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Mind-Blowing Facts About Debt

FACT #1: SINGAPORE’S DEBT-TO-GDP RATIO RANKS THIRD IN THE WORLD

With a Debt-to-GDP ratio of 382%, Singapore ranks third in the world according to a 2015 report published by McKinsey Global Institute. The global report found out that Japan lead with 400% followed by Ireland and Singapore.

This significant percentage includes the total debt of the government, households, and non-financial corporations. It comes no surprise that a large part of the country’s debt hails from the corporate sector.

FACT #2: OVER 9 MILLION CREDIT CARDS WERE ISSUED

The credit card is one of the most powerful tools of our nation’s consumers. Would you believe that the summation of the country’s credit card debt is worth over S$5 billion. All these are in the form of balances rolled over to the next statements. Shocking and scary at the same time, is it not?

Furthermore, over 9 million credit cards were issued in the past decades as of November 2015. I can only imagine how this number will grow after a year!

FACT #3: OVERWHELMING DEBT IS ASSOCIATED WITH MENTAL HEALTH ILLNESSES

A review of 65 studies published in the Clinical Psychology Review showed that there is potent association between mental health illnesses and debt. In fact, your likelihood of having a mental health problem is about 3 times higher if you have debt. This is because debt is a common stressor.

It can lead to the feelings of helplessness, hopelessness, and low self-esteem. According to Dr. Nadine Kaslow of Emory University School of Medicine, these three are risk factors for depression.

FACT #4: HOUSEHOLD DEBT IS SOARING IN THE RECENT YEARS

Singapore is a crucial financial hub across the globe. At 77% in 2013, its household debt relative to the GDP is among the highest rates in the Asian countries. It evidently rose from 2007’s rate of approximately 64%.

The rapid growth in the recent years were in accordance with the booming property market.

FACT #5: DEBT CAN CONTRIBUTE TO DIVORCE

As mentioned a while ago, debt is a common stressor. It can negatively influence relationships and marriages due to its alarming nature. Psychology Today found that couples who argue about money periodically were less likely to divorce over time than those who argue about money on a weekly basis.

FACT #6: YOU MUST OWE AT LEAST S$10,000 TO BE BANKRUPT

An individual becomes bankrupt if he or she owes at least S$10,000 and has no means to pay for it. It starts with the filing for bankruptcy by the creditor or the debtor. A deposit of S$1,600 to the Official Assignee (OA) is required. The OA is the authority that is responsible for selling as many of your assets as possible to repay your creditors.

Image Credits: pixabay.com

The effect of bankruptcy does not only take a toll on your finances but also on other aspects of your life.

Sources: 1, 2, 3, 4 & 5

5 Must-Read Books About Retirement

A prosperous retirement is more than just attaining financial independence. It involves finding happiness and meaning in this fresh chapter of life as well as stretching your financial resources to aid your journey.

Here are the must-read publications if you are looking for ways to make the most of your remaining years:

1. “HOW TO MAKE YOUR MONEY LAST: THE INDISPENSABLE RETIREMENT GUIDE” BY JANE QUINN

But it here.

Are you at the library right now? Check out the self-help books and other resources about retirement. You will notice that most of these books focus mainly on how to invest your money to create a potent retirement fund. The author’s experience supported this. Quinn once said: “I found books and websites on how to invest but practically nothing on how to prudently parcel your money out. If you take too little from savings, you’re depriving yourself of some of the comforts that you worked for. If you take too much, you’ll go broke.”

You see, spending your money wisely is just as important as building a nest. Find a balance between these elements by reading this book. Written in plain terms, this book explains how you can stretch your money once you are in retirement.

2. “THE NEW RULES OF RETIREMENT: STRATEGIES FOR A SECURE FUTURE” BY ROBERT CARLSON

Buy it here.

For people who are far from the retiring age or who are in the earlier stages of retirement, this gem is perfect for you. It is dubbed to be a “global book” that seeks to help its readers to wrap their minds around the whole subject. It takes a realistic look at the diverse life patterns that are emerging in the retiring Baby Boomers in the recent years.

It includes chapters that educate you about managing your fund, avoiding scams, planning for long-term care, and more. These chapters are detailed and easy to read.

3. “HOW TO RETIRE HAPPY, WILD, AND FREE” BY ERNIE ZELINSKI

Buy it here.

What makes this book shine above the rest is its Canadian humor and its focus on the non-monetary aspects of retirement. It encourages its readers to improve their physical, spiritual, and emotional well-being. It puts heavy emphasis on how to live during retirement. This is why the contents of the book are not only practical but also relevant.

4. “THE RETIRING MIND: HOW TO MAKE THE PSYCHOLOGICAL TRANSITION TO RETIREMENT” BY ROBERT DELAMONTAGNE

Buy it here.

A Psychological transition to retirement entails dealing with the emotional stress that comes with this significant milestone. A substantial part of the book is dedicated to finding the reader’s inner being to create a fulfilling life and to enhance personal relationships. Dr. Delamontagne helps us to understand our personality types as it influences how we grow toward the next stage. These nuggets of knowledge are backed by his personal experiences.

5. “WHAT COLOR IS YOUR PARACHUTE? (FOR RETIREMENT: 2ND EDITION)” BY JOHN NELSON & RICHARD BOLLES

Buy it here.

Learn about the wide array of variables that are involved in retirement as this book provides you with useful guidelines on how to be healthy, happy, and successful. There are worksheets and exercises inside for hands-on or practical learning.

Image Credits: pixabay.com

Ultimately, the authors view retirement as a crucial stage in life and not just an event that occurs when you stop working.

Sources: 1 & 2

Why Some Singaporeans Don’t Buy Travel Insurance Anymore

Some Singaporeans have gone off the idea of travel insurance. While it used to be considered an absolute necessity, more travellers now think of it as an unnecessary waste of S$50 to S$100.

This is particularly true of those who go on short trips, to whom travel insurance becomes a significant expense. But are they doing the right thing?

Why No Travel Insurance?

The most common reasons are:

They have personal accident insurance
They feel the claims process is unrealistic and restrictive
The seek cost-efficiency
They are already covered by credit card
They are covered under their employer’s insurance
They Have Personal Accident Insurance

For some travellers, their main concern is their healthcare related. They do not want to face medical expenses if they suffer from a fall, get hit by a car, etc.

They are less concerned about the other things that travel insurance covers. These are things like lost jewellery (they may not be carrying anything valuable), flight delays (not an issue if they have airline memberships that already compensate them), or tour agency issues (they may not be on a package tour).

For those travelling to countries where they have friends or family, some of the emergency assistance from travel insurance may be irrelevant. For example, if you are travelling to stay with your uncle in Canada for a few days, it may not be a big deal if your luggage is diverted for a day or two. The inconvenience may not be worth a S$100 insurance policy.

(It might be a different story if you are travelling alone, and know nobody where you’re going).

These travellers typically add personal accident coverage to their existing insurance policies, in the form of a rider. This can give them comprehensive protection wherever they are, for a fairly low cost (e.g. under S$30 a month).

If they are going skiing, for example, they may be happy to rely on their personal accident coverage, without adding travel insurance.

They Don’t Want to Go Through the Claims Process

Some seasoned travellers are intimately aware of travel insurance terms, and are dissatisfied with them.

For example, many policies do not allow you to make claims for lost jewellery. For lost cash, the maximum claimable amount might be too small to be relevant (e.g. The maximum claimable amount is S$250 regardless of how much you lose, and then insurance policy alone is already over S$100).

There are often tight limits on maximum claim amounts, on a per item basis. Even if the policy insures you for you to S$1 million, for example, the maximum claimable amount on your broken iPad may only be S$500.

Some travellers also feel the claims process is unrealistic, or too convoluted. For example, you may be required to present original receipts if you want to make a claim for your broken laptop.

With regard to trip cancellations, some policies only pay out only under specific conditions. For example, a policy may not pay out if the cause of the cancelled trip is the Singapore haze or a strike (the trip may only be insured against poor weather).

As such, a subset of travellers believe travel insurance has too many restrictions to be useful. If you want to join their ranks though, you will have to be sure that you make up for lack of travel insurance with the right safety precautions, and the right personal insurance policies.

They Seek Cost-Efficiency

As a rule of thumb, it is not cost-effective to insure expenses you can pay out of pocket.

For example, it would not make sense to pay premiums to insure your socks, or to insure cheap canned food in your kitchen pantry – the odds of losing them are so low, and the cost of replacement so cheap, that the premiums would just be a waste of money.

The same theory can be expanded to things like second-hand laptops, cheap watches, old clothes in your bag, etc. Some travellers would feel no significant pain from losing these items, and prefer to have more cash on hand for shopping or better accommodations. Should they lose the items, they have more than sufficient money to replace them immediately.

(Note: if your worry is losing your luggage and having no clothes, toiletries, etc., you should note that most airlines provide supplies or funds for passengers whose luggage they lose).

Their Credit Card Offers Free Travel Insurance

Many air miles credit cards, such as the Citi PremierMiles Visa Card, come with complimentary travel insurance if you charge your travel tickets to it. The Citi PremierMiles Visa Card covers up to S$1,000,000 in case of death or permanent disablement from accident in a common carrier, up to S$40,000 for medical expenses during a trip, and travel inconvenience.

If you are satisfied with these, there’s no need to buy more travel insurance.

They are Covered by Their Employer’s Insurance

Many people overlook this, so make sure you don’t.

If you are flying abroad for business, check with Human Resources on whether you are covered under your employer’s insurance. If there already is one, you do not need to buy your own.

Some companies have generous corporate insurance plans, that will cover you even if you are not on official business. If so, all you need to do is familiarise yourself with the terms (and get private only if you are unsatisfied).

(This article is brought to you by Singsaver.com.sg)

4 Times That Fast Food Chains Stole Your Money

When fast food chains offer their tasty meals, they go beyond advertising on television and social media. They employ different marketing strategies to entice the consumers into spending their hard-earned cash on the spot. Just take a look at their slogans!

Burger King once used the slogan: “IT JUST TASTES BETTER”. They provide no further explanations as to why their burgers and products tastes good. They simply implant this idea because they are business-oriented people. On that note, here are the 4 Times That Fast Food Chains “Stole” Your Money:

1. TEMPTING STORE FRAGRANCES

It is no secret that smell can induce cravings. These cravings can later lead to spending money.

Some companies (like ScentAir) are in the business of copying the natural scents of different food such as grilled burger, cinnamon bun, and popcorn. They sell these scents to companies that want to enhance the overall aroma of their stores. It works because smell can actually make your food taste better.

Dr. Brian Wansink once said: “it [odor] definitely makes the dining experience much more attractive to people, but unfortunately it also makes you want to get the fries instead of the salad.”

2. OVERWHELMING BUNDLE PRICE

Seeing me sip a cup of soda is a rare sight but, I always fall for the “bundle price” marketing trick regardless of that! Bundle pricing occurs when the company sells 2 or more products as a package with an intent of saving the customers’ money. Fast food chains habitually engage in this strategy which they refer to as “value meals”.

Currently, Burger King is offering value meals that come with burgers, cheesy fries, and sodas for only S$4.95 each. How can you not fall for a price that is significantly less than the amount of each item separately?

Image Credits: burgerking.com.sg

One drawback is that the portions are lesser than the usual.

3. APPETITE-ENHANCING COLORS

From the logos to the interior, two colors seem to stay at almost every fast food chains. These two colors are red and yellow. Red and yellow stimulate appetite, which probably explains why your stomach starts to make noises as soon as you see the yellow arches or the red logo. You cannot resist spending more inside!

Interestingly, you can combat how colors affect the way you eat by controlling your own plate. Researchers at Cornell University found that when they reduced the contrast in their plates and tables or in their plates and the food itself, people tend to serve themselves less food. To eat less, pair your white plate with your white table-cloth or a blue plate with a blue table-cloth.

4. ENTICING HEALTHY FEATURES

With the continued advocacy against obesity, consumers have been warned about the health risks of various fast food joints. Some companies heard this plea and incorporated healthy options to their menu. These companies came up with low-calorie ice creams, fruit bowls, veggie wraps, and salads.

Included in these said companies are McDonald’s and Burger King. Let us take Mac’s “Chicken McNuggets® 6pc Delight 500 Meal with Dasani Drinking Water” as an example. I was impressed with the website as it showed the nutrition facts, allergen information, and food sensitivity. In fact, the amount of cholesterol is this meal is only 59 mg!

Image Credits: pixabay.com

My friends at the fitness studio who are always on the go will enjoy this seemingly healthier option. Well, you know how popular healthy detox and other healthy alternatives are in the Singaporean social media.

Sources: 1 & 2

How To Ace These Tough 10 Interview Questions

There is nothing worse than coming into a job interview and the interviewer asks you with hard questions, which you do not know the answer to. Avoid this situation by being ready with polished interview answers.

1. WHY DID YOU LEAVE YOUR PREVIOUS JOB?

No matter how tricky this question sounds, you can make your way around it. I know how tempting it is to dish about your colleagues who mistreated you. However, this is not the time for that! Talk about your past experiences and focus on your career goals.

Elaborate about the important values and skills that you learned from your past experiences. Then, highlight that you are ready to use these in the position that you aspire to land. Another alternative is to state that you left to chase a better opportunity and face new challenges.

2. WHAT ARE YOUR WEAKNESSES?

There is no perfect way to respond to this question but, you must avoid literal and generic answers. Saying that you are a workaholic or you are incapable of driving will not boost your image during an interview. Instead, identify the areas that you want to improve on and explain how keen you are to develop that skill in the new position.

3. WHAT ARE YOUR STRENGTHS?

This question allows you to shine the competition. With this question, the interviewer is looking for work-related strengths that are in lined with the vacancy. Provide realistic examples of the times you displayed these strengths and connect it with the objectives of the job.

Image Credits: pixabay.com

4. WHAT ASPECT OF YOUR LIFE WOULD YOU LIKE TO CHANGE?

Most job seekers answer this question by stating that they are 100% happy with where they are at the moment. If that statement is entirely true then, they will not seek a new job opportunity to change their careers.

Rather than coming across as cliché, pinpoint a major turning point or a missed opportunity in your life. Manifest that you are willing to move on from the situation by taking positive actions to turn things around. Provide examples to back up your claim.

5. WHY DO WANT TO WORK HERE?

This question calls for prior research and analysis regarding the targeted company. As a Registered Psychometrician, I know how important it is to find an employee that matches the objectives and goals of the company. This is why you must respond in a way that echoes the essence of the company.

Mention the aspects of the company that you admire and how your abilities make you a perfect fit.

6. HOW HAS YOUR EDUCATIONAL BACKGROUND PREPARED YOU FOR THIS JOB?

There are various ways to respond to this broad question. I suggest to highlight the practical applications of the knowledge that you absorbed in school. State some examples that support the crucial competencies needed for the job.

This is an example: “During my last two years at SIM University, I had the opportunity to become a part of the program-committee and represent the whole batch of my course. I constantly practiced my communication skills given this responsibility.”

7. IS MONEY MORE IMPORTANT THAN JOB SATISFACTION?

It is alright to value money as it aids in our survival. By answering that money is more important, the interviewer may perceive you as someone who is blinded by a larger paycheck. Job satisfaction shall trump money in this situation.

Put emphasis on the pivotal role of job satisfaction to your internal motivation and to increasing your productivity at work. This will surely impress the interviewer.

8. HAVE YOU APPLIED FOR OTHER POSITIONS?

Interviewers like to ask this question to identify how interested the candidates are in the position and how determined they are on their search. Candidates who are applying for similar jobs (i.e., in the same industry or work environment) are more desirable. You may enumerate the typical characteristics that are needed for the job that you are applying for. Say something like: “I have applied for other positions that involve strong customer service orientation too.”

9. HOW DO YOU SPEND YOUR FREE TIME?

This question comes up frequently because it gives a glimpse into a person’s character and work-life balance. Instead of tailoring your answers to show some extraordinary pursuits, be honest and realistic. The interviewer will appreciate the conversation more if you explain why you engage in such activities.

10. CAN YOU TELL ME ABOUT THE WORST MANAGER YOU EVER HAD?

Ranting about your horrible ex-manager will not work to your favor. It is unattractive to talk badly about your previous managers or bosses. This is because your potential manager may anticipate that you will treat him or her in the same manner, somewhere down the line.

Image Credits: pixabay.com

A better response to this question is: “While no boss is perfect, there were some who taught me more than others. I am not complaining because I learned the types of leadership styles that I respond to the best.”

Sources: 1, 2, & 3

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