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Joash Chua

Joash Chua

Financial Consultant at IPP Financial Advisers Pte. Ltd.

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Financial Consultant at IPP Financial Advisers Pte. Ltd.

Joash Chua

Financial Consultant at IPP Financial Advisers Pte. Ltd.

  • Answers (12)
  • Questions (0)
  • Reviews (0)

Insurance

How do you turn down a friend who is trying to sell you an insurance product?
Joash Chua
Joash Chua
Level 4. Prodigy
Answered on 22 Jun 2019
At the end of the day, no one can possibly put a gun to your head and make you say “yes” to any recommendation - just remember that you are always in control of the final decision. As for the suitability of the recommendation, it’s more subjective than it seems. In fact, looking at this on a product level is too myopic. You should take a big step back and look at this from a much wider perspective. 1) Is the advisor competent? As far as I’m concerned, a financial consultant needs to actually understand financial concepts. If you go to a licensed doctor to be treated for ailments, then there’s no reason to be suckered into buying dubious health products frm a door-to-door salesman. 2) Is the advisor emphatic and a good listener? If he starts the meeting talking about a product without actually listening to you talk about your life and goals and fears, that’s a problem. Rule of thumb for the advisor - 70% listening 30% talking. At the end of the day, there is a lot of information asymmetry (what the advisor knows vs what you don’t know) which can be used against you. It comes down to whether u feel he/she can be trusted.
👍 1

Insurance

What insurance should I get because I am going to ord in July this year and I am going to start on my first ever full time job earning only $2k? Anyone can reco me a decent plan or what I should know before meeting an insurant agent? ?
Joash Chua
Joash Chua
Level 4. Prodigy
Updated on 07 Jun 2019
It is difficult for a young person like yourself who is just starting to enter into the working world to answer some questions which we financial consultants tend to ask. Questions like, what are your financial goals? Your dreams? Where do you see yourself in the future? Having gone through the stage in life which you are going through now, I know you probably wished you knew the answers yourself. But the fact is, you don't know where life is going to take you, and hence your answer will likely be the "best case scenario" - and we consultants sometimes will unfortunately take your answers at face value and make recommendations which, at the time made perfect sense. However life throws lemons at you and you have no choice later on but to make lemondaes with the policies/plans by terminating them. Start by asking yourself WHY you are doing what you are doing now - why are you working full time now? Is it to help support the family or to save up money so you can future your education? Why do you want to future your education and why did you decide on this degree? Asking yourself WHY will help you to understand how your choices came to be and it will inform you WHAT future choices will be open to you. When you do this, suddenly the fog clears and you have a road map for life which you never thought existed. Now, you are ready to talk about financial planning (insurance, investing for retirement etc.) because you can't plan no goal in mind Financial Planning is like Google Maps - it can only show you the best route if you know where you are going! This is my personal story: I used to be a cabin crew with SQ earning abot 4K a month. I just graduated from SMU with a degree in accountancy and I sure as hell didn't want to be an accountant. I went for the SQ interview with zero expectations and eventually I passed the interviews and enjoyed a career which paid very well compared to my peers. In my time as a crew, I never bought insurance and I didn't even know what insurance I had. I knew it is important to be insured, but KNOWING and actually BELIEVING are two very different things. Fast forward two years later, I joined the industry to increase my income potential because both my parents are barely insured themselves and I cannot afford to take care of them with just a 4k salary (cabin crew salaries stagnate) in the future. So the WHY that drove me was my parent's health in the future - with this I know what I must do to put this WHY to rest. As of now, I have 2 million in death coverage and TPD, 500K in CI and some others - and it doesnt bother me one bit how much i set aside to pay the premiums and I spend less on other things to make sure I always pay the premiums. By understanding the WHY behind my life choices, I found out what insurance is important for me and I will never have second thoughts if I'm spending too much. So my advice as a financial consultant is, let's not talk about WHAT insurance you should get. Let's talk about WHY you are working full-time? Cheers, Joash
👍 2

General

Savings

I'm in my mid-20, and didn't declare that I am freelancing. My strategy is to contribute up to the $20k limit of CPF OA to get the 3.5% ASAP by putting in a lot monthly, and empty it for housing. Any advice?
Joash Chua
Joash Chua
Level 4. Prodigy
Answered on 20 Nov 2018
Ok there is some misconception that needs to be addressed. Firstly, your CPFOA will NOT compound annually at 3.5%. It will compound at 2.5%. The additional 1% is a flat simple interest of 20,000 (200) which will be credited to your CPFSA (4% p.a.). As a self-employed person, you can limit your CPF contribution at 37%. Since your income hovers between 5-7K, I am assuming the average is 6K, which is the CPF wage ceiling. Your CPF contributions are also tax deductable, so your chargeable income on your tax returns should be about 40,000 after all other deductions. That would put u in the 2nd lowest tax bracket and the income tax is about 550 annually. Secondly, its good you are setting aside money for investments, but it looks like you are invested exclusively in Singapore equities. This is way too much concentration risk in your portfolio. You need to have a more geographically diversified portfolio. STI has been hammered and is currently -10% YTD, compared to S&P 500 +2-3% YTD. Finally, I hope you have an emergency fund. Salaried workers should have at least 3-6 months of living expenses set aside, while freelancers should have at least 6-12 months of living expenses in emergency funds. This is simply because freelancers have no guaranteed and steady cash flow compared to salary workers.
👍 1

Retirement

Property

AMA 1M65

CPF

I have been throwing all my CPF contributions to property despite having spare cash on hand as my concern is that the CPF retirement age will be pushed back?
Don't forget that you can actually withdraw the excess monies from your CPFRA account (created by withdrawing the balances from CPFOA and CPFSA at age 55), AFTER setting aside for the Basic Retirement Sum (half of Full Retirement Sum) - assuming you own a property and have sufficient property charge. So the point where your CPF monies become much more liquid is actually when you reach 55 years old, not the statutory retirement age. Once you hit 55, you make a decision on whether you wish to pledge your property (basically it means you promise to the CPF board that if you sell this property, you will refund back half of the Full Retirement Sum to your own CPFRA account with interest). If you do pledge your property, then you set aside the Basic Retirement Sum and this is untouchable. The rest of the money is yours to withdraw or to let it sit in the CPFRA account to enjoy a guaranteed interest rate. Here's an illustration: You are 54 years old and you have the following in your CPF. CPFOA: 200,000 CPFSA: 150,000 CPFMA: 80,000 When you hit 55 years old, your CPF should look roughly like this: CPFOA: 0 CPFSA: 0 CPFRA: 350,000 CPFMA: 80,000 Lets assume the Full Retirement Sum (FRS) is 250,000. The Basic Retirement Sum would be 50% of the FRS, so the BRS is 125,000. If you pledge your property and opt to set aside BRS, you can choose to withdraw 225,000. I hope this illustrates how your CPF actually becomes quite liquid at 55. And as for using CPF contributions to settle property, its really up to the individual risk profile. I have clients who are super risk adverse and only trust Gahmen stuff i.e. CPF etc., and then I have clients who prefer to have more cash on hand to pursue other investments which, given a long enough period of time, can potentially yield twice as much as CPF. Based on historical data of the S&P 500, from 1919-2017, the average annual returns over 20 years during this period is about 8%.
👍 0

Investments

Parents have a property and are looking to liquidate in the current uptrend. Expect to have a cashflow of ~500k that is not needed for immediate use. Should we sell and invest the money or is it better to just leave it and collect rental. TIA.
1) Is the property paid up in full or are your parents still paying the mortgage? If it is paid up in full, the rental collected is passive income which can be put towards other investments. If mortgage is still being serviced, then we need to work through the numbers to see if makes sense to hold on to it or liquidate it. 2) What are your parents plans in the next 5-10 years? While there may not be an immediate use for the proceeds from selling the property, your parents need to be more forward thinking when talking about "investing" the excess cash, simply because when you talk about investing, there is always a minimum timeframe that the money should be left untouched.
👍 0

Career

National Service (NS)

I am aspiring to be an entrepreneur after immediately after NS. What are some resources for people like me that we can dig on?
Almost all successful entrepreneurs we see today have real working experience under their belt. Everyone aspires to be someone, but not everyone will BE someone. If you knew what goes on in the life of an entrepreneur, you might just have second thoughts. After all, entrepreneurs are businessmen and you can't run a business if you have never learnt how business is conducted. Go out there and get some working experience and find a mentor.
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General

Loans

Family

Should I forgo investing completely and dedicate to clearing my mum's debt?
Ok first things first: 1) Be certain what kind of loan this is. From the looks of it, it seems like a personal loan (some banks call it cashline) given the low interest rate of 4.5%. However, such loans usually have a fixed repayment term like 3-5 years which comes up to a monthly repayment sum of between $1,118 - 1,784 per month (assuming the loan is $60,000). As you’ve mentioned, you are a fresh graduate and just started working. Assuming you have a gross salary of $3,500, your take home after CPF is $2,800. Technically you could help your mother with the monthly repayments, but you would have to do some serious budgeting for a rather long period. 2) Your mom is currently jobless. And she has a spending problem. It is imperative that you do not create a mentality in your mom that she can afford to be fiscally irresponsible and spend more than she can afford because her daughter will save the day. In the long run, this will ruin your relationship with her. I have a client who is in this situation and he is a very disciplined saver (to which he laments how much more he would have had if he hadn’t kept rescuing his dad). Banks do not lend so easily nowadays and they need to sight your NOA (tax returns) or your CPF contributions. Since your mom is not working, further borrowing would be difficult. However, the concern would be borrowing from moneylenders (licensed or unlicensed). Talking about this is relevant because if this problem isn’t resolved at its root, you probably will never have enough to invest because you are dealing with this problem which never goes away. Finally, I would actually recommend you to get yourself insured if you haven’t already done so. The ability to help your mom repay the debt is entirely based on the assumption that you are alive and able to work. Unfortunately, this assumption is untrue. An acquaintance of mine whom I suggested to get himself insured chose not to (he had just started worked 3 months into his new job). He was diagnosed with leukemia and he is just 25 years old. Don’t take youth for granted. Based on the information you’ve shared, this is the best that I can advise. Drop me a PM if I missed anything out or if you have more information but prefer to keep it private.
👍 0

Career

What do I do if I have the sum of $2K in my POSB saye account which is gonna be done for 2 years? Going to ord in July this year. Continue saving or use half for vacation to de stress?
Joash Chua
Joash Chua
Level 4. Prodigy
Answered on 06 Jun 2018
Don't save it and don't use it for vacation. Find out what opportunities there are which will let you make this 2K become 4K (and I mean real opportunities which involve you putting in effort and not get-rich-quick schemes). Example: Warren Buffett used to save like you and he would pick up bottle caps to sell them for pennies. He did this for a while and realised that a vast percentage of the bottle caps came from Coca-Cola bottles (showing clearly what the people in his neighbourhood prefered and wanted). During the summer where Warren grew up, it would get really hot and people would just lie down on the grassy lawn of their homes to cool down. On one of those days Warren was lying down just like that in the grass and he thought to himself how nice it would be to drink from a cold bottle of soda right now. Then he remembered about the bottle caps and his savings - soon he was selling cold bottles of Coca-Cola which he bought with his savings to his neighbours in the heat of summer on their lawns. And he sold them at twice the price he bought them for.
👍 1

UOB One Card

Savings Accounts

Credit Cards

Any savings account that allows you to earn bonus interest and air miles on credit card spend at the same time (currently using the UOB One card which is a cash back card)?
Joash Chua
Joash Chua
Level 4. Prodigy
Answered on 06 Jun 2018
you will find your answers and much more at the following link: http://milelion.com/credit-cards/credit-card-overview/
👍 0

DBS Altitude Visa Signature Card

DBS Live Fresh Card

Shopping

HSBC Revolution Credit Card

Standard Chartered Unlimited Cashback Credit Card

Credit Cards

I'm a fresh graduate and just started my first job. Which credit card I should use (thinking of DBS Live Fresh, HSBC Revolution, DBS Altitude and SCB Unlimited) for dining and online shopping. Advice?
Joash Chua
Joash Chua
Level 4. Prodigy
Answered on 06 Jun 2018
are you looking to accumulate airmiles? If you are, head to the link below and read up. http://milelion.com/credit-cards/credit-card-overview/
👍 0
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