Category: Investment Stab

How I Saved $1000 of my $2500 Salary

Here’s a story (or break down) of how I spend my money every month.
Salary: $2,500 per month
Expense: $1,500 per month

  • $300 to my parents
  • $700 for food (breakfast, lunch, and dinner), entertainment, transport, phone bills
  • $300 towards student loan repayment
  • $200 for surprise expenses and insurance

I managed to save $1000 saved every month.
Sure it helps that I’m single, am a guy (statistically speaking it is cheaper to be a guy), no family to feed (no kids no wife), no housing loan, no car loan, etc.
The only expensive thing is eating out every day, but that’s not too bad in Singapore, compared to other countries like Australia, etc.
I also try to stretch my student loan – not pay it down too fast, and I stated the reasons why in another article that you can read HERE.

My “amount of money saved per month” is not the best – I know a lot of people who get by every month spending even less than me, but it’s about saving a big enough portion of your pay while being happy, and everyone spends different amount to stay happy 😉.
After all, I’m a millennial who needs his Starbucks and stuff every once in a while.
There are temptations nonetheless and I’m constantly trying to fight them so that I can save more money.

Temptation Number 1: Buying New Clothes 
I have about 8 sets of office attire but wears only 7 sets of them (I try to avoid my white shirt because they can be hard to wash and maintain).
Some times I feel like my wardrobe selection is so limited that it would not hurt to get a couple extra sets of work clothes.
But honestly, I always wear a jacket at work because it is cold.
No one can see what I’m wearing underneath.
So it does not make sense to buy something that no one is going to see most of the time.
Besides, for a guy, it’s common to wear a white shirt and black pants daily – it’s like a uniform.
No need for variety – that’s 1 less headache every morning thinking about what to wear.
For women, I guess it’s tougher. I heard from female friends that their colleagues would talk about what they wear to work and stuff, so it’s probably tougher to always wear for the set of clothes for them?
A friend of mine told me that since she started working, her wardrobe expanded from 8 sets of work clothes to almost 30 sets – that’s a lot of money spent on clothing 😱.

Temptation Number 2: Coffee
Coffee Starbucks, Coffee Bean, or just the Kopi at the coffee shop below my office.
These all cost money.
What’s worse is that my office provides free coffee and tea 🤦‍♂️
Somehow, Nescafe, 3-1 instant coffee, or the coffee machine that brews coffee straight from the beans just does not taste as good as the $1.60 kopi-peng from the coffee shop below my office. Suddenly, after making some money, the need to buy decent coffee to start the day right seems important.
To make matters worse, I am actually trying to kick the habit (addiction) of drinking coffee.
Nonetheless, some things just cannot be avoided, and I guess the unnecessary coffee habit is going to continue 😢.
But, if you can avoid this, try to avoid this, you can save $8 per week or $32 per month just by drinking coffee provided by your office!
That’s like a decent meal at Din Tai Fung! 🤤.

Temptation Number 3: New Devices 
“I need a new phone”, “I need a new laptop”, “I need a new iPad”, “I need this, need that”.
How many of us fall into this trap?
Suddenly, because we can afford it, we start to find justifications to why we need new things in our life.
“I need a new iPad so that I can write more blog posts on my bed!”.
Yup, that’s the excuse I’m selling to myself to convince me to get the new iPad 😎.
That’s the idealistic voice telling me to reward myself.

Then there’s the practical side of me going “your laptop can fold into a tablet, if you really want to do work on your bed, you can use that laptop. But chances are you will not do any work on your bed because you are lazy”.
On the bright side, team Practical seems to be triumphing over team Idealistic so I managed to control and not splurge on a new iPad.
Nonetheless, I still browse through Apple’s website and store every once in a while, to admire the beauty of the product that I did not buy 🤣.

Conclusion
Instead of having strict budgeting rules and skipping the Starbucks, I follow the more flexible money management rule of 50-30-20.
And it sure seems that I’m well within the limits.
60% of my salary is spent on ‘Wants’ and ‘Needs’ instead of 80%.
40% of my salary is saved and invested instead of just 20%.
So I guess I am doing pretty okay.

What about you?
What are some of the temptations you face when you started working?
Let us know in the comments section😁
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Recommended Read: What is CPF Basic Retirement Sum (BRS)?


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Unhappy with your job? There’s something you can do about it.
A. Save up enough money from your job so that you can fire your boss – the problem is it might take some time and some effort
B: Find a new job, search for new opportunities. A career coach might be able to help you with that. And if you are looking for a free career coach, visit Workforce Singapore via the link below.
They can link you up with the career coach and you might be able to find new opportunities on their jobs portal.
http://ow.ly/GY8150wlfrF

CPF Accrued Interest: Why Do I Need To Pay Them Back?

Today’s post is an answer to the question: Why do I have to return into my CPF account the accrued interest I accumulated?This question is posted by one of our readers.We would like to thank him/her for reading and interacting with us by posting a ques…

Moving RSS to 90 is a Good Social Experiment

If you have not heard, CPF members who are on the older Retirement Sum Scheme (RSS) will now have payouts lasting up to age 90, down from the previous age of 95.
Here’s a link to the article.

Illustration:
If you are retiring at age 65, is not on the CPF LIFE Scheme (aka you are on the RSS), and has $50,000 in your CPF Retirement Account (RA).
Previously, when the payout would last until you are 95 years old, your monthly payout would be about $235 ~ $295.
Now, after the changes, your monthly payout would increase to about $260 ~ $315, almost 10% increase!
Now, the numbers here are for illustration only because we don’t have access to the actual calculation method, but we expect the numbers to be fairly close to our estimates.

This is great in 2 ways for those on the RSS scheme.
1) Those on the RSS scheme tend to be of the older generation (born before 1958) and the average life expectancy for this generation is estimated to be about age 71 or even longer.
So it does not make sense to lock their money up way beyond their life expectancy.
Of course, why drop to 90 instead of 85 if the life expectancy is about 70?
I have no idea but probably in case the generation live up to 90 years old then at least there’s some money for them, or maybe it’s a “caution” for the next group of people on RSS that we will explain in point 2.

2) Those born after 1958 but *do not have significant savings in their CPF RA* will also be under the RSS, and shortening the payout period would greatly increase their monthly payout – which is great.
*do not have significant savings in their CPF RA* are those who fit the condition below.

Source: CPF

Recommended Read: 9 Things I Learnt from my Internship at GIC

Commentary:
Now, this part is just how I feel, and not necessary is the Government’s stance.
But I think this is a pretty good social experiment.
I feel that this is a test on how citizens would react when they realise that they have run out of retirement money in their golden years because they have used up their CPF money.
There are so many people complaining that CPF is their money and that the people should be able to choose if they want to withdraw the whole sum out at age 65 (or 55) or leave it inside CPF.
The CPF stance has pretty much been “We care for you and your retirement, we are afraid you might mismanage the money and end up going broke during your retirement. So we take care of your money and give it to you in monthly payouts so that you can live comfortably.”
Unfortunately, not a lot of people are convinced by that narrative that CPF tries to sell us – even though it is true (many people cannot handle a sudden windfall of money and often end up broke within a few years after getting that large sum of money).

So to me, this is like an experiment to test if people would complain when they run out of money in their retirement.
It is tested out on a small group of Singaporeans (those born before 1958 or those with little CPF savings), so the negative impact of it is minimised.
And we have heard people say “If we run out of money during our retirement, it is our problem! You (Government or CPF) don’t have to worry our us!”
Now, we might have a way to put that statement to the test 😉
If we hear complains from people saying that are miserable, they are suffering, that the Government and CPF is not helping them when they reached 91 years old and have run out of CPF/retirement money, then we know for sure that the general folks cannot handle their money, and maybe, it is best to leave it in the hands of professionals.

What do you think?
Do you think this is a good social experiment also?
Or do you think this is a good change and it shows that the Government is actually listening to our demands?
Let us know in the comments! 😊

Recommended Read: What is CPF Basic Retirement Sum (BRS)?


Remember to offer your opinions. If you don’t put your two cents in, how can you expect to get change?

Have feedback? Tell us now!

Subscribe to us or
Follow us: Investment Stab on Facebook


Unhappy with your job? There’s something you can do about it.
A. Save up enough money from your job so that you can fire your boss – the problem is it might take some time and some effort
B: Find a new job, search for new opportunities. A career coach might be able to help you with that. And if you are looking for a free career coach, visit Workforce Singapore via the link below.
They can link you up with the career coach and you might be able to find new opportunities on their jobs portal.
http://ow.ly/GY8150wlfrF

The Purpose of Big Tech

Source: Logos

There are many Big Tech companies, and they are either added or dropped from the list very fast.
From the initial FANG (Facebook, Amazon, Netflix, Google), to the FAANG (the 4 + Apple), or GAFAM (Google, Amazon, Facebook, Apple, Microsoft).
But for our case, we are just going to talk about the Big Four: Amazon, Apple, Facebook, and Google.

I was watching a video from Scott Galloway – a business professor from New York University, talking about the problem with Big Tech and he gave a point of view which I thought was pretty interest.
If you are interested in the talk, here’s the video (it’s about 20 minutes long).

But the interesting point he made that stood out to me was the sheer size of human capital these Big Techs hires and what they do with their human capital.

The Manhattan Project, the creation of the nuclear bomb, which ended WWII and brought world peace ✌ had almost 130,000 people working on the project.
By a similar number, Facebook and Google hire a total of 134,000 people, and what they did was to try and predict and show you another ad so that you would click. Don’t hear it from me, the Prof from the video said so, so did Li Hong Yi (PM Lee’s son)
Of course, this is an interesting perspective but definitely not all true.
Without Google, you won’t be reading this article (powered by Blogger, which is owned by Google), you won’t be able to watch the video I added above, either would you be able to navigate in a foreign country (or even your own country without Google Maps).
And we definitely need Facebook to know what new branded bag our friends bought, who broke up with their partner and started ranting on social media etc.

Recommended Read: 9 Things I Learnt from my Internship at GIC

400,000 people came together to land Neil Armstrong and his team on the moon, which by any account is quite a remarkable feat for us.
Think about this: your iPhone has 100,000 times more computing capacity than the computer that landed the men on the Moon, and all we are doing with it is play Call of Duty (not that it’s a bad use, it’s a pretty good game 😁). 
Hires almost double the number of people in the Apollo Project, the main goal is to sell you another iPhone (you can buy it on Apple stores or Amazon website). 
Sure, Apple is focused on creating the best product and Amazon is focused on creating the best customer experience. 
 No one thought they needed to use their face to unlock their phones until Apple did it and suddenly everyone’s like ‘OMG! This should have always been the way to unlock a phone.’ 
 And if we don’t have Amazon, there won’t be Amazon Web Services (AWS), the cloud provider that powers between the bulk of the internet. Netflix and Slack are just 2 examples of companies running on AWS, in addition to many other governments and companies.
Conclusion
There are always 2 sides to everything. Technology is a 2-edged sword: you can benefit from it, or get hurt from it.
We connect with our friends and families via social media, but many are also cyber-bullied via these platforms.
We get information and knowledge via search, but many newspapers are losing revenue because of falling ad revenues.
We get products delivered to our doorstep fast, but many small businesses (and big retailers) are going bankrupt.
We get the best quality devices and services, but many other companies that are offering similar services get crushed via competition from the platform owners. 
Do I have a solution? Nope, I don’t.
I still want to watch YouTube videos for free (so I’ll watch the ads, even though now you can get YouTube Premium to not watch ads in your videos).
But I’ll use ‘Sign In with Apple’, to limit the data that companies are collecting on me when I use their services.
It is about making choices, and it always helps if we have clearer and better information about what are we getting, and what are the trade-offs.

Recommended Read: What is CPF Basic Retirement Sum (BRS)?


Remember to offer your opinions. If you don’t put your two cents in, how can you expect to get change?

Have feedback? Tell us now!

Subscribe to us or
Follow us: Investment Stab on Facebook


Unhappy with your job? There’s something you can do about it.
A. Save up enough money from your job so that you can fire your boss – the problem is it might take some time and some effort
B: Find a new job, search for new opportunities. A career coach might be able to help you with that. And if you are looking for a free career coach, visit Workforce Singapore via the link below.
They can link you up with the career coach and you might be able to find new opportunities on their jobs portal.
http://ow.ly/GY8150wlfrF

9 Things I Learnt from my Internship at GIC

I just ended a 24 weeks internship at the Government of Singapore Investment Corporation (GIC).
In case you do not know what’s GIC, it is one of the sovereign wealth funds that invest Singapore’s reserves on behalf of the Singapore Government – the other is Temasek Holdings.

About GIC
GIC has 2 goals
1. To preserve the long-term international purchasing power of Singapore’s reserves placed under its care.
2. After achieving 1, it proceeds to enhance the long-term international purchasing power of Singapore’s reserves placed under its care.
Simply put, its job is to first and foremost provide returns that match the global inflation rate (preserve purchasing power). After achieving that, it then tries to invest and earn a return above that global inflation rate.
Actually, over 20 years, GIC has achieved an annualised 3.4% return ABOVE the global inflation rate (AKA if the global inflation rate is 3%, GIC’s return was 6.4%).

Alright, now that you have read some background information about GIC, it is time to read what I have learnt.
But before you continue reading, I would like to warn you that this is going to be very long.
So if you are in the middle of doing something important, bookmark this article to read later.

Brief Information on my Role
I interned in the Technology department – no, not the technology investment department (though I wish I did).
I interned in the Technology department – as in the department that manages and develops all the tech/software that keeps GIC running.
My role is to develop software and applications for GIC’s employees to use in their daily work.
So if you are hoping for some investment tips, I’m sorry, there aren’t any.

1. Ask, Don’t Reinvent the Wheel
There were many instances during the internship where I spent time exploring and experimenting on solutions and ideas that others before us had already completed. Asking people might be faster than Googling for unclear answers and had I asked more often, I might be able to save more time and worked on more tasks. But I think the first thing we as people have to do is to overcome the stigma or fear of being seen as always looking for shortcuts and the idea that if someone is constantly asking for help, it means they are lazy and not willing to do their own research. We have to understand that if someone comes to us for help and if we help them, they can get work done faster, and they will gain experience, and that is a great thing. But we have this stigma that if we give them everything, then they would not learn; but everyone learns differently, and some people learn by breaking ready-made things apart, reverse-engineer, and learn from it.
 
2. Enterprise are Technologically Backward
While startups and new companies use applications like Slack for their internal communication, many old enterprises are still using Email (Microsoft Outlook) and Skype. In modern times, collaboration is important, we could simultaneously work on the same document via Google Docs, but when it comes to our workplaces, we end up creating a Microsoft Word doc, send that Word doc to our supervisors for vetting, our supervisors come back with their comments, we then make the changes before sending the document back to them. We make so many copies of the same document and sending them back and forth when all these could be reduced if we simply just used a collaboration tool like Google Docs. On a side note, Office 365 now offers online Office Suite, and you can collaborate simultaneously with your colleagues on the same document now – so do check with your company if you are subscribed to that service. If your company is using Microsoft Office, start using their online version of the software so that you can collaborate instead of creating multiple copies of the same document. But given that people are often reluctant to change, I think unless the on-device Office applications are removed, people will probably not move over to the cloud/online version of the product and will continue to use Email as the primary tool for sending and transferring documents.

3.  Culture is Important
I had learnt earlier from my other internships that culture is important, that it is possible for some people to not be able to fit into a certain company’s culture. The problem with culture is we will never know how it is like until we get into the company, and we will never know what culture fits us until we tried a few companies to know what we look out for. Personally, from my previous experiences, I learnt that I am not interested in companies that are focused on time spent in the office. An example would be like a company that requires employees to be on time or be at their desk most of the time during working hours. I think everyone works differently and works best in a different environment, some may like being bound to their desk, while others like myself, prefer to work in a different environment – some times at the desk, some times in the pantry facing the view outside the building, et cetera. To me, it is more important that work is completed on time (regardless of where I am doing my work) than spending exactly eight or nine hours per day sitting at the same desk, especially so in modern times where the workforce is mobile. Don’t hear it from me, hear it from the great Mr Wonderful, Kevin O’Leary from Shark Tank.

If you are wondering about GIC’s work culture, it is actually kind of in line with mine: as long as work is done, all is good. GIC practices flexi-hours, allows employees to work from home if needs be (usually for parents who needs to take care of their sick children), and practices open office and hot-desking, which is great since I can get a change of environment and let the brain “stretch” a little as well, which helps when I am stuck on a certain problem.

4. Find Interesting Tasks To Do
“If you do what you love, you’ll never work a day in your life”, these were the words from Marc Anthony. While I do agree with this quote, I do not think that we can be that lucky to have a job that always lets us do what we want; even if you are the boss of a company, there will be business matters that you hate to do but have to do it anyway. But, I do think that it is possible (and important) to be spending more of your work time on tasks that interest you. If the task interests you and has a purpose, then it becomes more than just a task, but like a stage in a game that you want to conquer – which is why gamification of work is getting more prominent in workplaces. I had my fair share of tasks that are interesting and meaningful, and some that were not so much of both, so I think it is a pretty good mix. Below is a table of how I view tasks; doing tasks in the green box is the best (tasks that interest you) and it is important to try and avoid the tasks in the red box unless there is no choice.

Nonetheless, I still completed the tasks assigned and you should too! As Amazon.com CEO Jeff Bezos says it, we can ‘disagree and commit’. We can disagree on what is the best solution for a given task but once it the solution is decided on, we will give our best to get the solution done.

5. Make Faster Decisions
Facebook’s founder Mark Zuckerberg’s motto used to be ‘move fast and break things’, which was how he navigated and dominated the social media space. Amazon.com founder Jeff Bezos says that decisions should be made with just 70% of the information because waiting till 90% would be too late, and most decisions made are reversible if proven to be wrong down the line. Both of them placed emphasis on one thing: speed. Technology changes very fast, decisions that were made yesterday might become obsolete by today because of a new technology breakthrough. Instead of waiting for more information or confirmation, sometimes the best course of action is to Just Do It.

During my internship, I would have debates with my supervisor over which solution to implement. But that caused a simple five-minute discussion to drag into a 30-minute long debate; which I thought was just time wasted. Eventually, I would just voice my opinion or solution, and if it was not taken, I would let it be and focus on working on the chosen solution – essentially putting that 25 minutes of discussion time into product development. If the chosen solution fails, then we would fall back on my solution. Most of the solutions are for the product’s small components and the impact on the product would not be huge; and if we were wrong on the chosen solution, they were easily reversible.

Like Jeff Bezos said, there are 2 types of decisions, and most decisions belong to Type 2. But large companies have the tendency to use Type 1 framework on Type 2 matters, which slows down progress and leads to frustration. So make sure you use the correct method for the corresponding decision.

6. Have Clearer Communication
Tesla’s CEO Elon Musk once lamented that the excessive use of made-up acronyms within an organisation would inhibit effective communication and that it should be cut down to the minimum. Amazon’s founder Jeff Bezos banned PowerPoint in Amazon.com, choosing to instead have employees to write a six-page, narratively structured memo. The emphasis here is on clarity – getting the message across with minimal understanding lost. I saw my team spent a lot of time working on their slide deck to present their solutions to the senior managers. I thought that time would be much better spent if instead of a slide deck (which requires time spent on the design, animation, etc.), a six-page narrative might actually work better in conveying the information that they wished to convey. It is clearer than icons and provides a source of reference that is there instead of relying on their memory on what was discussed or on the minutes which might not fully record the meaning behind what was said. Acronyms were another hindrance, with terms like EDMS, etc. that made no sense to someone who has not been with the organisation for longer than one month. Even though we did ask what they meant, my brain could not remember every single one of them and eventually I gave up since most of the acronyms I heard I ended up not having the need to deal with them – it is like they are rarely used so why even have an acronym for them in the first place?

7. Have Fewer Meetings
Tesla’s CEO Elon Musk set three rules for more effective meetings in his companies.

  1. No large meetings (maximum 6 people)
  2. If you are not adding value to the meeting, leave
  3. No frequent meetings. 

While it is true that everyone finds meeting a waste of time, no one actually leaves a meeting even if they are not adding value – unless they have something else on. You will have a room of associates, managers, supervisors, or more, all in a meeting listening to the discussion, with most of them bring quiet most of the time and some gave inputs once in a while when asked. But we would not leave these meeting because it seems rude to just walk out of a meeting with the reason: “I don’t think I am adding or receiving value from this meeting”. But I guess this is something that we need to get used to if we want to be more productive in our work – meeting really takes up too much of our time.

Side note: since I cannot leave the meeting, I zoned out during these meetings that I am not adding value, and focused on my other tasks.

8. Role of Middle Managers
Tesla’s CEO Elon Musk restructured the company’s management structure in 2018 to improve communication and increase efficiency. Facebook’s founder Mark Zuckerburg states that Facebook aspires its organisation structure to be flat, to be nimble, have more coaches than bosses, more facilitators than gatekeepers. The goal is to let people be in-charge of themselves and for communication to reach the key decision-makers as fast as possible so that decisions can be made fast. If we think about what middle management do, generally most of them break down tasks given to them from their bosses and pass them to be done by their subordinates. If their subordinates are managers, then the sub-task gets broken down into even smaller parts that are passed down to their subordinates – like the illustration I put below. Would it not be a lot more efficient if the first middle manager just split the tasks down into small components and pass it over to the associates, or if the associates themselves are formed in teams and each team is given a sub-task to complete (and how they would complete it is up to the team to split it among themselves).

But despite all the pros that might come with a flat organizational structure, the con is that there are limited positions available to promote amongst a huge pool of candidates, and some people no matter how good they are might just get stuck in a position forever because there are no seats at the top for them to promote to.

9. Agile / Scrum Leads to Faster Burnout
GIC is moving its development methodology to follow the Agile / Scrum framework. As part of our Scrum practice, we have daily standups with our supervisor to go through our progress from yesterday, our goals for today, and the problems that we faced. This part of Scrum felt stressful because what we do not want to do during the standup is to tell our supervisor that we did not manage to get anything done yesterday because we were trying to debug our program – it kind of made us look inefficient, which was something we did not want to portray. So what happened was we ended up working overtime quite a bit to try and get some tasks completed so that we have something to show the next day. This went on for almost two months and it felt extremely taxing and burnt me out that eventually I stopped and started saying “work in progress” when I faced a bug and could not resolve it by the end of the day. But apparently feeling burnt out is a common issue of Scrum, so it is not anyone’s fault; it is just the way the framework is, and me being inexperienced about how Scrum works, worked tirelessly on tasks using the framework that led to my eventual burnout. So if you following the Agile framework, do a search online for ways to reduce your burnout.

Conclusion
I had a really great experience in GIC, and I learnt a lot.
If you are interested, APPLY!🤣

Recommended Read: What is CPF Basic Retirement Sum (BRS)?


Remember to offer your opinions. If you don’t put your two cents in, how can you expect to get change?

Have feedback? Tell us now!

Subscribe to us or
Follow us: Investment Stab on Facebook


Unhappy with your job? There’s something you can do about it.
A. Save up enough money from your job so that you can fire your boss – the problem is it might take some time and some effort
B: Find a new job, search for new opportunities. A career coach might be able to help you with that. And if you are looking for a free career coach, visit Workforce Singapore via the link below.
They can link you up with the career coach and you might be able to find new opportunities on their jobs portal.
http://ow.ly/GY8150wlfrF

What is CPF Basic Retirement Sum (BRS)?

Source: CPFToday’s post: Basic Retirement SumIt is one of the 3 types of Retirement Sum launched by CPF.It is currently set at half the prevailing CPF Full Retirement Sum (FRS)Why would someone wish to pledge their house in exchange for a “large” su…

CPF for Young Adults

Image may contain: 1 person, text

CPF, in short for Central Provident Funds, is a “social security system that enables working Singapore Citizens and Permanent Residents to set aside funds for retirement. It also addresses healthcare, homeownership, family protection and asset enhancement.”.
Source: https://www.cpf.gov.sg/Members/AboutUs/about-us-info/cpf-overview

This is quoted from the CPF website and as defined by CPF. While most people would think that CPF is only for old people, youngsters should definitely not neglect it. This is especially true due to the magic of compounding interest. So what are the schemes that people in their 20s should know?

1. CPF Education Scheme
This scheme allows you to use your Ordinary Account (OA) savings to pay for your own, children’s or spouse’s subsidised tuition fees. Applications can also be made to use CPF savings to pay for your sibling’s or relative’s subsidised tuition fees but will be assessed on a case-by-case basis.

However, one point to note is that this is effectively a LOAN from whoever’s CPF you are using to pay for your education. Hence, it is necessary to pay back this loan with interest. The effective interest rate payable is then pegged to the OA interest rate, which is adjusted quarterly.

The student has to start repaying the loan one year after graduation or termination of studies, whichever is earlier. Repayment must be made in cash either in one lump sum or via monthly instalment over a maximum of 12 years. The minimum monthly instalment is $100 and the rate will be computed for the student based on the loan amount and repayment period.

2. CPF Investment Scheme
As we graduate and take on our first job, it is imperative to consider investing for retirement. If you are thinking of that, then this is the scheme that you do not want to miss out. This scheme allows you to invest your Ordinary Account (OA) and Special Account (SA) savings in a wide range of investments.

Conditions to be met before you can adopt this scheme:

  1. are at least 18 years old;
  2. are not an undischarged bankrupt;
  3. have more than $20,000 in your OA; and/or
  4. have more than $40,000 in your SA.
You can find the range of products which you can invest in here. One of the products is Exchange Traded Funds (ETFs) which our blog had been advocating!
3. CPF Nomination Scheme
We might be thinking we are so young, filled with hope and energy. Death might be the least of concern. This is especially so after the recent hoo-hah, where CPF stated that CPF funds are not covered under a will.

For more info: https://www.straitstimes.com/forum/letters-in-print/cpf-monies-not-covered-by-a-will

The nomination procedure is very simple.
All you have to do is fill in a form found on the CPF Nomination Website.
Download the form, fill it up and submit it to CPF Board.

Here are some other information that are useful to you!

What does a CPF Nomination cover?

Covered under CPF Nomination Not covered under CPF Nomination
  1. CPF savings in your Ordinary, Special, Medisave and Retirement Accounts
  2. Unused CPF LIFE premiums, if any
  3. Discounted SingTel shares
  1. Properties bought using your CPF savings
  2. Payouts from Dependants’ Protection Scheme (DPS)
  3. Cash and investments held in the CPF Investment Account under the CPF Investment Scheme-Ordinary Account (CPFIS-OA)
  4. Investments held under the CPF Investment Scheme-Special Account (CPFIS-SA)

More information can be found here: https://www.cpf.gov.sg/Members/schemes/schemes/other-matters/cpf-nomination-scheme



Conclusion
CPF is definitely not an organisation for the elderly. In fact, youngsters should harness such national scheme, especially since it affects us for the long term!

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Unhappy with your job? There’s something you can do about it.
A. Save up enough money from your job so that you can fire your boss – the problem is it might take some time and some effort
B: Find a new job, search for new opportunities. A career coach might be able to help you with that. And if you are looking for a free career coach, visit Workforce Singapore via the link below.
They can link you up with the career coach and you might be able to find new opportunities on their jobs portal.
http://ow.ly/GY8150wlfrF

Why I am NOT Paying Back my Student Loan ASAP

Most people after they graduate from University and start working, their goal would be to pay down their student debt, and save up for housing, car, marriage, etc.
That’s not a wrong idea to have, paying your debts down and all, especially if you took a bank loan that charges about 5% per year in interest.
I took the CPF loan out from my mother’s account, and the interest is 2.5%, and honestly, I am not that much in favour of paying back them soon. Here’s why:

  1. It’s a low-interest loan
    Okay, it’s not exactly that low but it’s not that bad. It is comparable to say a housing loan. So it’s better that I extend this low-interest loan and use the excess cash to invest in assets that give higher long-term returns (like stocks). 
  2. It is a form of interest arbitrage
    Refer to one of our latest articles to understand why – How the Rich Play the Money Game

This is not applicable for all though. You have to really invest the excess money for the long-term to make the loan worthwhile.

  1. It can’t be used for expenses, even wedding, proposal, home renovation, etc. 
  2. It can’t be used for anything that won’t give you an investment return. 
  3. It can’t be invested in assets that give you low returns like bonds
  4. Your parents have to be ok with you dragging the repayment (ie; they not in a rush to have money in their CPF). Sometimes they might need the money inside for housing, some times for your siblings’ future study. 
  5. Your parents have more than $60k in CPF. This is a bit more complex. So because the first $60k in CPF gets +1% interest, and those age above 55 gets another +1% on their first $30k. Essentially that is like a nice 4.5% interest per year, which is a pretty good return that can be quite hard for other asset classes or investments to beat. In which case, it’s better to return the money early to earn the 4.5% guaranteed by CPF than to try your luck in the assets market

Remember to offer your opinions. If you don’t put your two cents in, how can you expect to get change?

Have feedback? Tell us now!

Subscribe to us or
Follow us: Investment Stab on Facebook


Unhappy with your job? There’s something you can do about it.
A. Save up enough money from your job so that you can fire your boss – the problem is it might take some time and some effort
B: Find a new job, search for new opportunities. A career coach might be able to help you with that. And if you are looking for a free career coach, visit Workforce Singapore via the link below.
They can link you up with the career coach and you might be able to find new opportunities on their jobs portal.
http://ow.ly/GY8150wlfrF

Should I Transfer my OA Money to SA?

Today’s post: Should I transfer my OA money to SA?This post was proposed by one of our readers, who asked the question: is it wise to transfer my money in OA into SA?We would like to thank all our readers who posed us questions and sent to us tips.W…

How the Rich Play the Money Game

Interest Arbitrage:For those of you who have no idea what this phrase means, let me explain it to you.Interest: interest rates.Arbitrage: is the practice of taking advantage of a price difference between two or more markets.Simply put, the rich get ric…