Author: SG Budget Babe

Saving Money and Getting Loans from Credit Co-operatives (Are they better than banks?)

What is a credit co-operative? Unless you’re in one, most Singaporeans do not know of them nor the important role they play in society. More importantly, you may not be aware that there are plenty of benefits you can get from being a member of a credit co-op.

Co-ops are basically regulated social enterprises. They are organised on a voluntary basis, democratically controlled and member-owned, to achieve the common social or economic aim that benefits their members and/or society at large. In fact, co-ops are founded on values of self-help, mutual assistance, equality, care for community and co-operation. 

As its name suggests, credit co-ops provide financial services to their members, and as I mentioned earlier, there are plenty of benefits you can get from being a member of a credit co-op – including savings with attractive interest rates, access to loans at competitive interest rates, and more. They help you grow your savings/nest egg for the future and/or if you need to take loans, you won’t be saddled with a huge debt.

You might not be familiar with the term credit co-op, but surely you’ve seen some of these brands before! Take a look:

Some co-ops are profession-based in the sense that only individuals belonging to certain professions can join as members. For instance, if you are a teaching staff or full-time employee of a school, you can join the Singapore Teachers’ Co-Operative Society Ltd. Whilst staff from the Ministry of Home Affairs, Corrupt Practices Investigation Bureau, Certis CISCO, AETOS etc. can join the Singapore Police Co-Operative Society. So do check if your organisation has a credit co-op that you can join! For the rest of us, there are also credit co-ops that are open to public membership e.g. TCC Credit Co-Operative. There’s a really great introductory article that you can read here for more information on some other co-ops in Singapore.

How You Can Grow Your Savings with Credit Co-Ops

One good example is that of the Singapore Teachers’ Co-Operative Society Ltd, which gives an interest rate of up to 3.08% per annum on its bonus savings account upon maturity. This is relatively higher than similar products offered by financial institutions.

The Singapore Government Staff Credit Co-Operative Society Ltd is another good example. It is a co-op for public service officers looking to build financial resilience and a “nest egg” for the future. If you are employed in the Singapore Civil Service, Statutory Boards and Government-linked Companies, you are eligible to join them as a member.

Their member benefits include:

·      Maximise financial growth through savings

·      Receive FD for better returns

·      Loans at reasonable interest rates

·      Hospitalisation benefits

·      Educational awards

·      Free insurance coverage

·      Loyalty benefits

·      Funeral fund grants

·      Birthday gift

·      Provision of family membership and other privileges such as highly subsidised overseas tours and annual gala dinner

Taking a Loan with Credit Co-ops

Here on this blog, I’ve always advocated avoiding loans if you can help it (with some exceptions to the rule, such as a housing loan) and paying them off as soon as you can before you spiral down the path of bad debt.

I’ve also mentioned numerous times at my talks that credit card debt is something you should fear and be wary of. The interest rate on your credit card (if you don’t pay off in time every month) is much higher than most people think. It is easy to fall into the cycle of simply paying the minimum $50 payment each month, but many people forget that there are plenty of other rollover charges, not to mention an exorbitant interest rate. That is how credit card debts can so quickly spiral out of control! UOB and DBS charges 25.9% per annum whereas OCBC charges slightly higher interest of 25.92% on all outstanding amounts owed.

Borrowing from a moneylender, especially an unlicensed one (like loan sharks), can be even more detrimental. If you’re not careful, your debt can easily snowball into an avalanche that you may not be able to pay off even if you sold all your assets.

But what about if one REALLY is cash-strapped and needs a loan?

Well, if I ever had to recommend a loan, then I would say to go for a loan from a credit co-op instead. They are an alternate means of seeking financial assistance when you need cash, and since they’re less profit-driven than most commercial enterprises, credit co-ops tend to be more willing to go the extra mile for their members. This includes extending loans to lower-income members or even rescheduling members’ loans, and they can even work out a debt restructuring plan with you to help clear it off.

AUPE Credit Co-Operative Limited, for instance, distributes loans to its members for the purpose of:

·      Children’s educational needs

·      Medical expenses

·      House renovation

Members of co-ops can take short to medium term loans as the interest rate is relatively lower according to their websites. This is a HUGE difference if you compare to the interest charged by credit cards and moneylenders and are often even more competitive than personal loans offered by commercial banks.

So if you ever need to take a loan (although I sure hope you’ll never have to, but I understand life has a funny way of throwing us unexpected surprises sometimes), the ONLY place I’ll recommend you to go would be to a credit co-op rather than the usual credit card loans or seeking out moneylenders which many people resort to.

If this has piqued your interest, and you’re keen to learn more about the various co-operatives in Singapore, head over to SNCF’s website to find out more!

Disclaimer: This is a sponsored post written for the Singapore National Co-operative Federation to promote greater awareness of credit co-operatives in Singapore. All opinions are that of my own.

IPO Analysis: Is Astrea IV Private Equity Class A-1 bond worth a BUY?

Astrea IV Class A-1 bonds are the talk of the town right now, and I’ve received so many DMs about this so I’m finally sitting down to evaluate and write this.


Details:
– The bond is launched by Astrea IV Pte. Ltd, which is an indirect subsidiary of Temasek 
– 4.35% interest rate offered
– IPO applications close at 12 noon on 12 June 2018
– You can apply through ATM or online banking via DBS, POSB, OCBC or UOB
Minimum subscription amount: S$2,000
– You CANNOT use your CPF or SRS funds to apply for this bond.
– Bond starts trading on SGX-ST on 18 June 2018

What are you really buying into?

Now, don’t get misled by the above headline published in The Business Times last week – this is NOT a Temasek bond. Rather, it is a bond issued by one of their subsidiaries.

This is a really new and unique asset class because they’re neither government-backed nor corporate bonds. Instead, they’re private equity bonds. This is the 4th private equity bond that is being issued by Astrea, and the first one that is being opened up to retail investors. 

These Astrea IV Class A-1 bonds (“Astrea bonds”) will then be used to invest across 36 private equity funds, which are invested into 596 underlying companies. Traditionally, I would dig up details about the investment assets, but since there’s 36 funds and almost 600 companies, that’s an almost impossible task because much information isn’t available about these private companies, and neither does anyone have that much time anyway to scour through all.

The 36 PE funds. 


If you’re unfamiliar with private equity, what they basically do is to invest in distressed or promising companies, go in with their expertise and restructure or turn the business around (usually making operational or financial improvements), with the final aim (usually) being to sell it off for a profit. As a result, the returns on such investments (when successful) can be tremendous – think 2 to 3 digit percentage figures at least. 

So in this case, when you buy these Astrea bonds, you’re pooling your cash which will then be used to invest into these funds and underlying companies. The profits will then be used to pay the interest on your bond (4.35%) and finally return you your capital after 5 years.

Given the sheer number of funds and underlying companies, coupled with the fact that the exposure to a single partner / company / sector is quite low (even Blackstone Capital Partners, which is the largest, is merely 10.6% of NAV), the risk here is quite minimal even if one or some fold.

(There’s a step-up interest portion in these Astrea IV bonds if they’re not reclaimed after 5 years i.e. on 14 June 2023, but I’m not going to go into that because I’ve no intention to hold it for any longer than that, due largely to opportunity cost. There may be a bonus payment of up to 0.5% at redemption if performance condition is met.

For those of you who are keen on a longer-time holding period, there will be a 1% per year interest step-up rate if the bond is not yet redeemed after 2023.)

Who’s behind the bond?

Okay, so now that you know this is NOT a Temasek bond…then who exactly is behind it? That’s Azalea Investment Management, which was set up in 2016 and is a wholly-owned subsidiary of Azalea Asset Management, which is then owned by Temasek Holdings.

Although they’re relatively new as an entity, Azalea’s management team apparently has extensive experience and institutional knowledge in the private equity space. The senior management team comprises of PE veterans and is led by Ms. Margaret Lui-Chan, who has been with Temasek since 1985.

Temasek and its affiliates have also launched 3 Astrea investment vehicles prior to this. 
Check out this really informative Fitch report for more information.

Why is the yield so high?

That was the first question that came to my mind when I read about the bonds being launched. Compare this to the Singapore Savings Bonds which is pretty much 100% risk-free (since it is backed by the Singapore government) and yields 2.63% for this month’s issuance. Now contrast this to a riskier corporate bond such as Aspial’s bonds, which were launched for 5.25% previously.



If this is from (albeit indirectly) Temasek, the next financial juggernaut in Singapore, then why is the yield so high?! Wouldn’t it make more sense to price it at about 3+% yield, since the brand name Temasek alone would warrant some sort of a premium and perceived safety net?

According to Ho Ching, she says the main aim of this bond is largely to help retail investors in Singapore supplement their retirement income

Why is the yield so low?

You didn’t read that wrong πŸ˜› for investors who truly understand the huge kind of returns that are seen in private equity (remember, 2 or even 3 percentage digits can be fairly common, if they spot the right gems / get lucky on the sale), why is the yield being offered to A1 bondholders here so low at just 4.35%?

This can be easily explained using high risk, high returns; low risk, low returns.

Firstly, the minimum investment amount to participate in Class A-1 bonds is just S$2,000, in contrast to Class A-2 and B (US$ 200k each).

The risks in Astrea IV Class A-1 bonds in terms of default are also significantly lower than the other bonds issued in this exercise, as Class A-1 bonds will be redeemed first in any event before A-2 or B. This means that even if Astrea faces liquidity or financial problems, A-1 bondholders will be paid first.

Since the risk undertaken by class A-2 and B bondholders are higher (they only get paid after A-1), they’re compensated with a higher yield in order to incentivise them to buy these bonds. Unfortunately, you don’t get to buy them as they’re not open to the public and have already been fully subscribed anyway.


Are my returns guaranteed?

No. You MUST understand this point.

However, the risk of default is pretty low, in my opinion, due to how this has been structured. In the event of a shortfall, Astrea IV also has a 10-year committed capital call facility with DBS which will step in to cover the payments πŸ™‚

When can I get back my money?

You can sell the bonds anytime after 18 June 2018 on SGX, just like how you would with ordinary stocks. Otherwise, you can also choose to hold the bonds until its call date on 14 June 2023, or even longer if you want to be entitled to the step-up interest (provided the bonds aren’t fully redeemed by then).

Is there a chance that I’ll lose my money? Will Temasek save us if anything happens to Astrea?

The direct risks to bondholders which you should be aware of are:

– the bond price might fall below its issued price on the bond market
– the Manager might not be able to fulfil its interest repayments
– the Manager might not be able to reclaim the bonds and pay back the original capital sum to bondholders

Now, it is important to note that Temasek Holdings is not guaranteeing these bonds. This is even explicitly mentioned in the prospectus, that is, if you bothered to read through (all 306 pages of) it. Therefore, if the bond manager fails to repay the bonds and/or interest, there is no guarantee that Temasek will step in to save bondholders.


Are they capable of repaying the bond interest and capital? 

As with all bonds, you should always evaluate the financial health of the investment manager before you decide whether to buy or stay out. Remember, that’s the main reason why I said I was staying away from Aspial and Hyflux bonds back then?

Since Astrea’s financials are not entirely public and we can only rely on the numbers presented in their prospectus covering a limited timeframe of August 2017 – March 2018, a few figures to highlight are:
– USD 48.6 million of profits generated
– USD 342.5 million was used for their investing activities

That doesn’t really tell us much, especially when there’s no year-on-year comparison to gauge how they’ve fared. Therefore, we can only look to their Loan-to-Value below, where you’ll see that Class A-1 bonds have a LTV of 16.5%, which is relatively low, and thus the chances of default should also be quite low since only $181 million in the reserve account is needed to fully redeem Class A-1 bonds.

Sounds good, but what’s the catch?!


I’m a huge skeptic, so this deal honestly sounded too good to be true to me. But after scouring through the prospectus and various bloggers / investment houses’ take on this bond IPO, I struggle to find anything realllllly negative about it.

Initially, I thought, is this some conspiracy?! Why would Temasek issue a bond with such a high yield?! Can’t they get institutional or corporate loans for this? I bet companies would be scrambling just to subscribe! Or just get the private banks to issue it to their high-net-worth customers? Then I thought, or maybe they’re in financial trouble, that’s why they’re raising this money from us mortals? But then I realised that the total sum of S$242 million raised really doesn’t count for much, considering Astrea’s access and connections to Temasek Holdings.

My cousin attended the talk on this bond yesterday and I got her to ask them this question on my behalf. The answer by their CEO, Ms. Margaret Lui-Chan was that their vision is to open to retail investors. Lol.

So I can only say, looks like Ho Ching might be right after all, and this bond truly is being created to help retail investors? You can be the judge.

Disclaimer: I am NOT sponsored, nor do I have any connections nor payment from Temasek or Astrea or anyone, for that matter, in exchange for this post.


TLDR Summary
This is probably the longest IPO analysis I’ve ever written for a single product, so if you got bored halfway, I don’t blame you. Here’s a quick breakdown of my view towards Astrea IV Class A-1 Bonds:


Pros
– This is one of the safest bonds I’ve seen in a long time, especially given the A-rating by two reputable rating agencies (Fitch and S&P), not to mention Ho Ching putting her own personal name behind this (I assume, since she didn’t correct the BT article nor ask them to apologise / correct / take it down).
– Long track record since this is already the 4th Astrea bond being launched, with the first in 2006.
– There are some quality PE managers in the 36 funds listed above, including Blackstone and KKR. Private equity folks should recognise these names πŸ˜‰
– The Sponsor owns 55% equity interest, so they do have their skin in the game and are less likely to want to see this fail.
– Their marketing is rock solid and has definitely generated the hype needed for this to become over-subscribed. Talk about FOMO!
– The first few pages of their IPO prospectus is just lovely! Kudos to whoever designed it πŸ˜€

Cons
– It is not easy to understand, and is the first of its kind for retail investors.
– It was slightly mis-marketed (in my opinion) since there was so much emphasis and hype on their connections to Temasek, leading many investors to think this is essentially a Temasek Holdings bond.

You can also watch this short (marketing) video explaining the bonds here:



So Budget Babe, are you subscribing?!

Considering the hype and 4.35% yield, I’ll be subscribing to these bonds and leave it as part of my bond portfolio (together with my CPF). After all, I’m the biggest skeptic of most corporate bonds, but this is one in recent years that actually managed to get my attention.

With their connection to Temasek, I doubt that Astrea will default on the bond interest payments, and I don’t think their bond prices will fluctuate too much on the open market either.

But please don’t follow me – do your own homework! Here’s the full 306-pages of the bond IPO prospectus as well as the Fitch report for you to read before you make your next move. Nonetheless, I’m betting this is going to be oversubscribed, and can only hope that I get some allocation from my application!

With love,
Dawn

Save money when transferring abroad – Review of TransferWise

Did you know about these hidden costs in money transfers? 
If you’ve ever transferred money abroad, you’d be familiar with how the money that’s received on the other end is usually much lesser than you thought it’ll be.
I first experienced this when I had to make USD transfers for my crypto transactions and trades last year. There were so many hidden costs, to which I mostly attribute to:

(i)            a higher exchange rate charged by the banks

(ii)          a service fee for the transfer

In some transfers, banks go through numerous third parties as well before the money reaches the other end. In such cases, each third party takes a fee as well, so your capital becomes smaller and smaller. 

Even if there’s a $0 transfer fee charged, it doesn’t necessarily mean that is the best value-for-money option…because you ought to measure it by how much you receive on the other side, and not how much you’re charged for the transfer.

So when someone told me about TransferWise and how the fintech seeks to disrupt the money transfers market, he certainly got my attention.

What really intrigued me was how TransferWise charges just under $6 to send S$1k to the UK, in contrast to the other banks, particularly Standard Chartered and HSBC, who charge S$55 – S$57 for a single overseas transaction.

$0 fees / zero commissions promotions aren’t always the cheapest

Banks that offer $0 fees / zero commission are great…but if this comes at the expense of a higher exchange rate, that’s where consumers need to be careful as well. In fact, it’ll be best that you always check.

Don’t assume that both routes are priced the same 

I was surprised to see TransferWise recommend customers who are looking to transfer GBP to EUR to use Western Union instead, based on grounds that Western Union is consistently cheaper than TransferWise on this route. 

However, when you switch the route and try sending EUR to GBP, the fees become 6 times more. Western Union now becomes the cheapest in one direction, to being the most expensive (even more than the banks) in the opposite direction. You should be asking, why are people charged more to send money than people sending in the opposite question? 


That’s why it pays to always compare, compare, compare. Or stick to a provider who’s known for (almost) always being the cheapest, but still be open to alternatives or the occasional promotions when other competitors come up with them.

My Review of TransferWise


TransferWise is a fintech company with a mission to allow customers and businesses to send money overseas at lower costs. They’re able to do this as they’ve built a global network of (their own) international accounts, which allows them to send your money in over 60 different currencies for up to 8 times cheaper than a bank. 

They’re now available in close to 60 countries, covering over 500 currency routes. Whether you’re transferring money to India, Philippines, Bangladesh, Pakistan…or to Europe and the U.S., you can see the whole list below:

Is TransferWise regulated? 

That was the first question I asked, haha! So yes, aside from being regulated by the Monetary Authority of Singapore (MAS) and the Financial Conduct Authority (FCA), you can also check out their respective in-country licenses and approvals here. Being regulated under the FCA also means TransferWise is subject to the same rules as banks, so you don’t have to worry about the safety of your money.

It is relatively easy to get started – simply sign up on their website and follow the instructions!


Once you’ve entered your details as well as that of your recipient (for them to send your money to), you’ll be instructed on how to make payment to their local account in your home country, and then you can simply sit back and wait for the transfer to take place!

How does TransferWise work?


Waitttttt, what’s the catch?! Surely there must be a reason why others have to pay such high fees and TransferWise doesn’t. What’s their trade secret?

It isn’t rocket science, actually. Instead of paying exchange rate markups AND transfer fees, TransferWise guarantees the mid-market rate (on Reuters) on every transfer. A simple illustration is this:
– You transfer money to TransferWise Singapore
– TransferWise Singapore transfers to TransferWise London


Since money doesn’t actually cross borders (i.e. the international transfer is a combination of two local transfers), they’re able to bypass the third-parties and middlemen, and this is simply a transfer between TransferWise’s own accounts, that’s how they can offer lower rates to consumers like you and I. 

Today, more than 3 million people around the world use TransferWise. As a result, they’re also one of the few profitable fintech startups in the scene.

You can also read more about how they do it here.

Who I think will find TransferWise useful


There are quite a few groups of people whom I think will find TransferWise a godsend in helping them cut costs of their international money transfers. 

These are:

1. Overseas exchange / studies – parents or students

If you’re a student studying overseas, you can get your parents to remit your money to you using TransferWise. Whether you’re studying in Australia, US or the UK, TransferWise has local accounts in pretty much all the major countries. Given how many Singaporean students go on overseas exchanges and need to pay for tuition, accommodation and other living expenses, TransferWise should be quite helpful in this case.

When I went for my (two) overseas exchange programs during my university years, it cost a bomb to transfer money from Singapore to abroad, and sending it via international bank transfers weren’t cheap at all!


2. Expats sending overseas to your own accounts

If you’re an expat working in any of the 59 countries shown above, and need to send money back to your own home country account, you’ll find this useful. Many expats presently use TransferWise for this purpose to send to their own account(s) in the US, India, Europe and more.

3. Foreign workers

Whether you’re a blue or white-collared worker here, who came to Singapore looking for a better job or higher pay prospects so you can support your family members in Malaysia, Philippines, Indonesia or elsewhere…TransferWise can help.

In fact, many foreign domestic workers use TransferWise since they’ve accounts in most countries in Asia, where many of our FDWs are from.

4. Business owners who need to pay your suppliers from overseas

Many businesses here rely on overseas suppliers, and payments routed through PayPal or your bank often charge a high fee. You can avoid or reduce those fees by going through TransferWise instead! Simply add your supplier as a recipient and the money will be transferred from a local account there to theirs. The money you save will be substantial, especially if you’ve a high frequency of payments!

5. Small business owners who need to hire and pay freelancers from overseas

Just hired a freelance web designer, developer, copywriter or coder from abroad? Or if you’re like some business owners I know, who rely on overseas writers to churn out their content and orders, you can easily make payment to them every month now via TransferWise. 

6. ANYONE who needs to hire and pay freelancers from overseas


Just hired a freelance designer overseas to help design your wedding invites? I know of one bride who hired a Russian designer and had issues transferring the money when it came down to payment time. You can easily bypass this hurdle by using TransferWise as well! 

Here’s what other Singaporeans are saying about TransferWise:

Of course, don’t just take my word for the lower fees – go compare for yourself here, or simply calculate using this nifty calculator below:



I hope this helps all of you when it comes to sending your money safely and cheaply abroad.

Disclaimer: This post contains affiliate links. In line with my advertising policy (which you can review here), I only promote and recommend stuff that I personally benefit from AND which I feel my readers will get great value from. Overpriced, overhyped or simply a brand with huge marketing budget to throw for a sponsored post? Some influencers may do that, but most certainly not me, and long-time readers can attest to this.

With love,
Budget Babe


Should I Buy Maternity Insurance When I’m Pregnant?

The latest and most comprehensive list of maternity insurance plans offered in Singapore (2018 edition). I compared between the 7 plans that I considered during my pregnancy term and spoke to 4 insurance agents to get the full quotes illustrated below.

As most of you guys know, I’ve always been an advocate of buying insurance (after all, it is named as a core tenet under my Guide to Financial Independence tab here), so when I got pregnant, one of the first things I naturally thought about was whether I needed to get maternity insurance.

Photo Credit


What Is Maternity Insurance?
Maternity insurance is a type of policy which covers unexpected complications that arise during the course of your pregnancy, which could affect either mother or child. You pay a one-time premium for the plan and the policy provides a one-time payout to help offset any additional medical costs that could be incurred as a result of pregnancy complications or congenital illnesses in your child. Many insurers in Singapore also include a daily hospital benefit if warded for related illnesses.
How much does it cost?
$300 – $600.
I compared between AIA, AXA, Aviva, Great Eastern, Prudential, OCBC and NTUC Income while deciding whether I should get one. There’s also plans offered by Pacific Prime, but I excluded them in my analysis as they aren’t a recognisable household name in Singapore, and I had contacted them last year to enquire on another plan where no one ever got back to me…so let’s forget it.
What is covered under maternity insurance?
The benefits vary between insurers, but generally you can expect coverage for 
  • pregnancy complications for the mother, 
  • congenital illnesses for the child, 
  • hospital care benefit for both mother and child, including for premature births,
  • death benefit for either mother or child, or both.
Often, many of these complications may require greater medical care and a longer hospital stay, which can lead to shockingly high medical bills. If that should ever happen, your maternity insurance can help to cover the gap left by Medisave (since there are limits to how much you can claim).
Of course, this is one insurance policy no family will ever hope they need to claim πŸ™
As the NTUC Maternity 360 plan offers the most extensive coverage in terms of the widest number of conditions, I’ll use them as an illustration for the types of complications you can expect to get covered for:

For the mother, do note that Great Eastern, OCBC, Prudential and AIA only cover 7 – 8 pregnancy complications.

For your child, only Aviva and NTUC cover for 23 congenital illnesses ; the rest of the insurers cover only 17 – 18 conditions.

Is Maternity Insurance Worth It?

This is a tough question to answer, because it depends on many factors. Like all other insurance plans, maternity insurance is one where you buy for a peace of mind (especially if you’re really worried about potential complications) and hope you never have to claim it.
What are the risks, or the chances of you having to claim it?
Generally, I feel the risks are quite low, given Singapore’s high medical standards and low infant mortality rate. The rate of pregnancy complications and congenital illnesses are relatively low in Singapore as well, so I won’t be surprised if most people never end up claiming from their maternity insurance plans (which is a good thing for them, but even better for the insurers).
Moreover, if you have done your foetus screening tests (OSCAR / Harmony / Paranoma, etc) as recommended by most gynaecologists, you would have a good idea beforehand as to whether your child is healthy or at risk for certain illnesses. 
Since a pregnancy only lasts 9 months and the majority of deliveries go smoothly (albeit with a lot of pain for many mothers!), you should be thinking of this as a really short term insurance plan.
Is it affordable?
At just $300 – $600 for a $5,000 sum assured, you have to consider if you have the spare cash to spend on this. 
Also, note that there’s a catch! Most maternity insurance plans come bundled with another policy – typically an Investment-Linked Policy (ILP) or an endowment plan. If you don’t believe in converting to another plan after your pregnancy term is over, then you can only choose from 2 insurers : NTUC and Great Eastern.
While I’ve said repeatedly on this blog that I’m not the biggest fan of ILPs (read why I cancelled mine here), you can also take a different perspective by viewing them as an education or endowment fund for your child. If you’re not a savvy investor or a disciplined saver, then perhaps an ILP is what you need to ensure that you have funds parked aside for your child’s future. (This is why ILPs aren’t suitable for me, but might otherwise be for someone else if they can’t enforce their own disciplined savings and investments.)
Using Prudential’s PruFirst Gift as an example, you could opt for the $100 / month option for a $100k sum assured together with variable coverage for death, TPD and critical illness. In addition, a portion of your premiums will go towards investing in funds and if you have a baby girl, you’ll break even when she’s 21 years old ($24k premiums paid vs. $24.2k non-guaranteed cash value assuming 4% investment returns) whereas a baby boy will break even slightly later at age 22. This means that you would have “saved” $24k which your child can now cash out to pay for their university tuition fees, with all assumptions remaining valid. 

TLDR Conclusion
So should you buy maternity insurance?

YES if you’re worried about pregnancy complications (such as if you’re not completely healthy or if you’re an older mother), 
OR if there’s a history of congenital illnesses in your family, 
OR if you really want to get your baby on a full coverage life plan before any chance of illnesses can strike. 
This is your one and only chance – by buying before your baby is born and while they’re still healthy. At just $300 – $600, the cost isn’t a lot (skipping your weekly Starbucks will easily help you save that amount) for the peace of mind you’ll get with insurance coverage.

NO if you’re already tight on cash and your baby is healthy. This is one insurance plan that you could technically risk doing without, since the claims ratio is relatively low in Singapore. However, don’t forget that no one buys maternity insurance ever hoping that they’ll claim it anyway!

Another thing you need to take note of is how these maternity insurance plans do not cover for your hospitalisation bills, and the daily benefit of $50 – $100 per day may or may not help to offset much, depending on your bill size. The general sentiment towards maternity insurance is that the $5,000 coverage (which is the key focus and reason for buying) is also quite low compared to the premiums you’ll be paying. 
If you can’t afford this expenditure and you’re mainly worried about hospitalisation expenses, don’t forget that you can always claim it from your Integrated Shield Plan (ISP) as well! Although the coverage is not as extensive compared to maternity insurance plans, ISPs should be sufficient for most cases provided nothing goes wrong. 

My husband and I are still evaluating whether we should get maternity insurance (we’re not adverse against it because of how affordable it generally is. It is either that, or we set aside $5k as “self-insurance”) and I’ve narrowed it down to Aviva, OCBC and NTUC for now.
Here’s my table of comparisons among the 7 maternity insurance plans in Singapore, here it is (please view on your laptop and not your mobile browser):

Please be ethical and do not plagarise / attempt to steal my research and pass it off as your own. I’ve hidden some “Easter eggs” in the table below so you can bet I’m gonna catch you if you copy it off me wholesale!


AXA MumCare AIA Family First Baby Aviva MyMaternityPlan NTUC Maternity 360 Prudential PruFirstGift Great Eastern Flexi Maternity Cover (Essential) OCBC MaxMaternity Care
Pregnancy Complication Conditions $5,000
(10 conditions)
$5,000
(8 conditions)
$5,000
(10 conditions)
$5,000
(10 conditions)
$5,000
(7 conditions)
$5,000
(8 conditions)
$5,000
(8 conditions)
Hospital Care Benefit for Mother $100 / day ;
capped at 30 days ;
if warded for 10 insured events
$100 / day ;
capped at 30 days ;
if warded for 8 insured events
1% of Sum Assured / day ;
capped at 30 days ;
if warded for 18 insured events
1% of Sum Assured / day ;
capped at 30 days ;
if warded for 8 insured events
NA 1% of Sum Assured / day ;
capped at 30 days ;
if warded for 8 insured events
$100 / day ;
capped at 30 days ;
if warded for 8 insured events
Hospital Care Benefit for Child $100 / day ;
capped at 30 days ;
Normal ward : Incubation > 3 days or HFMD ;
ICU or HDU for any related illness
$100 / day ;
capped at 30 days ;
Normal ward : Incubation > 3 days or HFMD ;
ICU or HDU for any related illness
1% of Sum Assured / day ;
capped at 30 days ;
Normal ward : Incubation > 3 days or HFMD or Phototherapy or Blood transfusion for severe neonatal jaundice ;
ICU or HDU for any related illness
1% of Sum Assured / day ;
capped at 30 days ;
if warded in ICU or HDU due to 7 conditions
$100 / day ;
capped at 30 days ;
Normal ward : Incubation > 3 days or premature birth requiring neonatal ICU or HFMD
1% of Sum Assured / day ;
capped at 30 days ;
if warded in ICU or HDU due to 7 conditions
$100 / day ;
capped at 30 days ;
Normal ward : Incubation > 3 days or HFMD ;
ICU or HDU for any related illness
Death Benefit $5,000 for Mum $5,000 for Mum $5,000 for both Mum and Child $5,000 for both Mum and Child $5,000 for Mum ;
Refund of premiums for child
$5,000 for both Mum and Child $5,000 for both Mum and Child
Congenital Conditions Coverage $5,000
(18 congenital conditions)
$5,000
(18 congenital conditions)
$5,000
(23 congenital conditions)
$5,000
(23 congenital conditions)
$5,000
(17 congenital conditions)
$5,000
(18 congenital conditions)
$5,000
(18 congenital conditions)
Outpatient Phototherapy Benefit NA NA 1% of Sum Assured up to 10 days 1% of Sum Assured up to 10 days NA NA NA
Stem Cell Treatment NA NA 50% of Sum Assured NA NA NA NA
Developmental Delay NA NA 10% of Sum Assured NA NA NA NA
Coverage for >1 Child for Same Pregnancy Yes No Yes No Yes No No
IVF Coverage Yes, subject to 100% loading Yes Yes, subject to 75% loading Likely to be declined No No No
Bundling Requirement Yes, need to take up a ILP Yes, only life or ILP allowed No if you have an existing Aviva insurance policy; otherwise, need to take up a life for baby or qualifying plan for yourself / spouse No Yes, need to take up ILP Optional Yes, need to take up ISP for Child
Newborn Cover Purchase Option GIO with Critical Illness, within 60 days, capped at $150k after enhancement Transfer of ILP from Mum to Child within 60 days GIO without Critical Illness, within 90 days, capped at $150k after enhancement Simplified underwriting with Critical Illness, within 60 days, capped at $150k after enhancement $300k cover transferred to child’s life
$200k cover for child’s critical illness
GIO with or without Critical Illness, within 90 days Simplified underwriting with Critical Illness, starts within 15 days
Application Period 16 – 36 weeks of pregnancy 18 – 32 weeks of pregnancy 13 – 36 weeks of pregnancy 13 – 35 weeks of pregnancy 18 – 32 weeks of pregnancy 13 – 40 weeks of pregnancy 13 – 40 weeks of pregnancy
Premiums (Single Payment) for Mums < 30 $340 $360 $326 $390 $320 $542 $443
Premiums (Additional, every year) Yes, depends on Sum Assured Yes, depends on Sum Assured Yes, depends on Sum Assured No Yes, depends on Sum Assured, $100 – $300 per month for $100k – $300k respectively Optional Yes, depends on Sum Assured

With love,
Budget Babe (and mum-to-be!)

Too Good To Be True? Another Unregulated Investment Promoted By Instagram Influencer Joyce Quek

Just last month, I uncovered this investment that was making its rounds on Instagram, after being promoted by local social media influencer Rachell Tan (@pxdkitty) and even her friend Ang Chiew Ting (@bongqiuqiu) who had invested into it, while sharing why I found it so questionable.

Well, guess what? Here’s another one again. And while the durian investments saga previously only required a minimum of $1k+ to get started, this particular one is asking for a minimum of USD 10k!

Let me ask you again, why would you put so much of your hard-earned money with someone on Instagram whom you don’t even know?! Even if there ever comes a day where SG Budget Babe asks you to invest money with her (which will never happen, btw), you should rightfully be skeptical and run for the hills!

 

I got alerted to this by a few readers who checked in with me on whether this investment was legitimate, and that was when I discovered plenty of red flags.

And the methods used to promote this investments are starkly similar to that of the previous ones I’ve highlighted, with the majority of the posts being shown on the influencer’s Instagram stories (where all evidence disappears after 24 hours, unless someone took a screenshot).

Let’s take a closer look at these two investments that @jocelynq is promoting on her Instagram stories:

“Investment” #1: FOIN & Financial.org

Claims made by @joycelynq:

  • Guaranteed returns!
  • Monthly dividends!
  • FOIN is going to be bigger than Bitcoin! with proven numbers!

 

To present greater credibility, she also emphasizes that the company is legitimate and is a sponsor of the F1 race.  She also goes on to share testimonials, supposedly by clients who have invested with her, on her IG Stories as well:

   

Some of my readers were initially drawn in, and asked her for more information. Here’s what she said:

You’ll see that she mentions two key names – Financial.org and FOIN. I’ll elaborate more on each of these later.

Joyce also insists that interested parties / investors have to meet her up, and pass the USD 10,000 in cash to her. Are you kidding me?!

Why I feel FOIN is a questionable crypto investment

I’m fairly in tune with the crypto scene, so I went to ask around but NO ONE had heard of a crypto, much less an ICO, called FOIN. When I tried to research, there was barely any information on it either – no whitepaper, no details on the coin structure or technology, no github, nor any of the usual stuff that most cryptos have.

All I could find was a blog and an introductory Youtube video of FOIN here, promising that it is going to have bigger and crazier returns than Bitcoin, Ethereum and even Ripple.

Nope, I do not believe that at all.

You’re telling me that a coin that no one that has simply appeared out of nowhere is going to become bigger than Bitcoin and Ethereum? Are you kidding me? How exactly are those returns delivered?

Well, this is what their company website claims:

FOIN promises guaranteed returns! Built into their programming language! *rolls eyes to the moon and back*

Isn’t it also a little odd that the company’s website is on a hosted WordPress site? This doesn’t seem very professional to me considering what it’ll cost to get a proper and official corporate website done up. You can view the original article where I took the screenshots above here.

Even their Facebook looks really unprofessional and with so little likes.

Joyce Quek also shared on her IG stories that she had to fly to Indonesia to attend the company’s conference, where she took pictures with “royalty”. I have no idea who those people are, but when I researched further into the gala conference that she had posted about, I found this writeup here on BTC Manager where it says that Financial.org is the main sponsor. Also, if you scroll to the bottom of the article, you’ll find that it is a paid press release!

Given that MAS guidelines suggest digital tokens that promise a form of return are effectively securities and thus need to comply with the relevant securities regulations, it remains to be seen if FOIN actually meets these requirements, and what will happen to Joyce Quek for promoting such an “investment”.

I’m bullish about cryptos but I’ve always warned time and time again in my previous posts that scams are aplenty in the crypto universe, and there are plenty of “shitcoins” circulated around. If you’re not careful, you’re likely to get burnt.

Financial.Org – an unregulated “investment” firm on various regulatory watchlists

Now let’s take a closer look at Financial.Org, the company behind the investments.

Firstly, what on earth is Joyce Quek doing by promoting an unregulated investment firm?!?!

Financial.Org is notorious for having being placed on the alert lists of various regulators around the world, including:

Source
Source

Financial.org seems to also be owned by a UK citizen who is linked to many dissolved and liquidated companies, according to this source investigation:

Source

If you’re interested to find out more, there’s this really informative website dedicated to exposing Financial.org which you can check out here.

Now, I’d watched @joycelynq promote this particular investment (Financial.org and FOIN, which you’ll only find out after you DM her) on her IG Stories for the whole of last month, and was glad that she FINALLY started tuning it down.

But then I saw this:

“Investment” #2: Joint venture project for a developer!

Another new “investment”!?!?!

Looks like a leopard doesn’t change its spots. And the stakes keep getting higher – initially it was USD 10k while now it has been raised to SGD 20k.

Remember what I said about corporate guarantees when I got a lawyer to examine the legal contract provided by @pxdkitty and the company in the durian investments saga? If you don’t remember, you can read it again here to understand why such “corporate GUARANTEEs” are pretty meaningless.

But once more, it appears like she’s getting plenty of interest in her “investment” opportunities:

Remember, stay savvy, keep your money safe, and don’t be so quick to trust any random investment that any Instagram influencer promotes to you.

With love,
Budget Babe

Review of Your Financial GPS – Your handy digital financial advisor by DBS

If you wish to achieve financial independence, you need to plan and consistently ensure you’re on track to meeting your goals.

For anyone looking for a framework, I’ve repeatedly emphasized that the route involves:

1.    Cutting your expenses

2.    Setting up your emergency fund

3.    Growing your savings

4.    Protecting your assets

5.    Invest to further grow your capital and build passive income

You’ll find this bookmarked under the GUIDE tab on this blog.

To promote this message and culture of planning for financial independence (because we all know that inflation and the high cost of living in Singapore sucks), I’ve been working quite closely with DBS Bank to speak at their classes for NAV – Your Financial GPS, held in Tanjong Pagar at their NAV Hub.

I’ve have also encouraged many of you to go for the free financial analysis and consultation sessions which they offer where there is zero product pushing or hard-selling. This is important, because if you’re unlucky enough to work with a financial advisor who has a vested interest in their own commissions, you could very well end up with “recommendations” that serve to line their pockets instead of really fulfilling your needs at the best value.

Getting such a personalized session to help you understand your current financial health (awareness is always the first step to change), getting financial tips and attending financial planning classes at NAV Hub are just some of the reasons why I’ve been supporting the intiative and sharing my experience at some of their classes.

But time is always a valuable resource, so even if you haven’t yet had the chance to go down to Tanjong Pagar for a consultation, don’t fret! DBS has now gone one step further to launch Your Financial GPS in order to deliver a digital financial advisor straight to your fingertips. Yes, or those of you who might have attended the NAV sessions before, you’ll recognise this as an extension of their their existing “NAV – Your Financial GPS” intiative.


This operates on a SAIL concept – Saving, Assurance, Invest and Life Goals – which is pretty much in line with what I’ve always been preaching. If you’re an existing DBS or POSB customer, you probably want to log into your digibank app and check out this newly-launched feature for yourself.

Features & Benefits

Your Financial GPS relies on a combination of user data and behavioural activity to offer you personalised and tailored suggestions.

This digital financial advisor is integrated into your banking transactions, which allows it to provide an analysis of your activities, including:

       automatically categorising your income and expenses (I like that you can create custom categories as well)

       provide an overview of your set budgets

       tracking your status against long-term financial life goals (that you’ve set)

Think of it as a 3-in-1 personal expense tracker + budgeting + recommendation app.
If your transactions are through DBS, it will be categorised automatically for you (based on merchant codes and transaction descriptions, in case you were wondering about the “how”). You can also create additional customisation fields, add in non-DBS transactions and input them accordingly if you wish to use this as your main expense tracker from now.

It also makes some recommendations (which you might otherwise not have thought of!). For instance, want to set up a long-term goal to save for your baby’s university fees but unsure of how much is enough? Your Financial GPS will propose an ideal savings amount that you can consider and also offer some tips on small, actionable steps that you can take to achieve this goal. Or, if you’re saving for a wedding, you’ll be fed with tips on how to save money while planning for your big day!

And for those of you who have been looking for a community to support and accompany you on your financial growth journey, DBS will be launching YourNAV Community forum next month, where you’ll be able to ask questions online and get answers or tips related to financial planning. If you’re a “YourNAVer” member, you can also look forward to getting access to exclusive members-only events, classes, games and contests.

You can visit this link for more information. Until then, I’ll see you in the community. 

Disclaimer: I’ve been speaking at NAV Hub for multiple events so far, so this article is naturally written in collaboration with DBS to share their latest initiative with you guys. All opinions are of my own. Screenshots involve cursory numbers and are not meant to be taken as an accurate representation of my current financial status, which loyal readers should be able to recognise.

What To Do In Your First Trimester

So…if you haven’t already seen the news on my Instagram or on my Dayre, I’m pregnant with my first child! πŸ˜€


My first trimester was pretty tough because I suffered am still having really bad nausea and acid reflux, and it felt like time couldn’t pass any quicker. It was tough keeping the baby a secret from my colleagues at work, and even speaking at events – SGX and a SUSS cryptocurrency panel discussion – while trying to hide my discomfort! 

I honestly couldn’t wait to enter my second trimester after reading about how the morning sickness tends to go away for most people then, although at this moment I’ve just started my second trimester and it is still here πŸ™

Anyway! So yes, you can soon expect to see more pregnancy-related posts from me, as well as stuff on family finances, and even how I plan to teach and raise my kid to become financially-savvy with good values (let’s hope I’m successful, we’ve already come up with various games and methods haha)! 

Right now, I thought I’ll share about what to do in your first trimester, especially if this is your first pregnancy. I know I felt pretty overwhelmed and clueless in the beginning, and if it weren’t for some of our good friends who guided us through, we’d probably still be lost parents right now!


1. Take folic acid.
Many ladies who are trying to conceive take folic acid right from the start, but for us, the first thing we did when we found out from our pregnancy kit that I was pregnant was to go to Guardian and purchase their 5mg folic acid supplements. This was a tip given to us by a good friend who had been praying for us over our (short-lived) #ttc journey, so I hope this gets passed on to you guys today too! 

2. Decide if you wanna go private or public.
There’s SO MANY things to consider once you find out that you’re about to welcome a new life in 9 months and have to start preparing for it. The first thing you’ll want to think about is whether the private or public healthcare route is better for you. Some factors to consider: 

  • Costs: Is the private route affordable for you?
  • Waiting time: Are you willing to spend hours waiting before you get to see your gynae? Can you afford to spend (almost) an entire day waiting?
  • Dedicated or random gynae: Do you need / want a dedicated gynae who will see you through your pregnancy? If you go the public route, you’ll be randomly assigned to whichever gynae is on duty when you visit.
  • What’s the level of comfort and assurance you need? Generally, private gynaes tend to be able to give you more attention and put you at ease, vs. the super fast consultations at public hospitals.
  • Location of the gynae clinic
Source: MOH
Source: MOH

We considered between Ward A in a public hospital and a 2-bedder in a private one. Initially, I really wanted to go the public route because I was convinced that our government hospitals are good enough, but we changed our mind after some of my readers (who work in public hospitals) wrote to me advising me against it. Another key consideration was the fact that I was quite anxious as this is my first pregnancy, and I really wanted to have an exclusive gynae who would follow me throughout my entire journey, instead of being seen by random gynaes on duty. Our busy schedules also didn’t really allow us the flexibility of being able to spend an entire day waiting (and I HATE waiting), so after weighing the different factors, we decided to go down the private route instead.


My husband said something really sweet: “I don’t mind paying more for my wife to have a peace of mind”. =D Guys, listen to your wives!

3. Search for a gynae.
Go “gynae-shopping” if you need to! It is important that you feel comfortable with your gynae so don’t be afraid of hopping around until you find the right one. The only thing you should note is that first consultations tend to be charged higher, so if you’re “shopping” around for too long…you’ll quickly rack up a lot of costs. 

Ladies, if this is your first pregnancy and you’re an anxious mom like I am, remember that it is fine to spend more money to ease your fears because it does affect the baby. You have to weigh affordability against your personal comfort and emotional needs! 

You can generally expect to pay between $150 – $300 for each session with a private gynae. Our first gynae charged us $370 (although a source who was his patient last year said she only paid $280), so rates may still vary and it is best to check directly. When you call the clinic, the nurse will ask you for your last period date in order to calculate roughly how far along you are. You’ll be asked to come in for your first appointment in Week 7 – 8, although some gynaes will see you earlier if you really want to.

During our search, we read online reviews, spoke to a few close mummy friends and asked for recommendations (very few, since we couldn’t really announce our pregnancy yet), and shortlisted 3 gynaes to visit before we made our decision. As it turned out, our second gynae made us feel the most at ease and was within our budget, so we decided to stick to him!


4. Start thinking about which hospital you’d wanna deliver in.
Often, this is tagged to your gynae, which is why I placed this as #3. If you choose a private gynae, they tend to only deliver at certain hospitals, so your choices are limited. I made the mistake of shortlisting my desired hospitals first (including KKSH, TMC and Mount A) before I realised that not all my options were places that my gynae had delivery arrangements with. Sian.

You can also go on hospital tours to check out the facilities, although I don’t intend to do this until much later.

Photo credit: The HK Hub


5. Decide if you want to get maternity insurance.

Some people say maternity insurance is a MUST, while others say it isn’t necessary at all. As I’ve always emphasized, insurance is a very personal affair, and what works for someone may not work for you. So go ahead and speak to your agent(s), compare quotes, and decide if you’ll like to get covered for a greater peace of mind! 

I’ll cover this more in a separate post later as I’m currently still reviewing them now, and haven’t made up my mind whether this is a WANT or a NEED for me at this stage.


6. BUY MATERNITY BRAS.
The truth is that your boobs are likely to grow and become SUPER SORE when you’re pregnant. I know mine did (they’ve grown by an entire cup size now, much to the delight of my husband, and are often sore), and I had to resort to either going completely bra-less (at home) or wearing bralettes because wired bras became too tight and painful for me. 

I regretted waiting till my second trimester to buy my maternity bras (in my defence, I was concerned about whether my boobs would grow even bigger, so I wanted to save money and wait to buy only after I knew for sure  -.-). Don’t make the same mistake as I did! Otherwise, if you’re also concerned about changing bra sizes, you can lounge out in bralettes in the meantime first.


7. Avoid exercise (?)
This is really subjective but many gynaes will recommend that you avoid cardio or any form of strenuous exercise that basically involves shaking your womb vigorously as it’ll increase your chances of miscarriage. I actually exercise pretty often, but my husband forbade me to do anything during my first trimester πŸ™

Baby, for your sake, I’ll stay off my beloved abs exercise and dance classes!




8. SLEEP.
You’ll find yourself feeling tired and lethargic all the time. I’m not much of a napper, but I had to squeeze in 1 to 2 naps almost every other day (one during lunchtime, another right after work) in order to survive.

The contrary happened at night, as my nausea and acid reflux would typically hit me at about 11pm and last until 2am, so it was hard for me to go to sleep early. One night it got so bad that I couldn’t fall asleep until 6am!

Source: Instagram


9. Start thinking about how you wanna announce your pregnancy!

This is the most exciting part (heh)! We couldn’t wait to announce and tell our friends and family (my husband had a hard time keeping his mouth shut and spilled the beans to lots of people very early on, lol) and kept thinking about how to deliver the good news!

Most people usually wait till Week 12 – 14 to announce because that’s when your baby is pretty much stabilised and that’s when your risk of miscarriage drastically goes down. Have fun and be creative! There’s tons of great ideas here if you need some inspiration.

I’ll cover my thoughts on whether it is worth getting maternity insurance next! 

With love,
Dawn

SAFE DRIVERS ONLY – You can now pay less for your car insurance!

If you’re a safe driver looking to try and reduce your insurance premiums, I might have found just the answer for you.

I recently came across Vouch when a friend of mine shared about it on Facebook. Vouch, which is essentially a local digital car insurance platform partnering with major motor insurers like NTUC Income, Sompo and Tokio Marine. The exciting news is that they’ve just launched Singapore’s first No-Claims Rebate (NCR) for motor insurance last month!

You guys know how I’m like when I see a good deal – I go digging into whether it truly is as good as it sounds. So in this case, I reached out to the founder and grilled him about what Vouch is about, how they purportedly can offer a “cheaper and fairer” insurance model, and tried digging up the dirt. Surely there must be a catch!

But I found none. And that’s why I’m here today to share with you what I feel is a massive game-changer for the car insurance industry and for us drivers.

Note: This is NOT a paid or sponsored post. All opinions are that of my own.

Background

Now, remember how I highlighted my concerns last month about whether the motor insurance is headed down the same path as healthcare (where consumers now have to pay higher premiums and will no longer get to purchase full riders anymore)? You can read this article on the warning signs which I pointed out here.




My worry is that motor insurance premiums could soon be raised as well, given the industry’s underwriting losses and rising claims (highest since 2008). My husband and I pay pretty high premiums on our car so obviously if there’s a better option in the market, I want in.

How do car insurance claims really work?


If you’re not familiar with how insurance works, think of it as you outsourcing your financial risk to the insurer each time you buy a policy. The insurer collects the premiums from consumers like yourself, and pools them together – this sum of money then goes towards paying the distributors or agent commissions, administrative costs, claims…and whatever is left then becomes their profit.

So basically, you’re grouped and the risk is now spread out among all of you who are paying for the insurance protection (a.k.a. “risk pooling”).

Now, the problem comes in when too many claims are made and have to be paid out, which then eats into the insurers’ margins and profits. If it goes beyond a tipping point, the insurer (or the industry, depending on how severe the problem is) then runs into losses and needs to find other ways now so they can sustain their business. That’s what we recently saw in the healthcare space, where MOH and the insurers attribute the cause to a “buffet syndrome” which caused overall healthcare claims to go up and tip the insurers into danger zone.

Thus, is it really fair when your insurance premiums go up, even when you didn’t claim anything?

Obviously not!

For drivers, statistics show that 9 in 10 consumers don’t make claims on their motor insurance. So where exactly do the premiums (of the 9) go to?

Paying out the claims of others (the 1 in 10)?

But wait, there’s the No-Claims Discount (NCD), you say. The truth is, that’s still not good enough.

It is about time safe drivers stop being penalized for the reckless driving habits of others. How?

Introducing: Singapore’s first No-Claim Rebate (NCR)


Vouch is a Singapore startup (an insurtech platform) that now rewards people for safe driving.

They have recently launched Singapore’s first ever No-Claim Rebate (NCR) car insurance feature, partnering with major motor insurers to offer customers up to 15% cashback on our annual premiums, on top of our No-Claim Discounts (NCD)!


This translates into cheaper and fairer motor insurance for us consumers.

How does Vouch do this?
  1. For all motor insurance policies bought on the Vouch platform,15% of the driver’s premiums will be set aside for NCR, which is pooled with the other members in the group to form a common rebate pool.
  2. During the policy period, if any member makes a claim, part of the claim is deducted from the total rebate pool.
  3. At the end of each driver’s respective policy period, the remainder of the pool will be returned and split proportionally amongst the members who did not make a claim (the No-Claim Rebate). 
  4. If the pool runs out, there is no negative impact to customers, as everyone is still covered by their respective insurance company. However, because Vouch is attracting safe drivers only, it is more likely that the group stays accident-free (or in the unluckiest of scenarios, claims a little bit), and so everyone should receive the 15% cashback.

Their co-founder Chean Yujun, shared with me about how the traditional car insurance model works whereby safe drivers end up paying higher premiums to cover the risks of unsafe drivers. Vouch felt that this was unfair, and saw an opportunity to work with insurers to promote and reward safe driving instead.

Is this a good deal for us consumers? Should I switch now?


Yes, especially if you’re a safe driver.


If you’re a reckless driver, there’ll be no difference whether you stay with your existing insurer / policy or switch to purchase a new one through Vouch. The No-Claims Rebate won’t apply to you anyway.

But if you’re like the majority of drivers who hardly get into accidents, Vouch’s offer is extremely compelling because it is not only cheaper, but also fairer.


For instance, if you choose to buy with NTUC Income, you’ll pay the same for the policy, regardless of whether you buy through Vouch or elsewhere.

However, if you purchase through the Vouch platform, $138.55 (15% of your premiums) is set aside for your No-Claim Rebate, to be given back to you at the end of your policy year if you make no claims.


So with this cashback, you’ve effectively only paid $785 for your car insurance premiums!


TLDR Conclusion


– If you’re a generally safe driver looking to reduce your premiums paid, Vouch is looking for you, because they want to reward you for your responsible driving habits with up to 15% of No-Claims Rebate.

– This is on top of your existing No-Claims Discount (NCD), which means you’re paying much less for your car insurance policy now!

– Reader’s promo code: Use SGBB60 to get an extra $60 cashback! 



With love,
Budget Babe

What stock can I invest in that is low risk and high returns?

BB, what stock can I invest in that is low risk and high returns?

That’s one of the most common questions I get from readers and probably one of the most difficult to answer.

Everyone has a different interpretation of “low risk” and “high returns”, but in my case, the answer to the above question almost always comprise of value stock i.e. stocks that trade at a discount to what they’re really worth.

Sometimes this comes in the form of properties. Last month, I shared on my Patreon about a property stock which I found that was trading at a 77% discount to their book value of their cash and properties alone. Their price-to-earnings ratio at my time of purchase was also extremely compelling, at just 3.2X!

I did a full analysis and wrote a piece to consolidate my thoughts on the stock, and once I was done, I was in. I couldn’t possibly pass on something so cheap!



But sometimes cheap stocks can remain cheap for long, or even crash…because they might be a value trap in disguise. So how can you tell the difference, and ensure that you don’t fall for a value trap?

By getting educated and informed.

Education can come in various ways. You can read books (see my list of recommended books here) or go for courses to pick up skills, and then hone them further by practising and reading financial blogs, websites or doing hands-on (such as going in-depth into a stock analysis, attending AGMs, etc).

What should I look out for before I buy a stock? 

Personally, I’ve read almost every book on that list, attended many courses and workshops, as well as doing hands-on investing in order to get to where I am today. 

The most useful framework I’ve found, and eventually adapted to that of my own system, came from the Investment Quadrant workshop run by The Fifth Person. I won’t go too much into detail or give away their methodology, but I’ll share about some of the constants I always come back to whenever I analyse a stock.

1. Identify wonderful companies.

One of my primary criteria is to ensure that the company behind the stock is a great one, and I do this by assessing their business model, their competitive advantage, their economic moat, and the market that they serve.


If the company is facing structural headwinds or the entire industry is being disrupted and they’re slow to keep up, I generally stay away from such a stock (that’s a hint!).

Of course, I try to stick to things that I understand as well. For instance, I learnt through experience that I really just don’t understand the O&G industry enough, so I try not to go there unless there’s a compelling reason (such as if there’s a huge discount for the stock). Some people refer to this as sticking to one’s circle of competence, but I just call it common sense lah. Not familiar, just stay away lor. There’s a whole bunch of other stocks out there for you to choose from!




2. Can I trust the management team?

I’ve seen poor management screw up companies, and great management turn struggling companies around.


One way of assessing management quality includes studying the past decisions that they’ve made for the company, but on top of that, I tend to read the Chairman Statement on their annual report as well and compare it over the years. However, just watch out for PR fluff, as a lot of them might just be all talk but no action.



One example of a stock that I feel its management truly screwed up on is Netccentric (ASX:NCL), which IPO-ed in July 2015. You might not have heard of them, but surely you’ve heard of Nuffnang, the company which manages some of Singapore’s top influencers like Xiaxue. Its stock has crashed 94% since its IPO price of $0.20, and it suffered from internal management disputes (the original founders fell outboard calls for shareholders to dump founderformer CEO sues co-founder). In fact, earlier this year I was flabbergasted when CEO Desmond Kiu announced their decision to shut down their micro-blogging app Dayre, which I personally saw was a poor business move. Their fundraising attempts yielded just $700+, whereas I raised the $150,000 that they claimed was needed to run the app for a year…all within just 3 days. I won’t go too much into the saga, but you can read about my efforts to #saveDayre here and getting investors for a successful buy-out of the app

Another common red flag I look out for is how much management is paying themselves. If they’re giving themselves exorbitant salaries, then I’m out. I generally don’t like management teams who treat their company like their own personal ATM.


3.Quantitative Analysis – what do the financial statements say?


Even if the company has a fantastic business model, they might not always be earning profit. Loss-making companies are a big NO for me whenever I look for a value stock. I also study their income statement, the balance sheet and the cash flow statement, as well as run various calculations to see if the company is in good financial standing. 


For someone who wasn’t trained in math or finance, this used to take me days to complete, but over time I’ve become much faster at it with practice. If you’re just starting out and are unsure of what to look at, I highly recommend this course where they teach you what to zoom into within the financial statements, lest you get lost by all the numbers! 



4. Valuations

This is the most important part, and the one which always excites me the most. Here, I’ll be looking at whether the stock is trading at a discount, and whether that margin of safety is good enough for me to enter.


I’ll use DBS as an example, which I bought in early 2016 as a value stock because its discount was too good to resist. This has now blossomed to become one of my best-performing stocks in 2018, and now that CEO Piyush Gupta has announced its latest dividend payout, that translates to a forward yield of 8% for me given my original buy price.

Majority of the stocks I buy are stuff on a discount. If it isn’t trading at a discount, I’m happy to wait.

If you’re new to investing and am unsure on what type of valuations to use, do note that the suitability of metrics will differ based on the type of stock you’re analysing! Thus, if you’re really clueless and would like to simply get a framework to start, I highly recommend following the step-by-step process (including the flowcharts and checklists) taught in the Investment Quadrant.


Course Review: The Investment Quadrant

I shared here last year that I had paid for and signed up for The Investment Quadrant to hone my skills further, and I loved it so much that I’m back here again to recommend it to all of you this year.

If you’re new to investing, you’re gonna love all the checklists, step-by-step framework and the entire system that you can follow easily in order to get started. They’re so comprehensive that you’ll be able to start analysing and searching / buying for your first value stock the moment you’re done with the course!

If you’ve prior investing experience but have never been to this workshop, I highly recommend that you give this a shot because (i) it will challenge what you thought you knew about value investing and (ii) you get to pick the brains of investing experts Rusmin and Victor. They’ve done so well in their own investing journey thus far that they’ve managed to use this same formula to turn around a loss-making portfolio to $2 million in profits within just 2 years, with individual stocks yielding 50% to 300% returns!



The course consists of 2 parts:

1. Online : training videos, the checklists, flowcharts and formula worksheets
2. Offline : a complimentary one-day workshop for them to give you a crash course of the entire methodology, complete with case studies, common mistakes investors made, and FAQs

The best part is that beyond just a one-time course, I also get all their future updates they make to their course content. I paid for their Dividend Machines course in 2015, Investment Quadrant in 2016, and have been enjoying that benefit since.

If you compare this to the other value investment courses out there, you’ll find that this is severely underpriced at just USD 397 (and yes, I’ve been telling them that they need to raise their prices because the cost simply doesn’t justify the value they provide!). I’ll never forget how my own mom shelled out $4000+ for a value investment course with another company and the notes that she received was…so basic that you can actually learn all of them on my blog for free -.-

The Investment Quadrant course closes on 28 May 2018, and if you haven’t signed up yet, I’ve asked them and here’s a reader discount for you to get another $50 off (so that’s just $347 now!)

Honestly it is ridiculous that they’re even offering a money-back guarantee on this. I wish the one my mom signed up for had that (it didn’t), so we could have asked for a refund on hers!

In addition, if you’re a reader, let me know after you’ve attended the course (just drop me an email with your course confirmation afterward) so I can send you a reader freebie – a full stock write-up on one of my value stock purchases recently so you’ll be able to see the IQ methodology in action (together with some of my own metrics) and find out one of my favourite stocks in my portfolio which has never been mentioned on this blog before!

With love,
Budget Babe