2018 in review - Finance and Career

Finance

It's just three more weeks before the end of 2018. With the dividends and coupons in already, it's time to wrap- up the finance performances for this year.

1. Stock Investing

This is the year of the telecommunications for me. Only sale of the year is M1, while I purchased Singtel, Starhub and Lippo Malls Trust.

Summary:
Dividend - $4,120.20
Current Market Value - $50,440
Realized Gains - $1235.89
Paper Losses - $4,396.65

2. Bond Investing

I talked about the Singapore Savings bonds having a relatively good short term interest here previously. Apart from the SSB that I bought at the beginning of the year, no other bonds were purchased.

Summary:
Coupon Received - $4,359.10; 
Redemption Value - $140,000
(market value not considered, as there are no plans to sell them before redemption date for the time being).

When I did a simple calculation, this is about 3.11 % of the redemption value. Not too bad for bonds.

3. Endowment Plan

No endowment plans bought this year. And I guess, I am not buying them anymore going forward which I discussed about here. However, I am still holding on to my Maxsave and Maxgrowth. This year just involves paying the premiums for the Maxgrowth policy. One more year to go to fully pay for this policy.

When I look at this year's bond performance, makes me really wonder the value of endowment plans. Well, of course, you will need the bonds e.g. FCL and CMT (read more here and here) to bump up the interest compared to Singapore Saving Bonds.

Summary:
Assumed value - $72.198.35

4. Debt

My current debt will be the mortgage for my resale flat. To calculate net debt, the formula is used:
(outstanding amount - CPF OA savings of me and partner)/2

This is divided by 2 since my partner and I are responsible for the monthly repayment.We manage our finances totally separately.

Summary:
Net Debt - $70,000

The benefits of taking 16 weeks of maternity leave consecutively

Mothers of Singaporean children, who are legally married, and have worked continuously for a company for at least three months, will get 16 weeks of maternity leave in Singapore. There are some flexibility in this leave, which you can find out more here. You need to take the first 8 weeks consecutively, and the subsequent 8 weeks can be taken over the next 12 months. However, some companies may have different requirements over such flexibility.

I know of many who take the first 12 weeks consecutively, and then take the other four weeks (i.e. 20 days for a five- day work week job) as and when they need.

This is my second time taking maternity leave, and like previously, my choice is to take the 16 weeks consecutively, and I would advocate this if things are generally well, based on my experience.

There are many advantages, namely:

(1) You can spend 16 weeks of time with your newborn, focusing attention just on the baby -- (almost) no work.

Most company generally make arrangements for the long stretch of maternity leave. Or at least, that's the case for the company I am working for. During this period, there are very few (almost no) phone calls, and the requirement for you to check and reply email is very low (close to nil for my company). The work obligation required during this continuous stretch of maternity leave is very different from that required from you when you are on a few days leave. Why not just spend this 16 weeks in one go, and focus on your new born, (almost) free from work?

True, after your maternity leave, you may need to take time off for your child's vaccination, some clinic trips, and so on which demand leave. But, don't forget, you also have 6 days of childcare leave (for mothers of Singaporean children) and annual leave for that same year in addition to maternity leave.


(2) You can literally save on a month's worth of childcare. 

If you are getting external help for childcare, you will need to pay for the entire month, even if you skip childcare for a few days. By going back to work later, your kid can also start childcare later.


(3) Less disruption to your employer

The first time I took 16 weeks of maternity leave was because that's the preferred choice of my employer. For them, it is easier for them to plan their resource, and work if we take 16 weeks consecutively. I guess, while it's different for different employers, a continuous leave of 16 weeks brings more certainty to them.

If I could turn back time...

If I could turn back time... 

If I knew I would have kids in my early to mid thirties, I would have spent my twenties working hard to earn as much money as possible, save as much as possible, and learn investing early. Get a home, and complete my home mortgage by then. Make my twenties the time of my life in career and finance.

Once that is settled, then my thirties is the time I can YOLO- ing, with my kids. My kids will only love to spend all their time with me in their early few years, maybe ten at most? So from my thirties to my early forties, I will spend as much time as I want and they want, with them.

 I have not managed my twenties very well. So now, I have to manage my limited resource - time, with career and kids.

In mid forties to fifties, very likely, my career is on the downhill. By then, even if I have the time, would an employer prefer a young person or an old one?

Well, it's never too late for anything, as long as you are willing to put in the effort. But like all things, the earlier the better.

But, if I can turn back time, I would change my twenties.

Well I know, you cannot turn back time. You can only change today and the future, starting from today.

Have a productive week ahead.

Cheers!

Why I have never topped up my or my parents' CPF

This article is inspired by MR 15HWW's article on why he had never topped up his CPF yet. This article is full of very good rational reasons behind his motives. 

There are many articles that talk about the pros, and the benefits one have gotten from topping up their CPF or their parents'. For the sake of a balanced article, do a google search, and you'll get all the benefits. 

Why I have never topped up my CPF?

1. Automation in place

My current employer ensures that my CPF is "topped up" automatically monthly for all three accounts (OA, SA and MA) from both my salary and from my company (thanks Ms CEO's day job employer!). As long as I stay employed in such firms, this auto top- up stays.

2. Ideology

And this is my main reason.

Unlike Mr 15HWW, I may not be getting more returns than the CPF interest rate for now. 

Have you heard of the American dream? You can read more about it here, here,  or simply do a google search. In short, it's an ideology that is coined out during independence, where democracy, and equality, will allow Americans to lead a better life which they want through creativity and ambition.

I believe in the Singaporean dream. That if I were to try hard, one day I will succeed.

If I were to go for the safest option, and what many are doing, at the end of the day, I may just be average or at best slightly above average. And if that's the case, automation in place (see point 1) may put in the average position already. Why worry?

I may have started later in the investment journey, than many of the savvy personal financial folks. 

BUT, I still have 20 years before reaching 55. As long as I have the liquidity or option to cash out (abet with potential losses), I still have the chance to make my money work harder for me in many  other ways. 

For now, I will still keep trying. I may not be better off at the end of the day, but at least, if I try, I have a chance to be way better off. The counter argument may be to top up a bit, and not all your monies, as diversification and let the compounding effect do the magic, and in a very safe method. One day, when I have exhausted my methods, and decided that the CPF is still the best, I will. Not today.

3. Time value of money

In general, a longer term bond will give a better yield. For the monies in CPF, this doesn't really apply.You get similar interest rates whether you can draw if out in 40 years, or in 1 year. Of course, on the flip side, the longer you put in, the more the compounding magic.

Why I have never topped up my parents' CPF?

I give my parents allowances every month. And I trust my parents' are capable of coming up with their own decision based on some rational or basis. It's not up to me to decide that they don't need the money, or they are better off topping up the CPF. They can do what they like with it, and topping up their CPF is what they want, so be it. If they want me to enjoy the tax relief, they can let me know. It's an allowance for them. Once I have given the allowance, it's my parents' money. They decide. 

Three important words

I remembered my previous manager telling us, never to say "yes" to a client who wants us to meet/ finish something the next moment. His reason -- you won't be appreciated, and they will just take you for granted. 

He was right. Firstly, psychologically, clients appreciate slightly delayed response better because if you take more time, it means it is better thought out. And you are busy. Of course they appreciate you putting in time and effort for it. On contrast, if you give an immediate response, anything wrong it's because you do it too quickly with little effort. Also, since you can respond so quickly, you must be very free. Furthermore, next time, they expect it to be quicker, or if not as quick, since you are so free. Of course, you need to balance the delay (not immediate, but not too slow).

Have you noticed this in the family relationship as well? When kids grow up, you notice, parents (and parents- in- law) are often complaining about the one who is usually there, and full of praise for the one who is more absent. The psychology behind this? The one who is always there is free, but the one who is seldom there comes even though he or she is so busy. Who do you think seem to be putting more effort from the parents' (or parent-in-law's) point of view?

Slow down. If it's not life- and - death issue, some delay do not harm.

Say no. You should put your priorities first.

Respect your time. It's your time, not others. You decide.

"Say nothing"; "No"; "Wait".

Cheers.

This is better than many Fixed Deposit for this month

I used to be a fixed deposit person, putting my money in fixed deposit to earn the interests. So when I found out that this low risk instrument earns better than fixed deposit (or at least for this month), I am totally surprised! Based on risk and liquidity, should fixed deposit will yield better interest than them for the same tenure.

Let me give you some examples:
-  UOB gives a 1.2% per annum interest (with minimum deposit of $20,000) for a 10 month fixed deposit
- OCBC gives a 1.18% per annum interest (with minimum deposit of $20,000) for a 12 month fixed deposit
- Standard chartered gives their non- priority members 1.2% per annum for a 7 month tenor, and 1.3% per annum for a 10 month tenor, with minimum placement of $25,000. For their priority banking members, they get 1.25% per annum for a 7 month tenor, and 1.35% for a 12 month tenor.

For your information, this instrument that I am talking about is very flexible, and can be withdrawn any month (on a particular date) after its issue date, and you can start as low as $500! And guess what? It's giving you 1.55% on your first year, and 1.59% on your second year. What's more, unlike fixed deposit where you only see the interest at the end of the entire tenor, this instrument gives you your interest every 6 months. The only draw back is that you pay $2 when you get this instrument, and another $2 if you withdraw it in less than 10 years. These additional transaction fees are easily made up by the difference in interest rate.

What is this?

It is non other than our Singapore's Saving Bonds, and since this article is written in Jan 2018, I am comparing some promotional fixed deposit rates with the Singapore Saving Bonds that is to be issued in 1 Feb 2018 (you have to apply by 26 Jan 2018, 9:00 pm).

This is not a sponsored post. The writer expresses her thoughts and observation in this article.

Disclaimer:
The post is based on the online research at the time of writing. Websites referred to are referenced (via URL link to key words) in the post. Note that the information may have changed when you are reading. In addition, while the writer of this article tries to be as accurate as possible, there is no guarantee on the accuracy, completeness, suitability or validity of any information. In addition, all ideas expressed in this blog should not be thought of as an enticement to buy or sell any products, securities, assets, commodities or whatsoever mentioned.

See also, the section on disclaimer at the bottom of the website.

New Year Resolutions - UnSMARTing 2018

I was thinking about the new year resolutions for this year, and looking at the past years. Apparently, I only blog once about goals. Last year, I was thinking of setting monthly goals instead of new year resolution, by breaking down items into smaller bites. Well, it didn't go well. I stopped the monthly goals even before the first quarter of the year.

So this year, I'll try to be different (yet again) by unSMARTing myself.

S-M-A-R-T as in the acronym for specific, measurable, achievable, results, and time. This year's goals will be qualitative. There are things that I would like to achieve e.g. get a better job, be more involved in the stock market and so on. But these are just some things that I'll try to achieve. Not a hard and fast year. If by June, I realise that this is a totally aimless year, I can always start making more concrete plans. But for now, or at least for the first half of the year, no definite plans.

My intention of 2018 is to make it more experimental. Just like the many privileged young children today, whose parents let them try all sorts of activities before they focus on just some in later years. The parents' aim is to give the kids more exposure. When we are adults with more independence (both in terms of finance and choice of activities), shouldn't we continue with such explorations? As a kid, till my early adulthood, I have tried many things that I want to try, throw out many unsuitable ones, and kept just very little stuff. But as the demands of parenthood, work and complacency kicks in, I have stopped looking beyond what I usually do. The world has changed so much since then. What the hack was cryptocurrency then, pay from the handphone, etc. For many years, I have just looked at new things within the needs of my career, and necessity of life, I have not really tried much things. At this rate, very likely I will be like the antique using the public phone calling my friend on her landline, and getting no response. Okay, I exaggerated.

But my point is, for 2018, I will just do whatever my heart pleases me, and let's see what I'll achieve in this unSMART year.

Cheers!