Friday, 31 January 2014

Happy Chinese New Year!

Wishing everyone a

Happy Lunar Chinese New Year!
新年快乐 !

Kong Hei Fatt Choy, San Tai Kin Hong!

Xin Jia Ju Yi!


Here are some funny pictures I received. 



Saturday, 25 January 2014

Every dollar save is a dollar earn (Part 1)

I very much love this quote because it is absolutely true. Saving is a powerful tool that can help you harness all your potential to create wealth. It is very important to do some budgeting and limit your spending to your necessary means or earning capacity. What is the point of earning 10k when you spend 11k? To simply put, spend within your means and save as much as possible. 

I normally advice people who have poor discipline in saving to set aside an amount (be it through automatic bank transferring of a part of your salary to a saving account or other ways). I have one friend who has an obsession of splurging away his money whenever he sees money in his bank. He came out with a brilliant idea of saving his money by withdrawing out his money and putting them physically into a biscuit container. I honestly don’t know how it works but indeed it has helped him curb his spending habit and not touch his money in the container at all.  What a cute little logic. So I believe each and everyone have a special technique of saving and it doesn’t matter how one does it, as long as one is able to save, it’s definitely a baby step to further wealth accumulation.

As for me, I am definitely a saver and not a spender. Don’t get me wrong, I am not a miser but I am just wise and conscious in my spending. I am glad I know myself well enough when to spend and when to say no. One of reason could be my family upbringing who advocates on saving. Here are some tips I exercised on and I will share with you.

Keep track of your expenditure through the use of budgeting apps

I consistently keep track of my expense and cash inflow/outflow. I use this app called piggy, but I got very irritated by its recent app crashes, so I guess I will look out for a better app soon. Anyway, this is a very good way to see where your money is spent on every week or month and shows you which area of expenditure you have to cut back on. Basically, I group my expenditure into 3 different headings:
·        Fixed Expense

·        Committed Expense

·        Discretionary Expense

Firstly, fixed expenses are expenditures that require to be paid in similar amount in recurring months. For example, handphone bills, insurance premium. These expenses are difficult to cut back on because they are usually drawn up according to the contract you sign.

Secondly, committed expenses are money spent on basic necessities such as food (breakfast, lunch, dinner, supper), groceries and transport etc. A red flag in this sectors show that you are indulging too much in expensive good food, having too many meals, or travelling a lot. So this area can be cut back on a little just by having cheaper and better food alternatives. A few bloggers mentioned this before; I know some people out there pamper themselves with Starbucks/Coffeebean coffee where they charge nearly 600-800% difference from Kopi-O in coffee shop. I will admit hands down that Starbucks/Coffeebean are both intelligent in their marketing and branding to lure consumers into drinking ordinary coffee at a premium. Imagine a person who cuts down drinking a $7 coffee on working days. That will calculate into $1820 yearly. That is one huge lump sum that can be saved. Besides that, many people are also spending on Gongcha/Koi which I feel are just relievers for thirst cravings. It is not only expensive but are also unhealthy drinks. Fortunately I don’t have such cravings and likings for all of these above.
Back to where we are, this comes to my third point, discretionary expense. This is the greatest area where you can restrain on your expenditure. The name says it all “discretionary”. These are expenses that are spent on entertainment (movie, KTV etc.), personal well-being (clothing, haircut etc.), gifts, a new computer, a new TV and the list goes on. For me, gifts are compulsory expenditure in this section (sounds ironic, yeah it does). It is especially imperative to watch out for this sector and perhaps one can limit himself to a certain budget. 

Another cause of concern is smoking. I always advise my friends around me not to smoke but to no avail. I also hope smokers reading this can cut down too. No offense, but I just have this mindset that why would one spend money just to quicken his/her death. Some of these smokers will rebut me claiming: 

1. Life is short, enjoy while it last loh!
2. Smoke or don't smoke, fate will still decide when you will die lah!
3. Aiyah, people who never smoke also die from lung cancer
4. Stress lah bro! Smoke already can perform better. 

 I admired some of their response. People have their own opinion which I do accept but I cannot bear to see them harming their own health. If all these money are spent wisely and usefully, I am very sure he/she can make themselves enjoy a healthier and better life. It will be meaningful too if these money are donated to charity. If I calculate $12 a pack for half a week. This accumulate to $1248 a year. Amazing how small money can compile into big money in just one year. You save plus you keep yourself in the pink of health. Hmm, that is killing 2 birds in 1 stone. If I can stay smoke-free without even puffing once in my whole life, I hope and I strongly advise you to stop smoking / cut down smoking. Okay, now I sounds like I am an ambassador for Health Promotion Board.

I will follow on with " Every dollar save is a dollar earn" part 2 in my next post. Do stay tune.

Little Boy

Friday, 17 January 2014

Financial Knowledge

I had a little chat with my both of my sisters a few days ago concerning financial matters. From my understanding, my elder sister was convinced into parting her CPF money into unit trust by her insurance agent. Her insurance agent asserted that it will be a good idea to buy into unit trust to make her money roll to save up on her HDB apartment. Yup, her money literally rolls away. Her unit trust value eroded up to $3-4k of a size of about $30k. That is already more than 10% unrealized lost. Sometimes I wonder how fund managers can underperform so poorly. It is really ironic and unfair that these fund managers still receive commissions for “growing” customer’s funds. My simple advice I gave to my sister was to not invest in something you don’t know. At least it is much better to leave your money in the CPF account where you can get an annual risk free interest rate of 2.5%. It pays not to be financially literate I guess.

My second sister is now in a little dilemma. She wants to start investing, but do not know where to start because she has little knowledge about investment. She is cash rich, but she doesn’t make use of her excess cash to perform some compounding effect. As a saying goes, “Don’t work for money, let money work for you” - (Robert Kiyosaki). I advised my 2nd sister numerous times to set up an investment account, but she always claims that she is too busy. My belief is that time is a choice, it is only how much time you willing to set aside. I hope that she will see my good intentions in the near future and slowly start up researching on her own. The longer she procrastinates, the longer she misses out on an opportunity to grow her wealth. But of cause, investment is not a 100% full proof money making strategy. There are always winners and losers in the market, except winners are usually the one that mitigate their downside risk by doing their own due diligence. So, my greatest advice for her is to delve into lots of research first before entering the market.

Charity always begins at home. I hope to be able to help both my sisters. I can probably start off by having a general informative financial talk with them. Perhaps, one day I will be given a chance to manage their given sum of money. As of now, I still think I am not experience enough to handle such great big responsibility given the fact that I am only less than 2 years old in the market. I can only assist them by giving them simple advice and provide them with any forms of media read-ups. I been giving my 2nd sister interesting read ups from blogs or links that I found, and I really do hope she find some motivation and inspiration to start up investing. Her motivation always seems to die down after awhile :(

Henceforth, I believe that financial knowledge is one of the most important skill and a key to unlocking potential wealth. I deduce that our education needed to do a little alteration. One subject which is not taught and imparted to youth is financial knowledge. We may be advocated on the importance of saving but financial knowledge is a whole different league. Don’t talk about investments product yet; once we step into the real world, we have to consider the fact that we are going to settle lots of financial issues (Insurance, housing, loans, CPF etc.) Are we actually adequately equipped with such knowledge and well prepared? Most people will believe only the mouth salivating (“good guy”) agents. The naive one will fall for it and probably get the worse end of the deal. Why isn’t our education system preparing us for all of these? Our education system should educate youth/young adults on the importance of financial planning and provide pertinent knowledge on financial matters. At least there should be some informative sessions and general talks to provide understanding on the basics of all these. CPF for instance, is a part and parcel of a Singaporean; it is growing up with you. Knowing nuts about it is embarrassing and puts you at disadvantage. I pray that our education system can review and look in this; for a better and more financially educated Singapore.


Wednesday, 8 January 2014

2014 Resolution and Target

Hello fellow readers,

Happy New Year!

I am heartened to see a some financial bloggers popped by my blog and left some words of encouragement through my mail and my blog. I sincerely appreciate it and I feel blessed to be in this financial community where everyone is so willing to give a helping hand. I will continue to blog wholeheartedly, giving my 101% in every post :)
      It is a fresh start and a new beginning of another year. It will be blank new page in a 365 pages diary where it is time to set foot and make an impact in year 2014. I am anticipating for an exhilarating year ahead both in my life and in the financial market. I believe most people will set a target to achieve within this year, same goes to me. My aim for this year is very simple; continue to garner as much knowledge as possible and learn from the seniors. Wait for opportunities to invest in undervalue and fundamentally strong stocks. Anyway, patience is virtue, time is on my side.

     I have some personal New Year resolution too which I wish to share it here. 

      1. Be filial and respectful to my parents as always
      2. Study hard and smart (Need to cut down a lot of my distractions)
3. Maintain an active lifestyle
4. Widen my network
5. Plan for my future