Author: SG Budget Babe

Why I Won’t Be Using My CPF To Pay For My House


For those of you who attended my sharing at the CPF Talk on 22 Oct, I mentioned that I have no intention to use my CPF to pay for my new house.


Naturally, this raised quite a few eyebrows, because 8 in 10 Singaporeans pay for their house using their CPF Ordinary Account (OA) savings.


But you heard me right.




What I feel my CPF is for


Now, before you go bat crazy on me, please hear me out first.


In my view, my CPF forms my “untouchable” pot of retirement gold. It is my social security net when I am old and too tired to work for an income.


When viewed as part of my entire financial portfolio, the CPF component contributes to the “bond” aspect – low risk with reasonably high interest rates.


With an interest rate of up to 3.5% per annum on my Ordinary Account savings, and up to 5% per annum on my Special Account and Medisave savings*,  I get to enjoy interest that no high-yield bank account can offer. You can jump through as many hoops as you can on those accounts, but you’re unlikely to even come close to 3.5% interest on your bank savings.


*Inclusive of an extra 1% interest paid on the first $60,000 of a member’s combined balances, of which up to $20,000 comes from your Ordinary Account (OA). Members aged 55 and above will also receive an additional 1% extra interest on the first $30,000 of their combined balances, with up to $20,000 from your OA.


If I were to use my CPF OA to pay for my home today, I am basically borrowing from my retirement funds for today’s expenses. That potentially leaves me with lesser money for my future.


In fact, if I do use my CPF OA, I will then owe my retirement fund that capital (the amount I had withdrawn to pay for my house i.e. principal sum) AND accrued interest.


Accrued interest is the interest my CPF savings would have earned if I did not withdraw it.


You can love or hate the CPF accrued interest (I’m with the former), but its function remains the same: to grow your CPF monies for your retirement. If you withdraw from it today, you have to make sure you are more diligent in saving up for your retirement beyond what you currently have in your CPF.


In short, the more CPF monies you use for your house today, the less you leave for your retirement.


Why I feel using cash to pay is better


Some Singaporeans, especially young married couples fresh out of university, may have no choice but to turn to their CPF in order to finance their monthly mortgage because cash isn’t an option at hand.


My husband and I aren’t cash-rich, but we’ve been diligently cutting our discretionary expenses and saving over the past two years to ensure we’ll have enough money to pay for our home…without needing to dip into our CPF reserves.


You see, if I were to leave my CPF-OA untouched, my money can grow by 2.5% every year. Compound this over 40 years and that accumulates into a tidy sum.


Who should use CPF instead of cash then?

However, some prefer to have more liquidity (i.e. cash) on hand for emergencies. If so, using CPF instead of cash to finance their house would be a better option.

The caveat, however, is that you have to be disciplined and set aside your own retirement fund.

Should I refinance or pay off my home loan using CPF-OA now?


If you already have an outstanding home loan, a common question most Singaporeans ask themselves is whether they should quickly clear off their housing debt using their CPF-OA (and celebrate being debt-free) OR refinance their home loan instead.

What’s the difference, and which is the smarter choice?

I personally would prefer to opt for refinancing, because all I would need to do is to find a bank loan^ with an interest rate lower than 2.5% (which is the CPF-OA’s interest rate).

In other words, you could either:

       Pay the bank 1.85% interest while earning 2.5% in your CPF-OA, or

       Pay (your own) CPF 2.5% interest


Option 1

Refinance with bank loan

Option 2

Pay off full outstanding sum
using CPF OA

Interest paid in first year

$250,000 x 1.85% = $4,625

$250,000 x 2.5% = $6,250

(This is the accrued interest that your CPF savings would have earned for your retirement.)

Interest gain or accrued in CPF in first year

$250,000 x 2.5% = $6,250

$0

Nett loss / gain

+ $1,625

         – $6,250        


The bottom line is, as long as you can get a bank loan where the interest rate is less than the CPF-OA interest rate, it makes more sense to refinance and pay your bank loan using cash instead. There are plenty of such loans available, and
if you need to understand more on how home loans work, I’ve previously written about it here.

Furthermore, your nett gain of 0.65% is then compounded over time (2.5% minus 1.85%).

^ Just note that bank loans are subject to market fluctuations. On the other hand, HDB loans will always be pegged at 0.10% above the prevailing CPF Ordinary Account (OA) interest rate.


Conclusion


There is nothing wrong with using CPF to pay for your house, because for some it’s the only option. But in my opinion, with careful planning, cash is still the smarter option.

This is also because I personally see my CPF as my retirement fund, something to grow instead of withdraw from.

But if you still choose to use your CPF, just remember that you have to pay the principal sum and accrued interest back to yourself. It is for your own retirement after all.

If you want to understand how your home can help with your retirement, here’s an interesting video by CPF that explains more:  


Disclaimer: This post is written in collaboration with CPF Board. All opinions are of my own. 

What should you consider before taking out a vehicle loan?

Not many of us are fortunate enough to be able to pay for our vehicle in full using cash. As a result, we usually have to resort to taking out a loan in order to finance our purchase. A few of you have asked me to write about our own thought process when we got our car last month, so here’s me continuing this as Part 2 of my previous post here.

The first thing you’ll want to do before you decide to even go ahead and get that car, is to first check your finances to ensure you don’t end up stretching yourself too thin with loan repayments later on.

Liquidity vs. loan interests – What can I afford?

Depending on the Open Market Value (OMV) of your car, you can get maximum financing of up to 60% or 70% of the OMV. If the OMV of the car is below S$20,000, then you can get financing up to 70% and cars with OMV of S$20,000; above that is up to 60%.

But this doesn’t mean that you absolutely have to take the maximum financing offered to you! If you have cash to spare, there are two options you can consider:

1.     Should I make a larger downpayment in cash and take a smaller loan?

2.     Should I spread my repayments over a longer or shorter loan duration?

Always be wary of car brokers, because while there are some good dealers around, there are also plenty who are simply out to sell you a junk car and reap fat profits off the sale. Many of the dealers will also offer you stuff like an in-house loan and an extended loan tenure. “So you pay less every month, no need to worry!” they will sing. Please be smart and don’t fall for their tricks.

If you have cash to spare, a lower loan quantum and/or a shorter loan tenure will result in you paying less interest at the end of the day.

 Repayments terms and early repayment penalties

Make sure you read the repayment terms of your loan carefully. For instance, banks such as DBS, POSB and Maybank charge an early redemption fee of 20% of the total interest payable + an additional 1% of the original loan amount as an early redemption fee. You might want to pull out your calculator and look into this before running to the bank with your cheque book.

 

When we were in the car dealer’s office, the broker got my husband to sign on a multitude of pages without even checking, under the pretext of time and that “I’ve got you covered, bro. Don’t worry, all these clauses are the standard ones. You’ll get a copy of everything you signed, don’t worry.”

But because I was there, I stopped him from taking all our documents before I was done reading and checking every page. Yes, it took up more of his time, but what’s a few more minutes when they’re earning big commissions from your purchase? Don’t let them make you feel bad for wanting to protect your own interests and make sure you aren’t being scammed.

Even if you trust them (but I never trust anyone 100% except myself when it comes to money), please be sure to read though every single page! Yes, I know the document is thick, but if you fail to check and you end up signing your life away to some exorbitant interest rate or dubious terms that you weren’t aware of…no one is going to save you afterward.

Should you get a new car or settle for a used car?

Of course it goes without saying that used cars are cheaper to own than new cars (under the same category obviously). But are the loans on used cars cheaper as well? Unfortunately, not always. Here’s an example.

This is the difference between OCBC New Car Loan and Used Car Loan rates:

No matter which loan tenure you choose, you will be making more interest payments on a used car loan when compared to a new car loan.

Another aspect that you need to address when deciding between a new car and a used car is that financing options are limited for the latter. The older your car, the more limited your choices become. We got a 10-year-old secondhand car, and many of the more well-established banks did not offer loans for secondhand vehicles that old, so we ended up going with a smaller player (which wasn’t my first choice. I was aiming to go for a DBS or OCBC loan, but we literally had no choice as our car was too old). Almost all top banks including DBS/POSB, OCBC and UOB among others offer car loans for new purchases. However, not all offer the same options for used car purchases.

If you’re strapped for cash, a used car might not be the best option for the long haul anyway. Should you decide to extend the use of your car beyond 10 years, you will forgo your Preferential Additional Registration Fee (PARF) rebate, incur an additional surcharge on your road tax and even getting good insurance cover will be a problem.

So, with a new car purchase, you don’t have to worry about your car for the next 10 years but with a used car, the older it is, the closer you are to worrying about the exact same situation again if you’re planning to have a vehicle for a long time.

Are you planning to keep the car for long or looking to part ways in the near future?

This decision can greatly affect all the above considerations. For instance, let’s say you’re not set on retaining your car for more than a few years and looking to change or upgrade to a better car somewhere down the road. Have you accounted for this when choosing your repayment tenure, especially if there are early repayment penalties charged if you terminate early?

If you’ve taken a car loan for a tenure of 6 years and are planning to keep your car only for 3, then your plan is flawed; you can either terminate your loan early by paying the outstanding balance and the early redemption fee, or you have to keep the car for the next 3 years.

However, borrowing from the previous point, if you’re planning to change your car down the line, a used car might do you some good. That’s because your overall cost to get moving on the road with your car will be cheaper and you can afford a shorter tenure. Getting a used car might even let you save for your dream car without tampering with the convenience factor of owning your own vehicle to get to places. Of course, there’s also the intangible benefits such as not having to worry about train breakdowns, or not being able to get a cab anymore.

Who’s paying for the car? Can you afford the monthly repayments?

Another important point to consider is if the car belongs to the both of you, or if it’ll mostly be used by your spouse alone.

In my case, I hate driving on the roads (especially as road rage by some other drivers towards a female drivers is really terrible) so I was not for the idea of getting our own car at all. However, my husband needed it for work, and we did our calculations before realising that the amount he spends every month on Grab and Uber are almost equivalent to what our friend spends on his car every month (not to mention the inconvenience and stress of not being able to get a ride).

Should we spend a bit more money every month for the time savings and convenience that a car affords? After evaluating the decision for months, we finally decided to go ahead.

Since my husband will be the only one driving the car, and since he earns a higher income than I do, we both agreed that he will pay for the car in its entirety.



Always make sure that you never spread yourself too thin with your loan repayments. If you have to dip into your retirement savings or even borrow just to finance your purchase and loan, then perhaps you might want to reconsider if you realllllllly need it.



I hope this helps! Many thanks to the team at BankBazaar.sg who helped to offer some ideas on what we should look out for.

Disclaimer: This post was written in collaboration with BankBazaar.sgAll opinions are of my own.

Good luck to those of you who invested in XRP (Ripple tokens)

For those of you who have been reading this space for quite some time, you know that I don’t often write negative stuff here. However, I make an exception when I feel that it is something in the public interest to know, or it is an important expose to make because people are getting misled. 

I wrote about Ripple (XRP) tokens a few days ago because I could no longer take how people were being blindsided by the mass media and various online “influencers” into buying it.




If you’re new to crypto, please read these first:


Source: Twitter (first shared by my friend G)

Why do people believe that the value of XRP tokens are connected to the success of Ripple as a company?


I don’t doubt that the Ripple system is being used by banks  to great success. I also think that they have a long runway to grow in terms of acquiring more clients and attracting more financial institutions onboard. But I’m wary about the XRP tokens, which are presently not being used as much as the Ripple system is. 

My other concerns about investing in XRP can be found in an extensive analysis here so I won’t be repeating myself.

Source: Twitter and CNBC where over USD 30k was spent on buying XRP during the show
I also know of someone who bought XRP because of this:


So to all of you who bought because you saw it on mass / social media without really understanding how disconnected the XRP tokens are from the Ripple system…I can only wish you good luck, especially if you bought Ripple at $3 or higher believing that its value will only go up.

Take a look at XRP today:

Look at all those people who panic sold without understanding why XRP’s price was reduced on CMC. This is what happens when you buy a coin you don’t believe in, or when you buy shitcoins.
Can it go up higher? Sure. Can it go down? Yes, because my opinion is it is an absolute travesty that a coin with barely any utility value right now has a $100 billion market cap.

You’re free to disagree with my opinion. In the meantime, I’m staying far, far away from XRP.

Ain’t no love for XRP.
Signing off,
Dawn

Why I think Ripple (XRP) is a shitcoin

I think the Ripple tokens (XRP) are shitcoins, and I’m not alone on this.

The funny thing is, most of the people who have been in crypto the longest are almost absolutely anti-XRP. But if you ask the fanboys and the fangirls…they’re often the newbies, who will tell you that XRP is the next Bitcoin in making, only better.



Note: If you don’t understand crypto speak, first check out this post and then come back here.

Yes, I know XRP is now #2 in the crypto universe, but that doesn’t change my opinion about it being a shitcoin. If you bought into it because it was so hyped up recently, congratulations! You might want to look at this hilarious graphic (ignore the spelling errors) first before I delve into XRP deeper:

Source: Reddit


Why did YOU buy XRP?


Whenever I ask someone that, they give me the same usual reasons:

  • The Ripple system solves a real problem for banks and they already have banks using them
  • The payments industry is huge. Banks are more likely to use Ripple than Bitcoin. In fact, they already are! (Cites list of banks and Jap / Korean credit card companies here)
  • It is the world’s second most valuable payment currency

Mainstream media continues to shill and mislead by calling Ripple the “Bitcoin rival”, perhaps for clickbait. That’s an insult to Bitcoin if I ever heard any.

Ripple caught my attention much earlier last year, after I saw on CNBC that it rose a spectacular 4000% to finish the first half of 2017. At that time, XRP’s price was $0.23 when I first started studying it, but eventually decided not to buy because it is a shitcoin.

Well, XRP is $2.90 today. Earlier in November, I shared with a few friends that I believed XRP would rise because people won’t understand, or perhaps won’t be bothered to try and understand XRP from beyond all the shilling that they read online and on the mass media. And then there’ll be a crash after these people wake up and realise the gap and these glaring red flags. I hope you won’t be one of them. I might be wrong, and I’m open to being corrected, but so far no proponent of Ripple has ever been able to convince me otherwise.


Why didn’t I buy it at $0.23? Because I don’t believe in investing in shitcoins. Go ahead and trade them if you will, but when a crash comes, mark my words that the fundamentally strong coins will survive while the weak ones will get weeded out by the market. 

But what do I know? I can’t predict the future, and I’m just a girl blabbing online. So do your own homework and make up your own mind. But since a few readers have requested for me to write on WHY I think XRP is a shitcoin, here are my thoughts. 


Why I think XRP is a shitcoin through and through



It’ll be helpful to start with an analogy. Someone shared this earlier today and I thought it was really apt, so I’m passing it on here.

Think of 

  • Ripple as Apple
  • The Ripple system as iOS
  • XRP tokens as iPhones
But unlike how you can buy the shares of Apple to benefit from their growth (which I did), you cannot buy the shares of Ripple. You can only buy their tokens, which can be used in their system. Note that the tokens do not give you any share of the profits that Ripple makes, unlike Apple shares.

If you’re happy buying iPhones because you believe its value will go up, go ahead and buy XRP for all you want.


Other issues why XRP makes me really uncomfortable:
  • XRP tokens are pre-mined.
  • The ex-founder is holding tons and tons of it.
  • The system is centralized, which goes against crypto’s vision of decentralization.
Most people don’t understand that Ripple’s technology is not dependent on the token. I repeat, you do not need to use XRP tokens in the Ripple system. 

This is where some XRP fans step in and argue, but using XRP tokens will give the banks greater cost savings! Sureeeeeeeeee, but the banks aren’t using it. XRP’s valuation at $117 billion is downright ridiculous when the tokens aren’t even needed to use the software and no one is using it anyway.

In fact, banks can actually create their own tokens to be used in Ripple’s system. What’s so hard about that when you can literally do it in minutes? Just take a look at how one guy created his own coins that easily here. Also, here’s DBS about to launch their own digital coin through their off-shore subsidiary bank. Can those coins be processed on RippleNet? I sure bet they can.

Or have you been buying XRP because you believe it’ll be listed on Coinbase? I don’t know what Coinbase will do, but you might want to check this out:

https://www.gdax.com/static/digital-asset-framework-2017-11.pdf
GDAX is Coinbase’s exchange.
Decentralized. What was Ripple again? Oh, centralized. Rightttttttttt.

Most of the nodes that are being run right now are owned by Ripple, and the majority of Ripple tokens are held by their founders. Rightttttttttttttttttttt.

Still not convinced? Read this.

So, should you still buy XRP? Or sell the XRP tokens you bought without realising this major red flag? Those are questions only you can answer. While I label it as a shitcoin, there’s no denying that it has gone up exponentially in recent months, and you would have grown disgustingly rich if you had bought it earlier. 

In the meantime, I’m just waiting for a massive crash to happen once all the buyers who had FOMO-ed into XRP realise what a big mistake they’ve made. But who knows whether that crash will come? After all, humans believed the Earth was flat for the longest time until someone successfully sent a spaceship into outerspace and proved otherwise.

I think it is a scandal that XRP is #2 instead of ETH, and am waiting for it to be dethroned so ETH can be back in its rightful place where it belongs. 

But no matter what happens to XRP, you can be sure I’ll be watching on the sidelines.
I’ve got no love for XRP.

Signing off,
Dawn.

My #1 Advice for those new to crypto / Bitcoin

My #1 advice for those of you who are new to buying crypto…

Only invest using money you can afford to lose.

The crypto world is a volatile one. Prices swing up and down all the time. Can you stomach the ride?



One moment your screen looks like this…

You’re happy with your crypto profits, wondering if you should cash out, but then you remember that everytime you sold previously it only went up higher. So you decide to hold onto your coins.

Then the next moment this happens:

Are you sure you can sit through this?

Maybe you think you’re not good enough, so you decide to go on the Internet to find if there’s anyone you can learn from. You decide to find out what everyone thinks are good cryptos to invest in. After all, the wisdom of the masses must surely be right, right?

Then this happens:

The other day someone’s post appeared on my feed (yes, in Singapore if I remember correctly). He had taken out his home mortgage to buy Bitcoin at USD 19,000. Now his $100k has dropped to $75k and he’s in deep trouble. He asked for help on whether he should sell.

You can just imagine what people had to say to that.


Lastly, there are also tons of unethical social media “influencers” who are now promoting crypto in ways that I completely do not agree with. Last month, a popular Youtuber made USD 500,000 by promoting a coin which ranks #1 on my list of shitcoins. (Fun fact: Ripple ranks #2 on that same list, heh.)

Did you also know that there’s lots of price manipulation going on, and tons of of pump & dump happening in crypto? (They pump to you –> you buy at high –> they sell and take profit).

Let’s not forget the “gurus” sharing about how they’re a millionaire thanks to Bitcoin and crypto. One promises to teach you for free. Pay 0.1 Bitcoin to join his group and he’ll give you tips.

I’m not gonna risk getting sued here but you can just Google about all these and see for yourself. It is all there on the charts. The history is as clear as day.

So do you have enough guts for crypto?


Having said that, I’ve not lost a single cent on any of my crypto investments thus far, and I intend to keep it that way. My secret? Buying only coins that are NOT shitcoins. There’s tons of shitcoins out there and they’re doing a fantastic job of masquerading otherwise. Unlike stocks, these coins are mostly NOT tagged to any assets (eg. free cash flow, property, bank fixed deposits). But my story for crypto will come another day. Am I a genius or a guru? Neither, as there are also folks who made profits from investing in shitcoins. Ultimately, you just need to know how to balance your own risks. If you don’t share your profits, then don’t cry when you lose.

Should you go into crypto? Yes, I think so. Even if it’s just $100, or $1000, or $10,000. Use what you’re willing to lose. I cannot promise that you’ll be in profits, but I can promise you that this is going to be the most unforgettable ride of your life.

Now HODL! (that’s not a spelling mistake, it stands for Hold On for Dear Life)

Also read:

For those of you on the mailing list, I’m going to send out a private email to you guys to warn you about a platform that is being (irresponsibly) promoted by popular SG lifestyle influencers right now. You can follow their lead if you want to buy and NOT OWN your own Bitcoins. Look out for that in your inboxes soon!

Next post: My Best Crypto Investment for 2018 (no, it isn’t Cardano)

With love,
Dawn

The Ultimate Guidebook to the Best Cashback Tools in Singapore

If your new year’s resolution for 2018 is to save more money, one fantastic way to start is to get maximum cashback and rewards from your expenses.


My stance towards money is very simple – I believe in always getting the best value for my dollar whenever I spend. To achieve this, I’m always on the lookout for the best deals and tools that can help me on my financial journey.

Imagine if you could get cash back on your income tax payments to IRAS (or other mandatory expenses like utility bills, school fees and rental), and be rewarded for every dollar you spend on food, travel and shopping. As I mentioned in my previous post here on how I managed to double my net worth within a year, one of the important factors was in all the cashback I received on my expenses. Every dollar counts.

The idea to create an Ultimate Cashback Guidebook was born when a number of you guys privately messaged me asking for my “hacks” to getting more cash back on my dollar(s). As such, what you’re about to access is the product of months of research and meetings (with the respective founders of the tools I’ll be introducing in the book), in order to understand the real value they’re bringing to our lives and how we can maximise them.

Of course, you should not neglect to make your savings work harder for you by parking it in a high-yield bank savings account. Most of the better ones have been reviewed on this blog in previous articles (use the search button on the right), but here’s a quick overview:


What else is included in the guidebook:
  • Best credit cards for cashback
    • Bonus: Best debit cashback card
  • Best high-yield bank savings accounts
  • Cashback for insurance, loans, and other non-discretionary expenses
  • This tool gives you 2X the cashback
  • Buy 4D on weekends and keep your ticket price regardless of whether your numbers win or lose (instead of donating it to Singapore Pools)
  • Getting free miles on top of your cashback
  • Getting 50% discounts all the time, any day and every day
  • Cashback apps that are a waste of time
  • Promo codes and reader offers

Note that I’m not paid a single cent to write or give out this guidebook, and none of the content in the guidebook are sponsored by any of the brands mentioned. If you appreciate the work that I’ve done and in keeping this as a free resource, please consider supporting me on my Patreon page here.

Here’s how you can access a copy of
The Ultimate Guidebook to the Best Cashback Tools in Singapore:

  • For readers subscribed to the mailing list, you would have received an email from me with a password. Click here to unlock your copy.
  • A copy has also been provided to the partners who have provided valuable assistance in making this guidebook possible. If you’re a staff / user with the below companies, you can access your copy here with the provided password that has been disseminated to your marketing lead through these respective links:

The full comparison table of all cards reviewed in the guidebook are provided below.

Have a fantastic 2018 ahead, and may this help you to maximise all your cashback this year!

With love,
Budget Babe

2017 Update: How I Doubled My Net Worth In 1 Year

2017 has been an amazing year – I got married to the love of my life, officially moved in with my in-laws, finally visited Venice, went into cryptocurrencies right before its massive bull stream that catapulted it into mainstream consciousness, wrote an entire cashback guidebook (look out for the password to access it tomorrow in your inbox!)…and did a whole bunch of speaking engagements for CPF, DBS, Seedly, and more. It has been such a memorable year and I’ve learnt so much.

We’re now nearing the end of the year so it is time for an annual review of how I fared this year in terms of meeting my financial goals. Here’s a quick recap of previous years: 
My initial focus in 2014 was all about cutting down expenses and maximising my savings, but over the years, I soon came to realise that there’s a limit as to how much you can reduce expenses. If I wanted to save more, the key would be to grow my income – whether through my job or through side hustles such as selling stuff on Carousell and gleaning ad revenue from the blog (Google Adsense in particular).

Therefore in 2017, I decided that “cut expenses” would no longer be a realistic goal. Instead, I focused on “maximising returns from expenses”, which is why there was so much talk about cashback and other reward programs this year (you’ll find them consolidated in the upcoming Ultimate Cashback Guidebook). Most of the other goals remained constant, because when it comes to investing, it truly is a lifelong quest for learning and self-improvement.



So here’s how I fared in 2017:

1. Grow savings – ACHIEVED!


I was initially expecting a drop in savings, as we needed to spend money for our wedding this year, but fortunately all the hard work and late nights that went into planning a budget wedding really paid off. This included being savvy about the right credit cards we used in order to maximise cashback on wedding expenses as well. Being able to see my fairytale wedding dream come alive at a mere $88 per guest (when hotel banquet rates are typically $120+) was no mean feat, but was entirely worth it. As a result, we managed to recoup the majority of our expenses from the ang paos received, which helped to usher in the beginnings of a great marriage.

By opting to go for a budget honeymoon (where we backpacked), we ended up only spending $3000 per person for a 14-day trip around Italy, and even had funds left over to go for a $705 Vietnam holiday later on.

My cash savings this year came in at $45,000 which was aided by a rise in income (and yes, I’ve to pay higher income taxes as a result, but I guess it is a good problem to have). I’m pretty satisfied by how I’ve fared in this aspect.


2. Increase net worth – ACHIEVED!

I had originally targeted to hit the momentous milestone by age 30, and even detailed out a plan on how to reach that goal here. Last November, I managed to reach $100k in net worth (cash + investments + CPF)…this year, my net worth has doubled to $200,000

(How I calculate my net worth : liquid savings + investment portfolio + CPF)

How was this possible? I wondered the same, so upon digging deeper, I realised this was achieved through a combination of factors:
What I learnt from seeing my net worth double within a single year was that it gets easier over time, and the growth is truly exponential as long as you’re patient enough to let your seeds harvest. All the effort spent in the earlier years helped to allow compound interest to snowball, and all I had to do was to let the magic happen.

3. Improve investment performance – Somewhat ACHIEVED


I’ve made some good investment decisions, and some bad ones this year (you can read about them here). So as always, while there has been some stocks that have given me excellent returns this year, there are bound to be some losers dragging down the portfolio as well. This is where portfolio sizing is key, and having the conviction to continue holding until their value is achieved. I remain confident that the stocks I’ve bought will eventually have their true value recognised by the market, and will continue holding, or even adding on, when the price dips. 

Given how bullish markets were this year, it was difficult for me to find stocks trading at a discount, so I mostly added to the ones I already had, and took positions in other stocks which lost favour with the public this year (but I’m still bullish on, in the mid to long term). How did I fare in the stock market? Well, all I can say is that I can definitely still do better.

In the world of cryptocurrencies, I studied it for close to half a year before I was confident enough to put a portion of my money in, and the effort seems to be paying off at the moment, with my portfolio gains surpassing that of what I’ve made in stocks. Am I making money? Yes. Have I made MORE money than what some other people have made in buying (shitcoins, in my opinion) IOTA and Ripple? No.

There’s so many people rushing into cryptocurrencies now because of FOMO, chasing after coins that have already gone up by multiple times. Do you really understand what the coin does? Do you know the security measures required to safeguard your coins? Do you know how to transfer coins? Do you know that you can LOSE ALL YOUR COINS if you transfer to the wrong wallet address and YOU CAN NEVER GET IT BACK? 

Ripple, IOTA, Cardano (ADA). These are coins that are completely NOT worth their valuations right now, but hey why would you trust the opinion of some girl on the Internet right? I bought ADA when it was at a much lower price, believing it was worth at least 2 to 3 times more. I’m now up by 4x on ADA and I’m seeing everyone rushing into ADA now but errrrr no one can seem to justify to me why ADA is worth its market cap right now!?!

I quote Charlie Lee, the founder of Litecoin (and also the one that gave me supersized returns) on this:

Source

(Please don’t get the mistaken idea that cryptocurrencies are a sure-win investment. They are extremely volatile instruments and for the high returns, you’re taking on high risks as well. You may want to read this post where I talked about a friend who lost $500,000 overnight when the markets crashed on Christmas…are you sure you can stomach the ride? If you’re not prepared to lose it all, then perhaps you might not be able to handle investing in cryptocurrencies especially given the number of shitcoins out there.)

As always, I continue only to invest in only stuff that I understand, which are either undervalued, solve a real-life problem, or are changing the world. Whether in stocks or cryptocurrencies, this underlying philosophy remains the same and has served me well this year, so I don’t foresee it changing anytime soon.

Could I lose all my money? Yeah if Bitcoin crashes or go to zero, there’s no saying what will happen. So my mantra is only to invest in cryptocurrencies using money that I can afford to lose. If I’m wrong about cryptocurrencies (but I don’t think I am, lol) and lose my capital, I’ll just suck thumb and delay my FIRE plans. But if I’m right about this…heh.

4. Maximise returns on expenses – Somewhat ACHIEVED


You’ll find a recurring trend in my expenses – bills take up the biggest portion without fail, every single year.  The bills portion went up significantly this year because I started contributing to my in-laws household expenses since I’m now a permanent member of the family, and also because we clocked quite a bit of expenses for the wedding under my cards and funds.

Bills are non-discretionary expenses which are hard to reduce further. But even trimming discretionary spending has proven difficult in the last few years. There’s only so much a girl can do to skimp and save further, especially when I already live a pretty minimalistic lifestyle. (I prefer hawker meals and homecooked food over cafe brunches, I don’t drink or party, I mostly take public transport unless I’m cabbing for work, I don’t buy branded stuff or shop excessively on clothes / shoes / makeup…)

Therefore, instead of trying to make my life more difficult in trying to cut my expenses even further, I decided that the goal for this year was to maximise my returns on every dollar spent instead. By combining the right credit card strategy with various cashback tools and saving apps, I was able to make every single dollar go further. For instance, I got a few hundred dollars of cashback from routing my online purchases through Shopback, and managed to get rewards even on my tax payments to IRAS by going through CardUp!

2018 will be even better, now that I’ve finally gotten the Ultimate Cashback Guidebook out. This will be available only to subscribed readers and members of the merchants I’m working with, therefore, be sure to look out for the link and password in your inbox over the next few days!

The most important lesson I learnt this year? That it really does get easier. Once you hit your first $100,000, you would have established the key lifestyle habits crucial to growing your wealth. Thereafter, the rolling effect of compound interests really do start to become more prominent. And if you need some ideas on how to reach your first $100k, check out this post. 

What about you, how did you fare this year? Did you meet your financial goals? If not, what’s stopping you?

With love,
Budget Babe

Warning: Do NOT bank in these “cheques” you get from the banks!

Because we all need Public Service Announcements to save us from banking in money that isn’t ours.

There’s a marketing tactic being practised by the various banks in Singapore which I’m going to call out today as being extremely unethical and misleading, but hey that’s just my personal opinion and you’re free to disagree.

If these banks haven’t yet gotten a warning by MAS for their tactics, then my guess is that either MAS is completely unaware, or have chosen to close an eye to this. Whatever it is, I believe this is an issue that needs more awareness, and if none of local influencers who are always being paid by the banks / credit card companies to promote their products / services will do it, then I will.

(Don’t be quick to blame the influencers. Many of them rely on such sponsored postings for a living, and my guess is that many are afraid to talk bad or expose questionable concerns about the brands they work with in case it affects their future chances of being sponsored. That, is exactly what happened to me after I exposed the misleading marketing messages put out by the influencers engaged for the UOB Krisflyer campaign here. But credibility will always be fundamental to SG Budget Babe, and I’ll continue writing, sponsored posts or not.)


So I’ve been receiving some highly questionable “cheques” from Citibank and Standard Chartered because I’m a banking customer with them. It caught me by surprise the first time I saw it, as I thought they had mistakenly sent me a cheque for something which I wasn’t aware of. Upon a closer look, however, I realised it was simply a marketing ploy to get me to take up a loan with them, so into the bin these letters went.

According to others online, it seems like UOB is also practising such a tactic. If you know of more banks doing this, please let me know and I’ll add it to the list.

This tactic involves :

  • Sending out a “cheque” that actually looks pretty legitimate, with a sum of money printed on it which you can actually cash in
  • Accompanying letter states that it’ll be credited into your bank account when cleared successfully
  • It is even signed off by a prominent figure (in this case, the Head of Retail Banking) to lend some credibility 

I’m not sure how many folks would be savvy or alert enough to realise that this money is NOT theirs. Yes, the money does appear in your bank account if you credit it in, but at the same time, you get deducted the sum from your credit card bill. And if you go trigger happy and spend that money, thinking you just got a windfall?

Congrats, you’ll have to now deal with a 2.5% processing fee of the sum you just banked in, on top of late payment charges AND interest payment if you fail to clear off the debt within the month.

Clearly I’m not the only one who’s annoyed by such unethical marketing tactics. It belongs in the same category as the misleading marketing messages promoted by local Instagram influencers which I’ve called out previously here (UOB Krisflyer) and here (UOB Stash).

Is this unethical or completely acceptable? You decide.

If your parents are not completely English-literate, you might want to start reading their letters from the banks and credit card companies for as long as such unethical marketing practices (in my opinion) prevails.

With love,
Dawn

BITCOIN PLUNGES BY 40% IN A SINGLE DAY!

BITCOIN PLUNGES BY 40% IN A SINGLE DAY.IS IT A PONZI? IS BITCOIN A SCAM?!I opened my screen this morning only to see almost every single coin down by 30% – 40%. EVERYTHING WAS BLEEDING RED.Not even the oil crisis previously did we see such a massive ta…

Practical Ideas for Christmas Gift Exchange (under $50)

Stuck while trying to figure out what to buy for your upcoming Christmas gift exchange? Or for Secret Santa?

I’m not the biggest fan of Christmas gift exchanges for a very simple reason – I don’t always get to use the stuff I’m given, and I find that a huge waste. When I shop for gifts, I always focus on practicality and whether I think the recipient will use it. 

(Note: This is NOT a sponsored post. All recommendations are of my own.)

Here are some of my favourite practical gifts for the different types of people in my life:

For bosses

I’m always stuck when it comes to buying a Christmas gift for my bosses, but my friend solved my problem for good when she highlighted that a gift from a social enterprise will probably be the best, because it makes the recipient (i.e. your bosses) look good as well!

Check out these amazing namecard holders designed by autistic students from Pathlight School here. Can you imagine these holders being a key talking point for your bosses when he/she meets future clients? Bingo!

Price: $29.90

The teacher / tutor



Teachers have a love-hate relationship with marking, but they’re an evil necessity in order for our students to improve. As such, help them customize a stamp to make their lives a little easier! You can personalize a stamp using their names as well, such as “Mrs Tan likes this” to make their marking a little more fun!

Price: $13 and up. Get it here at More Than Good.

The Investor



Give your investor friend a gift that will keep on growing – a pre-loaded Ethereum card! Second only to Bitcoin in the cryptocurrency universe, Ethereum has grown from $1 to $735 this year, and will likely continue its long-term uptrend. 

Price: $5 (for the card). Feel free to load any amount of ether as you desire.

The K-drama addict 


Viu Premium all-access pass with priority viewing, so she can watch her favourite K-drama episodes as fast as 8 hours after it airs in Korea! I used this on many of my trips this year, and it was a great hack to saving money on my budget airline flights where entertainment systems aren’t provided, since you can download episodes or even movies in HD and watch it offline!

Price: $29.90

The skincare / vegan / organic junkie

The rise of the green skincare movement is taking the beauty industry by storm, with its focus on plant-derived ingredients and eliminating harsh chemicals made in a lab. Get your friend this organic gel sunblock, made specifically for Singapore’s weather and from a blend of 100% natural and certified organic ingredients.

Price: $18.90


The artist / gamer / young-at-heart



Ever wondered how you’ll look like as a LEGO character? Wonder no more, as Two Three Bricks will turn your photo into a LEGO print and put your curiosity to rest! Get it here.

Price: $16 and up.

The workaholic 

This lovely rose-gold planner at Kikki.K and thought it would make such a elegant gift for the workaholic to get their schedules under control. I’ve already requested for this in my Secret Santa this year!

Price: $29.90


The most practical gift? Vouchers!

I don’t care what people say about vouchers being a lazy gift, because at the end of the day, no one really likes that mug / notebook / chocolates you’ve giving either, so you might as well give them something they’ll actually get to use!

Seriously, I’d be elated if I get vouchers in a gift exchange, because every year I get stuff that I don’t really want or care for. Most of them just go into the wardrobe where they never see the light of day.

Here are some fantastic brands you get get gift cards or vouchers from:

  • Sephora (for the skincare / makeup junkie)
  • Klook (for the wanderlust traveller)
  • Book Depository (for the bookworm)
  • Guavapass (for the #fitspo)
  • Golden Village / Cathay / Shaw vouchers (for the movie addict)
  • Zalora / ASOS (for the fashionista)
  • Starbucks / The Coffee Bean & Tea Leaf / Costa Coffee (for the coffee lovers)
  • Mothercare (for the new moms)

Otherwise, if you’re not sure who will be getting your present (if it is a random office exchange where you pick numbers or names out of a hat), I can assure you these vouchers below will be well-received no matter who your recipient is!

  • NTUC / Cold Storage
  • Capitaland / Takashimaya
  • Watsons / Guardian 
  • Grab
  • Qoo10
  • Lazada
  • Zalora 
  • Shopee
  • Deliveroo / honestbee / Food Panda
  • Naiise
And the best thing is, you don’t even need to restrict yourself to any of these brands! My top pick for this season lies in a little-known app called Fuzzie, where you can purchase a gorgeous Christmas gift card to give away. 

Here’s what I got:


I discovered the Fuzzie app thanks to a tip from a reader, and was blown away by the type of merchants they have on the app. Some examples include Grab, Klook, Zalora, Qoo10, Lazada, Shopee, Book Depository, Costa Coffee, Naiise, Deliveroo, honestbee, Food Panda, Guavapass, Amore Fitness and more! 

Look out for the Ultimate Cashback Guidebook which will be released in a few weeks, where I’ll elaborate more on Fuzzie and how you can maximise your cashback on the app (on top of stacking with your miles / cashback credit card!).

Pssst, if you want an additional $5 with your first purchase (minimum $5 spend), sign up with my affiliate promo code SGBUDGETBABE when you download the app.

(Note: This is NOT a sponsored post. I do not get paid by any of the brands if you buy any of my recommendations from this article.)

Merry Christmas guys!

With love,
Dawn