Debunking The Myths On Frugality

Do you seek to attain financial independence? Well, you may consider taking “frugality” at heart. Frugality is the quality of being thrifty, prudent, or economical in the consumption of consumable resources (e.g., food). This quality is embodies while avoiding waste and extravagance.

For people who are mystified by this term, keep reading along.

MYTH #1: FRUGAL PEOPLE HAVE NO CHOICE

For a fortunate number of people, frugality is a choice. They see frugality as a method to create a strong link between time, labor, and money. Every purchase represents the time and effort they have spent working. It is a conscious decision to plan ahead for their short-term and long-term financial goals.

MYTH #2: FRUGAL PEOPLE ARE CHEAP

On the surface, people may assume that frugality and cheapness are one and the same. Similarities may be present, but these two are entirely different characteristics. A frugal person sees the best value for his or her money. While, a cheap person focuses on the lowest price.

Image Credits: pixabay.com

Say that you are grocery shopping for the entire family. A frugal person will use accumulated coupons and purchase items that are only on his or her shopping list. On the other hand, a cheap person will highly decline to spend more than S$50 on a week’s groceries.

MYTH #3: FRUGAL PEOPLE NEVER SPLURGE

Even frugal Millennials splurge from time to time! When you are able to skip on things that are not essential to your lifestyle, you will be able to free up more money for the things that are important to you. It’s a no brainer! For instance, I spend most of my money on quality food and cosmetics.

Image Credits: pixabay.com

Frugality is not all about self-sacrifice. If you are skilled in long-term savings, you may choose to spend the excess on something that you deem to be priceless. Personally, catching a sunset in Santorini sounds like a great idea to me!

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Debunking The 4 Myths About Small Business

Myths about small businesses are overflowing. Some people let the myths slide, while others adapt them perpetually to their lives. Doing so may hinder the attainment of success and full potential!

MYTH #1: SINGAPORE IS A TINY MARKET WHERE BUDDING BUSINESSES WILL NOT THRIVE.

Singapore is a relatively small market with a population of a little over 5 million people, when we speak in geographical terms. What others do not know is that private wealth concentration in the country is elevating by the day. Thriving local businesses were able to scale themselves to the neighboring Asian markets. Yes! You can scale a firm to the point where it becomes attractive to regional and global platforms.

Singapore offers one of the best business environments as its government give different grants to help Start-ups and SMEs (Small and Medium Enterprises). These grants aid in developing several dimensions of the firm’s growth such as human capital development and technology implementation. Some examples are the Productivity & Innovation Credit (PIC), Enhanced Training Support Scheme, and Market Readiness Assistance Grant (MRA). MRA is the specific grant designed for helping Singapore SMEs to accelerate their expansion overseas.

MYTH #2: INVESTING IN A SMALL BUSINESS IS PRIMARILY GAMBLING.

When you gamble, the house almost always wins. This is not the same with investment! As Wall Street investor Peter Lynch once highlighted: “An investment is simply a gamble in which you have managed to tilt the odds in your favour”. 

The odds can turn to your advantage if you run the business in a “right” way. This entails the out pour of skills, talent, and hard work. Running a successful small business requires long periods of research, which continues after you have invested your money in it.

So, investing in a small business is not entirely gambling as various factors are controllable.

MYTH #3: YOU DO NOT NEED A WRITTEN BUSINESS PLAN.

To enter the workplace in an orderly fashion, the business owner must devise a detailed business plan. This said plan shall include the study on the target market, funding, organization dynamics, and revenue projections. A realistic and robust business plan is mandatory if you are seeking creditors or investors. Furthermore, a business plan helps to anticipate critical items such as revenue and cash flow.

Some ideas that seem great as a concept may not be great when you put it down on paper.

MYTH #4: YOU HAVE TO HIRE A FULL-TIME STAFF.

Employees are essential to get the ball rolling, but maintaining them is costly.

From wages to office space, having full-time employees can take a massive chunk of your small business’ budget. This is why you must consider the alternative options such as hiring interns or outsourcing from independent contractors. Do your research!

Image Credits: pixabay.com

Image Credits: pixabay.com

Now that you know the difference between reality and fiction, you are ready to begin your journey. Keep on moving to the right track!

Sources: 1, 2, & 3

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Debunking The 5 Money Myths In Singapore

There is a whole lot of misinformation and mistaken beliefs surrounding personal finance. It is about time that we debunk some of it!

MYTH #1: TYPE OF SAVINGS ACCOUNT DOES NOT MATTER

Most savings account in Singapore reward you with only 0.05% interest rate per year. So if you left S$10,000 untouched in your account for a whole year, your interest will earn you $5 or less than 42 cents a month. With that amount of money per month, you cannot even buy a slice of watermelon at the hawker center!

Banks realized the importance of having competitive rates for its clients. As a result, big player banks introduced savings accounts such as DBS Multiplier Account (up to 2.08% per annum), CIMB StarSaver Savings Account (up to 0.8% per year), and OCBC 360 Account (up to 3.25% per year).

Know more about the most profitable savings account in Singapore by visiting this link.

MYTH #2: CPF SAVINGS IS ENOUGH FOR RETIREMENT

Contrary to the popular myth, your Central Provident Fund (CPF) savings may not be enough to sustain the lifestyle you desire during retirement. Keep in mind that your CPF savings depends on how much you earn during your working years. If your income is relatively low throughout the years then you can expect to receive lesser payouts than your “higher earning” friends. So your CPF savings may not be enough.

Plus if you exhaust your account earlier on to pay for your HDB flat, then you shall expect to receive lesser payouts than those who bought flats within their “means”.

MYTH #3: DEPENDENCY IS OKAY

Growing up in the Asian culture made us realize that we have a responsibility to take care of others especially to those in need. Having someone to depend on is a good thing but when it comes to finances, it can get pretty rough. If you believe that it is okay to spend since your spouse, parent, or children (based on the Maintenance of Parents Act) will take care of your expenses then you are putting the financial responsibilities outside from yourself. Thus resulting to inattention towards managing money and careless spending.

MYTH #4: ONE SIZE FITS ALL

Everybody’s financial situation is unique so be wary of the “one-size-fits-all” money tips from media’s financial gurus. Many factors such as your consumer personality, financial goals, and age should be considered. Thus, it is more beneficial to listen to your personal financial advisor. Ask your friends to recommend a good financial advisor.

MYTH #5: FINANCIAL ADVISORS CANNOT BE TRUSTED

I had met some financial advisors with HSBC and Prudential before. Can they be trusted?

In a study done by Scratch, nearly 3 quarters of Millennials said that they would rather go to the dentist than hear the financial advice of a banker. Part of their reluctance to financial advisors stems from the lack of services targeted to people like them. As you may notice, Millennials are highly self-reliant and that translates with how they handle their money. Most of them are not comfortable with trusting someone else with their money.

The truth is, financial advisors are knowledgeable and trained professionals whose job is to guide their clients to manage their money, investment options, and asset relocation. You have nothing to worry about as long as your money is in capable and honest hands.

Sources: 1, 2, 3, & 4

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