MoneyDigest - Personal Finance, Lifestyle, Money Saving Tips

You Will Be Sorry If You Missed The Lowrys Farm’s Farewell Sale

If you haven’t heard of Lowrys Farm’s plan to exit from Singapore, it would be a pity if you miss out their clearance sale happening right now.

Lowrys Farm opened its first store in Ikebukuro, Tokyo in March 1992. The brand managed by Point Inc has since expanded to all other parts of Japan and other parts of Asia such as Taiwan, Hong Kong, China and Singapore.

Based on the concept of casual and comfortable wear, the brand prides itself to carry quality and trendy apparels.

Quality usually come at a price. Most shoppers who reviewed in a local review website, TheSmartLocal, said that the clothes are trendy and of high quality, albeit a higher price tag. That is no surprise considering how Japanese worker uses artisanal skill to produce denims and other apparels in their production line, spotting every misaligned eyelets and stitches.

Unfortunately, the strategy didn’t quite worked out in Singapore as the fashion industry is very competitive with brands such as Uniqlo, H&M and Forever21 dominating the market offering cheaper alternatives.

Nonetheless, if you want to own a piece from Lowrys Farm (either for memory sake or simply a purchase for the upcoming Chinese New Year), it’s the best time to do so as they prepare to clear stocks.

Here are a few tips on how you can make use of their Farewell Sale to slash their usually high premium price to make your purchase.

1. Get 50% off when you purchase 5 or more items

Usually shoppers are attracted by banners with words such as ‘Sale’ and ‘X% off’. They were usually blown up big to catch your attention but there are two words ‘Up to’ that are strangely downsized to protect retailers from misrepresentation. And most of the time, you walk out of the store with disappointment as the favourite pieces are not included in the sales item.

But look, now you can get 50% off EVERYTHING when your purchase 5 or more items. This has to better than another store that offers ‘Up to 75% Off’ on a few limited items.

This shoe originally retails for $129.90, but after 50% discount, it costs you just $64.95.

2. Make up 5 items with lesser priced items

Found something you like but don’t have the budget for 4 more items? Then make use of this trick to qualify for the 50% off. Look for cheaper items such as ear rings, socks and belts to make up the shortfall.

Take this pair of ear rings for example:

It is priced at $7.90.

If you purchase 4 of this, it will cost you $15.80 and you can essentially buy another big ticket item such as this leather jacket that costs ~~$129.90~~. Oh wait, $64.95.

Or a bag at $44.95. (R.P $89.90)

If you are going to need this fluffy item in a winter country, after discounts it cost $79.95.

Imagine a family of 5 who purchase 5 of these which amounts to a saving of $400.

3. Shop with friends or family members

(Image credit: sg.kidlander.com)

If you want to be exceptionally frugal and don’t even want to spend $15.80 on 4 other items, there is no better reason to preach this clearance sale to your family members or friends with Chinese New Year around the corner.

Bring your siblings, or a couple, or three friends to raid the store. Good things must be shared right?

4. Organise a trip in a community

(Image credit: magnya-bbru.blogspot.com)

No one in your family is interested? Then organise a trip with a few others in your community. You don’t need me to teach you how to use popular forums such as Hardwarezone, SGForums and Cozycot right? If you don’t use any of those, you ought to have a active Facebook’s account.

5. Just walk into the shop and roped in other buyers

Don’t worry if you are an independent warrior, just walk into the store and look for what you want to purchase AND look for other shoppers with items in their hand. Ask if they want to combine purchase and i don’t see why would anyone rejects you when it is a win-win when both of you are enjoying the discounts.

If you own a credit card that offers rebates, then that’s even better. You offer to pay for the items with your card and get other shoppers to pay you in cash.

When will this last?

It will last all the way until the last day they withdraw from Singapore or while stocks last. We have no definite date yet but as a ballpark, we were told by the salesperson that it will be some time before Chinese New Year.

So happy shopping.

6 Ways to get Cheaper Books

If you’re a booklover and a voracious reader, chances are that you spend way too much money on books, with an average paperback book going for about $15 in the local big bookstores. It can be difficult to read as much as you would like with the costs involved, so here are some ways to save money while reading books!

1) Online retailers

Often, you can save a good deal of money simply by buying the books online, where prices can be up to 50% cheaper than the retail price in Singapore bookstores.

Some popular options are:
Bookdepository.com, an international site that offers free shipping to your doorstep, and carries a very wide range of all books;
local online retailer, OpenTrolley, which allows local pickup at a retail location, or shipping for a fee.

Other common options are eBay and Amazon, however, beware of shipping costs for these options.

When buying books online, be sure to also check out oo.sg, which searches all these online retailers and more, including Kinokuniya and Popular online, for your specific book and allows you to comparison shop for the cheapest price.

Generally, my go-to book retailer is BookDepository as they usually offer the most competitive prices with a large range of options.

Be sure also to check out the different editions of the book, as the softcover is usually cheaper than the hardcover.

2) Book Sales

The popular bookstore chains in Singapore, such as Times and MPH, regularly have warehouse sales a few times a year, either at the Singapore Expo or other locations. Be sure to keep updated on when the next sale will be so as to be able to grab books for really low prices, like $5 each new, or even lower!

3) Secondhand books online

There are a few options I would recommend for buying secondhand books online. Sites like secondhandbooks.com.sg or bookfishing.com.sg are frequently updated and have a good number of books listed by sellers.

Recently, the Carousell application has also seen quite a lot of use for buying and selling books, which is another option you may want to consider.

4) Secondhand bookstores

There are a few secondhand bookstores currently operating in Singapore, although they are a dying breed, and a few have closed their shutters. Bras Basah Complex is one place where you may go to find secondhand books and textbooks.

5) Book exchanges

If you’re looking to clear some of the unwanted books lying around your house, why not try to swap them?

For instance, the NLB has an annual book exchange where we can exchange our unwanted books for other donated books. You may also have some luck trying to swap books online.

6) Ebooks

Buying an eBook may not necessarily require you to purchase an expensive eReader! There are many eBook readers available for free to download on your smartphone or your computer. Ebooks are also significantly cheaper than physical books, and usually cost you a couple of dollars at most. Just be sure to convert your eBook into the desired file format for your downloaded eReader (ePub is generally able to be read by most eReaders).

Reading doesn’t have to burn a hole in your pocket, but with these tips, books may start to take up way more space than availabe in your house!

4 Ways to Negotiate Salary Increase Efficiently

Many are afraid or shy to ask for more money and better working conditions.

You may be afraid of the negative reactions you are expecting to get such as dismay, shock, embarrassment or being fired from the job.

But, whatever the reason may be, you are letting your long-term opportunities to be flushed away.

Negotiating a salary is a conversation that aims to reach an agreement with someone whose interests are not perfectly aligned with yours. Everyone with the right Psychological strategy and conversation tools can sway the opinion of another through a pleasant negotiation.

Here are 4 Ways to help you Negotiate Salary Increase Efficiently…

1. ASK AND YOU SHALL RECEIVE

There are many people who hardly negotiate at interview, and during employment, they fail to negotiate a pay raise. If you do not ask then you won’t get it.

Realize that your bargaining strength is all in your head. If you act as though you are prepared to walk away from a deal unless you achieve your desired goal, your bargaining partner will be far more eager to meet your requirements.

2. BE AWARE OF YOUR CAPABILITIES AND BOUNDARIES

As I said, your bargaining strength is all in your head, so are your assumptions about yourself and your job. Negative assumptions (e.g., I am inexperienced, I shall not ask because of the bad economy, and I am not capable of doing all the job requirements) hinder the person to negotiate for a pay rise.

Evaluate these assumptions because you may fail to realize that the company needs you as much as you need them.

Believe that you are worth it. Throughout the negotiation interview, you shall highlight how much of an asset you are to the company and prove how you are the best candidate for the job.

3. ASK FOR MORE THAN YOU ACTUALLY WANT

Your first offer must be slightly higher than what you want to avoid remorse and to give you a room to bargain. It uses the door-in-the-face technique wherein the employee starts with a huge and unreasonable request in order for the employer to settle with a smaller request.

Image Credits: Roy Blumenthal via Flickr

4. COMPETE

Negotiating a salary is a conversation that aims to reach an agreement with someone whose interests are not perfectly aligned with yours. Negotiating your salary is also a game with all of its players attempting to dominate each other. Dominate the game by researching all the needed information.

Go in-depth about the complete aspects of the job and the company. Also, collect data about the average pay and accurate salary opportunities in your position.

Use persuasion and assertion if necessary because research show that competition is a successful negotiation strategy (Marks & Harold, 2011).

Sources: Spring and Wealth Informatics

4 Ways to Boost Your Travel Fund

How can you pay for trips if your budget is too tight? Certainly, saving for travel money is not an easy task, which is why a sparkle of effort is needed to turn your dreams into reality.

Here are 4 Ways to Boost Your Travel Fund…

1. SELL YOUR UNWANTED OR UNUSED ITEMS ONLINE

Anything that is still in good condition and has a credible brand name will be flocked over by buyers. Even your old furniture can be sold in online sites such as Carousell and Gumtree. Nonetheless, you can always sell your precious items to your close family and friends through a Facebook group.

Rules on selling include: be honest with the product’s flaws, have a simple and accurate description, and charge right for postage.

The popular and safe websites (or mobile apps) for selling are:

a. eBay
b. Gumtree
c. Carousell
d. Facebook

2. INDULGE ON AIR MILEAGE CREDIT CARDS

Some companies such as Citibank or Virgin offer a significant amount of air miles every time you purchase. Once you have an air mileage credit card and use it abundantly (within your needs), you may even book your flight for free!

Image Credits: William Cho via Flickr

3. CONTROL YOUR UNNECESSARY BUYING INSTINCTS

Stop buying useless things that you do not need. Rethink if buying overpriced coffee rather than making your own coffee at work saves you more. Instead of buying lunch, pack your own lunch for at least 2 months. It will not only save more money, but it will reduce waste. It may seem simple, but these unnecessary expenses add up.

4. BE PATIENT

If you need to purchase something for your trip, wait for sale to come around or buy the last season’s model. When selling your items, you must be okay to accept an item price for less. You must practice the virtue of patience, as you wait for the right time before you may be able to travel.

Why it makes sense to contribute to the SRS account (to a certain extent)

Supplementary Retirement Scheme (SRS), as the name suggests, is a plan designed to help fund your retirement besides the CPF. It forms one of the multi-pronged approach by the government to help tackle the problem of a silver tsunami that Singapore is facing.

SRS is a voluntary scheme which offers tax benefits in the form of a tax relief for every dollar you contribute up to a maximum of $12,750 per year. There is no minimum amount and you are free to contribute any amount to your account with any of the SRS operators: DBS, OCBC & UOB.

You can also invest the amount in SRS in a variety of instruments such as stocks, bonds, unit trusts, fixed deposits, insurance and many more. You also have the option to keep them as cash which give you a meagre return of 0.05% per year.

One thing to take note is once you have decided to fund your SRS, any premature withdrawal before the statutory retirement age (currently at 62), there is a 5% penalty fee and 100% of the amount withdrawn is taxable.

If you have the discipline to keep it till the statutory retirement age, good news is only 50% of the withdrawals from SRS are taxable or what they call it as a 50% tax concession. And you can spread the withdrawal over a period of 10 years.

In other words, if you have manage to accumulate $400,000 in your SRS at retirement, you can strategically withdraw it over 10 years, i.e $40,000 a year – to pay zero tax. (Since only 50% of the $40,000 is taxable and the first $20,000 is not taxable.

In the cumulative SRS statistics published by MOF, less than half of the account holders are aged between 21 – 45 in December 2013. Only 11% of those those aged between 21 – 35. While it is understandable that these group of people are financially strapped due to family commitments, it would be wise to apportion at least part of their income to SRS to enjoy tax benefits.

While some may argue that the tax benefits are merely deferred and locking your cash up till the statutory retirement age of 62 is not attractive, a closer look into the numbers may prove otherwise.

Let’s take a look into a few scenarios, making certain assumptions.

1. 32 years old earning $50,000 a year

For someone who is taking home $50,000 a year, the tax payable is $1,250 ($550 for the first $40,00 + 7% of the next $10,000)

If he/she decide to fund the maximum SRS amount of $12,750, the taxable income would be reduced to $37,250 and the tax payable is therefore $453.75 ($200 + 3.5%*$7,250). The amount of tax saving amounts to $796.25.

a. If he/she decide to contribute all the way to 62 (30 years)

Assuming a growth of 8%, the SRS account would be sitting at a value of $1,444,360.94. There are many different way on how the withdrawal can be made. For now, let’s take it as an equal drawdown over 10 years, or $144,436 per year. Half of this amount is taxable which is $72,218. With a tax rate of $550 for the first $40,000 and 7% for the next $32,218, we get $2,805.26 of tax.

You might think that’s a huge amount ($28,052.60) considering that you have to pay it over 10 years and it is something which you could avoid should you not contribute to SRS as capital gain on shares are not taxable.

But let’s not forget that you also save $796.25 of tax per year for 30 years (assuming same income and tax rate), and should you have been more responsible with your finance to grow these extra savings at a modest rate of 4%, these savings would miraculously amounts to $44,657.63. That’s not too bad isn’t it?

The only drawback is you cannot withdraw from your SRS before the statutory retirement age without incurring any penalty fee.

b. If he/she only made a one time contribution of $12,750

Again, let’s assume growth is at 8%, $12,750 of contribution will grow to $128,298 in 30 years. This amount by itself will not be taxed if you are wise enough to spread the withdrawal over 10 years. (or 4 years)

Don’t touch it for 30 years? For a humble amount of $12,750, i will take it. Tax savings? $796.25. Opportunity cost saved? $8,021 at 8%, or $2,583 at 4%.

2. 32 years old earning $150,000 a year

For income earner in the higher tax bracket, the tax benefit are more evident than those in the lower bracket.

Tax payable without SRS: $7,950 for the first $120,000 + 15% of $30,000 = $12,450

Tax payable, contributing $12,750 to SRS: $7,950 for the first $120,000 + 15% of $17,250 = $10,537.50

Tax saving: $12,450 – $10,537.50 = $1,912.50

a. If he/she decide to contribute all the way to 62 (30 years)

Same as (1), you will be taxed at $2,805.26 per year for 10 years.

Which will you choose? Save $1,912.50 per year for 30 years or $2,805.26 per year for 10 years?

It’s a no brainer.

b. If he/she only made a one time contribution of $12,750

Do i even need to calculate this?

So is SRS a sure win?

The thing to note in both examples is if you have other income sources at your retirement and say it adds up to $150,000. This would have cost you $12,450 of tax. If you add your SRS’s taxable amount of $72,218, you may end up in the higher bracket with $222,218 of chargeable income. Doing the maths, your tax payable end up to be $24,749.24. ($12,300 of additional tax per year for 10 years) More than what you would have saved from the tax.

In addition, your children will not be able to claim for ‘Parent relief’ since your income is definitely more than $4,000 a year. (But look, i can’t fathom the idea of someone retiring with less than $4,000 of income in a year anyway)

Some may also argue that you can make a cash top-up to your CPF and enjoy a risk-free rate of 4% in your Special or Retirement Account. (Currently with a $7,000 cap for yourself and $7,000 for your family members)

There are many other scenarios which may throw SRS out.

But the trick here is to keep the value of your SRS within the lower tax bracket while maximising the tax benefits on the other hand. (A yardstick of $440,000 will not cost you any tax since you can spread $400,000 over 10 years and the remaining $40,000 is not taxable once it is reduced by 50%)

I am also assuming you will not be letting your money sleep in your SRS account. You need to make it work harder than the 0.05% that the banks currently offer while managing the exposure to your risk and age profile.

An option is to consider using your SRS to buy into the STI ETF.

1. 32 years old earning $50,000 a year

2. 32 years old earning $150,000 a year

So is SRS a sure win?

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