Money FM 89.3 Show - Seedly

Money FM 89.3 Show

We'll be on a 5-part series on the Money FM 89.3 Show talking about personal finance hacks for young adults in Singapore.

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We're unveiling an Exclusive radio show segment with MONEY FM 89.3

It will happen between 4 September to 2 October 2019.

The best part? We're involving guests who are above Level 8 Top Contributors from our community who are folks like Hariz Arthur Maloy and Junus Eu, who will appear alongside us on the radio show!

It will be conducted by Radio show-host and DJ, Michelle Martin, an 18-year veteran of the media industry. Michelle is the drive-time host on MONEY FM 89.3.

Here's the schedule:

  • 4 Sept 2019, Wed 10am: What you need to know about choosing your energy provider to save monthly (feat. Yeap Ming Feng, Content Head at Seedly)
  • 11 Sept 2019, Wed 10am: Hacks to maximise your CPF (feat. Hariz Arthur Maloy, Top Contributor at Seedly and FA)
  • 18 Sept 2019, Wed 10am: Personal finance 101 for Millennial young working adults (feat. Chew Tee Ming, Co-Founder, Product at Seedly)
  • 25 Sept 2019, Wed 10am: How to know when you should start investing and how to start with your first $5,000? (feat. Junus Eu, Top Contributor at Seedly and Entrepreneur)
  • 2 Oct 2019, Wed 10am: Planning your retirement blueprint at 30,40,50 (feat. Adam Wong, Co-founder, Editor at The Fifth Person)

We'll be covering topics surrounding Savings, CPF, basics into budgeting, cashflow, and of course planning towards retirement, investments and basic portfolio construction tips!

Ask your questions in the QnA section below to have them answered LIVE!

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Investments

Money FM 89.3 Show

Before you start investing, I’d suggest setting aside an emergency fund containing 3 – 6 months’ of expenses, having adequate insurance, and no high-interest loans. A home mortgage is ok, but try to avoid high-interest debt like credit card debts. In investing, time really is money. The longer you invest, the more money you will have, thanks to the power of compounding. Compounding i.e. time in the market is one of the keys to investment success, rather than waiting for the perfect moment to invest. It's nearly impossible for any investor to time the market perfectly on a regular basis. So, realistically, the best action that a long-term investor can take is to invest as soon as possible, regardless of the current stock market conditions. Furthermore, don’t let the size of your savings deter you from investing at the earliest possible moment. If you want exposure to Singapore equities, you can now invest from as little as $100 each month with Regular Shares Savings (RSS) Plan. If you want a globally diversified portfolio, you can consider digital wealth managers like Syfe. Syfe has no minimum investment amount and unlike traditional brokerages, no commission charge each time you increase your investment. Finally, some advice against picking individual stocks. You should always diversify your investments, rather than go all-in on one specific stock. This way if one underperforms, it doesn’t drag down your whole portfolio.

Money FM 89.3 Show

Savings

Investments

J
Jefremy
Level 3. Wonderkid
Updated 4w ago
Singapore has created safety nets for its most vulnerable citizens. However, the millennial question is still up in the air. The government is reacting with lowering tertiary fees and such. As millennials, we grew up with information at our fingertips and grown to realise the fact that our HDB is not an asset, our CPF is a never-ending chasm that never gets filled and though we love travelling, our pockets are never full enough to go far. We have to learn from our parents' folly of not taking profits. Accept the fact our generation is crushed like the eggs in an egg mayo sandwich and plough through. Save and insure what you can to create a buffer from ruin, get smart about money and invest the rest.

Investments

Money FM 89.3 Show

Stocks Discussion

Hi, you'll want to start by looking at the asset classes that are available to you. You'll want to consider the pros and cons of each asset class before you decide how to allocate your capital. Amongst these will be stocks/ETF/UTs. $50K can be possibly divided up amongst a couple of stocks, an ETF, a couple of UTs. However, you will want to manage the allocation so that your overall portfolio volatility is reduced while getting a decent return. The next thing to note is that you will have to consider the cost of investment. It probably isn't wise to invest $1K into a stock given that you'll need to pay brokerage, etc. Also, knowing which point to buy is also important, especially in the case of stocks as you'll want to minimize your potential downside risk. Opportunities will always present themselves, so do your research while waiting for the right time to enter, keep a watch list, and don't be too impatient to rush in.

CPF

Money FM 89.3 Show

Savings

Adam Wong
Adam Wong, Editor-in-chief at The Fifth Person
Level 3. Wonderkid
Answered 3w ago
We covered some of the advantages of using cash to pay your mortgage here: https://fifthperson.com/servicing-mortgage-cash-instead-cpf-can-add-200000-retirement/ But only consider this if you have the free cash to do so. Hope this helps!

Money FM 89.3 Show

Investments

Let's do this right now. Assume you invest 12k/yr @ 6% return. 20yr old to 30 years old. 120k invested. Return @ 6% would be $158,169.50. You stop investing additional money and let it roll for another 30 years. $158,169.50 @ 6% after 30 years would be $908,445.30. Now the same 12k/yr @ 6% return for 30 years. 360k invested. Return would be $948,698.20. You'd have returned almost the same amount of money but in the latter case, invested 3 X your capital. You can simply use the TVM formula to calculate this.

Investments

Money FM 89.3 Show

Jonathan Chia Guangrong
Jonathan Chia Guangrong, Fund Manager at JCG Fund
Level 6. Master
Updated on 12 Sep 2019
There are no options available for Singapore market. Personally I trade options and manage a portfolio in the US market. Platform wise I use thinkorswim as I got a group rate with comm of 1 dollar per options contract or 5 bucks for with no minimum monthly fee per month nor are there live data feed fees. The only thing better at interactive brokers for me would be that there are no stock assignment fees which is at 15 bucks per assignment. I'll suggest that you learn more about options before starting out. Paper trade or find a mentor to guide you. You can literally lose your entire account or more if you do not know what you are doing. Will be happy to share more. Hope this helps and all the best.

CPF

Money FM 89.3 Show

Savings

Since they both earn the same 4% interest per annum. Topping up your Medisave account could be the smarter choice. You can use your Medisave money earlier for paying insurance premiums, paying for delivery costs, or even your parent's medical bills. Your Special Account can only be accessed after 55. Definitely more rigid. Also, after you have capped your Medisave (up to the Basic Healthcare Sum - in 2019 this is $57,200), any more contribution to Medisave will overflow into your Special Account anyway. So no problems there. You're doing the same thing, but allowing more flexibility.

CPF

Money FM 89.3 Show

Savings

An extra 1% interest per annum is currently paid on the first $60,000 of a member’s combined balances (with up to $20,000 from OA). (Quote from CPFB) Hence, extra interest earned is earned on both SA and MA, so as long as you have $40K combined in MA and SA, you'll get an extra 1% on them. There's no need to have $40K specifically in SA, so a 50/50 split will work (i.e. $20K each in SA/MA). The remaining $20K in OA will also earn the 1%, but it is credited to your SA. Beyond those limits, Hariz and Larry have given some options to consider for the excess money. Usually, I don't advise my clients to invest SA, since 4% guaranteed is pretty difficult to beat. I find that I'll have to be getting at least 6-ish percent returns on my SA to have it worthwhile since I'm exposing myself to market risks and volatility.

CPF

Money FM 89.3 Show

Savings

Retirement

No right or wrong answer, but I do advocate ERS if there is sufficient liquidity elsewhere. For example, if you have something like $1 million in liquid assets, increasing your SA to ERS will only require $88K if you are 55 this year, which is a mere 8.8% of your asset base. The trade-off is that it is a one-way thing, so you will only receive the money back in the form of CPF Life payouts. However, a guaranteed life annuity with this kind of payouts backed by an AAA-rated government is practically impossible to find, so it is a trade-off between having control of how you generate income from your assets or relinquishing part of the control to CPF. I often find that if one has easy access to liquid funds, they usually don't last very long since we tend to under estimate our spending patterns. Consider your risk appetite, existing income assets, and ability to manage your investments before taking any action.

CPF

Money FM 89.3 Show

Savings

Hariz has given an excellent answer, but just to add on here: 1. The best time to contribute is at the start of the year. CPF interest is calculated monthly, but credited and compounded annually in December. So $7K contributed in early Jan earns $280 more compared to $7K contributed at the end of Dec. I experimented with this myself and although I can't get the exact figure, contributing earlier seems to result in a little more interest. 2. The faster you hit FRS, the faster you can let compound interest take care of the increase in FRS sum that occurs every year. 3. The tax savings from the contribution can be quite decent. More tax savings = more money for investing. Over time, this builds up.
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