She Got A Paycut taking childcare leave

It's first April, but this is no April fool joke. My friend recently shared with me the Paycut she was subjected to when she took childcare leave.

For parents of Singapore citizen, you get 6 days ( per parent) if your child is less than 7 years old and you have worked with your employer for at least 3 continuous months. If your youngest child is between 7 to 12  years old, you get 2  days per parent. More information, see the official website from Ministry of Manpower here.

As typical corporate warrior, my friend takes childcare leave before annual leave. Well, childcare leave cannot be brought over to next year and cannot be encashed ( if your company allows encashment of leave). So as usual, she took her childcare leave first before annual leave.

However, last month, she noticed that her pay was cut... 

Well, her pay was cut not because of her company, not because of anything that she did at work. Rather it was because...

Of another clause in childcare leave. If you have 6 days of childcare leave per year, the employer pays for the first  days. For the next three days, your employer will get reimbursed by the government. 

If you were to look at MOM website on childcare leave, you will notice that for each day, payment is capped at $500 per day including CPF contribution. 

She earns more than $500 per day, hence this explains the pay cut when she took her childcare leave. When I asked her why did she take so long to find out about this, and she mentioned that she was not subjected to this cut in her previous company. To be fair, for the first 3 days of her childcare leave, her employer paid the full amount. It was from the fourth to sixth day( when the company claims from MOM) is she them subjected to the pay cut.

This reimbursement from MOM is done by the employer ( usually HR) behind the scene. Apparently most employers just pay the difference. But there are some that pay the exact amount they get from MOM. 

So, if you are a high income earners, and took all your childcare leave without any paycut, thank the government and your employer for the last 3 days of your childcare leave.

Have a great day!

Fourth Child ?

My youngest turned one a few months back. As I see how his elder brother and sister enjoy playing and being his leader ( I simply mean bossing him around), I thought for a moment whether it would be great for him to have another sibling.

This was a a decision that I made for my eldest and second one. And the decision came easily then. 

But for this time round I was hesitant.

True enough the baby bonus, and CDA benefits are great for 4th child. Though there will be no additional tax benefit for me since I hit the limit. But, these benefits to me, are ' side effects' to my decision. They are never part of my decision.

During the pandemic, I got lots of time with the kids. But I also realized it was just tough to give all of them attention at the same time. My kids learnt less than I could teach if there were fewer kids, and I spent less time due to significant distraction by another ( e.g. diaper change, or just another kid making too much noise, etc.). To me, more kids would be sacrificing the current attention that I can give to any one.

I am getting old. When the kids are at home, whole day, I am exhausted by afternoon. Cannot imagine having more kids.

Another big consideration I have is space. Everyone needs space. Currently all my 3 kids share a single room. And there was once my daughter mentioned that she likes to be home when the brothers are away, as at least, she can play her own toys ( without them being snatched away suddenly). The time will come when the 2 boys want their own space too. I am considering a home with 4 bedrooms. Most new 5 room hdb flat just don't have 4 true blue bedrooms. The 4th room in a five room flat is just an extension of the living room. Perhaps it is big enough for a table but not for a bed with table and storage space. I looked at some condos, but the price for 4 bedroom is out of range for me. What's more, the living space is small. To me, moving to a condo is considered a downgrade if I have to forgo space. The swimming pool, the garden at the condo are  places that belong to just me. While there will be less people competing for such space compared to the public park or pool,  it is not my space.

 I looked at landed and cluster houses too. They are big enough. Now it becomes, whether I want to trade my freedom ( to be able to quit my job when I feel like it) for more physical space. 

Next factor is also related to space. But now it is car space. My sedan can only fit 5. Having more kids would mean a change in car ( or not having it). Not something that I would want to I'm the near future...

So, I guess I will stop at 3.

Main factors that made this decision was space and time.

Why topping up my CPF won't reduce my tax

It's going to be the end of the year, and there are many who are topping up their CPF to earn tax relief. For me, topping up my CPF will not reduce my tax in any way. So for me, I'm not going to top up this year. 

And the reason for that is simply because of this statement from IRAS:

A personal income tax relief cap of $80000 applies to the total amount of all tax reliefs claimed for each year of assessment.

So for individuals, note that your maximum amount of tax relief is capped at $80,000. Once you reach that sum, topping up your CPF will not help reduce your tax. 

I get a substantial tax relief from the working mom tax relief. The following is the tax relief for working moms:

• 15% of earned income for 1st child
• 20% of earned income for 2nd child
• 25% of earned income for 3rd child and beyond

As these relief are cumulative (meaning if you have 2 children, your tax relief is 15% + 20% = 35%), they become quite significant. With 3 kids, I qualify for 60% of tax relief of my earned income. This forms the bulk of my tax relief.

Another bulk of relief will be from my compulsory CPF contribution. Without us doing anything, a portion of our salary goes to CPF. This contribution is known as the compulsory employee CPF contribution, and they are included as part of my tax relief. 

After adding in my CPF and working mother tax relief, I've exceeded the personal income tax relief of $80,000. I like that IRAS highlight this (I copied this from IRAS' website):

Please note that a personal income tax relief cap of $80,000 applies to the total amount of all tax reliefs claimed (including relief on compulsory/ voluntary CPF contributions) for each Year of Assessment.

There will be no refund for accepted voluntary CPF contributions. Please evaluate whether you would benefit from tax relief on your voluntary CPF contributions and make an informed decision.

Well, part of my CPF contribution are taxed now OR you can look at it as I don't get the full 60%  working mom tax relief. Any way you look at it, topping up CPF in anyway will not reduce my tax. On a side note, this means based on current situation, I won't benefit from the additional tax relief for working mom if I have another kid. But honestly, whether I want more kids or not has nothing to do with tax, anyway.

Today's Christmas Eve! Have a Merry Christmas and a Happy New Year!

Life as a Consultant

I've been working as a consultant for the past 8 years. There are many consultants in the world, and they do a wide variety of different roles. But my job as an engineering consultant is to advise clients on how to improve their processes, engineering design, and so on.

Pros of Being A Traveling Consultant

In terms of work, I am most blessed to visit so many companies, and people generously share information with me, broadening my horizon. The generous sharing was of course so that I can help them as much as possible. But, when can you go to people's control room as an external person, and get to look at all their standard operating procedures (SOP), their control panels? Few will get that opportunity. Because my consulting company has a wide variety of clients, I've visited so many different factories (producing the weirdest thing to the typical things) in so many countries. Many don't get so much exposure as me. 

Office politics is minimal. For our clients, I'm seen as an outsider, and well, there's no need for politics with me. In my company, I 'm rarely even in the office. There's little politics, apart from nasty emails from people I hardly know. I have little feeling towards nasty emails since I don't see the person writing it. I just interpret it as poor writing on their part. 

As a consultant, pre- COVID, it was a jet- setting life. While many financial bloggers are talking about credit card hacks to gain as many points to take business class (ok, not for first class though. I've never taken first class), I've taken my fair share of business class flights (Emirates, Asiana and SQ only actually) for flights more than 8 hours. Also, from the incredible amount of travel I have done (during peak period, I'm on the plane every alternate week), I have so many Krisflyer miles for upgrades to business class or simply free flights. No need any hack. But, I  started being sick of traveling in recent years. I haven't traveled for holidays for years. I had been clearing leave by staying home. I used krisflyer miles to exchange for ipads (and other stuff from Krisshop) - I know, people say it's get the least value per mile, but it suits me best.

From the many hotel stays that I had, I am able to exchange for free nights staying in suites for free. I've stayed in Le Meridien in Sentosa (good bye), and also W Sentosa's suite (go check out how much it cost) for free. I'm a lifetime silver member of Marriot Bonvoy and am midway to life- time gold. #notproudatall

Meals abroad are paid for. We don't get allowances for travel, just reimbursement for food, transport, hotel, airfares and other travel expenses. So, I have eaten loads of different great food. Hai Di Lao, Ding Tai Feng and so on? I've eaten them, overseas. Hairy crab? I get to eat how much I like, and it's not expensive in China (my clients will direct me to the right place). 

When I'm visiting clients based in Singapore, I take a cab to their factories. Grab points, comfort- delgro points? I have loads of them to exchange for my own free rides (e.g. when I need to go office, or simpy going out).

Of course, all this travel was pre- COVID. Now you must be thinking this is an excellent job, and you want to take it.  I've many friends who envy my job. But, I envy theirs.

Cons of Being A Traveling Consultant

I didn't mention the pros to brag. Instead, I want to show that for all the perks you get, there's a sacrifice to be made. It's just whether you mind the sacrifice. 

Firstly, health. When you are on the plane, do you know that you are subjected to high amounts of UV rays? In fact, while you are indoor, you need more sunblock on the plane (think- you are even nearer to the sun now!). When you are eating out so often, there is less control over the quality (and how healthy the food is). 

If you are not traveling, you get to celebrate birthdays, respond to emergencies, and so on. When you are overseas, it's hard. Even if you only have 8 hours working, the rest of the time you have, you can't go home. Yes, you can go round and see the sights of the country. I have been to Taiwan for business more than 20 times. Taiwan is great, many places to visit, but as a not very adventurous person, it's not so appealing anymore. 

Next, when you have kids, the time away from home is bad. To make up for the time I'm absent (and not able to teach them), I spent a lot of money on enrichment (which I could have taught). To manage the kids while I'm away, my partner give in to TV and screen time. 

So now, with COVID, there's little travel for consultants like me. Travel has been replaced with conference calls. For local clients, I still visit them. It seems I should like my job even more. You would say I should love my job now. 

But something in me wanted a change. Firstly, my company does not pay well. It justifies it with great benefits. But I prefer money.  My boss hasn't promoted me (ever since he had been my boss), and he'll tell me if I do A- Z, maybe the company will consider, but no guarantee. Then, they are thinking of sending us overseas, go for quarantine, then visit our clients. What are your thoughts on these? While it's not confirmed yet, to me, it's simply a matter of when. 

And I have my plans too

When COVID is finally under control worldwide, travel will resume. And I'm sure my company will make me travel every week to make up for the lost time. 

And for now, while the managers think of long trips with quarantine overseas, I want no part in it. Rather than stressing over what happens then, I bit the bullet.

Sometimes, we hang on to a job too tightly when it's no longer aligned with our values, thinking that we can't live without that job. But there's abundance in the world. There are many opportunities out there. It's just takes time and effort to uncover them. You just got  have patience and believe in yourself.

We have to let go of some things, so that we can let other things come. 

Cheers!

How much I spend on 3 Kids a month.

Many people say that kids are one of the largest expenses you can have. I have 3 kids, and this is how much I spend on them per month.

1. Childcare

I am not ready to engage any domestic helper. Hence, while I am at work, the childcare centre will help me engage my kids. There are many reasons why I didn't opt for a domestic helper, but perhaps that will be in another post. My youngest is in infant care, and my two others are in childcare. After government subsidy, this come to a whooping $1,800 ($800 for infant care, and $500 each for childcare).

There are occasional outings at the childcare centre. I only let my eldest go, as I feel kids before the age of 3 are unable to appreciate or remember where they have been to. These excursions average $20 per month (so are more expensive like watching a play, while some like going to the library are just a few dollars).

Total per month for childcare: $1820

2. Enrichment

Following the same concept as excursion, only my eldest goes for enrichment. For just 2 enrichment per month, I spend $300.

Total per month for enrichment: $300

3. Milk

I have three kids. All of them are on different milk

The infant is drinking breast milk, so I do not buy milk powder for my baby. I pump most of the milk with a modestly priced breast pump, Spectra 9 which cost about S$100. I have used this for years, and it's still working. And I also have a spare. I have used this for all my 3 kids, and this is an excellent pump, worth its price.

If you want to store a lot per bag, consider this. I store about 300ml ++ per bag inside (I know it is above the capacity), and I use about 120 pieces per month. 

If you are going for a lesser quantity per pack, this is cheaper:

I also bought a freezer. It's a one time fee, so it's not included in my monthly calculation.

My 2- year old is on full cream milk powder (not formula milk). It costs about $60 per month.

My 4- year old is on UHT milk, and it costs about $20 per month.

Total amount spend per month on milk: $100

4. Insurance

I bought medishield plus rider for all of them. This cost about $162 per month for all three of them.

5. Diapers and Wet Wipes

My eldest is fully toilet trained, so no more diapers. But my two others are still on diapers which I buy here when it's on discount. They cost me about $70 per month in total for both of them. For wet wipes, I buy from value shop ($1 per pack), and this is at most $10 per month.

Total for diapers and wet wipes: $80

6. Food

I usually grit my teeth when I eat out with my kids, so I have been cooking for the most of the time. This actually cut down a lot of my food cost too. On average, I spend $100 per week on groceries. I can't differentiate theirs from mine, so I shan't. Though I guess most of the grocery cost is for me than them. They just eat one small bowl each per meal? Anyway, I just take the total cost of $400 per month.

Total for food: $400

7. Medical

This is for injections, doctor visits and so on. Most vaccines are government-subsidized, but we took those recommended as well. Together with other doctor visits, this is about $100 for all three of them per month. One tip, go to a polyclinic for doctor visits, you'll save a lot. One of my children had dry skin, and got a moisturizer. The cost of it is less than $2. Nice!

8. Activities at home

Kids need to be entertained continuously. I used to buy toys, but stopped as I feel that they do not need so many toys, and also because my home is going to become a junkyard for toys. Nonetheless, they still need many things to keep them occupied. These include stickers, color pencils, origami paper, books, and so on. I buy them from Value Shop. For about $1, you can get a 12- colored color pencil set. 

On average, I spend $10 per month in this category. 

9. Excursions

I bring my kids out. This range from free activities such as to the playground, park, library and so on, to paid ones such as the swimming pool, Uncle Ringo, Zoo, and so on.

I'll include items I buy for the trip to free places (e.g. kids scooter and tricycles, etc.).

On average, I spend $100 per month.

10. Clothes/ Shoes

I buy them only when needed. I don't see any value in having too many clothes or shoes since they outgrow them quickly. My younger and youngest wear those that my eldest can't wear, so I just spend on one person. This is about $20 per month. Buy online. $20 can last much longer.

Total Amount spent per month on three kids is about $3092

The One Thing You can Control at Work

This article was sparked from dropping my eldest at the enrichment centre. Before I left her for class, I told her to "Enjoy Youself!". Then I stayed for a short moment while she walked in, and overhead many parents telling their kids like "Pay attention.", "Speak loudly today." "Get more stars (the teacher will give a number of stars according to their performance)", and so on. None asked their kids to enjoy. Seems like the focus is performance.

Well, let me set it right. I expect my child to pay attention in class, and speak up when she knows the answer or have some stuff to say. My intention of enjoyment is definitely NOT just playing other things while the teacher teaches. However, what I hope is through the class, she finds things that she enjoys. It's a Chinese enrichment class. So it could be finding enjoyment in reading, listening, or interacting with others in Chinese. Whatever it is, as long as she enjoys something from the lesson. Whether she shows that she is the best or read the loudest in the class is not essential, unless that's something she enjoys.

This makes me wonder, instead of hoping for a smooth day at work, or a fruitful day and so on, why don't we enjoy a day at work? Instead of focusing on the things that we do not enjoy at work, why not complete all the tasks and at the same time, be mindful of the things that we enjoy and really savour it. Make that the highlight of the day. After all, we could be spending more time at work than anything else. This enjoyment could be doing an analysis that you are passionate about, reading up on a work related topic that interests you, talking to a colleague to understand more about what they do, negotiating with your favorite client, savoring the delicious coffee in pantry, working with a software that is only available in your company's computer, and so on.

For most of us, we can't fully control who our boss is, what we need to do, how our clients react, and so on.  These are external factors that have too many dependent variables. However, we definitely can control our mindset, and this in turn controls how we behave or react to things.

You have chosen to work today, so enjoy your day at work!

The Hard Truth about Employees and Companies

Have you heard or yourself made such comments before:

"How could the company be retrenching people when they are making profits?"

"Why can't the company provide us with more benefits, they are so rich, it's just peanuts to them." 

"Why does the company only ask me to work, but never send me for any training?"

"I sacrificed so much family time for the company, why am I not promoted?" 

Whenever I read or hear such comments, it just make me wonder why do people not realize the truth about the relationship between employees and companies? As a corporate warrior for nine years and counting, each year only reminds me more firmly about this hard truth. 

Companies exist to accomplish the vision of the owners. It could be to leave a legacy, fulfill their dreams, make money or whatever. It's never, I repeat, NEVER for the employees. To a company, employing an employee is a transaction. A transaction for a service the employee can provide for the firm, to allow it to achieve the vision. This is similar to you going to the hairdresser for a haircut. The hairdresser gives you a haircut and you pay him or her. Or you going to the supermarket to buy milk. You get the milk, the supermarket gets the money. Simply, a transaction. 

To be blatant, employees are just a pawn to accomplish the vision of a company, in return for something (money or pay). To allow the pawn to help achieve the company's goals, some companies may provide training, have good benefits and so on. But the ultimate goal is to ensure that the pawn helps it achieve the target.

So what benefit does the pawn get? 

While we understand that companies exist for themselves (the owners), it does not mean that the employee is always at the losing end. For one thing, the company has to pay the employee for the work which allows the employee to accumulate and work on this  pennies to create his/her wealth. As employees, we should make full use of the opportunity when given to work for this company. How you make full use really depends on your ultimate goal. It could be to earn reputation in a certain area to spring board your career, gain experience, learn a new skill through doing, and of course build wealth from the pay. 

Since companies exist for their own goals, the pawns (employees) exist for their own goals as well. 

Once you understand this hard truth, you will know that no one owes anyone a living. The company employ you for the service they want from you, and you agreed to provide them with such service to the required standards. If the company wants you to make sacrifices that you are against your goals, then it's your job to prevent that. 

Remember, it's a transaction. 

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).