Wednesday, July 30, 2014

(Sponsored Article) How to Finance an Overseas Property Investment

The current investment property landscape is rich with opportunities. The big question many have is if they should use financial leverage, and if so what international mortgages are available to them?

There are many ripening property investment opportunities around the globe. In many ways markets are experiencing an incredible aligning of the stars which provide the ideal timing for new income property acquisitions. Whether restructuring and optimizing an existing portfolio, or launching into real estate investing for the first time it is an attractive time to seize opportunities, ramp up property holdings, and it is always wise to be diversified.

Scaling a portfolio requires capital. Even for those who sometimes feel that they are burdened with too much capital, there are many advantages of using leverage to acquire more investment properties. This is even true today as global interest rates prepare to swing upwards.

Sunday, July 27, 2014

Why property agents are so important in your real estate investments

In 2012, when my wife and I finally decided to downgrade to a smaller HDB flat, we started to search for a trustworthy property agent to sell our five-room flat. At that point of time, we didn't approach our friends or relatives for referral because we wanted to be discreet about our plan. So when we saw a flyer from my property agent, we dropped him a call and arranged for a no-obligation meeting.

The first meeting went well because my agent was really transparent about the whole process. He provided us an insight of the market dynamics, assessed our financial profiles, determined our needs and advised us on the various fees (legal, stamp duty and commission fee) and proceedings. He came across as a honest chap and did not brag about his past property transactions. We had a good feel about him and decided to engage him to market our first home after a few phone calls.

One thing I liked about my agent was that he was able to provide a "one-stop" services such as recommending us a banker and a lawyer to process my home loan and CPF transaction. Our case was a bit complicated because we opted for a private loan instead of HDB loan. On top of this, the buyer of my home gave us a maximum grace period of six weeks to vacant our home, so we needed to manage the transaction schedule closely with the buyer and seller of our present home to ensure my family has a roof over our head. Therefore, my wife and I were very concerned of any potential show-stoppers. But thankfully, everything went smoothly and we completed the transaction in time.

Wednesday, July 23, 2014

How to grow your money and become rich through stock investments

Hi may I know if it would be wise to measure our portfolio including actual gains/losses? 

If so, is there any way to do it? Because the conventional investor would often tend to measure their gains or losses based on their current stock portfolio. Eg 8% growth for 2014. This are only paper gains/losses. However, it often neglects the ones that already have been sold for a profit or even receive dividends.

Thanks for your time and have a great day ahead!

I received the above email from one of my readers a couple of weeks ago. I fully agree with him that to be rich and successful in the stock market, investors should make the effort to note down the gains and losses made in their stock investments. The principles behind such an endeavor is not really to track the actually amount of gains and losses, but rather, to serve as a form of discipline and instil a sense of purpose to your investments. Such a practice can help a newbie investor avoid many investment traps and empowered him to make better financial decisions in the long run.

Monday, July 21, 2014

Are Singaporeans really intelligent?

Her gullibility is not representative of intelligent Singaporeans - anonymous reader.

The criticisms in response to my previous article reflected how shallow and ignorant most Singaporeans are when it comes to  issues on money management. Make no mistake, it is perfectly okay to have different views on money but I expect more substance from my readers when they comment in my blog. After all, I have been promoting best practices on money management for several years already. So I am disappointed and at the same time, surprised that many Singaporeans choose to indulge in self-glorification and refuse to accept the hard truth that we are not genetically engineered to be financially smart. Singaporeans forgotten the fact that the majority of our Chinese forefathers hailed from one of the provinces of China, Fujian. Our ancestors were mostly uneducated farmers and hence, most of us are endowed with intelligence lower than Hong Kongers and Taiwanese. This is a historical fact which cannot be changed, no matter whether you like it or not.

Several readers had dismissed Madam Goh's unfortunate ordeal as an isolated case and loathed to accept that Singaporeans are gullible and not good at managing money. Without even following my blog, they claimed that I generalize issues and linked different issues with no basis. What they failed to realize is that they have really short term memories and are unable to raise their IQ to analyze important issues.

Saturday, July 19, 2014

BullionStar opened new store in Singapore with a bang - free 1 gram PAMP gold bar!

Dear all,

We are pleased to announce that our new bullion retail shop has opened. Yesterday, 14th July marked the opening day!

BullionStar's CEO, Mr. Torgny Persson, congratulated our first customers Mr. & Mrs. Lim at the new shop with
a surprise gift, a 2.5 PAMP Suisse Gold Bar!

The new venue is worldwide unique. Nowhere else can you view, buy, store, deposit, audit, value, sell and
physically withdraw bullion in a one-stop shop.

Address of the new retail shop:
45 New Bridge Road
Singapore 059398
The closest MRT station is Clarke Quay which is a 2 minute walk across the road.

Opening Hours:

Monday to Thursday: 11.00 am to 8.00 pm
Friday: 11 am to 5 pm
Saturday: 10.00 am to 2.00 pm
Closed on Sundays and Public Holidays
Walk-ins are welcome.

Wednesday, July 16, 2014

How to establish a high traffic website/blog like The Finance SG

Over the past few years, there were a number of new financial bloggers joining the local blogging community. I appreciate their presence as they provide new ideas, thoughts and information for the readers. Such a development is good for Singapore because it helps to cultivate and strengthen Singaporeans' personal finance literacy. But I think one of the many blogs that stands out from the rest is The, a collection of local finance blogs in Singapore. The owner, Derek, believes that by consolidating quality sites and articles, the content can reach out to a larger audience and encourage like-minded people to share their views, thereby creating a vibrant community.

Sure, there are other blog aggregators in Singapore but I think the success of The lies in its simplified presentation format. The guest articles are published in an uncluttered manner, with a short teaser related to the main content. So if the reader is interested in finding out more about an article, he can click on the "read more" function and will be directed to the guest blogger's website. A lot of my blog's traffic has been directed from The and henceforth, I appreciate the work of Derek. But beside giving credit to Derek, I would also like to contribute to the local blogging scene by sharing with everyone on how to establish a high traffic website, or a blog for that matter.

Tuesday, July 15, 2014

Building a Win-Win Relationship with Your Property Agent Education Seminar

Two years ago, my wife and myself engaged a property agent from Propnex to sell our five room HDB flat. At that point of time, HDB had already implemented a slew of cooling measures to tame the bullish real estate market, so we are aware that there was a need for us to engage the services of an experienced property agent to assist us to navigate through the myriad of HDB rules. We also did not want the hassle of spending too much time on researching the HDB rules as my wife just gave birth to our daughter. Fortunately, the property agent was very experienced and he helped to ensure that the whole process of selling and buying transactions were smooth sailing.

Most Singaporeans far underestimate the role of property agents in their property transactions. A good property agent will do a proper financial planning before proceeding to market his services to you. This is important as there are many investors, down-graders, first-time sellers/buyers in the market and everyone's financial situation is unique. In view of this, property agents cannot adopt a one-size-fits-all strategy in approaching would-be property sellers/buyers. Basically, a competent property agent must be able to assess and help you plan your finance at first-hand opportunity to ensure that the transaction can go through. Take for example, during our first meeting, our property agent defined the potential show-stoppers in our transaction, such as  our accrued CPF interests for our existing property, whether we intended to do "contra", what was our expected cash-over-valuations and etc. If you are clueless on the terms highlighted in bold, then it is important that you seek help because these are important factors that might make or break your property transactions.

Monday, July 14, 2014

My money portfolio mid-year report

After reading fellow blogger B's article on his "Mid Year Goals Review", I was inspired to craft this post. I think it is a good practice to note down the progress made in our financial journey because it can help to crystallize our thoughts and at the same time, provides visibility of our financial status. I am not the type of person who will track my daily or monthly expenses. Neither do I make long term planning for my personal finances. But I believe setting financial goals can help to chart our progress and highlight areas to improve.

Health Insurance
Earlier this year, I reviewed my NTUC Enhanced Incomeshield and felt the need to upgrade my current Basic Plan to Private Plan. This was after I read from the news that public hospitals in Singapore are overcrowded nowadays due to the mass influx of foreigners. In fact, Changi General Hospital had to even set up temporary tents outside the hospital in order to address the shortage of hospital beds. I was told that if the beds in the public hospital are fully occupied, the hospital staff would transfer you to a private hospital for treatment. When this happened, you have no choice but to pay the bills for the private hospital stay, which can be really expensive. I hope this would not happen to me but I am not going to take chances. So I visited NTUC Income website and read up on their policy on pro-ration factor.

Thursday, July 10, 2014

Stock Investment Insights: The Meteoric Rise of OSIM

In my previous post, return on equity (ROE) was highlighted as an important indicator to measure the management performance of a company. But one of my readers pointed out that earning per share (EPS) is also useful for investors to determine the value of a stock. I totally concur with him and would like to emphasize that both are needed to evaluate the value of a stock.

Undeniably, valuing a stock is more difficult than assessing the financial health of a company because the former is a combination of art and science, while the latter can be found most of the time from the annual reports. In this article, I shall attempt to share with my readers how I value a stock, using the well-known OSIM as an example.

Wednesday, July 9, 2014

BullionStar's New Bullion Shop, Showroom & Vault at New Bridge Road, Singapore

Below is an announcement from BullionStar, a Singapore online bullion company where you can buy gold and silver at competitive prices. BullionStar was established in 2012 after Singapore government exempted investment grade precious metals from the goods and services tax (GST). I have interviewed the CEO, Mr Torgny before and found him to be an honest guy with a strong conviction in the prospect of bullion. His business expansion coincided with the slew of governmental policies to drive gold liquidity in Singapore (Metalor's gold refinery and new vaults in Singapore Freeport), thus reflecting the growing demand for gold in Singapore.

Monday, July 7, 2014

The case of Madam Goh Kah Keow vindicated the merits of CPF Minimum Sum

'I wish the banks had stopped me from withdrawing all my money!' - lamented Madam Goh Kah Keow who lost $400,000 life savings to con artists from China.
I wish the banks had stopped me from withdrawing all my money. - See more at:

In my previous post on the merits of CPF Minimum Sum, one of my readers Fred Khoo pointed out that the CPF Minimum Sum (MS) scheme is a national failure and that the government should not "lock up" Singaporeans' CPF monies. Well, one thing for sure is that most Singaporeans would have strong opinions on the CPF scheme but it does not mean that the CPF MS scheme is a flop. Indeed, there are flaws and improvements that can be made to enhance the policy to better suit Singaporeans' needs. However, it should be noted that the merits of CPF MS far out-weigh the flaws. The recent case of Madam Goh vindicated my point.

Saturday, July 5, 2014

Singaporeans need reality check before asking for $6,000 salary

According to a recent survey conducted by, it was revealed that 83% of Singaporeans were not happy with their income. The report also stated that Singaporean workers felt that their pay should be increased by 10 - 20 percent and that their ideal monthly salary should be at least $6,000 in order to sustain the current cost of living in Singapore.

To be honest, when I saw the results of the survey, I laughed non-stop to myself in my hotel room.

No, I am not crazy but which company on earth would give you this kind of salary increment just because of rising inflation? Singaporeans seriously need to have their head checked and get a reality check.

Most Singaporeans do not understand the principle of 'perception' at work. In our workplaces, we tend to have an inflated ego of our own abilities and do not realize that how we perceive ourselves is different from what others perceive of us. We tend to overestimate our intelligence and manifest our contributions to the organization. These are general human fallacies, but I noticed that Singaporeans are never satisfied with their income, no matter how good it is. We always want higher pay as if it is our automatic rights, without linking the increment to performance. Come on, inflation is not a valid reason for pay hike. Only good performance and increased contribution to the company can warrant a pay rise that meets your expectation.

Wednesday, July 2, 2014

Investment insights: Return on Equity (ROE)

According to an article in Dr Wealth's blog, there were more than 68,000 new CDP accounts opened in the past 12 months. Apparently, the number of people who now hold securities is at an all time high of 844,000 people.While it is a fact that more and more Singaporeans are interested in making money from shares, I am not so sure whether these Singaporeans are really investors or merely speculators. Given that the Wall Street is now at record peak, many existing local stockholders' portfolio have risen in value. I reckon this must have attracted people to open trading accounts and take part in the actions as well. After all, many Singaporeans want to make money and become rich quick. But before newbie traders get carried away, it is important to build the knowledge foundation first.

Tuesday, July 1, 2014

BullionStar Review: Singapore takes major step to become gold trading hub

Below is an article published with permission from BullionStar, a Singapore online bullion company where you can buy gold and silver at competitive prices. To be a successful wealth builder, investors must always stay ahead of the the curve and keep abreast on the latest development in investment trends. For the past few years, the government has been trying to establish Singapore as a precious metal trading hub. Clearly, there is an investment demand to justify such policy shift. Investors should therefore consider accumulating gold bullion on a long term basis before it starts to get expensive again.

It was announced last week at the locally held London Bullion Market Association (LBMA) forum that the Singapore Exchange will introduce a wholesale kilobar gold contract from as early as September 2014. The introduction of the contract for 25kg of 99.99 per cent purity gold underscores Singapore's ambition to become a major player in physical bullion trading at a time when global gold demand moves to the east.

Thursday, June 26, 2014

Much Ado about Wealth-Building

Dear Gerald,

I must first of all confess to you that even as I write, I'm filled with scepticism on how this correspondence will go. So am seeking advanced forgiveness for any sort of offence I may unwittingly create, and I also seek your patience in reading this email.

I am a 9-to-5 desk bound office worker. Through years of being with the same company, I've managed to earn my seniority and experience in dealing with international environmental agreements. I am happy with my wage - After all, I'm duly employed and these days in this unpredictable climate, it is a situation that I'm very grateful for, being gainfully employed, that is. 

But everyday there is something nagging at me to do something to increase my resilience to the changing world where everything seems to get more costly and so quickly, and where, quite frankly, money helps to take the discomfort out of our lives where necessary. I'm not trained in any sort of financial discipline, nor have I ever had any mentor whom I could approach, but I see the need for me to start thinking seriously about embarking on building up my savings and eventually being able to call it wealth. 

Wednesday, June 25, 2014

BullionStar calls for a clear regulatory framework regarding Bitcoin

Below is an article published with permission from BullionStar, a Singapore online bullion company where you can buy gold and silver at competitive prices. SG Wealth Builder believes that no matter what assets you invested in, the only way to make money and become rich is to adopt a contrarian approach. Gold witnessed a major correction since last year and the price has become stagnant ever since. Investors should seize the opportunity to accumulate now before gold becomes expensive again.

A call for a clear regulatory framework regarding Bitcoin BullionStar was set up in the fall of 2012 in the light of a GST exemption coming in to place in Singapore. Offering a wide range of precious metal products, and the ability to store the purchased products in one of the safest jurisdictions in the world, we have seen substantial growth in a very short period of time.

We believe in making it as easy as possible for our customers to buy and store almost any amount of gold and silver whether your a small saver or large investor. We have achieved this by offering a one-stop end-to-end solution for purchasing and storing gold, silver and platinum at very competitive prices. We offer a wide assortment of physical bullion products including our unique Vault Gram® solution which offers a low threshold for anyone that wishes to start saving in physical precious metals.

Thursday, June 19, 2014

Why Singaporeans should invest in gold bullion


This week, an article by Reuters reported that gold jewellery exports by India is expected to grow by 25% in the year to March 2015. This is an impressive figure given that last year, the Indian government raised the import duty to a record 10 percent and also make it mandatory for merchants to export 20 per cent of the imported gold. In Asia, various data released by gold analysts indicated that China and India will continue to be the leading consumers for gold. The key reason for Asian's fascination for gold is because the Chinese and Indians understand the value of gold as a means to preserve wealth.

Over in Singapore, the government is beginning to appreciate the role of gold bullion in the investment fraternity and has been implementing policies to develop Singapore as a metal trading hub for gold. In 2012, the government removed 7 percent GST from investment-grade precious metals, hoping to spur Singaporean's demand for gold.

Wednesday, June 18, 2014

Launch of Rental X-Value to Improve Efficiency in Singapore Real Estate Market

SG Wealth Builder is pleased to form a partnership with SRX Singapore Property to bring you the latest information on how to build your wealth through property in Singapore. Below article is based on information provided by SRX Research and readers must not interpret it as a form of financial advice. Many Singaporeans want to make money and become rich quick but very few bother to acquire the investment knowledge needed to build wealth. Check out how to be a successful wealth builder in Singapore.

Singapore Real Estate (SRX) is pleased to announce the launch of its newly invented Rental X-Value, which is unavailable elsewhere.  SRX is the market’s leading information exchange on property transactions and market pricing.

Rental X-Value is a computer-generated estimate of a home’s rental value. Landlords, tenants, and agents use it as a guide for establishing rent.

To calculate the Rental Value for a home, SRX computers employ a best practices methodology based on Comparable Market Analysis (CMA). StreetSine Technology Group, which powers SRX, developed the calculator’s algorithms in partnership with academics, government agencies, and leading valuers.  It draws on data from over 30 public and private sources.

Sunday, June 15, 2014

How to become rich through property auctions in Singapore

auction2 Many Singaporeans want to make money and become rich quick but very few bother to acquire the investment knowledge needed to build wealth.

Recently, there was an online article in Yahoo Singapore which illustrated how a Singaporean managed to afford a HDB flat despite having little investment knowledge and drawing an average salary. Apparently, he shared that the landed property was bought for a low price because it was a bank fire sale. He further shared that bank sales can be a good source of deals and revealed that he made a profit of $850,000 after selling it in 2011.

After reading the article, I was really impressed by how he built his wealth and was also heartened that he unselfishly shared his money secrets to Singaporeans . Unfortunately, there were many cynical and negative remarks given by readers in the Yahoo website. Many of them were jealous of his achievement and took the chance to throw brick bats at government policies that restricted them from becoming rich through property investments. Usually these naysayers are those people that would never ever become rich because they don't appreciate good advices given to them for free.

Friday, June 13, 2014

Civil Service Mid Year Bonuses

 Mid-Year Annual Variable Component of 0.5-month for all civil servants

In addition:

Division IV officers to receive a wage increase of $70 in monthly salary, and
Division III officers to receive a wage increase of $30 in monthly salary, over and above their annual increment in 2014.

The Singapore economy grew by 4.9% on a year-on-year basis in the first quarter of 2014, unchanged from the growth recorded in the preceding quarter. Global economic growth is expected to improve in 2014, supported by continued recovery in the US and the Eurozone. The overall unemployment rate in Singapore remained low at 2.1% in March 2014.

Why you should not quit without a job in Singapore

Recently I read that one of the fellow bloggers has resigned without a job. When I saw his article, I immediately commented to him that doing so was a terrible career move. Obviously people resigned for various reasons. The push factors could be because of bad bosses, poor company culture, lack of motivation to work or being overlooked for promotion. Whatever the reason it might be, you should never quit without a job, unless you are cocksure that you are going to be your own boss. Ten years ago, I made this career mistake, so now, I am going to share my experiences to young folks who feel like quitting from their jobs. Read on before you take the plunge.

Ten years ago
I resigned from my first job almost ten years ago, after deciding that I had enough of the stressful manufacturing environment I was in. As a young engineer, I could not imagine spending the rest of my career doing the mundane stuff I was doing. The pay was not bad, but not good enough for me to do over-time every week. So after quitting, I was very relieved and ready to venture out to another new job. I went for a few job interviews and the first question that the hiring bosses asked would be why I resigned from my previous company without a job. I had a hard time answering them because on one hand, I did not wish to bad-mouth my previous employer, but on the other hand, I felt like telling them how bad the environment really was.

Wednesday, June 11, 2014

Singaporeans' misconceptions on the CPF System

Last Saturday, there was a protest against the Central Provident Fund (CPF) system, drawing almost 3,000 people at Hong Lim Park. During the protest, the speakers demanded amongst many things, a better CPF interest payout, the allowance to draw out their CPF savings at 55 years old and to be able to opt out of CPF Life. The protest highlighted certain misconceptions on the CPF System which I find worrying for fellow Singaporeans. Obviously most Singaporeans don't understand how to manage their monies.

Higher returns, higher risks
According to the CPF website, an additional 1% interest will continue to be paid on the first $60,000 of a member’s combined balances, with up to $20,000 from the Ordinary Account (OA). The additional interest received on the OA will go into the member’s Special Account or Retirement Account to enhance his retirement savings. If a member is above 55 years old and participates in the CPF LIFE scheme, the additional 1% interest will still be earned on his combined balances, which includes the savings used for CPF LIFE. Savings in the Special and Medisave Account (SMA) currently earn either 4% or the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1%, whichever is the higher. The interest rate on SMA savings is adjusted quarterly, based on interest rates on 10YSGS over a preceding 12-month period. The average yield of the 10YSGS plus 1% from 1 March 2013 to 28 February 2014, works out to be 3.19%. Accordingly, the SMA interest rate payable to CPF members from 1 April 2014 to 30 June 2014 will be maintained at the current floor of 4%.

Sunday, June 8, 2014

The Little Book of Market Wizards: Lesson from the Greatest Traders

Being a value investor, I buy shares of growth stocks at a price below or near it's intrinsic value. Even though I am not a trader, I believe it is important to keep an open mind and understand the insights and strategies of traders. This is because  whether you like it or not, there will always be speculators and traders in the markets. Their behaviors and actions will invariably affect market performances and impact the way you make money in the markets.

Thursday, June 5, 2014

How much are you saving on property by riding the North-South MRT?

SG Wealth Builder is pleased to form a partnership with SRX Singapore Property to bring you the latest information on how to build your wealth through property in Singapore. Below article is based on information provided by SRX Research and readers must not interpret it as a form of financial advice. Check out how to be a successful wealth builder in Singapore.

Yesterday, you moved into a 1,000 square foot condo in Novena.

Today, you board the North-South line for your office at Raffles Place.  For every minute you are on the MRT, you have saved $81,479 on the purchase of your home compared to someone who has purchased a comparable unit within a kilometer of Raffles Place.

Tuesday, June 3, 2014

Pricing vs. Appraising a Property

SG Wealth Builder is pleased to form a partnership with SRX Singapore Property to bring you the latest information on how to build your wealth through property in Singapore. Below article is based on information provided by SRX Research and readers must not interpret it as a form of financial advice. Check out how to be a successful wealth builder in Singapore.

The introduction of the new HDB COV rules has sparked much public discussion about pricing homes versus appraising them.

In March, HDB moved its official valuation from before the Option-to-Purchase (OTP) to after it.  In explaining the change, National Development Minister Khaw Boon Wan said, "HDB will rationalise the process of price negotiations and restore the original intention of valuation, which is to help buyers get a housing loan. Negotiating based on price rather than COV will take some getting used to. However, it is a useful move for long-term market stability."

Saturday, May 31, 2014

How to get your CPF monies before you turn 55

Recently, there are a lot of debates on the merits of CPF Minimum Sum (MS) Scheme. Many Singaporeans are upset that the CPF MS has increased yet again and there are certainly anxiety among Singaporeans who are concerned whether they are able to retire comfortably. This has prompted Manpower Minister Tan Chuan Jin to come out and defend the CPF system.

Well, let us be clear what CPF MS is all about. According to the CPF website, "The CPF Minimum Sum (MS) Scheme provides members with a monthly income to support a basic standard of living during retirement. For members who are unable to set aside the full MS in cash, their property bought with their CPF savings will be automatically pledged, for up to half of their MS. Members may also join CPF LIFE with their MS so that they may have a stream of income for life. Alternatively, they may continue to keep their MS with the CPF Board to earn 4% interest per annum currently. The interest rate is revised yearly."

Thursday, May 29, 2014

BullionStar: The Chinese Gold Rush continues

Below is an article published with permission from BullionStar, a Singapore online bullion company where you can buy gold and silver at competitive prices. SG Wealth Builder always believe that every wealth builder should have bullion in their portfolio. Over the long run, the outlook for gold is still bright, especially in Asia context.

World Gold Council's Q1 report While 2013 was an exceptional year for gold demand in Asia, with shortages of minted physical gold bullion products and gold itself, according to some, 2014 continues to show robust gold demand according to the World Gold Council's Q1 report.

At BullionStar, we can testify about the growth in gold demand that we have seen in the last year. Whereas investors in the Western economies have shunned gold because it carries no yield or return on investment, regional physical demand in South East Asia has been very strong and is spurred by other factors.

Asian Gold Mindset
The Asian mindset to gold is different from in West says Managing Director of the World Gold Council, Mr. Albert Cheng, at the presentation of the World Gold Council's publication "Q1 Gold Demand Trends" to which BullionStar was grateful to be invited. Many Asians view gold as a conservative way of saving. With the economic growth in China, the increased gold demand is a result of the wealth effect continues Mr. Cheng.

Gold demand in the first quarter of 2014 was 1,074 tonnes, almost unchanged compared to Q1 2013. On the shortages which appeared during 2013, Mr. Cheng comments that it was the minting capacity that was limited rather than the supply of gold itself. The reason for the shortages last year was that it takes time for the delivery of 400 oz gold bars from the London vaults, through Swiss refineries minting 1 kg bars, before delivery can be taken in Asia, says Mr. Cheng.

Demand and Price of Gold
The price of gold went down substantially during 2013 with premiums for physical gold soaring in the retail segment. While Asians are taking physical delivery of gold both in form of bullion and jewellery, 880 tonnes of ETF gold held mostly by Westerners, were sold off in 2013. World Gold Council's data implies that the Chinese gold buyers are not very interested in ETF’s, certificates or paper gold as they want hold the physical gold themselves in form of jewellery or bullion.
For Q1 2014, the World Gold Council notes that the ETF gold selling trend has eased which has had an impact on the gold price premiums. Mr. Cheng notes that the gold premiums have come down significantly from the high levels seen in China and India during 2013.

On India, Mr. Cheng notes that the new leader Mr. Modi has, during his election campaign, communicated that the gold duties and complicated import rules for gold may be rolled back. Asked about whether a potential increase in the demand of gold from India may break the back of the physical market, Mr. Cheng says that the market rebalance all the time and that there’s a grey market in India which may skew the real picture.

Central Banks
During Q1, the central banks have continued to be net buyers of gold adding 122.4 tonnes to their reserves. Mr. Cheng comments that the central banks understand the importance of holding gold as a reserve asset. Most notably, the Bank of Iraq has added 36 tonnes to its reserves during Q1. Other countries such as Russia and Kazakhstan continues to buy steadily and has added 6 tonnes and 5 tonnes respectively.

Monday, May 26, 2014

The most valuable workplace skill employees must have

In my previous posting, I highlighted that one of the most important skills that every employee must acquire is the ability to sell. You can be a sales manager, engineer or accountant in your organization but no matter what your job scope is, it is important to know how to profile yourself and be seen as able to sell your ideas effectively to your colleagues. But then again, to be successful in our careers, what other essential ingredients are needed? Recently, BBC wrote to me and asked me to write an article on what is considered to be a valuable workplace skill. I thought hard about it and decided to blog down some of my thoughts with regard to the skill indispensable for people just entering into the workforce.

Many people claim that they understand the importance of prioritizing their work but not many know how to practice it effectively. For fresh graduates just entering the workforce, mastering the art of work prioritization is of utmost importance. This is especially so in Singapore context, where employees are expected to multi-task and take on additional assignments not related to their core duties. Those with positive mindset may treat such challenges as opportunities to learn and grow. But then again, even the most energetic and positive employees will grow weary and fatigue if they are continuously expected to take on time-consuming tasks or projects. So to be efficient, there is a need to focus on the task priority and accomplish them in the order of importance.

Friday, May 23, 2014 Singaporeans not ready for retirement

The following article is published with permission from, a leading online job site presently covering the employment markets in Malaysia, Singapore, Philippines, Indonesia, Japan and Vietnam. The survey done by revealed that Singaporeans are financially not ready for retirement. I am not surprised by the results of the survey at all because in general, I find that Singaporeans tend to procrastinate or avoid planning for their retirement. 

Many Singaporeans don't appreciate the importance of building wealth early on in their career journey and the worst thing is that many of them are lazy or cannot even be bothered to study the art of making money. Singaporeans have to wake up to their idea that if they chose to work for others, which is nothing inherently wrong, then they must learn how to invest to ensure that they can enjoy their retirement.

With the increase in life expectancy in Singapore, senior workers are considering to postpone their retirement beyond the country’s statutory minimum retirement age of 62 years old. recently conducted a survey to find out if employers in Singapore are willing to accommodate them. Responses were gathered from 150 employers and 1,400 Singaporean workers aged 40 years and above . The survey was conducted in March.

Monday, May 19, 2014

Property Cooling Measures Freeze District 9

SG Wealth Builder is pleased to form a partnership with SRX Singapore Property to bring you the latest information on how to build your wealth through property in Singapore. Below article is based on information provided by SRX Research and readers must not interpret it as a form of financial advice. Check out how to be a successful wealth builder in Singapore.

The below data vindicated the principles that Property Soul has been trying to highlight in her book ""No B.S. Guide to Property Investment – Dirty Truths and Profitable Secrets to Building Wealth through Properties". Before you decide to buy a second property, ask yourself whether you want to live in it or rent it out for investment purposes. It is important that you are clear of the purpose because the consideration factors for buying a house for living and for investment purposes are very different. No B.S. Guide to Property Investment - Dirty Truths and Profitable Secrets To Building Wealth Through Properties is available now in major bookstores such as Popular, Kinokuniya and Times.

If you want to see out how impactful the government’s cooling measures, look no further than District 9.

According to the Singapore Real Estate Exchange (SRX), the median Transactions-over-X Value (T-O-X) for District 9, which consists of Orchard, Cairnhill, and River Valley, was NEGATIVE $130,000.    

Each month, SRX computers compare the actual transacted value for each unit in a district with its X-Value.  The X-Value is a computer-generated estimate of the market value for a home.  The difference between the median transacted price and the district’s X-Value is the T-O-X.

In District 9, more than half of the buyers paid below market value. In fact, 50% paid at least $130,000 below market value.
In contrast, the T-O-X in District 10, which covers Bukit Timah, Holland Road, and Tanglin planning areas, was POSITIVE $37,500.  That means more than half of buyers paid above market value, with 50% of them paying $37,500 or more.  That tells us that the sentiment in District 9 is very bearish while District 10 is bullish.

Two luxury districts right next door to each other.  Why the huge disparity in T-O-X between the two?  The data suggests that District 10 is where Singaporeans buy to live whereas District 9 is where people – both local and foreigners - invest. 

The cooling measures primarily targets investors – both local and foreigner.  The buyer stamp duty applies to most foreigners while the Total Debt Servicing Ratio (TDSR) limits Singaporeans ability to over-leverage and purchase homes for pure investment reasons. 

Therefore, the cooling measures should dampen districts where investment activity outweighs purchasing homes to dwell in them. 

The tale of these two districts bares this point out.  Back in first quarter 2005, at the start of the private market’s huge growth spurt, District 10 was the luxury heavyweight.  It was about 13% more expensive, on a median resale PSF basis, than District 9.  In addition, District 10 saw 18% more transactions.
During the huge run up in prices after the Global Financial Crisis, District 9 outpaced District 10.  Today, even with the cooling measures, it is 12.4% more expensive than District 10.  Before the SRX Price Index turned in first quarter 2013, District 9 was 16.6% more expensive.

Since the turning the index (1Q2013-1Q2014), resale prices in District 10 has appreciated 0.4% while District 9 has seen a depreciation of 3.2%.  Meanwhile, District 10 has posted nearly double the number of transactions during this same period.

What this data suggests, at least in District 9 and 10, is that the cooling measures have been effective at cutting the investment market off at the knees but allowed the indigenous homeowners’ market to continue to grow, albeit at a slower pace. 

At the risk of further mixing metaphors, the cooling measures have frozen hot money.

Sunday, May 18, 2014

Understanding the risks of investing in Silver

In many of my previous articles, I have always encouraged Singaporeans to buy precious metals such as gold and silver bullion as a means to build up wealth in Singapore. This is because I have always believed that wealth is more secure in the long run when invested in physical bullion than in the current stock market, which I think is long overdue for a massive correction. But the perennial question is: is it worthwhile to buy silver or gold bullion? How do you build wealth with silver and gold bullion? To answer this question, it is important that Singaporeans understand the risks involved in silver investments.

Many novice investors thought that prices of silver tend to go in tandem with gold. This is not true and history has validated this point. During the Great Depression in the early 1930s, many people were buying gold to preserve their wealth, resulting in surging gold prices. But surprisingly, silver demand declined sharply during that period. Also, during the Civil War in America during 1860s, silver fell while other commodities like steel and rice soared. So the gist is that unlike gold, silver should not be mistaken as a form of wealth preservation during turbulent times. Unlike gold, it is not a sure thing that the price of silver will go higher during crisis times. History has proven that in terms of investment track record, gold fared much better than silver.

One of the key reasons why silver bullion is not featured in many professional investors' portfolios is because silver is a very volatile investment. It can surge more than 5 percent in one day and therefore, not many people can stomach this kind of volatility. In fact, silver reached its peak during 1980, valuing about $50 per ounce. 34 years later, it is languishing at less than $20 per ounce while gold has more than doubled in value since then. Of course, with volatility, there are opportunities to make money but then again, the difficulty in predicting the direction of silver prices had deterred many investors from buying silver. With silver, you stand a higher chance of losing lots of money if you are not careful with the price volatility.

Indeed, there are many supporters for gold and there were huge demands for the precious metal even during price corrections. In fact, when gold price dropped to record level last year, China and India governments took that opportunity to import more gold at bargain prices. However, this was not the case for silver. According to data collected by The Silver Institute, since 2000, governments had been net sellers of silver. This is because silver is not seen as an asset class like gold. Compared to gold and alternative investments like stock and bond, silver bullion has lower buying interests. There are simply very few financial gurus out there recommending investors to buy silver as a form of investment.

In conclusion, silver has it heydays back in 1980 but it does not mean that the peak will never return. With silver, it is always a mystery because you cannot take a contrarian approach and expect to make money through the usual buy low and sell high strategy. Nor can you view silver from the demand supply lens. Traditionally, silver has industrial demands, so logically, it should become rarer than gold and should cost more than gold. But historically, this was not the case. So in short, there are too many drivers that can push the price of silver up or down and investors are still learning how to feature silver in the mainstream investment system. But despite all these, investors should not write off silver as a means of building wealth yet. Just think about it, if silver is really not viable as a form of investment, then why would Warren Buffett purchased 130 million ounces of silver in the late 1990s?

Magically yours

Thursday, May 15, 2014

Property Investment: Location. Location. Location.

SG Wealth Builder is pleased to form a partnership with SRX Singapore Property to bring you the latest information on how to build your wealth through property in Singapore. Below article is based on information provided by SRX Research and readers must not interpret it as a form of financial advice. Check out how to be a wealth builder in Singapore!

What are the three most important factors in determining the value of a home?  Location.  Location.  Location.
This is a very old real estate joke that has survived the years because there is so much truth in it.

Another piece of advice that has persisted through time is buy the worst house in the best neighbourhood you can afford.
Both of these ideas point to the fact that location is by far the most important of all the factors that determine the value of a home.  While the quality of a building and its interior impact price, it is the location that ultimately drives the value of a home.

For example, savvy buyers and investors are combing through Geylang in search of bargains that will rise in value as the area upgrades.  They see opportunities to buy at a dip in the price.

Geylang is situated in an excellent location, surrounded by expressways with quick access to downtown, Marina Bay, East Coast Park and other points of interest.  All Geylang needs is some rezoning and a facelift, and it will be competing with the more fashionable neighbourhoods of Singapore.

Other areas, like Novena and Balestier, are making their play for under-appreciated neighbourhoods that are up and coming.
These neighbourhoods have several things in common.  First, they are located next to expressways and MRTs with quick access to places of work and shopping.  From a transportation standpoint, they are very convenient.

Second, they are next door to better-known and more well-to-do locations.  This is very important because by buying into these under-appreciated neighbourhoods, you essentially get the same location but at home prices that are considerably less expensive.

Also, the more affluent area next door will start to merge with your neighbourhood and pull its value up.  This means that before you know it, you are joking that your home has appreciated so much that you can no longer afford to buy it.

That’s a joke we can all hope for.

Tuesday, May 13, 2014

Cooling Measures Property Sale? Yes!

SG Wealth Builder is pleased to form a partnership with SRX Singapore Property to bring you the latest information on property trend in Singapore. Below article is based on information provided by SRX Research and readers must not interpret it as a form of financial advice.

Many Singaporeans want to make money and become rich quick but very few bother to acquire the investment knowledge needed to build wealth. Check out how to be a wealth builder in Singapore!

In the world of shopping, it’s easy to spot a sale.  Big, bold red-lettered signs plastered all over stores’ windows, proclaiming huge discounts and savings! 

But it’s not so simple in real estate.   To find a good deal, one needs to put in hard work and analysis.  To make matters worse, you must be brave enough to act before the herd mentality kicks in and recognizes the good deals, bidding the prices up.  It takes courage to buck the trend.
In February 2009 when the SRX Price Index (private, non-landed) was down 26% from the pre-financial crisis peak, there were some buyers who went into the market.
While the rest of the market was in a state of panic, these buyers did their homework.  They analyzed the situation and concluded that they could take the risk to invest in a down market.  My guess is that most of them were careful not to overextend themselves in the event the market continued to decline.  When the market eventually recovered, they saw huge gains.

The general mood of today’s market, like 2009, is one of pessimism.  Everyone seems to be griping about the market.  That is everyone but the shrewd bargain-hunters.  A quick perusal of project data in SRX Analyzer revealed that some buyers are purchasing homes in fundamentally-sound projects that are experiencing dips in prices due to the cooling measures.
For example, there have been two recent transactions in Hillview Regency this month.  This condominium’s price trajectory barely hiccupped during the global financial crisis but is now selling at a discount in this market.  Hillview Regency did its best to resist the cooling measures but finally, in April, it succumbed to two buyers who were able to negotiate a discount from the project’s normal price trajectory.  The buyers of those units have likely positioned themselves for success in the long run.

For buyers with sound financials, new launches might be the place to look for discounts.  The numbers suggest that there is ‘’a cooling measures sale’’ taking place in this segment of the market.
Typically, buyers pay a premium for a new home when compared with a resale home.  Since 2010, as the accompanying graph illustrates, median prices have converged in the two private markets.

For example, in Core Central Region, new homes used to be 37.3% more expensive than resale homes, on a median basis.  In 2013, the premium paid for new homes dropped to 14.1%.  That means the median price of new homes converged with resale homes by 62%.

Rest of Central Region saw a 52% convergence, while Outside Central Region converged by 83%.
The convergence of new sales with resale prices suggests that the cooling measures have had a larger price impact on the new projects market than on the resale market.  This means that new projects are priced more competitively than ever relative to units in the resale market.

While there is no large sign outside Singapore properties proclaiming a storewide sale, the data certainly suggest that there are bargains to be had for those who are willing to look.

Sunday, May 11, 2014

The New Retirementality you ever wondered how to build your wealth effectively in Singapore? One of the latest additions to my blogroll was "Growing your tree of prosperity". The author of that blog, Christopher Ng had apparently made enough money to quit from his engineering job and retired at the young age of 39. However, money is only one side of the equation. He is currently busy studying for a law degree to prepare himself for a second career in life. His story inspired me and resonate the teachings in Mitch Anthony's The New Retirementality (ISBN: 978-1-118-70512-4)

Originally written to get the attention of baby boomers, who were approaching 55, author Mitch Anthony started a revolution by showing people why they need to have a new attitude about retirement - a "new retirementality". More than a decade later, many people are facing a very different retirement reality than previous generations - failing pensions, an endangered social security system, and inadequate savings. They have been forced to face the reality of a retirement that may never happen, or one that will take place much later in life than ever expected.

While most books focus on a "number", this reliable resource shows readers that attitude is also an essential part of the equation. Including new research and studies on the latest retirement realities, The New Retirementality discusses what it means to retire on purpose; the expanding role of work in retirement; and how one can orchestrate their own future by recognizing their benefit needs. Mitch introduces readers with his latest concept, investing toward a greater Return on Life, to help people rethink the meaning of retirement and put them in a better position to enjoy the new "retirementality" they deserve.

Even though the book is written in the context of western countries with social welfare system, the fundamental concepts are generally applicable in an Asian society like Singapore. As such, I highly recommend this book to all Singaporeans because it will make you recalibrate your approach towards money and life. Many Singaporeans, in the pursuit of money, often wonder the definition of a fulfilling life. So many people are stuck in unhappy jobs with no passion in their work and lost track of what are their motivations and purposes in their lives. For the majority, retirement is about achieving financially freedom and having $2 to $3 millions to spend without working. But then again, even though money can give you options, it is only one side of the equation. Essentially, you need to ask yourself what is the kind of lifestyle that you want to lead without having to worry about money.

Perhaps Christopher Ng had read the book before because I found many of the activities practised by him in his blog. In my opinion, he has a successful retirement because he met the four philosophical pillars of the New Retirementality: Vision, Work, Balance and Successful Aging. Check out the book to find out how you can achieve a successful retirement!

Magically yours

Wednesday, May 7, 2014

Why some Singaporeans are destined to be poor


Whenever I flip through The Strait Times, there are so many get-rich quick seminars advertisements on forex trading. It seems that the advertisers are targeting the growing aspirations of middle-class Singaporeans seeking to build their wealth quickly through forex trading. These seminars are often marketed as "enrichment classes" with catchy tag lines such as "Mr X makes 2,000% profit in one month, so can you!" or "Mrs Y turned $2,000 into $50,000 in three weeks, so can you! Also, during the seminars, the modus operandi is to highlight the opportunity to retire young and the chance to earn extra income. The organisers would use hard-selling tactics and misled people into the false impression that the trading techniques can produce good money. In return, consumers had to pay thousands for these seminars or buy their in-house trading software.

I do not have the figures on the profile nor the number of Singaporeans who attended these forex trading seminars, but I suspect that many Singaporeans had already lost a lot of money from forex trading. This is a worrying trend which I think Singaporeans need to be aware of. Firstly, forex trading is a form of high risk activity as you are betting the future movement of currency exchange rates. Sure, you can make a lot of money through leveraging your bets, but you can also lose a lot of money from it too. Secondly, to succeed in forex trading requires a lot of discipline, real-time market information, experience and capital. Beside these, you have to devote 100% of your time monitoring the market. Therefore not everyone is cut out to be a successful forex trader. Thirdly, always remember that if something is too good to be true, then it is. There is no such thing as low risk and high profits. If the organizers has mastered the techniques of becoming rich through forex trading, why would they want to share with you? Always be cynical before you part away your hard-earned money.

Investors should realize that there is no free lunch in this world. Be cautious when you come across advertisements that claimed to produce consistent exceptional returns. To be a true wealth builder, ask yourself whether you understand what forex trading is all about, the risk nature and your ability to undertake such high-risk fast-paced activity. Some Singaporeans are destined to be poor, not because of their lack of education or laziness, but due to their greed. In their desire to become rich, they conveniently dismiss the downside and always focused on the potential returns. They don't realize that for every one person who really made big money from forex trading, there could be hundreds or even thousands who suffered huge losses.

Many Singaporeans are actually not investing, they are just greedy and foolish people who are easily conned into get-rich quick schemes. Many Singaporeans don't do their homework before they invest. They let greed rule their head and thought they had discovered the secret to making big money when it was actually a trap waiting for them to walk in. They think they can outsmart the rest of the world. How can that be? They have to realize that if something is too good to be true, it probably is. So get yourself financially educated by following my blog, SG Wealth Builder. Be a wise wealth builder in Singapore!

Magically yours

Saturday, May 3, 2014

Property Soul: Dirty Truths and Profitable Secrets to Building Wealth Through Properties


Many Singaporeans are obsessed with property investments but not many have been successful. Some have made a windfall, while many have lost a lot of money. Those who have become rich through property investments are reluctant to share their experiences and prefer to keep a low profile. This is understandable as who would want to reveal their secrets to building wealth? Therefore, I was a bit skeptical initially when Property Soul asked me to do a book review on her newly launched book "No B.S. Guide to Property Investment – Dirty Truths and Profitable Secrets to Building Wealth through Properties". I thought that she must be a property agent trying to market her services through publishing a book on real estate investments. But after a phone chat with her, I realized that I was wrong.

Property Soul was a Hong Konger who relocated to Singapore in 1998 (she subsequently converted to Singapore citizenship). She bought her first private property for rent in 2002 and within 4.5 years, managed to build up a portfolio of 5 properties. By 2008, her total investment value doubled. She sold 4 of her properties in 2010 and 2011 and made a handsome profit of 80 to 120 percent. She decided to share her experiences in property investments with Singaporeans and set up a personal blog called Interestingly, that was the same year that I set up my personal finance blog, SG Wealth Builder (my blog's predecessor's name is SG Web Reviews) too. Our blog goals are pretty similar: basically to share our investment experiences and to exchange ideas with fellow investors.

It took me a few weeks to do this book review because I have been pretty busy in my day job recently and there were several vendors who were interested to advertise in my blog as well. But after settling down and having read through the book, I realized it was such a good stuff that I feel every aspiring property owners or investors must read. Firstly the author does not work in the real estate industry, therefore the book was written from the perspective of a property investor. So you can be assured that there is no hidden agenda or hard-sell marketing tactic. Secondly, the book contains a lot of hands-on property investment experiences that you would not be able to find in many of the local finance blogs. Readers can leverage on the author's wisdom and lower the learning curve in their real estate investment journey. Thirdly, the book contained a lot of interesting anecdotes from her blog readers. These stories made the book engaging and at the same time, provide valuable lesson learned because the author also shared her thoughts on how to address these issues.

Personally, I find Property Soul's concept of "3-3-5" affordability test for property investment interesting and there are many other useful articles, such as how to deal with property agents, common mistakes in property investments and whether should investors opt for HDB or private properties. I am glad that I read the book because it covers many aspects of property investing that I never thought of. It is like a secret manual which contains all the author's property investment experiences and thought processes. Furthermore, this book highlights potential pitfalls that investors might suffer and forced me to re-examine some of my strategies for buying a second property. Indeed, I like this book very much because it is written in Singapore context and contains very little industry jargon. So Singaporeans who are interested in investing properties would find this book useful.

Not too long ago, one of my friends suggested investing in Japanese properties. I highlighted to him the potential dangers in investing overseas properties. I am not sure whether he was convinced by me but anyway, I am heartened that Property Soul shared the same thoughts as me. In the book, there was a section on why Singaporeans should be careful in investing overseas properties. Singaporeans should take note of this before parting away their hard-earned monies in overseas projects. Apparently, this had happened in Hong Kong in the nineties before and there were striking parallels between now in Singapore and back then in Hong Kong. I highly recommend this book to all Singaporeans interested in building their wealth through property investing. You might not become rich after reading the book but certainly it provides important pointers that could help you avoid pitfalls that may lead to financial losses.

No B.S. Guide to Property Investment - Dirty Truths and Profitable Secrets To Building Wealth Through Properties is available now in major bookstores such as Popular, Kinokuniya and Times.

The paperback can also be purchased online at

Magically yours.

Tuesday, April 29, 2014

More PMETs retrenched in Singapore

Recently, I saw an article in The Straits Times which reported the increasing trend of local PMETs being laid off in Singapore. It brought home the hard reality that professionals and skilled workers are no longer safe from being made redundant in their jobs. From the perspective of a wealth builder, it also reinforced the belief that in order to sustain in this dynamic economy, it is very important to build a solid personal finance foundation and master niche skill sets.

I always encourage young people who just entered the workforce to build up their own emergency funds as soon as possible. Life is always unpredictable. You never know when you will lose your job or encounter personal crisis. Having an emergency fund can help to provide short term security against market uncertainties. It allows you and your family to carry on life as per normal whilst you embark on the recovery journey. Without this sum of money as interim support, you have no choice but to borrow from friends and relatives. Personally, I don't like to, and have yet, to borrow from my friends and relatives.

Of course, having this emergency fund is only one of the key elements of the personal finance framework. It would not help to enhance your wealth nor elevate you to another wealth level. Put it this way, it is just another money "shield" or protection. To build wealth and be rich and successful in life, you must develop niche skill sets. To know what are your niche skills, what you need to do is think about what you can deliver on your own. For example, developing a high traffic blog on your own without taking the help of others is definitely a type of niche skill. If you keep honing your skills, over time, people will be willing to pay a premium for your skill. It could be to help them promote their businesses in your blog. Who knows? In fact, a number of vendors had paid me to advertise their services in my blog, SG Wealth Builder. So never underestimate what you can achieve.

I see many Singaporeans taking their jobs for granted and getting more complacent. A lot of them complained about their work in their blogs. They don't appreciate the importance of being gainfully employed until the prospect of being retrenched looms near. Some Singaporeans also thought that retrenchments only happened in SMEs and that working in MNCs are safe. This is a myth which I need to debunk because I have worked in a US MNC company that carried out retrenchment exercises before. Believe me, it was not a nice feeling seeing your colleagues being asked to leave.

In short, always strive to expand your skill sets in your job journey. You will find that the competencies you mastered will put you in good stead in your career. In addition, having good money control will help to alleviate the stress in the unfortunate event of being retrenched. Hope the above aid in your wealth building journey.

Magically yours

Sunday, April 27, 2014

The right time to invest in SMRT?

To become rich from your stock investments, you must do your research first before you invest. The following analysis covers one of the listed companies, SMRT, the largest rail operator in Singapore.

In recent years, every time the Singapore railway system broke down, it was like a nail to the counter's coffin. Due to the service disruptions, SMRT stock price has plummeted at a frightening rate from $1.74 in 2012 to $1.02 in March 2014. Speculators must have lost a lot of money in this counter. This is not surprising because to invest in SMRT, you need to hold a long term investment horizon. Fundamentally, even though SMRT has a monopoly in the public transport system, its business model is heavily dependent on government policies, and because of this, investing in this company is not so often straight-forward.

On 24 April 2014, SMRT share price rocketed 21% on rumors of CEO Desmond Kwek's submission of new financing framework to Singapore government for the company's assets. The increase was the biggest ever one day gain for the stock. I reckon that the CEO had to do something drastic to reverse the destiny of SMRT. In January 2014, the company reported a set of dismal results for the third quarter. The Fare business incurred a loss of $9 million, while its Non-Fare business brought in profit of $27.3 million. If not for the Non-Far business, SMRT would have incurred a loss in the third quarter. SMRT cited increasing operating costs as the key reason for the poor results. So going forward, if SMRT could not get the support from the Public Transport Council on train fare increases, the company need to derive new sources of revenue to sustain growth.

Investors should take note that SMRT has been going on a charm offensive since January 2014. In February 2014, SMRT issued a statement in SGX, explaining the service disruptions and pledging its commitment towards excellence in service reliability. In March 2014, it has signed a MOU with Huawei to jointly develop transport technology products in the international market. On March 2014, Standard & Poors affirmed SMRT's 'AAA' long term corporate rating because of the government's support. In addition, the company had also appointed a new Senior Vice President to improve the Group's operational performance in the trains and rail engineering business. This is in line with the Group's objectives of growing its engineering capability and positioning of SMRT Engineering for local and overseas projects.

The recent spike may create the false impression of a new dawn but in actual fact, the rebuilding project has been initiated since 2013. It is still unknown whether these new initiatives can reverse the fortune of SMRT but only time will tell. My assessment on this company is that the outlook is positive but investors need to be very patient with this counter. I am not vested at the moment but will initiate position once it drops to $1.15.

Magically yours

Friday, April 25, 2014

When you are facing death, what is the last thing on your mind?

When you are facing death, what is the last thing on your mind? In a recent radio report by UFM100.3, it was revealed that two thoughts commonly fill the mind of dying people. On their death beds, most dying people worried that they would become a financial burden to their families and many were concerned on how their families could cope financially after their passing on.

As a wealth builder in Singapore, I think the survey was quite accurate because when you are facing death, probably you would not be thinking of how much money you have in your bank accounts nor would you be concerned about the assets that you would leave behind. Very likely, it is the thought of not being able to see your loved ones again that made the pain of death so unbearable. Are they going to suffer as a result of your prolonged stay in hospital? How are they going to cope if you are the sole breadwinner? These are perhaps some of the worries that most dying people have in their last journey.

Death is an inevitable journey that everyone would go through and everyone is equal, regardless whether you are rich or poor. Yet most people refused to think or prepare for it. Many people thought that buying hospitalization plans and term policies is a waste of money but they overlooked the fact everyone would grow old and become ill one day. When that day comes, no insurance companies will cover you because you are deemed as high risk to insure. That is why I always encourage young Singaporeans who just started work to buy private medical shield plans and term life policies. Nowadays in Singapore, the public hospitals are so crowded that they might not even have a bed for you if you opt for a normal "B" or "C" Class wards. So preferably, go for the most expensive private shield plans if you can afford. You don't want to become a liability to your loved ones when you are ill.

In the last two years, I had lost my father-in-law first and subsequently, my father. Seeing them lying on hospital beds was an emotionally painful experience. My father-in-law was hospitalized in ICU for three months and my wife was pregnant at that point of time. So the feeling was really like a roller coaster ride for us. My dad was slightly more fortunate in the sense that he was in and out of hospital for several times. In the end, he passed away peacefully at home. He also got to see our baby daughter before his last journey. Both of them did not upgrade to private shields when they were healthy, so they were only covered under basic Medi-shield plans. For my father, he did not undergo surgeries, so the hospital bill was not hefty. But this was not the case for my father-in-law who had to undergo several operations, costing us ten of thousands dollars even after Medi-shield coverage.

Incidentally, I was on overseas duty trips on both occasions when my father and father-in-law were down. This made me realized that life is so fragile and in our pursuit of personal goals, we tend to take our loved ones for granted. Many people imagine that death would be a peaceful and slow process but in actual fact, it is very likely to be abrupt and unexpected. In fact, my wife and myself were not prepared for our fathers' deaths and there were times I feel that I could have done more for them.

Many local finance bloggers are so fixated about making their first million and how to become rich. In my humble opinion, it is unrealistic to expect having millions to spend when we grow old and retire. Rather, it is important to be contented with what we have now and not chase the money blindly. Be a wise wealth builder, don't be blinded by the color of money.

Magically yours