Tag Archives: Savings

Is Cash Really King?

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Cash Is King?

We have heard many times that “CASH IS KING” when the stock market or property market crashed. We lamented that if we had the cash in hand we would have grabbed the opportunity to pour in the capital investment and reaped a huge return when the market rebounded. Any uncle or auntie in Singapore would have said the same thing!

 
If you had $1,000,000 in your bank account now, would you have “plough in” $500,000 when the stock market was at it’s lowest and darkest moment in March 2009? If you did, you would have reaped a handsome return of more than 60% and got back $800,000 now, simplistically speaking.
 
It takes courage to act when others are quivering under the intense pressure from everyone, including fund managers! It takes courage to step forward when many others are hesitating to make their moves. It takes wisdom to say “Let’s do it now” when others are saying “Maybe tomorrow”…
 
Yes, even if you had a million bucks, you would have hesitated, I am sure because of the herd instinct. It is very natural and human to follow the leader instead of being the leader.
 
So what do we do now? The markets are reasonably valued and have gotten off the bottom since March 2009.  We have missed the bottom but definitely we are not at the peak now. Investing in batches is the way to go if you are considering to get into the equities market.
 
I wrote in one of my blog posting in July 2008 that it was time to start investing into the equities market but many people were fearful and indeed the market went down even further till March 2009. But looking back, by now you would be in a much healthier position, right?
 
Investing is all about holding power and your time horizon, if you have the extra cash sitting idle in the bank and have a time horizon of 3 to 5 years, you can seriously consider investing.
 
Inflation is around 3%, if you are still holding a ton of cash in the bank, your money is LOSING it’s purchasing power by the day! Open your eyes and look for opportunities. Closing your eyes will not solve this problem, plan and act on that plan to succeed or else your dream will alsways remain a dream. Reality comes when the dream plan is put into action!
 
See your financial adviser today to put that dream plan into action TODAY. Everyone is unique so you need to discuss with your adviser first before you invest.
 
No adviser? Let me help you by calling me for a discussion at my office next week.
 
 

Are You Saving For Retirement?

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Singapore


A recent survey revealed that two in five Singaporeans are lagging behind in their retirement savings after the global financial crisis. They have suffered serious losses because of the financial crisis.

As Singaporeans are expected to live longer due to the high quality of medical aid here, we are expected to live longer than our parents after retirement. Most Singaporeans are expected to live another 20 to 30 years after the official retirement age of 62.

Just picture this… How much will you need for a basic level of living? Just the bare minimum, no frills, no luxury, no extravagance. Do you need $1000, $2000, $3000, $4000, $5000 a month? This amount is very important as it represents basic living life style, any amount less than this means you will have to compromise your standard of living. Are you or your spouse willing to lower the standard of your lifestyle when you retire?

Next, you need to find out exactly how much you need to accumulate when you retire. Based on 3% p.a. inflation, you will need double the amount in 24 years time using the rule of 72 concept.

For example, you are 38 years old now and you intend to retire at age 62. If you need $2000 a month for retirement in today’s dollar, you will need $4000 a month in 24 years time for the same standard of living. If you are expected to live for another 28 years ( till age 80 ) you will need $1.344M.

That’s a lot of money by most Singaporean standards. There are two ways to save this amount, lump sum investment plus regular savings investment.

If you have $100K to invest at 6% p.a. now, you will have about $405,000 at age 62. The shortfall of $939,000n can be achieved if you  save and invest $1540 a month at 6% p.a.

This show that the earlier you start saving and investing, the lesser you need to set aside every month. If you delay your savings till you are in your forties, you will be very hard pressed to save with so much commitment with your family expenses.

Come and have a FREE no-obligatory discussion with me to find out how to achieve your financial security and success. Free consultancy for a limited time only!

What Happens To Your CPF Savings After You Die?

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CPF

Central Provident Fund Board

This question may often pop up when you are at someone’s funeral but are you clear what the real answer is?

CPF has clearly stated in it’s website that ALL the CPF savings in the Ordinary, Special and Medisave accounts as well as the discounted SingTel shares bought in 1993 when SingTel went public, will be distributed to his nominees according to the proportion stated in his nomination form.

If you have not made a nomination, your CPF savings will be distributed to your family members according to Singapore’s Intestacy laws. Muslims will have to follow the Inheritance Certificate from the Syariah Court.

If you have invested your CPF savings, the Dependent Protection Scheme (DPS) claims proceeds and properties bought using CPF savings are NOT covered by the CPF nomination. You should have a valid will to cover these assets. Properties held with the legal status of “Joint Tenancy”, usually with your spouse, is not affected as it will automatically vested in the spouse name. But your spouse should have a will too, in case both die at the same time.

If you are getting married soon, make a new nomination after marriage as your previous nomination while you were single will no longer be valid.

If you are divorcing your spouse soon and no longer want to leave any money to your spouse, make a new nomination as your previous nomination is still valid even when you divorce!

Click here for the nomination form and instructions.

CPF Nominations – What is covered