How $60,000 is gone before 2017...

I was evaluating my expenses to be for 2017.

Unlike previous years, where I have no mortgage to pay for, there is mortgage for 2017, and other additional. Hence, 2017 seems likely to be a year of high expenses.

Except for the home that we bought, my partner and I have totally separate finances, so his expenses are not included here. It's astonishing that even before 2017 starts, almost $60,000 is likely to be out! Do you have this problem like me? Some of the items can actually be cut down. Like cable TV, but it's at my parents' place... And the amount is small, compared to insurance and endowment, which easily eats up about 20% of the likely expenditure. Ridiculous.

Unless I do something about insurance and endowment, it's likely that I will need to spend $65,000 or more 2017. I am keeping $65,000 as the maximum target for 2017. I hope to spend lesser than that. Variable will be about $490 per month. Welcome austerity...

Fixed Expenses  - $59,130
$5050 for insurance (this includes a life insurance which takes up a huge portion of it; some term insurances, and health insurances)
$8000 for endowment plan;
$24,000 for parents
$15,000 mortgage (estimated)
$600 for Ang Baos
$480 for cable tv
$6000 childcare (estimated)

Others - $5870
which will comprise all other expenses, like taxes (property and income taxes), food, transport, entertainment, medical, etc., etc. That will leave just $490  per month for me myself then to keep to $65,000. Welcome austerity.

The Real Cost to be married in Singapore

December is the month where I would attend many weddings.

I recently attended my sister's wedding, which is extremely atypical of a Singaporean Chinese wedding.  I had to take leave to attend it, since it is on a weekday day time.

The wedding started off with solemnization at ROM. After that, the groom chartered us on taxis (ok, he booked the cabs) to their place for a lunch reception at their newly renovated flat. The event was cozy, and we get to chat with everyone, and even get to know the other side's relatives.  The lunch buffet was from a caterer which food my parents like.

I am from the bride's side, and I personally know the people she invited. As for the groom's side, it was a time to know his immediate family.

Honestly, I really enjoyed this wedding. I have never thought about a wedding like that, but I feel it's really really cool.

It was atypical of the 8 - 10 course banquets that I usually attend, sitting in a table usually with some strangers on the same table, and sometimes, having many awkward silences, waiting for the food hungrily, and gorging on them when they come. With regards to interaction with the newly married couples, I usually only talk (extremely briefly) to the bride/ groom when they make their rounds for the photo shoot, and at the start (and end if I stay till it) when we shake the hands of them and their family. Sometimes when attending such wedding, I wonder whether I am there only for the food. And after many years (maybe weeks), I don't really remember much about the wedding.


The Real Cost of Getting Married

What's the real cost to be (legally) married in Singapore?

The cost of getting married in Singapore is actually very very low.

$26 for Singaporeans/ PR. For foreigners wanting to get married in Singapore, the cost is at most $298. Click here for details.

The other costs, are generally what I call expectation costs --- costs incurred just to meet the expectations of the couples, traditions, parents, etc. You can still get married (legally) without them.

My thoughts are, the wedding is the most important day, from the perspective of businesses. For the couple, what you do after the wedding is more important. How much you spend of your wedding generally has little significance on how well you get along in the long run.

Why get into debt (meaning you cannot afford it) to meet all these expectations, when the real cost is just $26?

Making a four- room HDB functional for less than $8,000

I just moved into our 4- room resale HDB flat, and we made it functional in less than $8,000!

Notice, I didn't use the word renovate as we didn't hire people for renovation works. As such, let's use the term functional here.

Initial Condition of the Home

Before we moved in, the home came with the following:

• In- tact flooring tiles
• Adequate power points
• Available fibre optic point and television point
• Lighting switch is still working (though many bulbs were blown)
• Home came with concealed ceiling (which is bad for modification - so a decision not to rewire or change anything about the lighting except for the bulbs)
• Kitchen cabinet is still usable
• Kitchen Stove is still usable
• Paint still looks okay
• Windows and window grilles are in- tact
• Curtain rails are available
• Functional Sink/ taps/ drains
• Working Air- Conditioner
• Functional interior doors and exterior door/ gate

Project Goals

My partner and I made a decision not to engage interior designers and renovation firms to do up our home as we want to move in ASAP, and also, because of the cost.

As such, we gave ourselves a budget of $8000 and a time frame of 2 weeks to move in after getting out keys.

Our Strategy

My partner and I are minimalist people, and as such, we like to have as little stuff as possible.

We also have (some) time on our side. We took two weeks off after getting our flat, so we are able to do most of the DIY stuff ourselves. And to maximize time, we bought most of our stuff online. The internet is the best place to visit so many shops, within a day, and all of them come with delivery (though at a cost for most). That's apart from some electronic stuff, smaller items and IKEA products (which doesn't have an online shop here in Singapore. Why!).

DIY furniture are mainly from IKEA and GIANT. These come with good instructions, and as such, made our life easier. For the plumbing works, thanks to Youtube, we were given on- the- job training. Here and here are some nice training videos that we watched for the plumbing training. Surprise, surprise, surprise, there are some many screws for the toilet bowls (at least I only realize it now).

Functional Home Project Cost

The following are the stuff that we bought to make our home functional for within $8,000. Of course, there are some stuff that we already had beforehand, and this saves some cost.

I have listed them in details, so that next time, when I want to refer to , I have a copy. Also, I want to show you that you can make yourself comfortable without spending too much of money. Note that these may not be the lowest cost available for similar products, and this post is not meant as an enticement for you to buy any of the items (see disclaimer at bottom of blog).

Living Room (Subtotal = $882.50)

• TV bench (to put the modem, telephone) ($19.90 - see here)
• Extension Plug ($15.90 - see here)
• Sofa (to be exact, we went for sofa bed - $160 including shipping and installation - see here)
• Shoe Rack ($49.90 from here)
• Kids Table to double up as coffee table ($16.90 - see here)
• Book shelf ($59.90 - see here)
• 40 inch television with wall mounting brackets ($560 including delivery and installation - ok, we went to a physical shop for this.)

Master Bedroom (Subtotal = $944.70)

• Queen Bed plus mattress ($582 - see here)
• Queen size Mattress protector ($19.90 - see here)
• 2 x Bed sheet set for Queen ($9.90 x 2 = $19.80 - see here)
• 2 x Bolsters ($9.90 x 2 = $19.80 - see here)
• 2 x Pillows ($6.90 x 2 = $13.80 - see here)
• 2 x Bolster cover ($4.50 x 2 = $9 - see here)
• 2 x Blankets ($14.90 x 2 - see here)
• 2 Study tables ($50 - see here)
• 2 chairs ($12.90 x 2 = $25.80 - see here)
• 2 x 4 tier plastic drawers ($48 - see here) 
• Wardrobe alternative ($61 - see here - highly recommend, after shopping online, I find this idea of having poles for clothes not only economical, but cool!)
• Extension Plug ($15.90 - see here)
• Hangers ($20 - yes we bought many)
• Mini Iron board ($7.90 from here)
• Iron ($22 from here)

Kids Bedroom (Subtotal = $160.90)

• Single bed Mattress ($45 - see here)
• Wardrobe ($99 - see here)
• Bed sheet ($16.90 - see here)

Another bedroom - vacant for now

Kitchen (Subtotal = $3182.15)

• Refrigerator ($1000 from a physical shop)
• Washer cum dryer ($1300 from a physical shop)
• 2 x Dining Table ($98 from here)
• 8 x Chairs ($48 from here)
• Oven ($250 from a physical shop)
• 8 Plates ($9.60 fro here)
• 8 Bowls ($7.20 from here)
• 8 Rice Bowls ($16 from a physical shop)
• 4 Serving Plates/ 4 serving soup bowls ($80 from a physical shop)
• 8 Coffee cups ($7.20 from here)
• 12 glass cups  ($7.80 from here)
• 2 Pitchers ($15.80 from here)
• 1 Thermal Flask ($50 from a physical shop)
• 1 Rice Cooker ($30 from a physical shop)
• 1 Kettle ($25.90 from here)
• 1 Rice Storage ($17.40 from here)
• 10 pairs of chopsticks ($16 from here)
• Cutlery sets x 2 ($30 from here)
• 12 soup spoons ($7.80 from here)
• knife set with potato peeler ($5 from here)
• chopping board ($1.90 from here)
• Other utensils set ($5.90 from here)
• Cookware ($49.90 from here)
• Baking Pan ($6.90 from here)
• Kitchen towels ($3.50 from physical shop)
• Towel hanger ($5 from physical shop)
• 2 x Pails ($3.80 from here)
• Quick dry mop ($19.75 from here)
• Vacuum cleaner ($41 from here)
• Robotic cleaner ($96 from here)
• Utensils organizer ($5)
• Can opener ($9.90 from here)
• Bottle opener ($1.50 from here)
• Food containers ($4.50 from here)
• Dish drainer ($3.90 from here)

Washrooms (Subtotal =  $125)

• 2 toilet flushes ($80)
• 2 toilet seat covers ($30)
• Holders ($15)

Storeroom (Subtotal = $130.09)

• 2 x Shelves ($39.40 from here)
• Tool set ($43.89 from here )
• Battery operated drill ($46.80 from here)

Others (Subtotal = $1188.50)

• Replacement of blown bulbs ($75)
• 2 x Standing lamps ($39,80 from here)
• Bulbs for standing lamps ($9.90 from here)
• 2 x Standing fan ($65)
• Curtains ($150)
• Air- con servicing ($120)
• Cleaning supply prior to moving in ($30) 
• Taxi fare for self delivery ($55)
• Electric drill ($36.80 from here)
• Putty (to repair some wall cracks, and openings) - ($7)
• Change of lock for main door/ gate / letter box ($320)
• Rubbish Chute Replacement ($280)

Total : $6629.74

My home is not shabby. I have to emphasis it, as that's what many of my friends asked me when I told them about my function home project. And I have all the furniture, gadgets and equipment that I need, making my home comfortable for my family and I. In fact, visitors who came find it neat, tidy, and comfortable.

The end of this functional project doesn't mean that I will stop buying stuff for my home. With time, we may need some items, and of course we will buy it. The amount of things in a home will only get more with time, anyway, with our needs and wants.

Cheers!

Buying A Resale HDB Flat WITHOUT Property Agent

The Straits Times has been running articles about the increase in HDB resale transaction that did without a property agent. Hey, I am one of them! I recently got the keys for my resale 4- room flat, and did it without an agent.

My Experience
We bought the flat without an agent. Honestly, the HDB process was simple. Follow all the procedure from HDB website, and you are done. Here is a link to the procedures.

For my case, the hardest was to deal with the other side's (property agent or seller).

In fact, as long as you do your homework (meaning read HDB's website), look at past transaction prices (at HDB website, and you notice within the same period, the prices do not vary a lot for similar floors in similar areas, plus minus a bit for renovations), and are willing to negotiate (just tell them the price you are willing to buy, and ask them to call you if they can match that price), you should be ok.

Some property agents tell you that they can help you with the housing loan. Honestly, you don't need. There are just 3 major banks in Singapore (UOB, OCBC and POSB/DBS) that most people look for for housing loan. You just need to call to request for housing loan, and they can email you the packages offered. Whether you  have a housing agent or not, ultimately, you still need to make your own decision on which loan to take, the tenure, and so  on. You will need a conveyancing lawyer, and in my experience, banks will introduce you one (which are quite reasonable priced), and they will settle the rest for you. Another option is HDB loan. I didn't go for this route, due to the higher interest rate, for now.

Take note of some of the tricks from the property agent from the sellers' side, which I experienced first hand:
- Asking for option fee without asking the seller to sign the OTP. In my experience, the seller's agent asked us to pay the option fee of $1000 without finalizing on the price, and without the seller signing the option to purchase (OTP), to show our sincerity in buying the flat. We refused, of course. Giving a $1000 cheque without a signed OTP is as good as giving $1000 away. Seller can bank in the cheque, and say that there is no agreement (since nothing is signed). You have nothing against them.

- Seller's agent trying to tell you how hard the procedure is, and introduce you another agent to act on your behalf (and collect fees from you).

Next, very important, agree on the date to move into the home and other details before even signing the option to purchase (or when exercising the OTP). Put in down in a signed document. If there are other items agreed upon, e.g. furniture, etc, put it in the document too. In my experience, we did not do so when we exercise the OTP, and the seller pushed back the date we get our keys multiple times! To end the trouble, we engaged a lawyer to write an agreement - black and white. If we had done so at the start, this would have been easier.

My Thoughts
A buyer doesn't need an agent when doing a HDB purchase. Also, once the deal is done, the agent can't do anything. So is it really worth it to hire an agent?

Rather than getting an agent, I would rather engage a lawyer from the point when you sign the OTP to write down all the agreement, and let both sides sign. At least, after the deal is done, you still have a legal document to protect yourself.

For your information, the price to pay for a lawyer for such services (getting a legal document), is likely to be cheaper as compared to the agent fee (unless your home is super cheap), and you get a legal document to protect you (and not an administrative assistant).

HDB allows such private arrangements (go to their FAQ and you will see that many things are the private agreement between seller and buyer).

Comparison of CapitaMall Asia 3.8% bond vs Frasers Centrepoint Limited 3.65% bond at current market price

I have recently purchased CapitaMall Asia (CMA) 3.8% bond at $1.003. The price of this bond has since increased. Frasers Centrepoint Limited bond is currently trading below par at $0.982, and I am wondering if it is a better buy than CMA. My philosophy of buying bonds is to hold till maturity whenever I can, as such, this comparison between CMA bonds and FCL bonds assume that they are held to maturity.

Like CMA 3.8% bond, FCL 3.65% bond also have an optional redemption date. However, for the FCL bond, if it were to be redeemed earlier than May 2022, the bond will be redeemed above par. La Papillon from BullytheBear blog gave good details about this bond which can be found here.

Since the coupon dates for CMA 3.8% are in January and July, while the coupon payment dates for FCL 3.65% are in May and November, I simplified my comparison, by looking at January and July periods. Hence, the January period, would mean that the FCL bond had paid the previous November coupon, and CMA having just paid the January coupon. Similary, the July period means that FCL had paid the previous May coupon, and CMA having just paid the July coupon.

I have assumed FCL 3.65% is trading at $0.982 while CMA 3.8% is trading at $1.003. The comparison involves 10,000 units of bonds, and using PEOMS as a trading platform. For different platform, the fees may differ slightly, and you may like to use the following calculator to determine the total cost for stock purchase in Singapore.

I calculated the cashflow for CMA 3.8% bond at each possible redemption date. Similarly, this is done for FCL 3.65% bond.

Cash Flow for CMA 3.8% Bond at each possible redemption date

Cash Flow for FCL 3.65% Bond at each possible redemption date

A comparison of the IRR for these two bonds, and the absolute extra amount to be received are as follows:

Comparing IRR for CMA 3.8% Bond and FCL 3.65% Bond at each possible redemption date

Comparing Absoluate Amount Earned for CMA 3.8% Bond and FCL 3.65% Bond at each possible redemption date

From above, it seems that the earlier FCL is redeemed, the better it is compared to CMA 3.8% in terms of absolute amount earned and the IRR.

If it were you, which bond would you buy?


Disclaimer: I am not a financially savvy person, so what I is written is based on what I deduce from my limited research and reading. This may not be an accurate account of the real scenario, and you are to do your own judgement on whether such funds are good or not for yourself. I won't be held liable for any inaccuracies or omissions (see also my disclaimer at the end of the blog).

CapitaMall Asia 3.8% 220112 Bond

I used to think that shares and bond prices should have an inverse relationship. However, it seems that it's not true for now. With share prices are dropping (with the STI dropping below 2600 points today), I see that 2 of the 3 retail bonds I hold are now trading below par.

I hold CMA 3.8%, FCL 3.65% and CMT 3.08% bonds. CMA is trading at one of the lowest price now since it was listed, and both CMT 3.08% and FCL 3.65% bonds are trading below par. Well, I am wondering is it due to poor market sentiments (like the shares in general), or is it due to an expected rise in interest rate (hence making current bond yield less attractive), or it could be since the market is down now, people are trading the bonds for higher yield items, such as stocks!

With these 3 bonds' prices going down, as long as the companies can still pay me the interests, and pay me back what I put in at maturity, I have no qualms about their trading price, since I intend to hold them to maturity. 

I am interested in getting CMA 3.8%. Note that this bond is still trading above par at $1.003 at this point of writing. This bond could be redeemed starting next year (at the discretion of the company), and at subsequent coupon payment date  (January and July). If the bond is not redeemed in January 2017, the interest paid per year would be 4.5%. 

I am using POEMS as my online trading platform. As such, if I were to purchase 10,000 units of CMA 3.8% bond at $1.003 per unit, it means that I will need to pay $10,064.34. To make calculation easier, I assume that this bond will be redeemed in January 2017 (thus I will receive 2 interest payment or 3.8% of 10,000 units).

I used the following method to estimate the IRR for this investment:

Thus, if this bond were to be redeemed next year in January, I would have earned about 3.1% for a one year bond. If this bond were not redeemed in January next year, I would be receiving 4.5% interest, making the effective yield closer to 4.5%.

I find it a relatively good buy. As such, I have added 10,000 units of CapitaMallAsia 3.8% 220112 Bond to my assets.


Disclaimer: I am not a financially savvy person, so what I is written is based on what I deduce from my limited research and reading. This may not be an accurate account of the real scenario, and you are to do your own judgement on whether such funds are good or not for yourself. I won't be held liable for any inaccuracies or omissions (see also my disclaimer at the end of the blog).