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Two blog posts I would like the "recovery group" to read.

Tuesday, August 26, 2014

Earlier this month, I shared that I was going to give a talk and that talk happened last night. After the talk, I went home and thought about it and only fell asleep at 2am, maybe, 3am. Not too sure. I am terrible, I know, but that's me. Insomnia is nothing new.



Insomnia? Banana...

Anyway, in case participants of last night's session should visit my blog, here are the two other blog posts I would like for them to read:

1. How to make recovering from investment losses easier?

2. Managing exposure in AK's investment portfolio: Examples.

Of course, anyone is welcome to read them too. No bias here. I nice or not?

Find out who invited me to give a talk and also read the review: here.

How to earn 6.30% interest after 4 years?

Monday, August 25, 2014

Someone tried to interest me in this not too long ago:


I have forgotten about it until I saw an email advertisement recently.

Any interest in this "interest"? Well, I blogged about why it did not interest me before and if you are interested, please read related post number 1 at the end of this blog post.

What I find objectionable about this advertisement is the use of the word "interest". What do we think of when a bank promises us a certain interest rate? What do we understand by the word "interest"?

Definition of "interest":
Money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.

When a bank promises an interest rate of 6.3% after 4 years to us, most people would interpret it as a fixed deposit with a total of 6.3% in interest paid after 4 years (or about 1.575% per annum). If we asked any reasonable person, that would be the view. Then, if the product is not what any reasonable person think it is, we have a problem, don't we?

Read the small print:
"Because the Structured Deposit is structured with the objective of returning your initial investment amount only at maturity, repayment of your initial investment amount does not apply if you terminate the structured product prior to maturity. You may potentially lose the principal sum invested if the investment is not held to maturity. There is no unconditional guarantee of repayment as repayment is subject to the creditworthiness of the (bank) i.e. if (bank) defaults, you may lose your initial investment amount."

This is a structured deposit, not a fixed deposit. It is an investment product and not a savings product. It is very different from what any reasonable person would have thought it was looking at the advertisement.

And the disclaimer:
"You must seek your own independent advice from a licensed or an exempt financial adviser regarding the appropriateness of investing in this product, before making a commitment to purchase this product. In the event that you choose not to seek your own independent advice from a licensed or an exempt financial adviser, you should carefully consider whether the product is suitable for you. (bank) has no fiduciary duty towards you, nor does it assume any responsibility to advise on, or make any representation as to the appropriateness, suitability or possible consequences of investing in this product."

The person who served me was quite pushy and I had to give her a piece of my mind. I was there to start a 15 months fixed deposit which promised to pay an interest of 1.25% per annum.

Now, this is not the point of this blog post but, theoretically, over 4 years, if I could get paid 5% in interest by putting my funds in a fixed deposit that pays 1.25% per annum, why would I bother taking on greater risk for another paltry 1.3% "interest"?

I don't like it when advertisements are worded in ways which could mislead and this advertisement ranks highly on the AK Dislike Scale.

Related posts:
1. Why fixed deposits over structured deposits?
2. Nobody cares more about our money than we do.

Save money: Frank Card, Signature Card & Dividend Card.

Sunday, August 24, 2014

My sister brings my niece to buy textbooks and other school supplies every year. It is a ritual and some of us will remember doing the same when we were school children.

One of the places that we would visit was Popular Bookshop. Over the years, they have established themselves as the most sought after school textbooks supplier in Singapore.

This is probably one reason why they have managed to survive in an industry which is so plagued by online competition that names like MPH went the way of the Dodo.

Well, I was talking to my sister about buying some Popular Bookshop vouchers online because I am able to get a 6% rebate for all online shopping with my new and funky looking OCBC Frank Card (which I got because of the OCBC 360 account). Buying $300 worth of vouchers would mean saving $18.



Click to enlarge.
https://www.popular.com.sg/jsp/gv/gv_order.jsp

My sister could then use these vouchers to buy school textbooks and other school supplies for my niece end of this year. She could also use her Popular Bookshop membership to get discounts, where allowed, before paying with these vouchers. Then, we would be getting a discount on top of a discount. Sounds good? I might buy the vouchers next month.

Then, recently, I received advice from UOB saying that I have reward points (known as UNI$) expiring next month. The thing I thought of doing right away was to exchange them for CapitaMalls vouchers simply because there are so many CapitaMalls around. So, there is always a good chance of being able to use the vouchers. There are Popular Bookshops in CapitaMalls too.

However, since Popular Bookshop have vouchers of their own, I decided to check if I could exchange UNI$ for Popular Bookshop vouchers instead. What did I find?




Wow! That is a big difference! I am glad I checked.

There is a catch with these "free" Popular Bookshop vouchers. They cannot be used with membership discounts and they cannot be used for the purchase of school textbooks. However, we can still use them for the purchase of stationery.

So, still a great deal being able to get 25% more in value for the same amount of UNI$ used. So, if you are a parent with school going kids and if you are a UOB credit card holder, you might want to take note of this.

Having said this, if your UOB card is a VISA Signature card and if you have accumulated UNI$ 4,000, there is an even better deal! What is it?

You could get a S$ 100 cash rebate (which translates to S$20 for every UNI$ 800)! This is much better than the rate for getting a S$20 voucher from Popular Bookshop or CapitaMalls.


Happy!

However, this is probably the last time I am getting any reward from my UOB Signature card as my credit card of choice now is the OCBC Frank card. I still use my Citibank Dividend card for the purchase of petrol because of the 5% cash rebate (for fuel purchases of above $50 per visit) but not much else.

Save some money if we have to spend some money? Yes, I like this.

Related posts:
1. Getting value out of everything.
2. OCBC 360 and CIMB Star Saver.
3. 7 ways AK saves money.

8 pragmatic reasons to be Singaporeans.

Saturday, August 23, 2014

A reader, JK, shared his perspective and he has graciously allowed me to publish it here after some editing.




Why a Singapore citizenship?

1. Pay less in HDB Service & Conservancy Charges (S&CC)
 Most of the town councils have increased the rates for S&CC. Singaporeans don't have to pay the higher rates. Our 4-room HDB flat pays a monthly rate of S$51.60 instead of S$61.50 which means an annual savings of S$118.80.

2. Plan to have children? You will get a cash gift called Baby Bonus from the Singapore government. You get S$4,000 for your 1st child. It is free money for you to use as you like. It was raised to S$6,000 for the 1st child starting from end of August 2012.



3. More money for your child? Sure, you could get an additional $6,000 from the Singapore government if you save $6,000 in a Child Development Account (CDA). It is a dollar for dollar matching program by the government.  There are only two banks offering the CDA, Standard Chartered Bank and OCBC Bank.

OCBC CDA gives 0.5% interest, if you keep a $20,000 balance in the CDA account, the interest rate is 0.8%. I upgraded my OCBC CDA to OCBC CDA Extra, agreeing to a contribution by GIRO of S$50 per month. This option will pay an interest rate of 0.8% per annum too. 



Money in the CDA may be used by all your children for fees at Approved Institutions (AIs) which have registered with MCYS under the Baby Bonus Scheme. These include child care centres, kindergartens, medical clinics, licensed pharmacies and optical shops.

4.  Parenthood Tax Rebate. Get a one time tax rebate of S$5,000 for your first child. Second child?  S$10,000. 3rd child? S$20,000. For some, it is like not having to pay any income tax for the next 20 years. Why don't Singaporeans want to have more kids ?

5.  Working Mother's Child Relief (WMCR). For the first child, a mother can claim 15% of her earned income. There is a lot of savings come from here. Do the maths and you would be shocked too. For those who have 3 children or more, they could claim up to 25% of the mother's earned income which translates to huge savings!


6. Qualifying Child Relief (QCR). Either the father or mother of a child can claim QCR which is S$4,000 per child. With WMCR and QCR, there will be huge savings in taxes paid per year. 


7. Only Singaporean households can keep their HDB flats if they should purchase private residential properties. Singapore PR households MUST sell their HDB flats 6 months after the purchase of private residential properties or 6 months after the T.O.P. date of the private residential properties.

8. Singaporean households are also allowed to rent out their entire HDB flats after obtaining the relevant approvals. Singapore PR households are NOT allowed to rent out their HDB flats.


For the pre-edited articles, follow the links below:
"Singaporean Benefits (Part 1) and (Part 2)."

In the past, I would wonder why some people want to be Singaporeans. After all, our homes and cars are notoriously expensive. However, I do know that the Singapore passport is well respected and that we have a good and safe environment to bring up children.

Now, after this blog post, I have a better appreciation of why some PRs would like to become Singaporeans. For sure, there are many benefits which are for Singaporeans and Singaporeans only which I did not appreciate before.

Related posts:
1. Why I don't feel proud to be Singaporean?
2. CPF-HDB scheme to trick Singaporeans!
3. Take the good with the bad retiring to Malaysia.
4. Something only Singaporean males know.


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