Financial Freedom

Starting Salary for Poly Grad

The starting salary or pay for a poly graduate is up from $1850 to $1950. That is a $100 increase. The survey was conducted by the the five polytechnics in Singapore. You can compare it with the starting pay last year.

For poly graduates who have completed national service, the median gross monthly starting salary was also up from $2,100 in 2011 to $2,253 in 2012.

How Much to Give for Church Weddings

Not too long ago, I wrote a post about how much to give for Chinese wedding dinners. It was pretty well received so I thought a good follow-on would be how much to give for church weddings.

Well, the custom amongst most Singaporean Chinese is to give red packets or what is also commonly known as "hong baos" during weddings. It is a custom and trying to explain a custom is probably the worst thing one can do. But red packets are a custom and like it or not, it is considered "polite" to give a red packet when attending a wedding.

A church wedding is usually a much simpler affair compared to a wedding banquet held in a hotel. The costs involved are usually just the rental of the church premises, catering and other miscellaneous items that the couple arranges for. Considering that most church weddings are usually held during lunch time, lunch or tea might be served. This usually cost around $10 to $12 per head for the catering but can of course go up if better food is served or additional frills are thrown in.

While I will say that $20 per head ought to be respectable amount to give in terms of ang bao money to "cover for one's expenses", I have reason to believe that the market rate might be slightly higher around the $30-$50 range if one is just solely invited for the church wedding and not the dinner banquet. This takes into consideration the cost of booking the venue, etc.

However, it is also not uncommon that guest to church wedding might not even give a red packet. This is especially so if they have been invited for both a church wedding as well as a lunch/dinner banquet. In this instance, they usually give a combined red packet during the banquet itself.

That being said, there is no standard rule to follow. And how much to give is really up to individuals. Some couples are not picky and might really be inviting friends to join in the celebration. On the other hand, certain couples might be tight on their pockets and a little extra "help" from guests will be appreciated by them.

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

Articles on retirement, savings, financial planning and investing:

Real Estate Investment Trusts (REITs)

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The Road to Financial Freedom:

Why Invest in REITs

The growth of the real estate securities market around the world has led to a discrete asset class known as real estate investment trusts (or REITs). While the United States was probably the first country to introduce such an asset class, REITs are fast catching on in various European and Asia Pacific countries. There are over 20 REITs listed on the Singapore stock exchange today. And REITs do make a compelling asset class of their own. Today, let's look at some of the reasons to invest in REITs.

Diversification Benefits

REITs are known to have a low correlation with stocks and bonds. This means that it does not move in tandem with other investments and can thus be used to reduce an overall portfolio's risk. Portfolios that contain a small allocation of REITs have higher returns and lower risks compared to a portfolio that contains only a mixture of stocks and bonds.

Apart from diversifying away from stocks and bonds, REITs also allow real estate investors to diversify away from just the domestic real estate market. Besides this, investors also have a wide range of different kinds of properties to invest in. This includes industrial, residential, retail, office and even hospitals. So apart from allowing a property investor to diversify across different countries, REITs also allows one to diversify across different property types.

Liquidity Benefits

Besides diversification, REITs also offers liquidity. Not only can investors own a small piece of real estate with a small capital outlay, this asset class is also traded on the stock market where one's investment can easily change hands. An investor thus does not have to worry that he or she might not be able to sell the investment. And with the market price known, an investor will always know how much their investment is worth.

Income Benefits

With many baby boomers hitting retirement age, they seek out a portfolio that will give them investment income similar to bonds. REITs allow them to collect income via the distributions that are paid out. This dividends or distributions makes it an attractive asset since it literally puts money into one's pockets. In today's low interest rate environment, REITs often trade more than 2-3 percentage points above the risk free rate that one can get from holding AAA government bonds.

Conclusion

REITs as an asset class is increasingly gaining popularity. They provide diversification, liquidity and income benefits while allowing investors to be exposed to the real estate market with very little capital outlay. Why do you invest in REITs?

Jimmy Kimmel - Halloween Candy Prank

In this video prank, parents tell their children they ate their halloween candy whilst they were sleeping. See the funny reactions!

Investment Outlook and Stock Picks for 2013

What better way to start the new year then to give an outlook on what 2013 ought to bring? And what better way to know what 2013 will bring by looking at what the experts think will happen.

OCBC Research will be sticking to the strategy of overweighing in the oil & gas, banking, healthcare and selective property sub-sectors. Their stock picks for 2013 include Biosensors, CapitaMalls Asia (CMA), CapitaMall Trust (CMT), City Developments (CDL), DBS, Ezion Holdings, Keppel Corp, M1, Sembcorp Marine, Starhill Global REIT, UOB and Venture Corp. Despite strong gains in 2012, they expect further upside for these sectors/stocks.

For Phillip Securities Research, their top picks include SIA Engineering Company, Capitaland and Pan United. Thematic plays will be dividend stocks and construction stocks.

Here are the closing price of all the stocks on 31 Dec 2012:

	Closing Price on 31 Dec 2012
Biosensors	1.205
CMT	2.130
CMA	1.940
City Developments	12.870
DBS	14.840
Ezion Holdings	1.690
Keppel Corp	11.000
M1	2.710
SembCorp Marine	4.600
Starhill Global REIT	0.785
UOB	19.810
Venture Corp	8.060
Capitaland	3.700
SIA Engineering Company	4.390
Pan United	0.775

We've Crossed 400,000 PageViews

With more than millions of blogs around, this blog is not one of the large blogs around. Neither is it a "hi - bye" kind of blog. Each milestone is memorable and crossing 400,000 pageviews is memorable enough for me.

Thanks to all readers for supporting thus far.

What are REITs?

Real Estate Investment Trusts or REITs can be a corporation, business trust or association that acts as an investment agent that acquires or provides financing for the acquisition of real estate or real estate mortgages or even a combination of both. It basically combines the capital of many investors to purchase any form of income producing real estate. In most countries, REITs are often accorded special tax breaks where they are not required to pay any corporate income tax if it distributes the majority (usually 90% to 95%) of its taxable income to shareholders each year.

Unlike property stocks, REITs is akin to holding personal property where the taxation of income takes place at the investor level rather than at the company level. In certain countries, dividends or distributions are also not taxed. So there is an added advantage for investors to own it. REITs are usually traded just like any stock or share on the stock exchange. They are easily liquidated compared to owning a real property.

Different type of REITs

REITs can be classified as equity REITs, mortgage REITs or Hybrid REITs. Mortgage REITs are more common in the United States compared to the Asia Pacific region where most of the REITs are equity REITs.

Equity REITs invest in and own usually immovable properties with revenues and income derived mainly from the rental income of these properties. Most equity REITs are spun off by property developers who aim to free up capital for their core business of property developing which gives them a better return of investment compared to owning property just for rental yield of less than 10%.

Mortgage REITs invests in loans that are secured by real estate or mortgage backed securities. Their revenues and income are usually derived from the interest paid for the mortgage loans or the difference in rates at which they borrow and lend out money.

There are some REITs that are also a hybrid of both equity REITs and mortgage REITs.