First Pile of Investments

Previously I tried buying shares using iOCBC Securities to see how things are like.

And today, I have finally made my first substantial transaction! (actually two).

Based on the advice from an eBook written by a renowned forumer on HWZ, I went to set up a Security Trading Account with Standard Chartered Bank because it's suppose to have the lowest fees for transaction above $1000.
Through this account, I invested in the counter ES3 - STI ETF (for regular investment) and CC3 - Starhub (just because I felt the price was low).

It took me a rather long time before I decided to take the plunge.
I have been monitoring the prices, and the price for ES3 seems rather high at the moment.
I felt like I would be at a disadvantage by going in now.
But the Dollar-Cost Averaging (DCA) advocates for a regular investment, no matter the price.
So, I just did it.

Another step towards my financial goal~!

Plotting out my expenses for 2017 (First 8 weeks)

I have been recording my every expenses in life, as much as I can remember, for around 3 years + now. Although I have the data at hand, I didn't really commit time to do anything with it.

So, as for a start, since 8 weeks have passed for the year 2017, I have decided to just quickly conjure up some graphs for quick observation of the trends.

Tada~! After so many years of putting in effort to record, I did up only the recent 8 weeks of data. haha..  Still, it's a start.

The graph only showed 4 categories, which are the 4 most common categories that I usually record. There are another 10 more, but most are rather fixed expenditure like income tax, or have rare occurrences like medical. I will just leave them out first and see how I can better illustrate them as I go along.

Let's see some averages:

Categories	Average
Food & Beverages	$106.22
Transport	$37.00
Leisure	$15.24
Shopping	$81.63
Total	$240.09

The F&B trend seems rather stable across the 8 weeks, and seemingly dropping recently. But unfortunately, not for my weight. The transport fee increased a bit over Week 5 to 7 due to some uber/cab. The spike in Week 3 for shopping was for a CNY hamper for Dearest's family, and my CNY clothes, and a personal shopping item - a packable 28L backpack from matador. I think this kinda hiked up the average quite a lot. haha.. As for leisure, also quite minimal expenditure I must say.

The average expenditure for these common categories are only at $240, which means the monthly average is around $1K. Yet, my monthly expenses, together with all the other categories, always go beyond $2K++. hmm... WHY?! What did I spend my other $1K (or ++) on ??

Maybe next week I would do a more detailed analysis, with more categories included.

Wedding Plan - Step 1

Dearest and I started planning on our wedding around 2 weeks back. So recently we have been rather active in researching for all the wedding thingy~

And just 2 days ago, we have gotten our potential wedding dates from the Feng Shui master!

This is our 1st step towards planning for the wedding =)

We were given 3 dates, but we definitely preferred the earliest one.

So now, we can start working towards that date. 

Hopefully the venue that we want would still be available by the time we confirm. *pray

This whole planning for our wedding is rather challenging, as it consists a lot of comparisons, and each with their own complexity. 

Hopefully our efforts into all these research would help us to save some money for the wedding =)

Breakdown of fees involved in trading

So I emailed my broker the other day and he promptly called me to say that I will receive a mail on the breakdown of the fees involved. Save the trouble of me figuring it out 😁

Here's the breakdown!

Proceeds	$115.50
(1) Brokerage Amt	$25 (Min.)
(2) Clearing Fee	$0.03 (0.0325%)
(3) Misc Fee	$0
(4) SGX Trading Fee	$0.01 (0.0075%)
GST @ 7% for (1) to (4)	$1.75
Net Amt	$142.29

Jiayou to me on making investments!

My 1st experience of shares trading!

After setting up my SGX account and brokerage account with OCBC for more than half a year, I have finally made my first purchase of shares! >_< Although given by my age (of 29) it seems like a 'meh' kind of event, but I felt that it is quite a big step for me.

Recently I have been wanting to do a purchase as part of the list of things I want to accomplish this year. So on Thursday night I was going into my account and looking at just doing a simple purchase to understand the whole process of buying.

I'm not really literate in this area, but from what I have gathered, buying ETF stocks seemed to be a rather conservative and safe approach to familiarizing myself with the environment. So I went into my account, and took a look at what I think are the 2 prominent ETF stocks in Singapore.

1) SPDR Straits Times Index ETF (ES3.SI) @ 1.15
2) ABF Singapore Bond Index Fund (A35.SI) @ 3.00

I thought for a 1st purchase of trying it out, I would just buy the minimum number of shares at the minimum price. So I placed an order of 100 lots of STI ETF @ 1.15.

Some time on Friday, I received notifications that my purchase went through, and I have officially bought my 1st shares!

The total cost of the purchase was however a question. So today I logged into my OCBC account, and took a look at the amount to pay through the Electronic Payment for Shares (EPS). It was $142.29!

It came as a bit of a shock, but I recalled that there is a minimum sum of transaction fees involved. Determined to do a thorough breakdown of the fees, I did a quick search of all the transaction fees involved and see whether it worked out to be $142.29. But all the processing fees and brokerage commission didn't add up. My calculation showed that I should be paying more than $142.29. haha..

I guess I would just ask my broker for help on this.

It's one of the many first step.

Towards financial independence! Gambatte!

My First Financial Read

I finished this book within 2 days! 

Mainly because it's a very short book; not because I suddenly gain the ability of speed-reading.

But what makes this book special, is because I believed this is my first book on financial knowledge.

Previously, most of my financial knowledge and wisdom (however limited it is), is learned from the web from various sources.

To introduce the book first... 

by Goh Eng Yeow

This short book gives rather broad but sound advice on financial investment into the market that you can make, e.g. buying ETFs such as the STI ETF. It cites quite a bit of knowledge from the famous Warren Buffett, and describes the potential pitfalls in the market, as well as when you should 'make your own'.

Note to self: Not sure whether it's in the book, but take note for SPDR STI ETF (ES3) and Nikko AM STI ETF (G3B).

Some pointers to take note of from the book that I like to archive in this post:

• Time and Health is more important than Wealth
• Buy experiences, instead of materials
• Lucky people try hard to add variety to their lives; to create more "chance opportunities" for themselves to get lucky
• Financial Independence is working a financial plan, keeping to it, and sufficiently covering oneself medically
• Buy and hold stocks that one believe will last, instead of stocks that will have a temporary boost
• Observe the daily happenings to understand what industry/sectors are thriving, and will continue to thrive in future
• Low-beta stocks (stocks less sensitive to market movements) are good for long-term investment
• Look for under-valued stocks when the market is not good 
• Be fearful when others are greedy, and greedy when others are fearful
• Fund flows are indicative of market trends
• Cash is king in uncertain times; the opportunity to snap up assets on the cheap when others do not have the mean to do so
• Avoid overtrading, following the crowd, momentum investing, noise trading, and selling the winners and keeping the losers
• One strategy is to top-slice successful investment - sell enough shares to take back capital and some profit, but still have some shares left to make potential further gains

That's it.

I think I need to buy a new book. 

Financial Goals~!

As the date of the July bonus draws nearer, I began to think more about what to do with the extra money that I have. I have almost maxed up my savings account to earn the bonus interest, so I'm thinking of using the excess for investment in stocks. 

And just today, Dearest came to me to ask me to set ...

Yes! Financial goal!

I believe everyone needs to have financial goals for long-term planning.

And to set goals, we need to set some rules also.

As advocated by my company, and also Dearest, we need to set....

SMART goals!

Goals that are Specific, Measurable, Attainable, Relevant, and Time-bound.

So here's what I aimed to do.

To attain a portfolio of $5,000 worth of stocks that provide dividends 

by the end of year 2016

Specific - It's a rather detailed aim

Measurable - $5,000 can be measured

Attainable - $,5000 is within my ability for investment

Relevant - Aligned with my ultimate financial goal of attaining financial freedom (i.e. retirement)

Time-bound - By the end of 2016

So that's it, I will aim towards this!

On the other hand, Dearest also committed to an aim of starting her first investment by the end of year.

Although not as specific as mine, but she plans to explore other alternatives with a financial advisor, and then perhaps plan from there on.

Jiayou us~!

Finally, a brokerage account!

A few days back, my brokerage account finally got through! So now, officially, I can trade. Hee.

I'm no expert, but on the surface, it seems that because of the recent Brexit, the market is quite volatile. Might not be a good time to get into it at the moment. oh well, let me observe further and think through carefully how to go about doing this.

I guess in general, the route to being able to trade can be summarized into 2 main steps:

1) Get a CDP account

Download the form.
Prepare whatever documents are needed.
Send in through snail mail; email doesn't seem like an option.
Wait for confirmation of account.

2) Get a brokerage account

Choose which brokerage firm you want to open up the account with.
Go to the bank and tell the person you want to open up a brokerage/trading account.
Wait for confirmation of account.

It's that simple, though I took some time to decide which brokerage firm to open up the account with.

Might be able to open up accounts with different firms, not that sure. Anyway I got rejected by Standard Chartered Bank because on the form, it requires me to have knowledge on trading or financial background in order to open up an account with them. I have read on forum that you can just fake your way through and they won't be care, but I'm more inclined to say the truth and seek alternatives, even though the fees for SC is lower.

I have signed up with OCBC. So now on a daily basis, I get emails from my broker on market research. I have saved the emails that talked about ETF and dividends, because this is what I'm looking for in the long term. Will look into it in the near future!

Staying at home today because my throat is infected again.
This is the 3rd time in a short span of 2 months.
I'm beginning to think that the free flu vaccination jab is giving me more problems.
It might make me immune to flu, but it definitely doesn't make my throat infection less probable.

Financial considerations for my future with Dearest

Valentine's day has just passed!

Dearest and I didn't really celebrate it, but we spent quality time with each other =)

Part of it was an impromptu discussion on our financial needs for our wedding and BTO, both of which would be coming in early 2018.

Here's a rough calculation of the budget that we think we would need:

Wedding

• Banquet - $30K

• Bridal package - $5K

• Actual day costs (Photographer, Videographer, etc) - $5K

• Wedding band - $1K

Total = $41K

Renovation

Total = $45K

Furniture

Total = $25K

Summary

Total = $101K

Wow~!

A whopping $101K cost that we both have to prepare for our wedding and our house.

Of course, this is still a rough estimate, and there are other things that we haven't take into account such as the hong baos that we are going to get back during the wedding banquet.

Based on our current savings, we could barely cover this cost when it really comes. haha..

Maybe when the date draws closer, the budget will be a bit more clear.

Will come back to this when we are really planning for it! =)

The BEST Savings Account!

With the new year just starting out, it's perhaps time to review whether my current savings account is still the best!

There was a time when all the hype was about OCBC 360 Account, which grants you over 3% p.a. interest rate.
I rode on the wave quite early, but it seems like the wave is dying now. haha..
Other banks such as UOB and BOC has since created 'new waves'.

Instead of diligently checking the updates from every possible bank in Singapore, I usually surf around the local forums and those finance blogs to get a sense of what's hot at the moment.

The information I have gathered so far shows that the current Top 3 contenders on the BEST savings account are:

1. BOC SmartSaver

2. OCBC 360 Account

3. UOB One Account

The information given by the banks are usually quite comprehensive, but might be confusing due to the overload of it.

Here's my attempt to decipher what the individual bank is promoting about their savings account, and what is the best option in my situation.

		BOC SmartSaver	OCBC 360	UOB One
Maximum Amt Applicable for Bonus Interest		$60,000	$60,000	$50,000
Prevailing Interest Rate (p.a.)		< $5,000 - 0.25% ≥ $5,000 - 0.275% ≥ $20,000 - 0.35% ≥ $50,000 - 0.40%	0.05%	0.05%
Condition 1	Credit/Debit Card Expenditure	$500 (min)	$500 (min) Credit Cards only	$500 (min) One Card/Direct Visa Debit Card
	Bonus Interest (p.a.)	1.55%	0.50%	First $10,000 - 1% Next $20,000 - 1.5% Next $20,000 - 2% => For $50,000 - 1.6%
Condition 2	Salary Credit	$2,000 (min)	$2,000 (min)	$2,000 (min) *Either Condition 2 or 3 will be considered.
	Bonus Interest (p.a.)	1.00%	1.20%	First $10,000 - 0.5% Next $20,000 - 0.5% Next $20,000 - 1.33% => For $50,000 - 0.832%
Condition 3	Bills Payment	3 bills online/GIRO OR 1 BOC Mortgage Repayment	3 bills online/GIRO	3 bills via GRIO *Either Condition 2 or 3 will be considered.
	Bonus Interest (p.a.)	0.60%	0.50%	First $10,000 - 0.5% Next $20,000 - 0.5% Next $20,000 - 1.33% => For $50,000 - 0.832%
Condition 4	Insure/Invest	-	Financial or Investment products	-
	Bonus Interest (p.a.)	-	1.00%	-
Condition 5	Incremental Acct Balance	-	Increase in Avg Daily Balance	-
	Bonus Interest (p.a.)	-	1.00% of Incremental Amt	-
Maximum Interest Rate (p.a.)		0.40% + 1.55% +1.00% + 0.60% = 3.55%	0.05% + 0.50% + 1.20% + 0.50% = 2.25% (excludes Condition 4 & 5)	0.05% + 1.60% + 0.832% = 2.482%
Maximum Interest		3.55% of $60,000 = $2,130/year = $177.50/mth	2.25% of $60,000 = $1,350/year = $112.50/mth	2.482% of $50,000 = $1,241/year = $103.42/mth

The short answer from the table is that, BOC SmartSaver is the obvious winner~!
The difference from OCBC 360 I can potentially get from BOC SmartSaver in just a month is $65!
I can eat a lot of chicken rice with $65.

However, the long answer is, it depends on what kind of criteria can you fulfill.
My situation is that I would fulfill all the 3 conditions needed to attain the maximum benefits.
But if you can't, you probably have to work out which savings account is the optimal choice for yourself.
For example, if you're unable to hit $500 for credit/debit card expenditure, UOB One is definitely out of the picture.
BOC SmartSaver will yield 1.60%, but OCBC 360 will yield 1.70%.
In this case, OCBC 360 wins.

Things get more complicated when you have way over $60,000, and are deciding on a second savings account, and can fulfill the criteria of the second savings account.

But at the moment, I'm only capable of just one savings account.
The choice is clear, and I have made my choice.
Well-researched and calculated. haha..

Hopefully my wealth will start to grow grow grow~

A Quick Infographic on Buying a Car in Singapore in 2016

I think I should avoid trying to write long and informative blog entries, basically because it's hard for me to allocate time out to write a long one.

So I guess I should just keep the entries short and have quick updates on my progress =)

Anyway, this infographic on buying a car just came up on Yahoo.sg today. I just wanted to keep this image in my blog so that in future when I do decide to buy a car, it's a quick guide to understanding how much money do I actually have to fork out in order to afford one. Right now, it seems near to impossible and impractical. Haha.. poor Singaporeans.

Infographic from MoneySmart

To many more short entries before the month ends! haha..

CPF Part 2: Using Medisave & Medishield Life to pay hospital bill

Have been missing a few promises I made to myself on blogging.
But I wanted to squeeze out some time today to write up this post!
So here I am, downloading my research and findings into this cyber space.

Today's topic is...

Using Medisave & Medishield Life to pay hospital bill

Recently the hospital has just sent a chaser snail mail to ask my family to pay up my mum's recent hospitalization bill.

So it reminded me on how I was figuring how the hospital determined how much I need to pay.

I believed many others would not have much knowledge what how this part of the CPF system works, until they finally have to deal with the unfortunate incident of a family member being warded into the hospital.

Well, the main realization is this...

MEDISAVE & MEDISHIELD LIFE DON'T PAY EVERYTHING!!!

This feeling of "Why we pay for Medishield Life every year, we still have to pay so much for the hospitalization bill?!?" resonates with my dad the most after he received the bill. haha..

So how much does Medisave and Medishield covers your hospital bill?
Well, it depends on quite a few factors.
I shall try to make it as simple and straightforward as I can here for an easier comprehension as compared to reading off the CPF website.
Alternatively, I believed the nurses at the hospital could help explain this part (but my experience is that some of them are not that knowledgeable too).

Qns 1: What is Medisave and Medishield Life?

As explained in my previous post (Link here), Medisave is one of the 3 accounts in the CPF that an adult Singaporean would have.

It is a mandatory saving scheme which helps Singaporeans to save a fund to use for their personal or immediate family's hospitalization, day surgery, and certain outpatient expenses.

Once you start working, a portion of your income that goes into CPF, goes into your Medisave account (8-10.5% of your income, depending on age group).

Then what is Medishield Life?
Medishield Life is a basic health insurance plan that is mandatory for all Singaporeans. Just recently on 1 Nov 2015, Medishield Life has replaced Medishield with better coverage and benefits.

As an insurance, its aim is to buffer against the times you incurred large hospital bills, or even certain expensive outpatient treatments (e.g. dialysis and chemotherapy).

The good thing about this plan is that the premiums for this insurance can be fully paid using our Medisave accounts, so we don't have to pay out any cold-hard cash.

Qns 2: How does Medisave and Medishield Life works to offset hospital bills?

There are some limitations of how much Medisave and Medishield Life can actually help in paying the bills.
In my opinion, it's not gonna help much whether you know how all these works.
Because in the end, you still gotta pay up whatever is stated.
But it does however gives me a better perspective of why health insurance should be taken up.

Let's use my mum's hospital bill as an example of how these two Ms work.
She stayed for 3 days in a public hospital, B2 Class ward, and had a minor operation.

Total Charges: $6,015.18
Government Subsidy: $3,621.55 (~60%)
Amount Payable: $2,393.60

They round down the $0.03 out of goodwill I guess. hahaha...

So let's see how this amount that is payable goes through the limitations of Medisave and Medishield Life.

Limitation 1: Medisave Claim Limits

Apparently, unknown to me beforehand, there is a limit to how much money can be claimed from the Medisave account to pay for the bill.
There are just too much conditions that would affect the claim limits, so I wouldn't talk about them here.
Here's the link to the MOH website for the whole list (here!).
Specifically in my mum's case, there are 2 claim limitations that were considered.

A) Medical / surgical inpatient cases

I can only claim a maximum of $450 per day for daily hospital charges.
So for a 3-days hospital stay, my mum can claim ($450*3)= $1,350 from her Medisave account.

**Daily limit has been changed to $700 per day for Medishield Life.

B) Surgical operations (inpatient and day surgery)

A fixed limit would be added to the amount claimable from the Medisave account.
The actual limit is dependent on the complexity of the operation (I'm guess the more serious the operation, the higher the limits).

A minor operation like my mum's would add an amount of $253 to the limit.
(I have to work backwards to get this amount because I am lazy to read through the table of operations to find the corresponding limits)

I believed that these two conditions are the common conditions that would be considered in usual cases too.

Therefore, adding these two limits together...

Total Sum claimable from Medisave: $1,350 + $253 = $1,603
Amount Payable: $2,393.60
Total Sum NOT claimable from Medisave: $2,393.60 - $1,603 = $790.60.

So, $790.60 has to be paid in CASH.

Then what about the $1,603?
Is it possible to use Medishield Life to offset this amount so that I do not have to use my Medisave funds?
This leads on to the 2nd limitation.

Limitation 2: Deductible Limit

Deductible is a fixed amount that needs to be paid by the individual before Medishield Life actually has any practical use.
Here's a table that I koped from the MOH website.

Source

You would only need to pay the deductible once every policy year.
So that means if you got hospitalized twice in the same policy year, and you paid the full amount of deductible during the first stay, you don't have to pay the deductive in the second stay.

In my mum's case, a B2 class ward, and my mum being under 80 years, the annual deductible is $2,000.
For the Medishield Life payout to kick in, the amount claimable from Medisave needs to be more than the deductible.
Since $1,603 < $2,000, my mum's bill could not make use of Medishield Life.
The entire $1,603 has to be deducted from Medisave account, without any help from the health insurance (which I emphasized again, is mandatory, and also useless in this situation).

This was definitely not easy to explain to my parents.
I had to explain around 3 times before they started realizing that their son is making sense.
My dad's immediate response to this limitation was,
"我们每年还将多的钱买这个保险，都不可以用。买来做什么？？？"
(Singlish translation: Every year pay so much for this insurance, also cannot use. then buy for what???)

However, if the amount claimable from Medisave account does go beyond the deductible, a third limitation will set in.

Limitation 3: Co-insurance

Simi si co-insurance???
It basically means other than the deductible, it's an additional amount that the insurance company wants you to pay before they actually pay.

But how is this different from deductible?
Why not just lump deductible and co-insurance together instead of separating them?

That's because the co-insurance component is not a fixed amount.
It is calculated according to the total sum claimable from Medisave account.

Here's a table that I edited from the MOH to just display the Medishield Life portion.

Let's say the total sum claimable from Medisave account was actually $9,000.

Total Sum claimable from Medisave: $9,000
Deductible: $2,000
=> Co-insurance applicable for ($9,000 - $2,000) = $7,000

Breakdown of Co-insurance payment.

[$2,001 - $3,000] = 10% * $1000 = $100
[$3,001 - $5,000] = 10% * $2000 = $200
[$5,001 - $9,000] = 5% * $4000   = $200

Co-insurance payable                   = $500

Medishield payable                      = $7,000 - $500
                                                     = $6,500

In the end, you still need to fork out an extra $500 as co-insurance even though Medishield Life has kicked in.

Conclusion

As illustrated, the mentality of thinking that Medisave and Medishield Life are shielding you from the hefty medical or hospitalization bill is fallacious.
Before the policy even begin to take effect, there is still quite a bit of money that you have to pay.

In summary, you pay the following:

1. Amount that can't be claimed from Medisave due to claim limits
2. Deductible (depends on class ward and age)
3. Co-insurance (depends on total amount claimable from Medisave)

So don't get a shock when you receive a hospitalization bill next time, as how my parents felt when they got the letter of payment.

This episode, and together with my dearest's advice, prompted me into action on getting some better health insurance coverage for myself.
There are plans out there to take care of the 3 payments that I have mentioned above.
I am currently in discussion on this and other insurance matters with a financial consultant whom dearest introduced me to.
I will probably write more about this in future when I'm more or less certain on what's the best plan for myself.

On a side note...

It's been very hard to keep to my promise of blogging twice a week (every Wed and weekend).
I thought I would have time to sit down and track my progress every now and then.
But I was seriously disillusioned that this can happen without me really committing to it regularly.
There is usually very little time left in the evening during weekdays after dinner, watching tv with family, exercising, and chatting with dearest.
And I usually fill the weekends with other activities instead of setting aside time for the things I want to achieve (currently would be learning Java).
I need more discipline and more motivation!!!

rawr.