Are you Ready?

Scenario 1: Let's go back in time to school days (I assume most readers are working adults). 

Do you have instances where your teacher tells you you can't do certain things well, and you should just focus on a few. (E.g. instead of taking 4 A level H2 subjects, you should take just 3). They feel you do not have an aptitude to do 4 in the final A levels. The reason is you didn't ready yourself for one of the exams and didn't do well overall. 

Are you not ready to take 4 A level H2 subjects during A level?

Scenario 2: Now, you are in your company. 

So you tried for a position in your company, or is looking to a promotion in a company, and you didn't get it? What reason does your company give?

I'm not sure about other company, but mine gives the reason that ' you are not ready'. If you ask what can you do to get that position next time, they would tell you, you could do A- Z list, and the manager will happily help you put it in your business plan. And you do the A- Z list. The next time you try again, you didn't get it. And the reason is, well, although you have done A- Z, someone is more ready than you. And then, they dropped a hint that you shouldn't apply anymore.

Are you not ready for the position?

Scenario 3: Now, as a parent, I sent my kid to an enrichment centre. This enrichment centre says it caters to ability rather than age, and it promotes kids to the next level based on ability. 

I know my daughter is a fast learner. Only problem, she is very shy and doesn't talk freely. Furthermore, when you over- test her, she starts telling you wrong answers purposely. But because of this, the centre does not want to promote her to the next level. And she's stuck learning the things that she already know. (As a side note, of course, I withdrew her from the centre, and decided I should do the teaching myself.)

Is my daughter not ready?

What do you think about these three scenarios?

There will always be naysayers, especially we are starting out. Most will gloss over your short-comings more than your abilities. There is a saying that we should always listen to people's advice, so that we can improve. But as I experience more, I can only say advice are just words that come out of their mouth based on people's motivation and bias. You do not need to agree with what they say (even if they are supposedly specialist in that field).

If you think you are ready, but just not given the opportunity, then look for other ways to get the opportunity. Like scenario 2 and 3. For scenario 1, you can simply ignore the teacher (unless forced by school). In fact, when I was giving tuition, I have students who insisted on taking 4 subjects despite the schools' incessant advice not to, and did really well for all subjects in their A levels at the end of the day.

So, are you ready when someone says you are not?

Why I stayed on...

A few months ago, I mentioned about the decision to moved on from my current job without any plan here.  Nonetheless, things do not usually follow as planned, and a surprise occurred, and I decided to stay on.

It's not a promotion, it's not a change in role. Those would not have changed my decision at that point in time.

Rather, it's an upcoming new addition to our family that made me think twice. To be very practical, I am thinking of the upcoming paid maternity leave. Also, this allows me to buy time to plan for what I would like to do in future.

Sometimes, things happen for a reason, and it may be for a good thing.

Cheers!

A Parent's thoughts on time vs money

As a parent, I want to give the best to my children. And as much as I could, to provide them with the opportunities and exposures. Undoubtedly, money gives one a higher chance of accessing resources, beneficial to giving my kids a head start in future. With this belief, I persevered in my current job, where I spend about 30% of my time out of the country, away from my young children. 

With the money I get out of my job, I outsourced childcare to childcare centres (so that I can continue working). When I am overseas, my partner looks after the kids at night, outsourcing childcare to TV when it becomes unmanageable. 

Have my kids benefited from the my fruit of labor at work (aka money)?

What have I benefited from the relentless work?

Is the cash gained from this job really worth the sacrifice?

If I derive joy from joy from my job, gain valuable experience, perhaps it's worth it. But, what if the job just becomes a transaction between time and money?

I'm leaving my current job, without plans for next. To many, they may say it's an irresponsible plan for a parent. But to me, this is one of the most responsible thing I'm going to do for my children.

While this is the first time since after graduation when I live without a pay, I have enough buffer. Living frugally, this could last me some time. 

 

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.