Wednesday 31 October 2018

And along came a little Singa...

Many things in life can and will happen along the way that forces us to update our financial plans e.g. getting a car, buying a flat, getting married, but most impactful (or longest term) of all, is having an little addition to your family. 😁

One plus year ago, being already not so young at 31 back then, both my wife (also 31) and myself felt we were ready to start a family, and wanted to try for a baby. 



Like many couples, we thought that it was be pretty easy. But it was not an easy journey, after many months of trying, visits to both Western doctors and TCM, we were fast becoming disheartened. 

When you see your peers getting pregnant one after another, it does gets to you. Facebook was a bane to me back then. People posting cheerful photos of baby bumps, new borns, full month celebrations. Call me selfish, but sometimes I just wished to quit FB or unfriend these (insensitive) people until I had my very own little one (or maybe forever). It is also along this line of thought that I do not really post much on FB, whether happy or otherwise occasions. Meaningful occasions are for family and loved ones to experience, not for the whole world to know how great your life is. Last, but not least, I also hope to preserve whatever little privacy we have left in today's world of social media. 

[If you, like us, have been trying to conceive without success, besides living a healthy lifestyle, exercise more, eating clean, stop alcohol and smoking, it might actually be a good idea to wean off / reduce your time on social media for a while because it does really get demoralising. Besides you are not missing much without social media.]



And so tried and tried we did. It got to a point where we had exactly Zero expectations when we did the test kit. After almost 7 months of trying and on the brink of giving up, we were stunned when we finally saw the two lines. It was pretty surreal and we both did not quite believe it. MS tested it again and the next day as well at the poly clinic. 

While I was physically at work that day, my mind was miles away when wife whatsapped the photo of positive results, certified by the doctor! The next few moments were simply amazing and I was totally feeling light headed. This was the additional line we have been waiting all these while and it was HERE!!



Daddy (Boys) being Boys after all, the first thing I actually thought of getting for Little Singa was his/her ride (stroller)!! Hahaha, not too sure but maybe all daddies' are hardwired that way? As it was our first born, we chose not to know the gender even when it was possible to do so. Both wifey and myself had no preference on the gender because we know we will love and protect him/her to bits, regardless. 



One of the thing we had to decide was the hospital / gynae for the regular check ups and delivery. After some research and asking parents friends for recommendations, we decided on NUH. While it was far from our place in Punggol, we were assured that the cost would be somewhat reasonable (being a public hospital) and they had excellent medical facilities (NUH being the other hospital, besides KK, that all private hospitals will direct newborns to for further procedures, in case of complications where private hospitals did not have the necessary facilities.)



We first went the public route for the first few regular check ups before signing for the Antenatal package (approx $900 for senior consultant) at Week 22. With the package, it meant that all future consultation were covered and we could stick with the same gynae through out. Milestone scans were also included in the package. The key benefits for going private are shorter waiting time, more comfortable waiting areas and the same gynae each time. Before week 22, while on public route, some of the doctors which saw to us were housemen, aka trainees doctors. Nothing wrong with that but sometimes we just felt more assured with a senior consultant. 

Our consultation sessions with the gynae were quick, barely 10 minutes and we were out! That is of course great news, cos that meant that Little Singa was growing well. 



Source: NUH

One other key factor why we chose NUH was because of the possibility to downgrade to Public in the event your newborn needs to be admitted to NICU. A1 NICU daily ward fee was almost $650 which we could ill afford in the event it was necessary. Wifey requested for a single bedder so we going for A1 but in the event if NICU was needed, we could try to request to downgrade perhaps to B1 or even public, subjected to means-testing. If you were to go to private hospitals, you will not be able to do this downgrade within their hospital as they do not have public wards. 


Source: NUH
This above essentially summaries the start of the whirlwind 40 weeks to the arrival of Little Singa. Happy to share more in future posts. Do stay tuned!

[After note] Since the delivery of Little Singa more than a year ago, i also had the chance to visit friends / relatives who delivered at other hospitals, e.g. TMC and MA, and i felt that we made a right choice with NUH. Personally, I felt that NUH nurses were more pro-breast feeding, less $ driven and were more patient in general. But that is just my personal observation. 

Would you also be welcoming a little one soon? Feel free to reach out if you need more information, and heartiest Congratulations in advance. 


If you are still trying for a little one for a while now, pls do not get discouraged and try, try and try again. One fine day, you will be rewarded for all the hard work. All the best now! 

Bye for now!
Frugal Singa


Tuesday 30 October 2018

Frugal Singa becoming Frugal Tai (Nan) for a week!


Together with Little Singa and Mama Singa, Frugal Singa took a week long trip to Taiwan recently! This was little Singa's second overseas trip, but first with only both Mama and Papa. Her first trip was a little easier as it was with grandparents as there were extra hands then.

Thought that it was a good idea to share a little on our trip and what was overall a great experience on a conservative budget. 

Air tickets
Ever since we had little Singa, we were inclined to fly full-fledged airlines as we did not want to pay for every little thing which we may require on board, so we went with Singapore Airlines. 

We bought our tickets about 6 months before our trip and it cost about $1000 for 2 adult tickets and 1 infant, pretty alright I feel. For curiosity sake, I looked at budget flights and after adding in all the extras, the prices were pretty similar to SQ. As a bonus, SQ had entertainment(!), which we hoped that we could catch some shows on this 5 hours flight, provided Little Singa allowed us to. It was really tense the first time we flew with Little Singa as we were afraid she would feel uncomfortable and cry her lungs out and we would get death stares 😒 from other passengers. I totally feel parents flying with babies now. 😐 Happy to share now that both Mama and Papa managed to catch up on some movies on the flight. 

Taiwan - Taichung
Upon landing in Taoyuan Airport, we took the 2 hours airport bus transfer (approx. S$25 for 2 pax, Little Singa was free) to our Taichung Airbnb accommodation. We decide to take the airport bus transfer instead of (HSR) train simply because it was seamless, unlike HSR where you needed to change train to get to Taichung Central. 

We stayed in Xitun District. The airbnb we booked was really really reasonable. We stay 3 nights and it cost us $140. Yup, less than $50 a night. Amazing value. While it was just a basic small room, it was clean and centrally located (Xitun District) as well as near Feng Chia Night Market. For cities accommodation, I typically look for a central location more so than the other amenities. 

One thing you will notice about Taichung is that they do not have metro systems like Taipei. So... we tried out their buses instead. We were initially a little hesitant (esp with Little Singa with us) but after trying out once, we felt they were pretty easy to figure out and the best thing is the rides were mostly FREE (up to 10km, i think). 



So long as you have their EasyCard, you can use their buses. You can purchase the EasyCard at their MRT stations and convenience stores. All you got to do is to tap when boarding and alighting, simple as that. If you, like us, visit the usual attractions in Taichung, it should be mostly free rides! Google map was our best friend when it came to figuring out what buses to take, it also provided the bus schedule so you know when the bus is arriving or if you should take an alternative bus route.



In Taichung, we visited the following main attractions:



1. Rainbow Village- As it was a little out of the way, we took Uber to the Rainbow Village. Uber pricing was rather reasonable. It had free entry, not a big place, you can easily cover within half hour or lesser. There was not much shelter there though and weather was hot when we visited. Big effort by a former soldier, now Uncle, who painted the village red, literally :P We managed to get a photo with Painter Uncle (for a small donation) while we were there as well. Amazing to see what could one person do and save the village when he set his mind on it. 




2. Feng Chia Night Market- Huge Huge night market with a lot of food stuff mainly. It was fun to soak in the hustle and bustle of the night market. We did not managed to buy much stuff here, other than street food and more bubble tea. We do not usually drink bubble tea in Singapore, but we just kinda let loose while in the Land of Bubble tea! There are bubble tea shops at almost every corner we turned. 

3. National Taichung Theater- We did not watch any play/musical there as we were not keen. We just popped by to check out the building and there are interesting shops at the atrium selling quite cool wood work related stuff though they are a little pricey. There was also a cafe if you like to sit and watch the world go by. 



4. Wu Pao Chun Bakery Taichung Store- This is a famous Taiwanese bakery, who's baker / owner won an award in the bread category of the 2010 Bakery Masters competition in Paris. The award winning Taiwan longan with red wine bread was available for sample as we queued to enter the shop. It was quite nice as it was warm and has tinge of wine in it. You can buy this bread for about S$16, though it was nice, we felt that the loaf was too big for us to finish and instead bought some other type of bread. And if you are keen to taste their bread, you can entire travel to Taiwan or wait till 2019 when Singapore will get its first Wu Pao Chun bakery at Capitol Piazza. It is a joint venture with Breadtalk. I bet it will not be cheap once it arrives in Singapore, given its reputation and rental at Capitol. But its always better to taste something in its "most original" state, in Taiwan!

5. Chun Shui Tang (Original Store)- If I am not wrong, CST is the one which started it all. Bubble Tea that is. The pearls are made in house and are really chewy and delish! Ate some side dishes (nothing really special) there and of course we had to order their original bubble tea (large size!), think it cost about $6 for 500ml! Super Shiok!! The tea was also quite refreshing and had a pleasant after taste. That said, i am inclined to say there are no bad bubble teas shop in Taiwan, but then again I am no bubble tea connoisseur. So perhaps its reputation (one who started it all) and atmosphere (dinning in its original store) added points to the bubble tea experience. 



6. Miyahara Ice Cream. Its main attraction to me was its design, both interior and exterior. As the place was a former eye hospital, they renovated the place and keep some of basic structures and added lots of other intricate details. Miyahara has a huge, unique range of ice-cream flavours from teas, fruits to yoghurts and 17 different types of chocolates. The toppings were interesting, ranging from cheesecakes, pineapple tarts to almond crisps and more. We dined in as it was a hot day and we wanted to rest our weary feet. We did not realise that there was a minimum spending of 380twd (S$17) per pax. While it is not exorbitant, it was still rather pricey for Taiwan standards. Besides we had not intended to eat so much desserts but had to try anyway to meet the min spending. The staff were excellent and attentive though. And the toppings for the ice cream were cool! 
These were the main attractions we visited in Taichung, after which we visited CingJing, Jiu Fen and Taipei. Hope to share more in future post on the other locations. 

One tip for those who are planning to travel to Taiwan, you can visit their Tourism office (30 Raffles Place, #10-01 Chevron House, Singapore 048622) with your air tickets and at least one night accommodation as proof to collect some freebies / gift (offers changes from time to time). The current gift (till 30 Nov 2018) is a Taiwan Fruit Picking Voucher. 


Signing off for now...
Frugal Singa

Friday 26 October 2018

Droplet - Just what in the world...

Two days ago, NTUC Income launched their Droplet Insurance Plan- It is essentially insurance for your Grab rides on Rainy days. Yup, you read it right, insurance for your Grab ride in Singapore. 


Source: droplet.sg

My initial thoughts were... seriously WTH... I would give it to them if they launched this plan on 1 April but nope, it was launched on 24 Oct 2018. They are dead serious. 

There is a dedicated website for Droplet and not like a sub-page of Income web site (which might be so also because this could be a real joke and they did not wanna implicate Income website). A search on "droplet" on Income website also strangely yields no results (at least till today). Perhaps their website is not updated yet.

My initial thoughts were WTH, my thoughts now are still WTH! What were they smoking when they came up with this insurance plan? Are there no other areas they can think of to insure? Anyway, in an article, Income did shared "Droplet is a blue-sky response to consumers’ pain point – surge pricing due to rain – when they book a ride on ride-hailing platforms."

[Anyway, this post, like every other post in Frugal Singa is solely my personal opinion and based on my own usage of Grab rides so we can always agree to disagree.]

So this is how it works...


Source: droplet.sg

Commuters will need to buy the insurance at least a day ahead i.e. you cannot buy for the day itself when you wake up and see the dark gloomy clouds outside your window and decide to sleep in and Grab in for work. 
Buying it earlier (couple of days in advance) also means you will pay lesser but the max you pay is $9.60 a day (buying one day before). There is a minimum coverage of 2 days each time you buy i.e. minimally it will cost you $19.20 unless you bought it in advance.

Droplet will pay up to 60% of your trip fare if it is raining at the point of your pickup. 

On their website, Income robots will ascertain whether it was raining at the date, time and start location of your ride using their database of weather records gathered from NEA. Personally, I really do not know how does this will work out. If it was indeed raining heavily when you boarded but their Robot / database say nope, then its your words against theirs, which is not a very good position to be in, especially when it comes to insurance. 

Perhaps you should take a video of yourself boarding Grab and show its pouring outside or on the Grab app, it will indicate that "Raining Ride" (both are quite ridiculous actually). 

You can submit unlimited number of ride claims a day but there is a claim cap of $50 a day. Only Grab rides are covered for now, other smaller ride hailing platform e.g. Ryde, Tada rides are not covered, but there are plans to extend to others by the end of this year. 

If we run some numbers, assuming you pay $9.60 a day, and Droplet covers up to 60% of your rainy Grab ride fare, i.e. you would be "better off" so long as your ride is >$16, which is actually quite common in itself. 

But question is, how many rides do / can you really take within the rainy period? Since you need to buy at least 2 days worth, you will need to spend a min of $19.20 which if you only take one raining day ride, it needs to be >$32 to be "better off", which is a little less common. And also, we typically take a cab to a place, spend some time there and when we leave, rain might have already stopped which also means your insurance cover has "ceased". 

Last but not least, if you need to plan ahead i.e. buy Droplet in advance, wont a better alternative is for you to arrange a Grab Hitch (zero surge pricing) ahead? As a Grab passenger and user of Hitch, I am quite happy with the % of acceptance of Hitch rides request. Best thing is Hitch fare cap of $15. Admittedly, some of your hitch request might go unaccepted, but likewise, some of the days you buy insurance cover for will not rain as well. 

Overall, I feel Droplet is a really strange and "uncharacteristic of Income" type of plan. 

Signing off for now...
Frugal Singa

Tuesday 23 October 2018

CPF- Thinking out loud on using CPF for HDB and its opportunity costs...


In Singapore, it is really common to use our CPF-OA funds to pay for our house, both down payment and monthly installment whether bank or HDB loan. 

In fact, when taking up a HDB loan in the past, buyers would have to wipe out their CPF-OA balances to pay for their flat before they can take up the HDB loan. This changed August this year when government announced that buyers who are taking HDB loans, could keep up to $20,000 in their CPF-OA and get the HDB loan. I personally feel this added flexibility is good thing for flat buyers. 

I believe many of us (typical young couples) take on this mindset when deciding to use CPF-OA for our housing loans: "Since i cannot touch my CPF funds, at least not until 55/65 years old which is a good 30-40 years away, I might as well spend it on the biggest house i can get. Besides, monthly installments can also be serviced using CPF, so its akin to zero cash outlay, so why not?" I admit that was also my mindset back then. 

However, when I recently started to take the time to understand the CPF scheme more, I started to question my decision taken 4-5 years ago, because using our CPF monies for HDB will affect our retirement funds. 

Our CPF-OA earns us 2.5-3.5% interest while our CPF-SA earns us 4-5% interest and because we are young when we buy our flat, the runway for compounding is really really long at that point in time. 

Assuming after the recent change that allow us to keep $20,000 in our OA, this $20,000, if left in OA for the next 30 years will double to about $42,000 and that is us not lifting a finger, no additional top ups, zero effort on our part. 



If we are confident enough that we really will not need to use this $20,000 in our OA, we can transfer it to our SA which will earn us at least 4% (5% on the first $40,000, which is likely the case given young adults SA is unlikely to have that large an amount in SA), we will have quadrupled our $20,000 to about $85,000, which is simply WHOA to me. Likewise, this is zero effort on our part, all we need to do is to transfer this $20,000 from our OA to our SA. Granted, this $20,000 is effectively "useless" to us for the next 30 years because SA funds is primarily for our retirement and cannot be used to do much except do certain investments before we turn 55. 



Besides not compounding in our own OA, one more drawback from using our CPF-OA for our housing is the accrued interest incurred which we need to refund to CPF when we sell our HDB. When I log into my CPF account, I am able to see that I have about $5000 accrued interest incurred to date which means that I will need to refund this $5000 into my CPF when I sell my HDB, in addition to the principal which I borrowed from my own CPF. 


Source: CPF

It seem like a double whammy to me. When I use my CPF to buy my HDB, besides forgoing the 2.5-3.5% interest rate, I am now required to earn more on my own (whether from selling the house in future or otherwise) to pay back to my CPF in future when i sell my HDB. 

As I had only used about $50,000 back then, the accrued interest does seem manageable for now. However, if you had used a large portion of our CPF, e.g. $500,000 OA to pay off your HDB flat. You will need to refund the accrued interest of about $140,000 into your CPF if you sell your place after just 10 years. This accrued interest will only increase the further down the road you go as it compounds (against you!). So if the above scenario couple had plans to sell their HDB to unlock some value in their home by selling it, the cash they could get back is greatly reduced from the accrued interest. 



Notwithstanding, I note many of us (me included) would not have been able to afford the HDB down payment without touching our CPF. However, I feel that for our monthly installments, we should try, to the best of our ability, to pay in cash. Unless, we are confident that we can use the cash to earn us more than 2.5-3.5% consistently through the years, in the long run (which is actually not an easy thing to do), it would good for us to be prudent when using our CPF for our housing. 

When we are in a financially comfortable enough position (saved a little after perhaps 5-6 years in the work force), we could consider doing a voluntary refund of the housing amount withdrawn. So we can actually pay back CPF on our HDB loan even if we do not sell our HDB. By doing so, we will stop the compounding against us, and for it to work for us instead! 

Frugal Singa

Tuesday 16 October 2018

CPF- Yay or Nay?


This would be the first of many CPF-related posts, simply because i think CPF is an important and prominent part of a Singaporean working adult life (whether we like it a not). At the ripe old age of 32, I have only recently started to realise that CPF is not such a bad deal for Singaporeans after all. The following is my personal opinion. I am happy to hear alternative views as well. 😀 

As a young adult, many of the things we learn about, we learnt though social media. And social media thrives on controversies. Controversies are called controversies for a reason, because they stir up emotions and bring out strong opinions. Many times, the loudest (not necessarily the correct- correct in my opinion at least) get heard and people can get convinced or confused accordingly.



In June 2014, it was reported about 2,000 people gathered at Hong Lim Park to hear speakers talk about CPF and demanded the government return CPF monies to citizens. That event certainly generated a lot of publicity / spotlight on CPF and talks if it was being misused. I personally gave it some thought but finally personally decided that my CPF funds are in good hands. Or rather put it in another way, would you know if there are better hands out there whom we should hand our CPF monies to? 

Four years ago, I was even more ignorant about CPF than I am today, but thankfully, I have learnt a bit more about our CPF systems along the way and have also grown to trust it more.  



It is sometimes thought that many people (especially our parents' generation) did not have the luxury of being financial trained and are hence not financial-savvy, given a huge amount of money at 55 years old, would they know how to deal with it? For those who are more risk adverse may choose to put the funds into banks saving accounts which pays out peanuts compared to CPF interest rates which could be =>6% for those older than 55, which bank would be able to pay such high interest rates? 

People say that "Its their money, let them deal with it themselves." which is fine in itself, but if after their money runs out, who would these people turn to? I am not saying they would definitely turn to the government but there is a high chance they would look to the government for handouts. If their children do not support them as well, then who would these people turn to? Though it seems like a rather pessimistic point of view to take, I would rather be pessimistic and be proven wrong then optimistic and proven wrong, cos then, there would be a much higher price to pay for both government and citizens. 

Singapore is not quite a welfare state as compared to the Scandinavian countries (which comes with high tax rates correspondingly). I am not saying which is the better systems but they are fundamentally different systems which different governments have adopted.

My views on CPF:
  • Yes, 20% of our monthly wages is not a small sum, but your employer also needs to contribute another 17% to your CPF as well. So it is like bonus of 17% each month. So effectively, if your salary is X (for cases where X=<$6,000), you are effectively getting 1.17X monthly, just that you do not get them all in cash in hand. Putting in 20% for an extra 17%, I think it is still alright for me personally. I feel I should be able to survive on 80% of my salary, basing on a fresh graduate (normal local uni degree) starting salary.
  • The returns on our CPF monies is (nearly) risk-free with government's backing. Should something major detrimental happen to Singapore government / economy, I personally think there will be bigger issues for us to worry about than our CPF returns. Granted, CPF is still very important to all of us and in no way I hope to see anything unfortunate happen to it. 
  • Interest rates are quite decent ranging from 2.5% to 5% (<55 yrs old) and 6% (>55 yrs old). No banks / insurance company out there can provide this guaranteed risk free high interest rate.
  • The minimum interest rate of 2.5% for OA and has been there since the beginning of CPF, I am pretty assured it should continue for the foreseeable future.
  • Assuming one starts to work at about 23 (for females) or 25 (for males), one is able to make use of CPF's favorable interest rates (compounded) to their advantage for a good 30 plus years. Assuming you contribute just $500 to your SA which pays you 4% interest, at the end of 30 years, you would have almost $350,000. From your investment of $500*12 months*30 years= 180,000, you would have almost doubled your money. [This is a conservative estimate since you would earn an additional 1% on your first 40,000 of your SA funds.]
  • If you are able to double the contribution to $1000/ month, you would end up with $700,000! That is more than half a million!  Granted this is provided you do not use your CPF to buy your house, which many of us in Singapore do, me included. Regardless, these figures made me pause and forced me to re-assess my then decision to pay for my home using CPF back then, though that is another post for another time.

Therefore, at the age of 32, with a tinge of regret, I did not realise the eighth wonder of the world earlier (in my 20s). I am now trying to make it work for me to the best of my abilities by transferring my OA to SA and am also considering if i should make Early repayment of my HDB loan to inject some spare cash on hand into my SA. Some might say it is a drastic move, but missing out on the 4% interest compounded over many many years is also pretty drastic as well.


A neat tip for those who have just started working. If you do not have need to use your CPF for housing, you could starve your OA, and stuff your SA for additional interest. 

E.g if you had 20k in OA (earning 3.5%) and 40k in your SA (earning 5%). But if you starve your OA by transferring your 20k in OA to SA (20+40K=60k) you will have 60k in your SA earning you 5% instead of part 3.5% and part 5%. Do bear in mind that by doing so, you "lose" the usage of the 20k for your housing and can possibly only touch it at 55.

I will touch on CPF for housing in my next post. Do stay tuned. 

Frugal Singa



Thursday 4 October 2018

Book Review: The Millionaire Next Door, The Surprising Secrets of America's Wealthy


At the recommendation of some personal finance blogs, I recently read this book. It is a relatively easy read but can be rather long winded at certain parts. Many of points raised are.. well... quite common sense actually, hence its "surprising secrets" is quite well named i guess... 

The book categorises people into Underaccumulators of Wealth (UAWs) and Prodigious Accumulators of Wealth (PAWs). Essentially UAWs are spenders and spend more than they earn (many on credit) while PAWs are savers who save more than they spend. I prefer to use the term "spenders" and "savers" for this post as "UAWs and PAWs" is a mouthful and it is also easier to understand. 

Some of the key takeaways from the book for me are below: 



1. Meet the Millionaire Next Door- Essentially living well below your means.

So it does not quite matter if you are a farmer (blue collar) or doctor (white collar professional), so long as you live well below your means, you can become a millionaire. Book shared the example of a farmer (saver) who drives a modest family sedan / truck, wears a cheap watch, and totally do not look like anything near a millionaire and lives well below his means. 

This farmer could be wealthier than a doctor (spender) who earns perhaps 3-4 times the farmer's annual income but spends a whole lot more. One of the reason is the societal pressures associated with their social standing as professionals forces them to spend on houses in expensive neighborhoods, drive luxury cars, and send their kids to private schools (essentially keeping up with the Joneses). This need to keep up means they spend so much more to maintain their outward appearances but in fact have little to no savings of their own. 

Looks rich, but not quite...
So between looking rich and being rich, I would prefer the latter. 😃 This has in fact got a lot to do with our upbringing as our children will most certainly take after ourselves in our spending and saving habits. So being a new parent to a one year old girl, this has certainly given me pause and strive to be more prudent in my spending as it would certainly have a lasting effect on my kid (when they become more aware at least). 

2. Frugal Frugal Frugal- Your lifestyle will decide if you can become a millionaire. 

This sorts of expands on point 1 (where it gets long-winded) where savers go for off the rack clothes, shoes, cheap watches instead of custom made and bling bling watches. The affluent also tend to have frugal parents (hence upbringing is important), frugal spouse and are also frugal themselves. So there is no leaky tap in that sense (book called it Playing Great Defense). The affluent usually spend considerable time planning their budget / finances, uses the "pay yourself first" strategy, hold many discount cards and credit cards (for discounts to certain supermarkets) and set clearly defined set of goals.


Mouthwash hacks!
3. You Aren't What You Drive (or live in): Simple. Do not buy new. Given that cars are a depreciating liability (not asset), buy second hand cars so the first owner helps take a heap of the depreciation out first. 

This is set in the US context, so it might not be as applicable to Singapore since we have many special conditions on car ownership and its lifespan with COEs. While buying second hand will help take off some of the "new car" cost, Singaporeans also need to bear in mind the decreasing COE lifespan where you can get to use the car as well. But all in, Singapore is still one of the most expensive places to own a car, so... better to not own a car if one is able to... 


Is your ride more attas than Warren's? You must be wealthier than Warren!

As for houses, the author shared that living in a expensive neighborhood will cost you more and also tend to have really nice houses around (which will make you compare more). Therefore, living in an average neighbourhood is your best chance to becoming a millionaire. 😆 It also means you will not need to overspend on your housing mortgage and pay too much interest. I think this is also quite applicable in Singapore. While living in non mature estate does have its inconveniences e.g. lack of amenities and infrastructure, houses are cheaper in these areas and the prices should eventually appreciate as well as the town matures. I personally feel it is a better bet for price appreciation. 


Many millionaires hidden within!
Nay? I know its a beautiful house, not a fair comparison.

4. Economic Outpatient Care (EOC)- EOC refers to handouts / economic gifts and "acts of kindness" which parents give their adult children / grand children. The key point is "The more dollars adult children receive, the fewer dollars they accumulate, while those who are given fewer dollars accumulate more." 


Give them more by giving them less!

So essentially, what they are advocating is not spoon-feeding your adult children and let them fend for themselves. This, i think is quite applicable in our Asian contexts as well. As parents, we always want to give the best to our children and provide them with a head start but sometimes when we gift them so easily, we take the fighting spirit away from them and in the process, they become complacent. So giving them too much is actually taking away more from them. 

I think the tough part to this is knowing where to draw the line so that we give them a fair enough start in life and not disadvantage them by withholding resources where we can help with. 

Many other parts of the book provide more examples of living well below your means, do not spoil your kids, make them earn their keep, and its not that difficult to become a millionaire after all! 

Do check out the book if you are interested!

Frugal Singa

Monday 1 October 2018

Investment mis-adventures (so called lessons)...


No more trust in Unit Trusts...

Many many years ago while I was still schooling, I recalled my parents investing in something called unit trusts (called mutual funds in the US) at the advice of a relative. Being naive and foolish, I asked to invest some money too (who don't wanna make more money!) Because "they" said there was a "professional" fund manager who was going to manage my money and there wasn't any apparent fees involved! Because Professional = Good = Sure Win right!??

It was only after a few years when I asked to check on its performance, i realised it was actually worth much lesser than its initial value. 😖 Besides the investment being underwater, I was still being charged management fees and some other front load fees and other what not (this is regardless if my investment made / lost money!). That was my first painful lesson when it comes to investment. Lesson learnt then: There is no sure win investment. Not even with the so-called Professionals. (that was before i learnt about CPF.)

Pay peanuts, get monkey (largely speaking)

There were many more painful lessons to come through my investment in China penny companies in the SGX. 

The temptation of buying a 1 cent China company stock on SGX (it could be other country company as well, just that there were many Sino-type companies on SGX, even till today) and potentially doubling my money when it rose to 2 cent was simply too great and yes, I eventually got burnt when the stock tanked (that's a relatively positive thing actually) or company got de-listed (lost all money) due to some governance issues crap. When investing, one tend to always look the potential upside and fantasise how much we can profit. While I was aware I would lose 50% of my capital if the 1 cent stock dropped to half a cent! (how is there even HALF a cent!?), that thought wasn't quite strong enough to prevent me from buying the penny stocks (greed was stronger). Being aware of the risks sometimes do not mean much IF you keep thinking to yourself, nah, wont be so sway one la, my penny stock will not be the one to tank. 😛



Those losses are what I call tuition fees... and also learning that prices do usually indicate quality. These companies are cheap, for a (or many many) reason(s). Notwithstanding, there could be some great value penny stocks out there which may eventually outgrown its "penny" status over time, but of those that do, many many many more do not and eventually fail, so the odds are not really in our favor. 

So lesson learnt: Do not be greedy and avoid the temptation of penny stocks (or invest a tiny bit of money you are prepared to not see them again).

The above happened during the days where minimum purchase "lot" of SGX-listed securities was 1,000 shares, which was partly why one would look more to cheaper penny stocks, simply because buying 1 lot of DBS at $17 would require $17,000! A positive change SGX made in 2014 made buying blue chips stocks more accessible when one could now buy 100 shares instead of 1000 shares. e.g. you could now buy 100 shares of DBS at $1700. Too little too late for me at least...

Still learning, after all these years...

Fast forward to this year. 

Together with my wife, we recently took another loss of a couple of thousands when we used our CPFIS-OA to invest. At the advice of an independent financial adviser (FA), we parked about 100k CPF funds for him to invest. I was initially uncertain if we should be investing our CPF OA but the adviser shared that he would be able to make >2.5% in the long run. Granted, I believed that it was possible, but I always had that nagging feeling in me that the fees were going to eat into the returns. 

In addition, I had only recently learnt about CPF tips and hacks. Took the effort to sit down and read up on CPF tips from blogs and books and came to realise that CPF was actually quite a good investment vehicle with 5% for first 40k in SA and 4% thereafter. The FA did not touch our funds in our CPF SA because he said that 4 - 5% were decent returns. But it did not dawn upon me (yes, late to realise 😞) that i could transfer my OA to SA to get those amount instead of investing them in unit trusts. Yes, i understand there are implications in transferring OA to SA and will share more in another post.

My wife and I gave it serious thought and decided to bite the bullet and divest our CPFIS-OA investments after only about half a year and stopped our regular investment via CPFIS as well. Given the short time frame, it was no surprise we lost money, both in the UTs as well as the management / processing fees. But given the 4% interest in SA, we should be able to "recover" them within the next two year. So another tuition fee paid. 😓

Lesson learnt: Do your own research and learn / understand / digest all the schemes (e.g CPF) available to you before committing any big moves on your investments because no one will care about your money more than yourself! 


Frugal Singa



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