CPF-approved Funds do well in 2nd Quarter (22-Aug-09)

From my dealing with my clients, MOST of them have a portion of their CPF money in Unit Trusts and Investment-Linked Insurance Products with the respective insurance companies. Me too.

In this financial crisis that started from end 2007 onwards, most people would have suffered a loss in the range of 20% - 60%. And they started to lose trust in such products. Pretty fair enough judgement at a glance.

Let's take a step back and review. Did your so-called 'financial consultant' explained to you the situation and do the necessary actions for you? I went through portfolios where the funds were never touched from the first day it was implemented until today. WHY? Because the consultant is no where to be found. Obviously the loss is unimaginable.

Unit Trust / ILPs are not instruments for you to make a quick buck within 2-3yrs, because you also have to factor in the peaks and troughs of the economy. The portfolio you have should be in line with your objectives, time horizon, risk profile, and expectation. It is through a combination of i) Time (probably >5yrs) and ii) Regularly monitoring that your portfolio is able to make reasonable returns. I put my actions where my mouth speaks. My portfolio is almost similar to what I buy for my clients.

Remember, an IFA works on the side of the client, and not for the company. U win = I win.

UP (Aug 09)

I dun know if this comes with age. How many times have you heard yourself saying.. "I should have done this 10yrs ago", OR "If only I had done that when I was in Uni or whatever", OR "If only I had done this this this...." etc.

In "UP", this lovely couple dreams to build their house on the mysterious Everland since young. It was only after that the wife passed away, the husband finally plucked up the courage to DO IT. Although eventually he did it, BUT realistically, is it a bit too late? The morale of the story is to tell people not to forget their dreams and continue to pursue it while you can. But my interpretation is to GO DO IT while your dreams & your goals are still fresh in your mind, and while you still have TIME.

What we are today is a combined result of many decisions we made in the past. And what we are in the future, is the result of many decisions we make today. Agree with me?

Have you considered how you want to lead your retirement years? Is it eating plain porridge and watching your plasma TV at home, play mahjong with kakis or stroll leisurely along your nearby park? Or will it be something more financially needy like travelling round the world with your loved ones... doing charitable work, or blah blah blah.... tai-tai lifestyle?

THINK again. Do you want to give yourself the options of a simple or moderate or luxurious lifestyle? Or simply wait and see what happens when you reach 50s or 60s... and says "...see how lar, things will work out by themselves"...

If you find yourself not saving regularly, and worse still, not using the appropriate instrument, beware! You do not want to end up 10 or 20yrs later and find yourself buying the wrong products for a different objective.

Do contact me @ 9876-0237 for a good financial review, or simply to have an idea what it takes to reach your goals and dreams. UP UP & AWAY!

Singaporeans grossly Under-Insured: Study (21-Aug-09)

If you are a responsible person to yourself and your family, do read this with due care.

Studies have shown than the average Singaporean needs about $495,000 of life insurance, but is covered for only 1/3 of that amount. You may be thinking like... 'Aiyar.. it's just a b***s*** number, only to cheat people to buy more insurance only one... I no money to buy some more...'

Let's put it in another perspective, and think whether does it make sense:
What are the chances that you or your loved ones will meet up with the 3 enemies, namely Death, Total&Permanent Disability, or Critical Illness?

If your answer is low, fair enough.

Next question. What would you do IF it happens? Use your own savings to tahan the crisis period? Or you would rather get the insurance companies to pay for you? Use a cent to pay for a dollar, that's what insurance is all about.

Yes, it is a probability game when it comes to 'Who will kana Death/TPD/CI'. We all think that it would only happen to unlucky people whom we never met in our life. BUT, deep down in your heart, can you GUARANTEE that it won't happen to you? Or worse still, your loved ones.

If you are convinced, read on.

What does they come out with $495,000 as a proper coverage? My rough guess would be this:

If your liability is $2,000/mth for a typical family man, and you have to support your older parents or younger children for another 20yrs, it will work out to be
$2,000/mth x 12mths x 20yrs = $480,000

This is the sum of money that you want to leave behind for your dependents in the event of Death. The calculation of Critical Illness could be even higher as the expenses would add on.

"Nearly 3/4 of Singaporeans were aware of the need to insure themselves, but only 48% were aware of how to go about it."

In the past, insurance agents are merely product pushers because of the incentive structures. But times have changed. The role of an independent financial adviser is to focus on the needs on the consumers, and choosing the best instrument to suit their needs.

Would you want to help youself achieve a peace of mind? Start by engaging a competent financial adviser to assist you. If you trust me on a personal & professional level, do contact me for a non-obligation discussion on how we can go about doing a solid financial planning. It's much more than buying a few policies and chucking it aside it your shelves. \(*-*)P

Disability Income Insurance

I guess most of you would be familiar with the typical coverage of an insurance policy, namely 'Death', 'Total & Permanent Disability', and 'Critical Illness'. My concern is, what happen if you are unable to work for reasons that cannot fit into the above 3 categories?

In this topic, I would like to touch on the 'Disability Income Insurance (DII)' which is still quite undeveloped in Singapore.

If you look at the definitions of TPD & CI closely:

Firstly, TPD is generally defined as one of the following:

• Total and irrecoverable loss of use of two limbs at or above the wrist or ankle.
• Total and irrecoverable loss of sight in both eyes.
• Total and irrecoverable loss of sight in one eye and loss of one limb.

The actual claim statistics for TPD is usually quite low as one needs to satisfy the stringent requirements for both ‘total’ and irrecoverable’.

Secondly, the scope of Critical Illness is very narrow. It usually refers to the typical 30 Dread Diseases found in most insurance policies, with slight variation from company to company.

Pls do not mistaken me as saying that our life insurance plans are not useful. On the contrary, they are very, very important! Their existence is there to ensure that if you or your loved ones, unfortunately faced with such a crisis, the money payout would be far more precious that you can imagine to be.

The application of a Disability Income Insurance is to compliment your existing life insurance as an additional safety net for your wealth protection planning. A DII cover is different from the usual TPD in the sense that it does not require disability to be permanent or total.

Features of DII:

• After a waiting period of 60~180days (depending on T&C of the policies), a monthly payout would be given to the insured if he/she is incapable of going to work, as diagnosed by the doctor.
• As the name implied, it is meant to provide you with an income in the event of partial disability, up to 75% of your existing income
• Expiry date can be extended up to age 55, 60, or 65

e.g. Mr X is a salaryman whose monthly income is $4,000. One day, he is being knocked down by a car, and unable to go to work for many months due to whatever medical reasons, e.g. loss of one leg, severe backpain, partial paralysed, etc. Under the definition of TPD, he would be UNABLE to claim anything from his life policies, but what he can claim is from his Personal Accident Plan, and also the Disability Income Insurance Plan.

Assuming he is insured under a 75% DII plan, he is entitled to $3,000/mth ($4k x 75%) up to the day he is able to go back to work. And in this case, if he lose his original job after his 'recovery', and has to take up a lower salary job of $2,000, he would be able to claim another 75% of the difference ($4k - 2k) = $1,500/mth. In other words, his total income would be: $2,000 + $1,500 = $3,500/mth.

Don't you think it's advisable to equip yourself with the right instruments so that financially, you are prepared for any major crisis that may strike you unknowingly?

From my dealings with my clients, many are unaware how much they are insured, and how much risks they are absorbing on themselves. Do not take chances where you cannot afford to lose. Just look at how many accidents on the road, and how many patients at the hospitals.

Target market: Anyone!
The doctor/specialist who need his nimble hands to operate on his patients, the engineer who is in risk of handling big machines, or even a clerk who need to type report, etc. Can you imagine not being able to work and not getting an income while you are partially disabled?

Do contact me if you wish to find out more on this Disability Income Insurance. I have one. Do you?

Who says you can't be Rich? (16-Aug-09)

Financial Independence or Financial Freedom. In a simple meaning, it simply refers to the status where you can choose NOT to work and continue to enjoy the lifestyle that you desire. If you continue, it's hopefully because you LOVE to work, and not because you NEED to work.

Look at the people around you. Do you think the smiling auntie at the McD or KFC is truly enjoying her work, serving customers, faithfully cleaning the floor because she loves the job? Was it a choice that these employers prefer to work out their retirement years for 'fun', or was it because they need the money for survival reasons?

When it comes to wealth management, many people wants to take charge of their own destiny (afterall it's their hard-earned money). But many choose to procrastinate and get indulge in their existing work issues and current problems.

In this article, the Ms Lorna Tan (the regular finance correspondent of ST) described the belief of getting rich, which I totally agreed. There is one part which said: " Another unpleasant truth is that most people are too lazy to be rich. They may say they want to be rich but they don't do much about it except to hope to become rich by chance e.g. Toto, 4D..etc."

How many times had we gossiped among our friends and colleagues, envying this guy buy this condominum or car, that guy earning 5 digits, that lady what what what.... then at the end of the conversation, we go back to our 9-to-5 job and carry on our daily activities. End of story. I was one of them. But I decided to change and put words into actions.

The fundamentals of getting rich, it seemed, is to have the correct beliefs and mindset.

Last, but not least, changing your mindset is not enough, so have an action plan to help you achieve your goals. Be diligent in acquiring more financial knowledge by reading up about money management and investing. Get professional advice.

If you truly wants to be financial prepared for the present and the future, you can consider my professional assistance at 9876-0237 for a good discussion. That's so much to gain and practically nothing to lose!

SGP Fixed Deposits Comparison (Aug 09)

These are some useful information I extracted from a website:
http://singaporesearchsite.com/singapore-tips/fixed-deposit-interest-rate/

As there is a myriad of fixed deposit interest rates available for various tenor/period as well as deposit amount, we shall concentrate on the most common combination:

Tenor/Period: 12mths
Deposit Amount: less than S$10k to S$50k

Based on the above tenor and deposit amounts, the following is a comparison of the Fixed Deposit Interest Rate (% p.a.) offered by the full banks in Singapore.

Rates collated on 5 August 2009:

At a glance, none of them is giving any interest rate > 1.0%.

Money in the bank is important for your liquidity usage. A wise guideline is to have at least 6~12mths of your monthly expenses in your bank in the event of any job loss or unexpected event, doesn't really matter how much interest it is earning.

The next aspect is in how to make sure of your "spare cash" to their fullest use. Do you think it's the wisest choice to lock them in banks' fixed deposit? You decide.

There are other instruments by different insurance companies that can provide a much better rate of interest. The lock-in time frame can range from a short 2yrs to a possible 20yrs. And on top of that, they normally give a basic sum assured for death coverage.

And not to forget there are unit trusts, stocks & shares, etc. A simple rule of thumb, low risk low return, high risk high return. Don't expect to strike gold by paying peanuts. If you have such a method, pls teach me!

If you want to know how to make your money work harder while you are working hard at your job, do not hesistate to call me @ 9876-0237 directly!

Property Boom in Recession Times? (Aug 09)

SINGAPORE (AFP) - Despite Singapore's worst economic slump since independence, the residential property sector is in the midst of a new boom reminiscent of 2007, when the city-state was known as the world's hottest real estate market.

Greed and its twin brother Fear are back in play as punters stake out condo launches days before sales open, with some offering blank cheques to pre-book flats, prompting the government to hint it may have to cool things down.

"Some of the practices and habits that you saw in the last property boom are beginning to come back, so I think we'll have to be careful," said Minister for National Development Mah Bow Tan, whose portfolio includes housing."

"A little bit of speculation is inevitable in every market, but when it becomes excessive, then it is something that we should try to avoid," he said.

Prices of luxury condos -- the segment worst hit by the recession -- are now inching toward peak levels achieved around mid-2007, according to an analysis by business weekly The Edge.

Foreign investors, including Asians looking for a secure place to park their money, are also back in the Singapore market.

Singaporeans enjoy one of the world's highest savings and home ownership rates, but most live in relatively spartan government-built flats, making owning condos an obsessive goal for families.
- extracted from Yahoo! Singapore

*****
For those who are rushing on the bandwagon of getting a property, cool down first. Singapore is the only country in the world (I think) where the property market is growing like wild fire despite us entering the worse recession that most of us experience for the first time in our lifetime.

Buying a home, or even a 2nd property, is a big commitment. Do not have those mentality that 'U jump, I jump'. Sometimes the consequences are beyond your imagination if things do not go your way.

Do your mathematics and understand your limits on how far you can stretch your dollar, e.g. your monthly CPF contribution, % of bank loans you can take, rental yield, etc. Many Singaporeans end up asset rich but cash poor when they reached their retirement years. Is that desirable?

If you need any advice on what kind of debts (good debts vs. bad debts) you can expect to face, do give me a call. I can also help you source for your ideal property as well as an extra service.

MindChamps®: A Champion Mindset

Have you wondered what it takes to be a champion?

After years of research by those gurus, the answer is actually very simple. A champion mindset.
It has been proven that this champion mindset can be 'copied' and applied to whatever field, and you still can remain a champion. This verdict was concluded after many interviews and researches with the great Olympic champions and world leaders.

Financial Perspectives (the pioneer and market leader of the CERTIFIED FINANCIAL PLANNER®(CFP®) Certification Program in Asia) and MindChamps® (the world's leading Specialists in Mind Development Programs), have come together to collaborate and promote this champion mindset among the younger generation.

"MindChamp: Our mission is to challenge and improve educational standards internationally, because we believe that the beginning of the twenty-first century is the time to be living - and learning - for the future. "

There are many learning centres around in Singapore that helped to develop your child's ability. But I am quite sure if you want to give the best to your precious child, MindChamps would be right choice for you. Why do I say that so confidently? I was there personally to attend their seminar and was so impressed by how they are able to transform an ordinary child into an extraordinary child with better learning abilities, and more imporantly, a child that is learning happily. See it, and experience for yourself.

If you keen to know more about MindChamps and their courses, do drop me an email or call me directly. I will be very glad to share with you my experience with them!

http://www.mindchamps.org/about.html

Who's Problem Is It Really?

A man feared his wife wasn't hearing as well as she used to and he thought she might need a hearing aid. Not quite sure how to approach her, he called the family Doctor to discuss the problem.

The Doctor told him there is a simple informal test the husband could perform to give the Doctor a better idea about her hearing loss.

Here's what you do," said the Doctor, "stand about 40 feet away from her, and in a normal conversational speaking tone see if she hears you. If not, go to 30 feet, then 20 feet, and so on until you get a response."

That evening, the wife is in the kitchen cooking dinner, and he was in the den. He says to himself, "I'm about 40 feet away, let's see what happens." Then in a normal tone he asks, 'Honey, what's for dinner?"

No response.

So the husband moves to closer to the kitchen, about 30 feet from his wife and repeats, "Honey, what's for dinner?"

Still no response.

Next he moves into the dining room where he is about 20 feet from his wife and asks, Honey, what's for dinner?" Again he gets no response. So he walks up to the kitchen door, about 10 feet away. "Honey, what's for dinner?"

Again there is no response.

So he walks right up behind her. "Honey, what's for dinner?" "

James, for the FIFTH time I've said, CHICKEN!"

The problem may not be with the other person as we always think, could be very much within us!

Retiring Without Tears (02-Aug-09)

An annual Future of Retirement study from HSBC has found that an alarming 91% of Singaporeans do not have any idea what their retirement income would be, and only 9% are prepared for this phase of life. In addition, while 39% feel that they understand their short-term finances very well, only 23% can say the same about their long-term finances.

So, what have you done? Are you the type who just work and work everyday and hope that when you retire at X yrs old, there is sufficient money to fund your retirement years? Or is there a backup plan, like... depending on your children? Work for longer years (provided your young boss still needs you...)? Or work part-time at fast food restaurant? Seriously, I am quite sure most of us do not expect such scenario to happen to us.

But why HOPE for it to happen, when you can PLAN for it to happen? Yr retirement nestegg is also an important big ticket item, along with yr house, your car, that needs time and gd instrument to build up.

According to the article, to improve your prospects of a comfortable retirement, you cannot afford to delay reviewing your retirement nest egg. Here are some considerations:

i) Your retirement age. 55? 60? 65?

ii) Number of years of retirement. 20yrs? 30yrs?

iii) Retirement lifesyle. Simple? Moderate? Lavish?

iv) Inflation

v) Financial commitment. Children? House? Car? Insurance Premiums?

vi) Medical expenses. Is your H&S plan in place?

vii) Leaving a Legacy?

viii) Existing assets & Post-retirement income

My role as a professional IFA is to help you analyze your current financial situation, and work alongside you to work towards your goals and dreams in a realistic way. I had made my move, have you? Medically, a doctor is there to cure you. Financially, an IFA is there to assist you, a.k.a. a financial doctor. Has your existing financial consultant done enough to make sure you are on the right track?

If you want to make an easy job seem mighty hard, just keep putting off doing it. ~Olin Miller