Singapore-based financial blog that aims to educate people on personal finance, investments, retirement and their Central Provident Fund (CPF) matters.

Wednesday, 13 November 2019

What is CPF Basic Retirement Sum (BRS)?


Source: CPF

Today's post: Basic Retirement Sum
It is one of the 3 types of Retirement Sum launched by CPF.
It is currently set at half the prevailing CPF Full Retirement Sum (FRS)
Why would someone wish to pledge their house in exchange for a "large" sum of money?
This post will answer that question.

For more information on the different types of Retirement Sums, click HERE
For more information on the amount on the different types of Retirement Sums, click HERE

Criteria for BRS

1) You need to have a house.
The house will be used and pledged against CPF.
Is your house fully paid or are you still paying it?*

2) You need to have money in excess of the BRS amount
The BRS amount from now until 2020 has been set.
For 2019, the BRS is set at $88,000 for those turning 55
For the years beyond, please look at our post HERE

Advantages

1) You get to withdraw your CPF money
No, you don't get to withdraw all your CPF money.
But you get to withdraw the amount that is in excess of your BRS.
So if your BRS is $90,000; you can withdraw from your CPF money in excess of that $90,000.

Disadvantages

1) Lower Monthly Payouts
Because you currently only have half the Full Retirement Sum (FRS), you will only get half of the monthly payout. But, you have withdrawn the excess amount.

2) You have to Return the Money to CPF
If you sold your house, you have to return the money you have taken out, back into the CPF.
BUT! You can still use the money in your CPF to buy another house and then apply for BRS again to get the excess money out if you have any. For more details, look at our post HERE


*If you have fully paid your house, you can pledge your house to withdraw money in excess of your BRS.
If you have not year fully paid your house, you can still withdraw the CPF money in excess of your BRS after pledging your house.
Your outstanding housing loan, however, will be paid with
       a) your CPF OA money - if you are still working or if there is still money inside
       b) with your cash - if your CPF OA has insufficient money to pay your monthly mortgage
The money in excess of BRS that you withdraw WILL NOT be forcefully used to immediately pay your housing loan.
For more concrete examples, you may refer to the link HERE and THERE

Recommended Read: Why I am NOT Paying Back my Student Loan ASAP


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Unhappy with your job? There's something you can do about it.
A. Save up enough money from your job so that you can fire your boss - the problem is it might take some time and some effort
B: Find a new job, search for new opportunities. A career coach might be able to help you with that. And if you are looking for a free career coach, visit Workforce Singapore via the link below.
They can link you up with the career coach and you might be able to find new opportunities on their jobs portal.
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Wednesday, 30 October 2019

CPF for Young Adults


Image may contain: 1 person, text

CPF, in short for Central Provident Funds, is a "social security system that enables working Singapore Citizens and Permanent Residents to set aside funds for retirement. It also addresses healthcare, homeownership, family protection and asset enhancement.".
Source: https://www.cpf.gov.sg/Members/AboutUs/about-us-info/cpf-overview

This is quoted from the CPF website and as defined by CPF. While most people would think that CPF is only for old people, youngsters should definitely not neglect it. This is especially true due to the magic of compounding interest. So what are the schemes that people in their 20s should know?

1. CPF Education Scheme
This scheme allows you to use your Ordinary Account (OA) savings to pay for your own, children’s or spouse’s subsidised tuition fees. Applications can also be made to use CPF savings to pay for your sibling’s or relative’s subsidised tuition fees but will be assessed on a case-by-case basis.

However, one point to note is that this is effectively a LOAN from whoever's CPF you are using to pay for your education. Hence, it is necessary to pay back this loan with interest. The effective interest rate payable is then pegged to the OA interest rate, which is adjusted quarterly.

The student has to start repaying the loan one year after graduation or termination of studies, whichever is earlier. Repayment must be made in cash either in one lump sum or via monthly instalment over a maximum of 12 years. The minimum monthly instalment is $100 and the rate will be computed for the student based on the loan amount and repayment period.

2. CPF Investment Scheme
As we graduate and take on our first job, it is imperative to consider investing for retirement. If you are thinking of that, then this is the scheme that you do not want to miss out. This scheme allows you to invest your Ordinary Account (OA) and Special Account (SA) savings in a wide range of investments.

Conditions to be met before you can adopt this scheme:
  1. are at least 18 years old;
  2. are not an undischarged bankrupt;
  3. have more than $20,000 in your OA; and/or
  4. have more than $40,000 in your SA.
You can find the range of products which you can invest in here. One of the products is Exchange Traded Funds (ETFs) which our blog had been advocating!
3. CPF Nomination Scheme
We might be thinking we are so young, filled with hope and energy. Death might be the least of concern. This is especially so after the recent hoo-hah, where CPF stated that CPF funds are not covered under a will.

For more info: https://www.straitstimes.com/forum/letters-in-print/cpf-monies-not-covered-by-a-will

The nomination procedure is very simple.
All you have to do is fill in a form found on the CPF Nomination Website.
Download the form, fill it up and submit it to CPF Board.

Here are some other information that are useful to you!

What does a CPF Nomination cover?

Covered under CPF NominationNot covered under CPF Nomination
  1. CPF savings in your Ordinary, Special, Medisave and Retirement Accounts
  2. Unused CPF LIFE premiums, if any
  3. Discounted SingTel shares
  1. Properties bought using your CPF savings
  2. Payouts from Dependants’ Protection Scheme (DPS)
  3. Cash and investments held in the CPF Investment Account under the CPF Investment Scheme-Ordinary Account (CPFIS-OA)
  4. Investments held under the CPF Investment Scheme-Special Account (CPFIS-SA)

More information can be found here: https://www.cpf.gov.sg/Members/schemes/schemes/other-matters/cpf-nomination-scheme


Conclusion
CPF is definitely not an organisation for the elderly. In fact, youngsters should harness such national scheme, especially since it affects us for the long term!


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Unhappy with your job? There's something you can do about it.
A. Save up enough money from your job so that you can fire your boss - the problem is it might take some time and some effort
B: Find a new job, search for new opportunities. A career coach might be able to help you with that. And if you are looking for a free career coach, visit Workforce Singapore via the link below.
They can link you up with the career coach and you might be able to find new opportunities on their jobs portal.
http://ow.ly/GY8150wlfrF

Wednesday, 23 October 2019

Why I am NOT Paying Back my Student Loan ASAP


Most people after they graduate from University and start working, their goal would be to pay down their student debt, and save up for housing, car, marriage, etc.
That’s not a wrong idea to have, paying your debts down and all, especially if you took a bank loan that charges about 5% per year in interest.
I took the CPF loan out from my mother’s account, and the interest is 2.5%, and honestly, I am not that much in favour of paying back them soon. Here’s why:

  1. It’s a low-interest loan
    Okay, it’s not exactly that low but it’s not that bad. It is comparable to say a housing loan. So it’s better that I extend this low-interest loan and use the excess cash to invest in assets that give higher long-term returns (like stocks). 
  2. It is a form of interest arbitrage
    Refer to one of our latest articles to understand why - How the Rich Play the Money Game
This is not applicable for all though. You have to really invest the excess money for the long-term to make the loan worthwhile.

  1. It can’t be used for expenses, even wedding, proposal, home renovation, etc. 
  2. It can’t be used for anything that won't give you an investment return. 
  3. It can’t be invested in assets that give you low returns like bonds
  4. Your parents have to be ok with you dragging the repayment (ie; they not in a rush to have money in their CPF). Sometimes they might need the money inside for housing, some times for your siblings’ future study. 
  5. Your parents have more than $60k in CPF. This is a bit more complex. So because the first $60k in CPF gets +1% interest, and those age above 55 gets another +1% on their first $30k. Essentially that is like a nice 4.5% interest per year, which is a pretty good return that can be quite hard for other asset classes or investments to beat. In which case, it’s better to return the money early to earn the 4.5% guaranteed by CPF than to try your luck in the assets market


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Unhappy with your job? There's something you can do about it.
A. Save up enough money from your job so that you can fire your boss - the problem is it might take some time and some effort
B: Find a new job, search for new opportunities. A career coach might be able to help you with that. And if you are looking for a free career coach, visit Workforce Singapore via the link below.
They can link you up with the career coach and you might be able to find new opportunities on their jobs portal.
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Monday, 21 October 2019

Should I Transfer my OA Money to SA?



Today's post: Should I transfer my OA money to SA?
This post was proposed by one of our readers, who asked the question: is it wise to transfer my money in OA into SA?
We would like to thank all our readers who posed us questions and sent to us tips.
We would love to see more of that coming in, so do feel free to keep sending us these messages!
You can contact us via email (investmentstab@gmail.com), comment on our blog, or drop us a message via Facebook or Instagram.

There is a scheme in the CPF that allows you to transfer your money in your OA account to your Special Account (SA).

Benefit:
1) Higher Interest - SA gets 4% while OA gets 2.5%.

Considerations:
1) Money transferred from OA to SA cannot be transferred back - its a one-way traffic.
You will only be able to get the money back at age 55, IF you have met your minimum sum

2) The range of investment products that you can invest in becomes smaller.
SA is unable to invest in ETFs and other investment products, however, money in OA is allowed to invest in ETFs, and other investment products.

3) You can only transfer money from your OA to your SA until your SA hits the prevailing FRS (currently at $176,000). No more money can be transferred from your OA to your SA unless the FRS sum is raised again next year or if you managed to spend the money in your SA.
*Monthly contribution can still be contributed into your SA even if your SA has reached the minimum sum.

4) Should you have insufficient money in your OA to pay for your insurance premiums or your mortgage, you would be required to pay these in cash. You are unable to use the money in your SA to pay for almost anything.
So only transfer the excess money you will not be using if you wish to transfer from OA to SA.


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Unhappy with your job? There's something you can do about it.
A. Save up enough money from your job so that you can fire your boss - the problem is it might take some time and some effort
B: Find a new job, search for new opportunities. A career coach might be able to help you with that. And if you are looking for a free career coach, visit Workforce Singapore via the link below.
They can link you up with the career coach and you might be able to find new opportunities on their jobs portal.
http://ow.ly/GY8150wlfrF

Thursday, 17 October 2019

How the Rich Play the Money Game


Interest Arbitrage:
For those of you who have no idea what this phrase means, let me explain it to you.
Interest: interest rates.
Arbitrage: is the practice of taking advantage of a price difference between two or more markets.
Simply put, the rich get richer by taking in a higher interest rate return than the interest they pay on the loan they take.

Simplest Example:
I borrow $1 million from the bank at 2% interest.
I lend it out to someone at 6% interest.
By doing nothing, I earn 4% interest.
Of course, the real-life example is not that simple. But as an illustration to show you the point.

More Common Example:
I buy a house for $1 million.
I put a 10% down-payment ($100,000) and borrow the rest of the $900,000 from the bank.
And yes, the banks are more than willing to lend huge sums of money to rich people than to the average Joe and Jane.
Here's where it gets interesting:
Now, I can negotiate a deal with the bank to not repay them the principal of the loan (the $900,000).
Instead, I will pay only the interest portion of the loan - aka Interest-Only Loans.
The bank, hoping to have my business, will agree to this (competition is tough these days for the banks).
So I now have a property that I can rent out for income, and net me some cash if my rent is greater than my interest payment.
If I want to, I could also lower my rent to equal my interest payment, just to ensure that I got someone paying my interest for me.
Here's why it makes sense to do that - warning: a fair amount of maths below.

Recommended Post: CPF LIFE Payout Sum's Difference

Properties tend to increase in prices in the long-term (agreed?)
Properties probably can average a 6%-8% return per year in the long-term (rent + capital appreciation, agreed?)
Interest rates probably won't go beyond 5% in the next 10 years
So essentially, what I, as the rich have done, is borrowing other people's money (the bank's money) cheaply to invest for returns that exceed the cost of my loan. 
The only thing I have to ensure is that I have money to pay my interest payment and that I can last long enough for my property to appreciate significantly in value so that I can sell it for a profit.
Simplified mathematics: 7% return - 4% cost = 3% net return per year on average over 10 times

Now, the property is not just the only tool used for such action.
Those of you who trade in Forex and commodities will understand that you all leverage to earn extra money.
Stocks have leverage (brokerage firms allow you to borrow up to 2x the capital you put with them).
When you buy your HDB, you are also essentially hoping to sell it in the future to reap a good profit when you are near your retirement, that is also a form of interest arbitrage.

Risks:
Now, that is not to say that such arbitrage doesn't come without risks.
If you cannot pay your interest-only mortgage, the bank seizes your property (think 2008 Financial Crisis).
If you cannot provide enough funds to support your trading positions, the brokerage firms will sell out your positions in stocks, Forex, commodities, bonds, or other trading assets to recover their money.
You need to have enough planning and financial resources to cover the risks involve (you must have money to pay your loans when you got no tenants paying for you).
It takes a huge understanding of how asset classes (stocks, bonds, properties, etc.) work to be good at this.
For example, the probability of the stock market being positive over any 10-year period is almost 90+%. If you could borrow at 2% interest, invest over the long-term in the stock market that gives you a 7% average return per year, you earn 5% without putting any of your own capital. But the problem arises when the market is down (and the stock market can be down 30% or 50% in less than a month), under such circumstances, do you still have the resources to pay the 2% interest you incur every month?

Recommended Read: Why stocks are better than HDBs

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Unhappy with your job? There's something you can do about it.
A. Save up enough money from your job so that you can fire your boss - the problem is it might take some time and some effort
B: Find a new job, search for new opportunities. A career coach might be able to help you with that. And if you are looking for a free career coach, visit Workforce Singapore via the link below.
They can link you up with the career coach and you might be able to find new opportunities on their jobs portal.
http://ow.ly/GY8150wlfrF

Wednesday, 16 October 2019

CPF LIFE Payout Sum's Difference


Source: CPF

In today's post, we will be discussing why is the Full Retirement Sum monthly payout not double the Basic Retirement Sum's payout.

As you can see above, it is an image of the monthly payout you will get based on the different Retirement Sum savings you at have age 55.

Retirement Account Savings at 55:
The FRS is 2x of BRS.
However, the monthly payout from FRS is not 2x of BRS (2x of $730 = $1460).
The same is for ERS, where the payout is not 3x of BRS (3x of $730 = $2190)

This is because the Effective Interest Rates (EIR) on each Retirement Sum is different.
EIR is the real interest rate return you get from your money.

In 2019,
a) OA earns 2.5%
b) SA, MA & RA earns 4%
c) First $60,000 of your CPF balance gets extra +1%
d) First $30,000 of your CPF balance gets extra +1% if you are age 55 & above

FRS is 2x of BRS, however, the income derived from FRS is not 2x of BRS because the effective interest rate is not the same.
BRS enjoy a higher effective interest rate than FRS and ERS even though it will earn higher than the base 4%.

For a clearer picture on the EIR issue, please refer to our other post: EIR of CPF.
It will explain why is the effective interest on your CPF money decreasing as more and more money is accumulated in your CPF accounts


MORE LINKS
Accrued Interest More than Housing Profits?
CPF +1% Interest for those age 55 & Above
5 Financial Things to do in your 20s
Singapore Finance Minister on Personal Finance Part 2
Reducing CPF Housing Accrued Interest
CPF +1% Interest for those age Below 55

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Unhappy with your job? There's something you can do about it.
A. Save up enough money from your job so that you can fire your boss - the problem is it might take some time and some effort
B: Find a new job, search for new opportunities. A career coach might be able to help you with that. And if you are looking for a free career coach, visit Workforce Singapore via the link below.
They can link you up with the career coach and you might be able to find new opportunities on their jobs portal.
http://ow.ly/GY8150wlfrF

Monday, 14 October 2019

Private or Public Housing Loan?


Buying a HDB flat for the first time can be an intimidating experience. It is probably the first big-ticket purchase in your life that will take the next couple of decades to pay off, so you would definitely want to rake in as much savings as you can.

Perhaps you have not really thought about what kind of loan to take up. If you do not already know, you have a choice between taking up a HDB loan or a bank loan, provided you are eligible for them.

You might want to hold on to your cash and pay off your home loans using your CPF, but did you know that taking up a bank loan allows you to pay less interest? This is because bank interest rates are lower as compared to the CPF Ordinary Account (OA) interest rate which home loans are pegged to.

Recommended Read: Climate change: You can save money and the planet

And while the down payment required to take up a bank loan may be higher (at 20%, with at least 5% paid in cash) as compared to a HDB loan (10%, fully payable with your CPF), you get to enjoy greater flexibility in retaining your savings in your CPF OA. Conversely, upon the collection of keys to your new home, HDB will wipe out your CPF OA balance to reduce the loan quantum required for you to service.

In the following infographic, we run through the main factors to consider while taking up a home loan for your HDB flat, and the main differences between taking up a HDB loan and a bank loan.


Click HERE to see the full infographic.

Recommended Read: Here's how you can opt out of CPF LIFE

Infographics provider:
The team at Redbrick Mortgage Advisory has more than 60 years of banking experience and is proficient in structuring and sourcing for the best financing terms for both residential and commercial real estate in Singapore, Malaysia, USA, UK, Japan, Thailand and Australia.

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Unhappy with your job? There's something you can do about it.
A. Save up enough money from your job so that you can fire your boss - the problem is it might take some time and some effort
B: Find a new job, search for new opportunities. A career coach might be able to help you with that. And if you are looking for a free career coach, visit Workforce Singapore via the link below.
They can link you up with the career coach and you might be able to find new opportunities on their jobs portal.
http://ow.ly/GY8150wlfrF

Saturday, 12 October 2019

CPF LIFE or Private Annuity Plan?


Disadvantages of using Private Annuity Plan instead of CPF LIFE.
Although this post title is "Disadvantage", but we included some "Advantage" of Private Annuity against CPF LIFE too below.

From what we have found, Private Annuity Plans available in the market tend to supplement CPF LIFE instead of replacing the CPF LIFE.

Instead, Private Annuity Plans can be used together with CPF LIFE to
1) Boost your monthly retirement income.
2) Help you withdraw out a portion or the whole of your Retirement Sum.

Advantage
1) Potentially higher returns (Annuity plans invest your money into a unit trust which can bring high potential returns. However, this depends a lot on the trusts that the insurance company invests in).
2) May comes with rider benefits (Eg; cheaper insurance premiums if you buy other INSURANCE from the same insurance company you bought your annuity plan).

Disadvantage
It is fairly difficult to plan for your  Private Annuity Plan to replace your CPF LIFE.
We made some comparison on our previous post HERE
1) Returns not as great as what CPF can provide.
2) Returns are not guaranteed - 4.25% is not definitely a 4.25% every year. Returns are determined by underlying investments (usually unit trust, which has a history of not performing well)
3) Might not have bequest left over for your children
4) Unable to plan accurately your future annuity monthly payouts*

*Your CPF LIFE cost (Retirement Sum) and its future monthly payout to you is determined when you reach age 55. The 2 figures will keep changing every year. Thus it is very hard to accurately plan your annuity plan to match its monthly payout against the CPF LIFE's future monthly payout.
This difficulty to match payouts might make you under-sized your future annuity payout and hence unable to withdraw your Retirement Sum out from the CPF fully.

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Unhappy with your job? There's something you can do about it.
A. Save up enough money from your job so that you can fire your boss - problem is it might take some time and some effort
B: Find a new job, search for new opportunities. A career coach might be able to help you with that. And if you are looking for a free career coach, visit Workforce Singapore via the link below.
They can link you up with the career coach and you might be able to find new opportunities on their jobs portal.
http://ow.ly/GY8150wlfrF

Wednesday, 9 October 2019

Retirement Might Not Be For Everyone


Reaching your retirement tough, especially with inflation, low-interest rates and longevity.
The amount that we are saving might not be sufficient for us to retire at the age we feel we should be retiring.

Assuming you make the income as per below.
Assuming you save 20% of your monthly income, and there is no inflation.
Age Monthly Income Annual Savings
20 - 24 $2,000 $4,800
25 - 39 $2,500 $6,000
30 - 34 $3,000 $7,200
35 - 39 $3,500 $8,400
40 - 44 $4,000 $9,600
45 - 49 $4,500 $10,800
50 - 54 $5,000 $12,000
55 - 59 $5,500 $13,200
60 - 64 $6,000 $14,400

When you reached age 65, you would have saved $216,000 in total.
Below is the retirement income you can get depending on how long you think you can live.
Live Till Retirement Years Monthly Income
95 30 $1,200
90 25 $1,440
85 20 $1,800
80 15 $2,400
75 10 $3,600
70 5 $7,200

Base on the above 2 tables, we can tell that the longer you live in your retirement, the less you get monthly from your retirement fund.
Retirement is going to get tougher as we live longer unless we push it back to after age 65.
Currently, if we start working at age 20, retire at 65 and live till 90, we are using 45 years of work to support 25 years of retirement; that's nearly equivalent to using half your monthly salary to support 1 month of your retirement, which technically, is fairly insufficient.

Recommended Post: 3 Reasons Stocks are Better than 99 Year HDB

Several facts below:
1) On average, 1 year is added to your estimated lifespan every 10 years.
2) People used to live till 60+ 70, so retiring at 55 would still get you a fairly good monthly retirement income (35 years of work to support 15 years of retirement).
3) Retirement is going to get tougher as you live longer unless you work longer.

Sadly, most people will never have a scenario where there is no inflation. Most people will see inflation being higher than the interest they can receive, which erodes away their money's value.

*Above assumes a saving rate of 20%, which is the amount Singaporeans technically "save" via a compulsory retirement scheme call Central Provident Fund (CPF).
Just a little heads up, if you are unable to grow your retirement savings at a rate faster than inflation, chances are, you are going to have to work past your retirement age to ensure you do not face any retirement income shortfall.

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Tuesday, 8 October 2019

Here's How You Can Opt Out of CPF Life


Everyone has a goal of retiring comfortably after working more than half their lives out for money.
We all hope to get a lump sum retirement fund when we reach our retirement age.
But, in Singapore, our money is instead secured away and we are given a monthly income from that pool of money.
Although we still think the CPF is a pretty solid retirement scheme, not everyone agrees to this.
So if you think you are better off with the full sum of CPF money in your pocket, we will be sharing how you can get that pool of money out of your CPF!

There are 2 ways to do this:

1) Buy a Life Annuity Plan
We talked about what an annuity plan is and how it can help you withdraw your retirement sum from the CPF.
You can find the post here: How to Escape Retirement Sum? 

2) Own a Pension
By owning we do not mean you go out and buy a pension.
A pension is usually a retirement payout paid by the company you worked for.
It is usually a fixed amount of money paid from the day you retire to the day you pass away.
It is rarely (if not no longer) seen in Singapore (except if you are from the really old days of Singapore).
If you are paid or going to be paid by a pension, you can apply to be exempted the setting aside the full retirement sum!

Recommended Post: Can I use my CPF to pay for my housing after age 55?

You will be exempted (fully or partially) based on the monthly income you draw from either/both sources.

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Friday, 27 September 2019

Climate Change Is Real

Image result for climate change meme
Polarising views regarding the recent speech that Greta Thunberg gave at the United Nation's meeting have surfaced and are spreading wildly on social media.
One side praised her for determination and bravery, and admire her for pushing world leaders to act on climate change.
Another side said her speech was too cringy, that she was hypocritical, amongst much other criticism.
I figure I could give my 2-cent view on this whole thing (environment and her speech) since this is what this blog is about (although this is not a finance post, this is a platform for betterment).
PS: this is a long post, I'll try and break it down into headers you can follow.
But, let's start with a video of her speech:


Facts
Let's get some facts straightened out before we continue
1. Climate change is real, most of it comes from our man-made activities.
2. Climate change can cause serious damage to biodiversity (animals and plants), increase number of natural calamity, cause extreme weathers, and more.
3. The richest countries produced the most greenhouse emissions, the poorest countries suffer the most consequences from it


Greta's UN Speech
Most of the netizens found her speech cringy - honestly, so do I.
Was she overly melodrama? - Yes
Was her tone and expression overkill? - Yes
Was it necessary? - No
Does it matter? - NO
Why are people fixated on her tone, the cringe, the melodrama, instead of the content of what she's saying?
Focus on the content: the world leaders need to get their act together so that there's a sustainable future to speak of.


Paris Climate Agreement
The Earth's temperature is set to rise several degrees if we continue our current path.
Doesn't sound like much but if you read enough on the science behind rising temperature, you'll know it is actually quite a lot (refer to Fact 2)
In fact, we have gone way past the stage of reversing the effect of climate change.
If you read the Paris Climate Agreement, the world leaders and scientists aren't even talking reversing the effect of climate change. 
They gave up reversing it, they're just going "let's try and contain the temperature rise to 2 degree Celsius".


Xiaxue's IG on Greta's Speech
Xiaxue commented that Greta sees things too one-dimensional and views the world too simply.
Not going to deny, but Xiaxue's right, to hope to get the world leaders to act for climate only is too one-dimensional (more on it below), and Greta does view the world too simply.
But, let's just give credit to Greta for trying to get her "prevent global warming" message out on a global stage to world leaders instead of posting another beach photo on a social media platform to a pool of netizens (I'm guilty of this too btw :P).
And why are we mocking her simple world view? 
Would Greta be mocked if she was 61 instead of 16?
When we were kids, we all had wild dreams - to save lives, to fight crime, to be ironman, etc.
Our parents, relatives, adults around us didn't go "not possible la, face reality, hard to be them ok!"
Nope, they went "if you study hard, work hard, you can be any of the ones you choose to be".
Suddenly when it comes to "I wish to prevent global warming", the reply becomes "you see things too one-dimensional and too simple, it is much more complex than that, etc...".
What's the difference? You cannot choose something that's much bigger than yourself?
Well, her choice of "career" is saving lives, not in the "vaccine creation" way, but in ensuring the adverse effect of climate change never hit us (which is kinda like a vaccine)

Then there's a second post on straws, killing oneself to save Earth, and time left before the end of the world.
Not going to deny that not using straws are going to help much, but at this stage, every bit counts.
For a budding 5000-followers micro-influencer, losing 10 or 20 followers isn't going to matter much, but every one follower counts towards a larger audience.
On time left before climate change ends our world, the timeframe given is almost always never spot-on. World's going to end in 2012, and here we are in 2019.
Here's the thing, scientists are split on the exact time period, might not even be this century.
Doesn't mean we are not going to do anything until we know the exact end date.
Like you know you are going to retire, you just don't know it's before or after you are 65 years old.
Doesn't mean you stop working because you don't know the exact date you can retire.
We don't know the exact date the ice cap will melt, but we do know it will melt finish, and when it does, that's going to create a lot of problems.

On killing oneself, may I refer you to the below part where I talk about the misconception people have on climate change actions?


FB Post from Critical Spectator
So this post compared our current times to our history of wars, famine, civil unrest, pandemics etc.
We are so much more fortunate now than we are in the past, where most of the world don't experience any of the above problems.
And yet Greta is complaining that her dreams were stolen by the inaction of world leaders towards climate change when so much had already been done to ensure the betterment of mankind.
Nice history recap in the article except, maybe if besides reading history, the author also read the biographies of those who were involved in these wars etc, he/she might get a better picture.
We have a stop button for wars - armistice, surrenders, etc. And if you stop a war, it stops. Period.
In fact, after wars, we had institutions set up, meetings, and discussions held by world leaders to prevent war (UN), famine (UN), civil unrest (UN), pandemics (WHO) from occurring again because we know the devasting affect any of these have on our societies.
The problem with this model is, we act (or start to act) only after we've been hit.
We didn't have a UN to prevent wars, famine, civil unrest until after we had them, realised they were bad, and decided to do something about it.
We didn't have WHO until we had pandemics spreading like wildfire, then realised we needed to get something done about it.
We as a whole, as a society, are reactive instead of proactive when it comes to solving problems.

I think it’s easier to be blindsided by history than to face the future
If we look back at what the kids of the past wished, they also wished for no wars, even campaigned for it not much dissimilar to Greta albeit with a smaller platform because there was no social media then.
And probably the adults in the room probably dissed them off too, stating war has always been the way because the adults then weren’t forward-looking enough to solve the problem before any war begins - and after it ended realise they needed to stop wars before they happen, hence UN.
Looking back at history, many would agree wars and diseases were preventable or casualties could be minimised to lowest.
The same can be said for climate change, if enough people die, we’ll have adults in the future saying “climate change could have been prevented etc”.
We just have not reached that stage yet (where enough people died), and just saying, if we ever reached that stage, we better hope Elon Musk colonised Mars or Jeff Bezos colonised the Moon, and the tickets there are cheap.
Because it is not like wars where an armistice can end it, nor like pandemics where vaccines can be created really fast. In climate change, if it is here, it is here.


Rich People's Game
If I don’t have a roof to sleep, food to eat, water to drink, I also won’t care about climate change.
It just so happen that those who have the above 3 are contributing to climate change the most.
Yes, refer to Fact 3.
So Greta can only choose the UN platform (where the most carbon emission contributors gather) to get them to get their act together.


People's Misconception of Going Green
I have spoken to many people about going green.
I've tried going green - I tried to use less plastic, use reusable food containers for takeout, use bottles/tumbler for takeaway drinks, take more public transport, etc.
Nonetheless, I still use plastic - the candies I eat are wrapped in a wrapper, the ice cream I eat still comes in plastic container, the food delivery I ordered came in plastic bags, and I still fly around and travel.

People seem to think that if someone is going green,
they must do the following:
1. Use ZERO plastic (no disposables, no plastic bags, etc)
2. Don't fly or travel
3. Don't eat meat
4. Generate minimum waste
You are either environmentally-friendly or not environmentally-friendly, you can't be in between.

Not going to deny, there are those who do live their lives that way, but most environmentalists don't.
Think of it as a spectrum.
On one end, it's the person that uses only disposable items, drives diesel cars, meat-only, and generates tonnes of wastage - 10 tissues to clean 1 mouth. Let's say this is 0 marks.
On the other end, it's the person that uses zero plastic, flies when necessary, vegan, generates waste that fits inside a jar. Let's say this is 100 marks (full marks).
Most of us are in between, we use plastic, eat meat, travels, and generates a decent amount of waste, but we also use cups and plates (at home), take public transport, and turn off lights when not in use.
The goal here is to be as close as we can to the full marks, or a nice 70 marks would work too.
Most of us probably fail - I don't have a matrix for this but if you do food takeout daily (food or drinks, especially coffee and lunch) you probably failed.
Think about it, 1 plastic container, 1 plastic bag, 1 plastic spoon and fork, 1 plastic cup (paper cups are actually just as bad as plastic - surprised?), all used and thrown after about 1 hour of use.
If you go to work 200/365 days, you generated 200 sets of the above combination. That's a lot.

But, we can always improve to a pass.
1. Bring your own food container to put takeaway food (can save $0.20 container money).
2. Bring your own bottle to put takeaway drinks.
3. Turn your air-con to fan mode after a couple of hours
4. Sleep early (if you don't use lights at night, you don't create emissions :P)

Yup, I know, I heard people say "but if I wash it, it wastes water. Isn't it just as bad?"
We have NEWater plant, we have developed ways to clean water so that they can be reused.
I haven't heard we have developed anything to biodegrade plastic harmlessly or reuse disposable plastics.

We have gotten used to our lives that we cannot revert back already.
It is almost impossible now to work without air-conditionally, or to expect us to not travel as the world gets more interconnected.
But what we can do, is to use renewable and sustainable alternatives.
Use renewable energy instead of coal, generate less waste, push for greener materials in buildings, push for more energy efficient transportation, etc.


Why Political Actions are Required
Policies need to change to incentivise or disincentivise certain actions.
Traffic rules and fines are created and enforced to ensure accidents don't happen like before these rules came into place.
Our government gave out subsidies to students so that they can afford education, an education that would give them a chance to succeed in life.
The same can and has to be done for the environment, but the political will to do so does not exist.


Why Political Will to Act is Low? - because welcome to the real world
In the US, oil companies pay huge lobby money to politicians to ensure their business are protected. And politicians need the money to ensure they get elected (how else would their election campaigns and political party funded?).
Clean renewable energy, green companies etc, on the other hand, are budding industries, they don't have money to lobby politicians to side them. These companies need government subsidies or private funding to ensure they can get their product to the market. Nevermind competition against the old oil & gas companies, it would be nice if it was a fair competition - but it's not.
So without the voters pushing their politicians to act, how else would green companies be able to compete and provide their solutions to us?
To compel matters future, oil & gas companies hire many employees - think millions of employees.
Support green companies and put the oil & gas companies out of business.
The repercussions:
  • As a politician, I lose my corporate sponsors (lobby money)
  • My voters will be out of jobs. Voters are not going to be voting for me in the next election
A politician is a career in the US. It's not a part-time thing like Singapore. Imagine, you doing the right thing and the result is you lose your job. Sounds good if it's the right thing to do, but let's face it. Who's going to really risk their career to do the right thing - takes a huge amount of guts that most of us don't have.
But, voters can change this. You can vote to protect your politician if he/she did the right thing.
Except if he/she caused you to lose your (oil & gas) job, you probably aren't going to give him/her your vote.

In Singapore, this is the same. Our Jurong Island refineries employee thousands of Singaporeans.
While we do not produce much of the greenhouse emission, we refine oil for other countries to use. We in a way "produced" these emissions.
Do we have a choice to shut these refineries down? - Yes
At what cost?
1. Tens of thousands of Singaporeans will lose their job
2. We might get a Hong Lim protest to get the jobs back
3. The government sure ain't going to be elected in the next GE
4. Job loss creates social disruption in many different ways

SO THIS IS THE DILEMA POLITICIANS FACE


Conclusion
I've said my piece.
Action or no action is up to you.
Appreciate if you could share this article with more people to let them know that if we want to see less of Greta on stage making a cringy statement, then we need to get our act together, prevent climate change, reduce waste, and make the world a better place.
Thank you for reading.

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Tuesday, 16 July 2019

Who Pays For Your Credit Rewards?

Cashback, air miles, merchant discounts, other perks, these are the incentives that banks and credit card companies (Financial Institutions - FIs) use to attract you to apply and spend on their cards.
Every transaction you spend using these cards, merchants are charged a fee by the FIs for providing the card facility. The fees (known as interchange fee) are what the FIs earn and use to pay for your rewards.

For example, if you swipe your credit card when you buy a new laptop for $1,500 from Courts, FIs would charge Courts 2% of that money (or $30). That $30 would be used to pay for the FIs operation costs and a portion of it will be channelled back to you as rewards (either cash back or some other form). FIs also use the money from the cards' annual fees and interest for late payment to fund the rewards program.

In order to make up for the fees the FIs charge, shops often have to increase the price of their products/services in order to maintain their profit margins (or profits). That means if you are paying via cash or debit card, you are not earning any rewards AND you are paying for a higher price in order to subsidise those people who spend with credit cards.

"If you are using a debit card or cash for purchases, you are literally leaving points and money on the table. It's like throwing away money every time you use cash."

Here's a video that explains in detail how cards are earning money and giving you the rewards

So, use your credit cards wisely.
1) Always pay your monthly credit card bills on time and in full!
2) If you can, always charge any expenses you can find to your credit card
3) Avoid late fee payment and interest charges
4) Ask for an annual fee waiver if possible - although often times the waiver might result in loss of reward points or air miles.

Recommended Post: Spend $40 and Reach Starbucks Gold Membership

How to get more cashback and miles out of your credit cards
How many of you have this problem where you are always wondering which credit card in your wallet will give the best rewards when you are just about to make a payment? With so many different cards available in Singapore, each with their own set of rewards, bonus categories, minimum spending requirements, and more, it can be a huge challenge to know which card will give the best rewards based on how and where we spend our money. 

To help solve this problem, a team of credit card enthusiasts set up a new community-driven project WhatCard that provides a free tool to help everyone find the best credit card to use at every place. 

The website is a simple search engine, so all you have to do is key in the merchant name in the search bar and it will show all the different credit cards ranked in order of rewards given, with additional filters to see cashback or miles rewards cards and also filter by category (e.g. Groceries in the screenshot). The rewards data that the team used was put together from: 
  1. their own transactions, 
  2. transactions from other personal finance communities like Seedly and the HWZ forum
  3. terms and conditions of the various credit cards. 
The team did share that WhatCard is very much still in beta phase so you can expect more merchants (they are currently at 1,100+ merchants), functions and features to be added over time. Because it is a community-based kind of project, the more people using it and contributing to it, the better the service gets. If you find any new offers by your bank or credit card, you can contribute to this project by letting them know the offer, or you could also report any errors or share feedback and suggestions on what to include next to make this tool even more useful for the community.
We think that this is a good project built by the team as a way of supporting and giving back to the personal finance community in Singapore. It is still a beta so it is not perfect, but it is definitely good enough to use regularly and the team have proven to be really responsive in continuing to improve the product.

Check out their website www.whatcard.sg

And if you want to find more promos and deals, check them out at our new page HERE.

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Tuesday, 9 July 2019

Spend $40 and Reach Starbucks Gold Membership


This is the young adult's symbol of status, and how much we are willing to splurge for coffee.
This Starbucks Gold Card is only available to those who spent $300 per year via their Starbucks card.
That's about $25 per month.
But fret not, here is 1 trick that I have been using for the past several years to maintain my Gold status without burning a hole in my pocket, and here's how you can too!

Most of us are trying to reach Gold status via our own effort. I applaud you for that though I think you have started to realise that you either spent too much on Starbucks or you seem to never be able to reach Gold level although you seem to drink quite a lot of their Frappucino.

The trick here is to rely on the collective effort of the people around you to help you reach that Gold (pun intended).
Here are some ways I use to reach Gold:

1. Buy Starbucks on behalf of friends and colleagues
We all have friends who once in a while wants to drink Starbucks. These are friends who are not die-hard fans but do have their cravings every once in a while.
They don't have the Starbucks card and are not in the business of collecting the stars.
Why not charge their drinks to your Starbucks card?
If 4 friends buy a Venti Frap each, that's $8.30 x 4 = $33.2 charged to your Starbucks card, you are 10% closer to Gold without spending a single dime!

Recommended Post: 5 numbers more important than your income

2. Share a Starbucks Card
Got a partner, sibling, or best friend who is a Starbucks-drinker like you?
2 heads are better than 1, or in this case, 2 person spending is better than 1.
If you can't reach the Gold on your own, find someone to support you along the way.
You can share 1 Starbucks account and charge all your Fraps to that Starbucks account via the Starbucks App.
Of course, you have to decide how you want to share that free drink you get with every 60 stars.


The last tip and I feel this is one of my best tips:
3. TREAT YOUR FRIENDS $1 OFF THEIR VENTI FRAP 
Yes, treat them to $1 off the largest drink, and only the largest-sized drink.
Here's why.
The largest size Frap cost $8.30 each cup (lowest cost Frap).
If you offer a $1 discount, it will cost your friend $7.30, and you have just spent $1 to get 8.3 stars.
But there's more!
You only have to treat 7.3 friends to get 60 stars credited into your Starbucks card.
And that 60 stars entitle you to 1 free drink from Starbucks - YES! You just spent $7.30 to get an $8.30 Frap drink and chalked 60 stars to Gold (20% down!).
And so far, I have rarely seen friends that reject me when I offer or suggest to get Starbucks and give them a $1 off.
And I usually do this towards the last few months of my Gold membership when I'm still short of about 100 stars.
But assuming you did this for all 300 stars, you will reach Starbucks Gold status spending only $36.50.

There you have it, the 3 tips I use to maintain my Starbucks Gold membership year after year.
What other tips do you have for you to reach your Gold status?
Share with us in the comments below!
And if you want to find more tips, tricks, and promos, check them out at our new page HERE.


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