS TIME IT IS DIFFERENT" syndrome has not appeared.

From a very rudimentary analysis, it will thus seem that the bull market still has some legs to go. How much longer is anybody's guess. Probably till 2015? What do you think?

Falcao's First Goal for Manchester United Against Everton

So Manchester United won 2-1 against Everton tonight even without the services of Rooney who is out on suspension. Here is Falcao's first goal scored as a Manchester United player:

Angel di Maria's first goal which gave Manchester United the lead is below:

I Didn't Know My Own Strength - Amazing X Factor Performance

Am a semi-fan of X Factor. I like how they spot raw talent. This is an amazing rendition of Whitney Houston's song by Andrea Faustini. I think he does a wonderful version of it. You can check out Whitney Houston's version in the subsequent video below. Which do you think is better?

Happy long weekends!!! (at least for my readers in Singapore)

You can check out other entertaining videos here or here:

Dividends for August and September

Since I am so far behind in my computations for the amount of dividends received, I have combined the money received over the months of August and September 2014.

For August 2014, I received $389 in dividends
For September 2014, I received $396 in dividends

I am setting a year end target of $500 in monthly dividends and hopefully I can achieve it.

There are only 3 more months to go before the year comes to a close so it is quite challenging a goal. I guess I had digress from the earlier goals that I had set out for myself.

Anyway, what strikes me lately in the newspapers is the number of property advertisements. It seems like every other page is filled with an advertisement calling out for people to own a condo either in some exclusive district in Singapore or to own a property in Bangkok/Australia/London, etc. You get the drift. Is this a sign of the times?

Check out my dividends for previous months:

Dividends for July 2014

Have been a little busy to update. Finally found some time to sit down and compile the dividends collected for the month of July 2014. Well, better late than never =)

Dividends collected was $331. Pretty normal.

I have been just too busy to find the time to sit down and write over the past few months. Hopefully, I will get more time soon.

Where I am sitting at right now, the skies are blue and a warm breeze is blowing by. There are so many dreams that remain there for the grabs. At the same time, there is a sense of contentment that I have. Not that I have accomplished much. But perhaps another door is opening and my focus on life has changed.

Please see dividends for other months compiled below:

Dividends for June 2014

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)

Commodities/Gold/Silver

Insurance

Popular Reads

How Much to Give for Baby Shower

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).

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

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.

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:

http://www.iconsingapore.com/jan11/social/index.php?choose=social

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.

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.

Tokio Marine Never Cuts Bonus: Participating Fund Update 2014 - Things We Can Learn From

Just received Tokio Marine's Participating Fund 2014 update from my whole life policy with them. As expected, they are maintaining the bonus rate for their participating policies.

For info, Tokio Marine is one of the few companies that maintains its bonus rate for its whole life policies pretty consistently over the years. In fact, the report states that they are the ONLY life insurer in Singapore to have honoured all their bonus rates for the last 66 years!

This is probably testament to their sound investing policy for their participating fund. Even though they acknowledged the volatile investment climate of 2013, they are still maintaining the par fund bonus even though the returns came in lower than expectations.

Some interesting stats from their par fund:

Market Value (measured by total assets in $million)

2011: $2,142
2012: $2,677
2013: $3,073

Asset Mix of Fund for 2013

Equity : 37%
Fixed Income: 52%
Cash: 7%
Property: 3%
Others: 1%

Breakdown of Fixed Income S$1,589million

Singapore Government Securities = S$288million (18%)
Quasi-Govt/Investment Grade Bonds = S$857 million (54%)
Other Bonds = S$444 million (28%)

Top 10 Equity Holdings (the most interesting part to me...) S$1,126 million

Tokio Marine Fund - Far East Equity Portfolio
TMA Umbrella Fund - TMAI Asian Equity Fund
SingTel
DBS
UOB
OCBC
Keppel Corp Ltd
Singapore Press Holdings (SPH)
StarHub
Singapore Technologies Engineering

Disclaimer: I am not a Tokio Marine insurance agent and am not making any recommendations whatsoever about Tokio Marine and its insurance or investment products.

Peter Lim - New Owner of Valencia

Peter Lim has done Singapore proud. He is now the owner of Valencia football club. I know that this is probably already stale news but it is a moment to be savoured nonetheless. How many Singaporeans do you know that actually own football clubs?

I think it is rather good publicity for Singapore since many Europeans probably do not even know where Singapore is. And what better way to gain some publicity than to own one of their very own football clubs.

Anyway, Peter Lim had previously made a bid for Liverpool. That deal did not come to pass so I was thinking that this deal might also not come through. Glad that it did come through in the end.

For those who don't know Peter Lim, he used to be a stock remisier who made it big in the Singapore stock market. He married an ex-actress, Cherie Lim. Believe he also has a daughter, Kim Lim, who is 22 years old and is currently studying in Singapore Institute of Management. Recall reading in the news that his family stays in an entire 11 storey condominium tower around the Orchard area.

For those who don't know, Peter Lim is also said to be quite active in charity work. His involvement in the local football scene also saw the SOF-Peter Lim Charity Cup (an exhibition fundraiser match) held in 2013.

Wishing him the very best of success in his ownership of Valencia.

Recieving Cash in mailbox Every Month

Most people probably dread opening up their mailbox because they know that only bills await them. However, I am probably one of a few people who actually enjoys opening my mailbox to check for mail. The reason? I receive monthly cheques in my mail so I am always excited to open them up and add it together with other dividends that might have been directly credited into my bank account.

Those of you who have been following my blog over the years probably know that I am a dividends kind of investor. My timing into stocks are quite bad. But dividends have always been my kind of thing. I like the certainty of investing into businesses that provide shareholders with cash in their pockets. Over the years, I have lost count of the dividends I have received.

My favourite kind of dividends are those that are paid regularly. Some of my holdings even pay monthly dividends. That is amazing from my point of view. In short, I have been able to supplement my very average salary with passive income without actually moonlighting.

Foreign holdings in U.S. Etfs and monthly dividend stocks are those cheques which end up in my mailbox. And it is always nice to reach home at the end of a long hard day at work to find a cheque or sometimes piles of cheques in my mailbox. Trust me, the feeling is quite surreal when you get the first cheque but after sometime, it still feels awesome!

Just this month alone, I have received 3 cheques. And the month isn't over yet :)

Dividends for April 2014

Finally took time to compile the cheques that have been coming in through my mailbox and calculated the dividends received for the month of April 2014.

Received a total of S$237.

This comprises dividends from Armour Residential REIT, Gamco Global Gold, Linn Energy and a host of other unit trusts like FAHY, Schroder, John Hancock.

The interests from my bank account (DBS multiplier) also contributed quite a fair bit and I have set up the OCBC 360 account for a similar purpose since it offers higher interest rates compared to a normal savings account.

Engineers Surely Can Relate to This - The Expert (Short Comedy Sketch)

A very funny short clip on what happens when an engineer is put in a room with a group of people who don't seem to be making any sense. I am sure everyone can relate to this video at some level - especially engineers.

OCBC 360 Account Offers Incredible Interest Rates of over 3%

Recently, I posted about opening a DBS multiplier account that offered interest rates of over 2% depending on your cashflow with the bank.

It now seems that OCBC has up the competition by offering a similar account that offers interest rates up to 3.05% . OCBC 360 account seems attractive as the bonus interest rates are also much more achievable.

To get the bonus interest rates, I will just need to credit my salary, carry out 3 bill payments, and charge $400 to an OCBC credit card. Each of the above gives a bonus interest of 1%. Together with the base interest of 0.05%, it adds up to 3.05%.

I think the offer from OCBC seems to be too good to be missed. Opening my account with them definitely.

Dividends for March 2014

Haven't had much time to blog lately. Have been busy with work. Everything has been same old same old. Nothing much has changed and I have been feeling pretty contented lately with everything that I have been blessed immensely with. Good job, health, family, etc, etc.

Anyway, I just managed to consolidate the dividends/interests/etc received for March 2014.

The total amount is around $360. Not too bad but I guess it can always be higher if I had been a little more disciplined with my savings and investing.

Perhaps it is time to take a fundamental re-look at all my expenditure and savings and to see if I am channelling my savings in the best manner into my various investments.

Dividends for February 2014

Finally got down to compiling my dividends received for the month of February 2014.

Total dividends received was $255.75.

The dividends came from a total of 8 different "sources". This includes stocks, unit trusts as well as the DBS multiplier account that I had signed up for.

I am glad that I have managed to diversify my sources of dividends. However, the amount is still quite low as compared to my targets. It looks like I have to start saving a lot more.

Hilarious George Bush Bloopers!

Some funny bloopers from Ex U.S. President George Bush. Don't really blame him though. One can only imagine how hard it is to string words together when facing a large crowd or the cameras.

Holidays and Travel Insurance

The first two months of 2014 are already past. And it seems like the school March holidays are almost here again. How fast a term flies! Most people are probably gearing up for short holidays here and there before the June holidays.

However, the haze is back in Indonesia and Malaysia. Who knows when it might hit Singapore (another good reason to start planning a holiday especially if the haze situation worsens). Most people are avoiding Bangkok due to the ongoing political unrest there. So that leaves quite few options for those who just want a short getaway.

On a related note, I realised that I have been very inconsistent in the purchasing of travel insurance. There are times when I purchase travel insurance when I go for holidays and there are also times when I do not.

So I would like to hear your thoughts:

Given the current situation (haze, political unrest, etc) in neighbouring countries, where is good place to go travelling (not too far away from Singapore)?
Do you usually buy travel insurance? If so which is the best plan around?

His Hand Doesn't Even Move

His hands move so fast that you can't even see him draw the dotted lines.

Crazy Japanese Prank Floor Disappears

Crazy Japanese Gameshow Crocodile Prank!!

Watch this crazy Japanese game show where the guy dresses in a crocodile suit and tries to get close to REAL crocodiles.

The Smallest Woman In The World

Arab Guy Does the Meanest Prank

Instant vapor - Boiling water freezes instantly in Siberia

Check this out. Boiling water freezes instantly when thrown out in the cold. Please don't try this at home....

Real Chucky Ad Prank At the Bus Stop

Extremely Scary Corpse Elevator Prank in Brazil

Do You Want to Build a Snowman (Cover)

This is a really nice cover of the song from Frozen - Do You Want to Build A Snowman. Enjoy!

Why I Bought and Sold Coca-Cola (KO)

I bought Coca-cola (KO) at a low price of $37.21 during the recent market downturn. That was before the results were announced on 18 Feb.

The share price went up slightly thereafter. Even with the news of the tie-up with Green Mountain coffee, the share price did not move much. Considering that I was sitting on some paper gains, I decided to cash out. Thankfully, I did so before the results were announced. This is probably one of those rare occasions where my timing of the market worked.

The results released on 18 Feb was probably met with some concern as the share price dropped quite a bit to close back at near the price that I had earlier bought it. Investors are probably fearing that 1% to 2% global volume growth will become the new norm for Coca-cola. The fact that some states in the United States are thinking about implementing soda taxes doesn't help either.

Disclaimer: Not vested currently. But looking to buy if the stock dips any further.

Why I signed up for the DBS Multiplier Account

I recently signed up for the DBS multiplier account because of the higher interest rates that were offered compared to a normal savings account.

The process of opening the account was fuss free as everything was done online through internet banking.

Basically, the account offers a higher interest rate depending on the cashflow of that account. The cashflow is limited to a few items (e.g. salary), and various tiers of higher interest is offered if the cashflow exceeds different levels.

Considering that I had spare cash in another account, it made sense to just open the account and earn a higher interest rate for the time being. Besides, the interest is paid monthly!

President Obama at the White House Correspondents Dinner 2013

Apologies. Realised that the previous upload of the video did not load correctly and only showed a link. Uploading it again for all to view.

Bank Promotional Offers for Higher Interest Rates

OCBC is having a Chinese New Year promotion where they are offering interest rates of up to 1.8% per annum or even up to 2% per annum (Premier Banking customers only). The first offer is called the OCBC Bonus + Savings Account and the second offer is called the Premier Dividend + Savings Account. The effective interest rate works out to be 0.9% p.a. and 1.00% p.a. respectively. That is not too bad considering that a normal savings account usually offers much lower interest rates. Of course, terms and conditions apply (e.g. fresh funds, etc). But anyone interested ought to check it out.

At the same time, POSB is also offering an account to earn up to 2.014% interest per annum with a POSB eMSA 2014 account. This requires one to set up a regular monthly savings plan (from $1000 to $3000) into the eMSA account in order to enjoy the higher interest rates.

I have not signed up for any of these accounts but think it might be worth checking it out. Think the promotions might be ending soon. So those who are interested ought to check it out really soon. Caveat emptor.

On the other hand, if you are not interested in all this, you might just be interested to read my previous post why it might make sense to top up your cpf account.

Funniest Obama video Yet! Both sides will laugh

President Obama shows his funny side during a memorial dinner that was held sometime during his first presidential campaign. From watching this video, I can see why he won and became president. Not only is he funny, he is also very witty. Enjoy the video!

Why Topping Up Your CPF Might Actually Make Sense

Topping up one's CPF might actually make sense. I am talking about the act of actually making voluntary contributions over and above what you are ordinarily required to contribute either as an employed person or self-employed person. Here are some reasons why it might just be worthwhile.

1. You get tax breaks

Okay, this might not be a big deal to most people. But one actually gets a certain amount of tax relief (capped at a certain limit each year). So if your income is just slightly over a certain tax bracket, it might actually be worthwhile to make a voluntary top-up to pay less in income taxes. Yeah, it is nothing exciting. But if you have spare cash lying around, it might be something worth considering.

2. Higher Returns

For those who are not too savvy with investments, the CPF accounts might actually provide a higher interest than your normal savings account. Yes, some banks are now offering promotional interest rates of slightly above 2% but that is still lower than the 2.5% and 4% interest rate for the Ordinary.Account and Special/Medisave Account respectively. In addition, the first $60,000 in your CPF earns an additional 1% interest. So do the math and it might actually be attractive compared to the paltry interest rates of a normal bank account. Of course, there is no guarantee that the rates will stay that way since these might be subject to changes in the future.

Considering that some people might not be confident of getting a 2.5% or 4% returns on their investment, it might be worth allocating some of that to top up one's account.

Of course, there are some drawbacks in making voluntary contributions. Firstly, the money is locked up until you are allowed to withdraw your money at a certain age. So you need to be very certain that you will not need this money till retirement. Secondly, if you are topping up under the minimum sum scheme, it means you cannot get apply for future exemptions. All these disclaimers can be found on the CPF website.

I know this post is likely to draw some controversy since most people will never think about making voluntary contributions to their CPF. For others though, it might just be one idea that might make their retirement planning a whole lot easier.

Disclaimer: This post is not an investment advice. The author neither encourages or discourages his readers to make top ups to their accounts.

Chinese Scientist Joe Wong Makes Americans Laugh at Radio and Television Correspondents' Association Dinner

This is a really funny video of Joe Wong who cracks up the crowd at the RTCA dinner that was broadcasted on C-SPAN channel in the United States a few years back. I still find it pretty funny. Love his deadpan face when he tells his jokes. Think I have watched the video at least 5 times now. Just sharing it with all to chase the Monday blues away. Enjoy!

Featured Post