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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

Extremely Wrong Reasons To Buy A Home

If you are updated with the latest in property, you will know that Singapore housing prices are trending down. In fact, the private residential property index decreased by 3.83% (or 3.45% when adjusted for inflation) in Q1 2015. However, the downward shift in pricing does not automatically mean that it is a good time to buy your own space.

Buying a home is one of the greatest financial commitment for most Singaporeans. It is a long-term commitment and responsibility that you must carefully plan for. Start by determining what you can afford as well as what you need to pay for. What you can afford depends on your total income, existing debts, savings on-hand, and loan eligibility.

Upon figuring these things out, examine if you are committing to a home for the right reasons. Otherwise, you will be a victim of these extremely wrong decisions…

1. TO EXHAUST ALL THE CONTENTS OF YOUR CPF ACCOUNT

If you are thinking of purchasing a home because you can simply deduct almost all the expenses from your CPF savings, think again! You can use your CPF savings to pay for a part of the home and to service the loan but not for the monthly expenses (e.g. mortgage insurance or conservancy and management service fees). You need to have sufficient cash to pay for these ongoing payments in addition to meeting your current monthly living expenses (e.g., rent and telecom bills).

A better reason to purchase a home is the fact that you already have savings to cover for the upfront payments such as the down-payment, agent’s fees, and stamp fees.

2. TO SUPPLEMENT YOUR “STABLE” JOB

Are you fond of your current occupation? How long have you been in the organization? Are you confident that your position is stable for the next couple of years?

The truth is, you can never be 100% sure that your job is secure. You can argue that CEOs or founders of the company can keep their jobs for the longest time but then again there’s the case of the Lehman Brothers. When deciding on whether or not you shall buy a flat, consider your current job situation as well as the workplace climate. To be sure, hold off a few years and grow your savings first before making this important investment.

3. TO SATISFY YOUR NEED TO MOVE

If you love the thrill of moving to a fresh nest and constantly changing your neighborhood, you will realize how difficult it is to sell your relatively new home in a short period of time without encountering a big loss. This is because most people prefer homes with better home equity. You cannot build a high value of ownership for your flat overnight!

4. TO COHABITATE WITH YOUR CURRENT PARTNER

As Nelly’s song goes: “Lovers to friends…why do all good things come to an end?”

With relationships, you have little to no certainty about what happens in the future. You may be in the best terms now but who can really be sure that you will end up together forever?

If purchasing a flat together is your solution to fixing an unstable relationship (even if you are engaged), what will you do if your partner suddenly vanishes? Or perhaps if he or she goes unemployed after a few months? You will have to carry the burden of the mortgage and all the monthly costs on your own. This poor reason for housing commitment will affect your credit.

Sources: 1 & 2

Local Tech Startups That You Do Not Want To Miss!

As I was looking for the textbook definition for “Technology Startups”, I was surprised with the scarcity of written works that directly answer my question. Try to Google “What is a technology startup?” to see for yourself. Hence, I must define the term by dissecting each word – much like how Lance Weatherby addressed the situation.

According to Weatherby, defining a startup is the easy part. He was right! A startup is a company that it is in its first stage of operations. The founders of a startup often attempt to make money by developing product or service that they deem to be in demand. Startups are all about finding a market and a business model that works. Skype and Airbnb were once examples of tech startups but they have since grown to become established companies.

On the other hand, defining technology can be quite difficult. Technology is a broad and pervasive scope that encompasses something as simple as a wheel to something as complicated as an IPhone. In terms of technology startup, something must be made as a result of engineering or science.

Tech startups are on a mission to offer something to solve a problem in a different manner. In general, tech startups are unique and innovative.

On that note, here are some of the amazing tech startups in Singapore:

HIPVAN

Since its inception in 2013 with a funding of S$500,000, HipVan has been making waves regionally due to its lifestyle design inspirations and great sales. HipVan is a fashion-tech startup founded by Danny Tan, Kevin Vo, Deborah Wee, and Shobhit Datta. It is an online store that offers up to 70% off the retail prices of furniture, accessories, kitchen-wares, and so much more. Check their collections at www.hipvan.com.

Image Credits: www.facebook.com/thehipvan

BURPPLE

Ranking as #9 in Singapore at startupranking.com, Burpple shines from the rest due to its clever and beautiful way of discovering and sharing food experiences. You know how Singaporeans love MAKAN! Burpple allows its users to submit eatery listings and reviews with appropriate photographs. It is now downloadable on both the App Store and Google Play.

VAULT DRAGON

Founded by Vishesh Mittal and Tseng Ching-Tse, the Vault Dragon is basically your “Dropbox” for tangible items such as your secondary school books and holiday sweaters. You simply have to put the items on the storage boxes they delivered (i.e., free delivery of storage boxes but you can use your own too) and they will collect it and store it securely. Worry not about the prices as they are all affordable!

Communication is done through their website or through their number: +65 9385 9924.

Image Credits: pixabay.com (CC0 Public Domain)

Sources: 1,2, & 3

Starbucks: Salted Egg Croissant & other Delicious Treats (fr 11 May 16)

Your favourite salted egg yolk has now arrived at Starbucks.

From 11 May, Starbucks will start selling their own version of Salted Egg Croissant at all outlets, together with other delicious treats such as Creamy Chicken Foldover, Curry Chicken Puff, Golden Brown Waffles, Glazed Donuts and more.

It will only be available for a limited time, from 3pm to 6pm.

Bite into a flaky croissant crust that’s overflowing with buttery, salted egg yolk filling.

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Surefire Ways To Earn More While You Sleep

1. JUST SLEEP

As researchers had found, sleep can improve your concentration, boost your cognitive function, reduce your stress levels, and even increase your Emotional Quotient (EQ). But aside from these, it can also increase your salary! An additional hour of sleep per week has shown an increase in salary by 1.5% over the length of a season and 4.9% over the length of a few years. This increase is due to the positive effect of sleep on productivity.

2. CREATE A PAID BLOG

By constantly writing or blogging about a certain topic, you become sort of expert on that topic. In order to get started, your blog must have a thematic niche such as fashion, finance, or parenting. Preoccupy your time by improving the blog’s design and content. Then, start earning by placing advertisements or becoming an affiliate partner. The most feasible ways to earn money from your blog are paid advertisements, paid articles, offering courses, and selling books.

Curious on how much a successful blogger can make? Well, they can earn as much as S$5,000 a day.

3. SELL YOUR PRODUCTS ONLINE

Capitalize on your products to support your business and your clients’ needs. Online platforms are a great way to sell your products. You simply have to put a page, employ a shopping cart, and promote it. If you are designing a yoga sportswear collection, consider launching it online to receive a stream of revenue even as you sleep.

4. BE AN INVESTOR

According to Investopedia, an investment is a monetary asset bought with the assumption that it will provide income in the future or be sold at a higher price. Investments in Singapore include the purchase of stocks, bond, gold bars, and properties. Fortunately, you do not have to be regularly present to operate these investments. Start by knowing more about the different investment types and how each one works through indulging on the free resources available physically and virtually.

Image Credits: pixabay.com (CC0 Public Domain)

Sources: 1,2,& 3

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