Money and Marriage

I was reading the Straits Times today on Money and Marriage and how the writer felt that it takes two to tango.

He suggests couples could ask each other these questions:

1. Do you know what insurance policies or investments you have?
2. Do you have the ability to manage money well?
3. Do you have absolute trust in the other person?

Taking the cue from the author, I picked up a conversation with the wife regarding the remaining car loan that we had of $23K ++

I started off: "So we still have a car loan of $23K++"

Wife: "Yup, want me to pay off? I got money in my bank."

Me: "Chey..I also have."

Wife: "Then you pay la"

Me: "I am making my money work hard. So as long as I can earn more than the car loan interest rate, it does not make sense to pay it off. Your one is sitting in the bank and if it is not working harder than the car loan interest, then maybe should use it to pay off."

Wife: "Yah lor. That's why I say use my money to pay off"

Me: " But we can invest it to get better returns."

Wife: "Then you help me invest."

Me: " Of course I can, but it is better you participate. Two heads are better than one. Always good to have a second opinion to make my investment strategy better."

Wife: "My investment knowledge is zero... that's why I leave it in the bank. My brain is used for other things."

Me: ""

Wife: "I don't know la. My only financial goal is to make sure my bank account stays above $78K"

Me: "..............................."

Why It Makes No Sense to Invest

Okay, the title of this posting might be a bit misleading.

It actually reads: "Why it makes no sense to invest your CPF-SA money"

As most of us know, the Special Account in our CPF or CPF-SA earns an interest of 4% per annum. Till the end of 2010, the first $60,000 in our CPF accounts also earn an additional 1% interest. For most of us, that means our money in the CPF-SA account is earning like 5% interest per year.

This is guaranteed and is entirely risk free!

As such, it makes little sense to invest your CPF-SA money unless you are able to find an investment which gives you returns at greater than 5%. Considering that one cannot invest their CPF-SA into high risk funds, it is difficult (in a certain sense) to be able to achieve returns of greater than 5%

As such, it makes a lot of sense to just keep your money in your CPF-SA for the time being unless you are able to find an investment that gives you greater than 5% per year.

Food for thought.

$2.20 For A Cup of Ribena

I was at a foodcourt just now and ordered a cup of ribena. It is shocking to find out that it actually cost $2.20 just for a small cup of ribena.

Imagine the profit margins that the drink stall is earning!

$2.20 could have bought me a thosai and a cup of coffee for my morning breakfast and I would still have change to spare.

The cost of living in Singapore is definitely going up.

I am pretty certain that many years ago, $2 could have bought one a plate of chicken rice. Now, it won't even get you a cup of Ribena.

I shall keep this entry in here as I would like to look back at this posting maybe in 20 years time and see how "cheap" ribena was then. I could then lament to my children and tell them that things used to cost so cheap then.

One can only imagine what the price of a cup of Ribena will cost in twenty years time.

Anyone dares to make a prediction and we will see who gets the closest price in twenty years time?

Portfolio Update

I sold 5 lots of NOL at $1.83 a piece. That was a few days back.

Was that a wise decision?

Only time will tell as the price has rocketed up past $1.90 recently.

I am now on the look out for stocks that have the opportunity to zoom up further in this current bullish market. However, I do not want to hold "risky" stocks that might go bust or have dubious prospects (remember China Print and Dye?)

I want to have a stock that I can hold and sleep with (even if the price drops).

So far, I can only think of 1 stock that is not too high in its current price. SingTel...

Is it Possible to Time the Market?

I have always been wondering how good my technical analysis skills are in timing the market.

However, I have come to realise that when I speak about timing the market, I actually have no standard definition to measure my success or failures at timing the market.

If I could put it simplistically, timing the market would mean being able to buy the stock at its lowest and selling at its highest. That is of course a good definition.

However, one faces the problem of the timeframe.

When I buy a stock at say $1.00 and sell it a month later for $1.10, I might be very happy at the profit that I have made which is quite close to 10% return on capital after subtracting the various admin fees and brokerage charges.

However, should the stock rise to $1.20 the next week, does that mean that my timing of the market has failed?

Or let's say that the stock drops to $0.90 the next week, does that on the other hand mean that I am successful at timing the market?

The problem I guess is the time frame. Because if I were to look at the stock price say 1 year later, the price might be up or down compared to my sell price and I would then determine my success on whether my SELL price is above or below the current price of the stock.

So when we say that we can time the market, what do we REALLY mean?

What is the timeframe we are looking at? How do we measure our successes? Do we really keep good records of our trades to see whether a buy and hold strategy might have earned us more money or does our active trading actually earn us more money?

Rich People Do Plastic Surgery

Today I saw a person who had plastic surgery.

Age was quite old but because of it, she looked much younger.

Seems like only rich people will bother to do plastic surgery. Poor people simply do not have the means to do so.

Is plastic surgery wrong?

Another Contest with Prize Money

I was thinking of creating another contest similar to the Free $50 to Give Away contest that I held not too long ago.

Some initial thoughts would be to get people to invest with say an imaginary $10,000 using a buy and hold strategy (e.g. starting at the start of a certain month) and then see whose portfolio has grown the most by the end of the month. I think things like trading and stuff might be too complicated for me to monitor so perhaps it would be just a simple buy at the start of the month and then value it at the end of the month.

In this way, we can all get some ideas about each other's investment strategy and stuff.

Any suggestions?