Investment Stab

Monday, 21 December 2020

Monthly Housing Installment: Use CPF or Use Cash?

08:29 CPF-Related No comments

"Should I pay my monthly property installment using CPF or cash?"

This is probably a very common question people who just bought their house think of.

Which should you choose?

Let's find out!

Scenario 1: Use cash to pay for mortgage, CPF money remains in CPF

This is the least common way Singaporeans tend to pay for their property.

1. You are earning interest (2.5% + 1%), by keeping your money in CPF OA.

2. No accrued interest incurred from using cash to pay for housing loan.

3. You will have less cash on hand, thus it is not recommended to do this UNLESS you have quite a sum of cash or income to sustain your monthly mortgage.

Usually, those people that I know do this tend to

a) have sufficient cash/salary to pay for their mortgage, and

b) are keeping their money in CPF to earn the high interest because there is no where else that pays 2.5% (or 4% if you transfer to SA).

Recommended Read: Complicated Steps To Pay $10 DBS Stock Brokerage Commission

Scenario 2: Use CPF to pay for mortgage.

This is the most commonly used method to pay for most property purchase in Singapore.

Because the idea is: my money is locked away in CPF. I cannot touch it until age 65, might as well use it to pay for my property.

1. You won't be able to earn CPF interest because the money has been used to pay for your property.

2. You will incur accrued interest, which you would need to return back to your CPF account when you sell your house in the future.*

3. You get to keep cash in your hands! There's a lot of things you can do with cash that's in your hands, like investing! 😉

Conclusion

Depending on your own circumstance, decide which is the right path for you to take.

There is no right or wrong option; just whether it suits you or not.

Recommended Read: Get Free $8+ By Signing Up For Google Pay

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Free $8+ With Google Pay

08:32 Reader's Promotion No comments

Here is a guide to finding your promo code to share with your friends.

The first part of the guide is to get you signed up and get your first $8.

The second part of the guide is to get you familiar with how to share your promo code with your friends so that you can get your subsequent $8.

Get them to download Google Pay so that both of you can get $8 from Google!

You don't have to use the app, we just want you to get that free $8 first 😉.

Recommended Read: Complicated Steps To Pay $10 DBS Stock Brokerage Commission

Part 1: Getting My First $8

Step 1: Click on the link here: https://g.co/payinvite/h12c70z

*Use your mobile phone to access the link.

**Just a disclosure, if you successfully earned your first $8 via the link above, we'll also earn an $8 reward 😉. Thank you for supporting our operations with this small gesture.

Step 2: Sign up for Google Pay and download the app

Step 3: Sign in with your Google Account, and link it to any of your bank accounts.

Step 4: Click on 'New Payment' and make a payment.

There are a few ways to do this.

Step 4A: You can send $10 to any of your friends via their PayNow, and get $8 in cashback from Google. Then ask your friends to send you back the $10 👍.

Step 4B: You can pay for something that cost $10 (or more) via Google Pay, and get the free $8 in cashback from Google.

Step 5: View your rewards

Scroll down and click on 'Rewards'.

That will show you all the cashback you have earned.

So far, all the cashbacks have been credited back to my PayNow account.

Ta-da! So Simple! 😉

Recommended Read: Cannot Withdraw CPF Money If Never Hit CPF Retirement Sum?

Part 2: Getting My Subsequent $8

Now that you've got your account set up, time to get the next $8.

Step 1: Find your Promo Code

Scroll to the bottom and click on the 'Invite' button.

Step 2: Share your Promo Code with your friends

Yup, share the code with your friends and get them to sign up for Google Pay (let them follow Part 1, send them this website 😊).

Step 3: Ask them to transfer you $10

Yes! Ask them to transfer you $10 via Google Pay; that will earn them their first $8 cashback from Google.

And that will also earn you that $8 referral fee.

Then, of course, you should transfer the $10 back to them if you still want to keep that friendship 🤣.

You can repeat this with up to 80 friends!

Recommended Read: Why You Should Max Your CPF Retirement Sum Early

*Bonus Part 3: Getting Random Cashbacks

While you use Google Pay to make these transfers to your friends or to pay for goods and services, Google is currently also paying you a little cash back.

After every purchase/transfer, go to your 'Rewards' section.

There will be a scratch card reward that you can scratch to get a random amount of cash back from your transaction.

Conclusion

Our motto is 'Free Money Just Take'!

Good things must share, so we are telling you this offer now!

And you better act fast, because the offer ends 31st December 2020!

Recommended Read: The 4% Shortfall In Your CPF Retirement Fund

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History Predicts Who Will Win The US Presidency

07:00 Others 2 comments

"History does not repeat itself, but it does rhyme".

This is a quote that aids in quite a fair bit of my decision making.

History rarely repeats in an exact way, but often in similar ways.

In my view, there are 2 ways how history "repeats" itself

Same-Same-But-Different
Think of it as stock market cycles: there's bull, there's bear, and there are corrections in between. Same pattern, just different themes: technology bubble, oil crisis, etc, and duration.
Different Audience
Those who lived through the WWI/II, the oil embargo, housing crisis, etc, would have a different mindset than those who didn't live through it. And often those who had not lived through such events are the ones who repeat history.

Who Will Win The Presidency?

This is generally under the 'Same-Same-But-Different' category.

We might think people are choosing based on ideology, based on their beliefs, based on their religion, their liking, or whatever you can name.

But more often than not (and not completely explainable), Presidents are elected based on certain historical patterns.

Presidency History Trend 1

US Presidents tend to be re-elected for the position

Since 1933, almost every US President won their re-election.

Unless you're Jimmy Carter or George H. W. Bush.

Since 1933, 9/11 (nine-out-of-eleven. Pun intended) sitting Presidents won their re-elections.

That's a very high percentage of re-election.

If you asked me to bet what's the likely outcome of a US election and there's a sitting President standing for the election, I am going to side with history on this one.

Recommended Read: Dumb Sh!t My Property Agent Said - Part 2

Presidency History Trend 2

Democrat candidates win during recessions

Very specifically since 1933, if the month of voting (which is always November) happens to be in the period of a US recession, 100% of the time the Democratic candidate wins the Presidency.

Recession Period	Election Date	President
Aug 1929 - Mar 1933	November 1932	Franklin D. Roosevelt (Democrat)
Apr 1960 - Feb 1961	November 1960	John F. Kennedy (Democrat)
Dec 2007 - Jun 2009	November 2008	Barack Obama (Democrat)
Feb 2020 - Now	November 2020	??? 😉

There were no instances of a Republican candidate winning when the election date falls between a US recession.

That's not to say that a Democrat candidate can only win during a recession.

There are instances where Democrat candidates who have won the Presidency when the election date is not between a recession.

But, in cases where the election date does fall within a recession, Democrat candidates seem to always win.

My guess on why Democrats win during recessions:

This is purely hypothetical, but my guess is Democrat candidates are more welfare-based: free/cheap education, healthcare, subsidies, financial aids etc.

These are policies that tend to matter more to people when times are bad (aka recession), hence it aids in Democrat winning the election.

Presidency History Trend 2A

Recession in the election year flips the Presidency

As a follow-up to Trend 2, this trend evaluates when a recession happens in the year of the election.

Recession Period	Election Date	Sitting President	Next President
Aug 1929 - Mar 1933	November 1932	Herbert Hoover (Republican)	Franklin D. Roosevelt (Democrat)
Apr 1960 - Feb 1961	November 1960	Dwight D. Eisenhower (Republican)	John F. Kennedy (Democrat)
Jan 1980 - Jul 1980	November 1980	Jimmy Carter (Democrat)	Ronald Reagan (Republican)
Dec 2007 - Jun 2009	November 2008	George W. Bush (Republican)	Barack Obama (Democrat)
Feb 2020 - Now	November 2020	Donald J. Trump (Republican)	??? (Democrat?)

As we can see, if a recession occurs in the election year, tables can turn to the other team even if it ends before the election date.

Conclusion

This time around, we are seeing 2 contrasting historical trends batting out.

Honestly, even I'm excited to know what's the result even though it does not really affect me.

Do you think Trend 1 or Trend 2 will win?

Who do you think will win the US Presidency?

Recommended Read: Complicated Steps To Pay $10 DBS Stock Brokerage Commission

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Dumb Sh!t My Property Agent Said - Part 2

08:18 Others 1 comment

This is part 2 of "Dumb Sh!t My Property Agent Said", where I list down the dumb stuff my property agent said to my family.

If you missed the first part, please click on the link below to read about it.

Dumb Sh!t My Property Agent Said - Part 1

Quick Recap

My family recently went shopping for a new house.

After we visited one of the homes, we had a conversation with the seller-side property agent.

The agent was explaining how to earn money in Singapore's property market.

Needless to say, I thought half of what the agent said was completely crazy or stupid.

To quote Uncle Roger, "Different people have different opinions, just some people are wrong".

Dumb Thing the Agent Said

"99-years properties has risen much more than 999-years and freehold property over the last decade. The trend is there. So I tell my buyers that buying 99-years property can give better returns than 999-years or freehold properties if done right"

Not the agent's exact words, but that's the gist of it.

My Inner Thoughts

The salvage point of the whole statement the Agent gave, was that ending of "if done right".

Otherwise, the whole statement is just a logical fallacy.

"99-year properties have risen more in value (or price) than 999-years or freehold properties over the last decade."

This statement is true - refer to 99.co research.

But it is a bad idea to presume what happened in the past will continue forward, especially for the following reasons.

A: the Government announced in 2017 that all 99-years properties will be worth $0 at the end of its lease.

Would you still push prices up knowing that it'll be worthless after 99 years?

B: assuming that 99-years higher growth rates will continue indefinitely into the future.

The price will probably peak at where the price matches those of freehold status.

People are not that dumb to spend equal or more money to buy a 99-years property when that same amount can be used to buy a freehold.

So that growth rate will reach a cap and eventually the 99-years will grow at the same rate as the freehold.

Personal Take

Personally, I'm not a huge fan of property investments because of several reasons.

1. Govt always has a stake in ensuring property prices/rentals are not too high.

If prices are too high, people will complain, and Govt will lose votes.

Which is why we have tools like ABSD, etc.

All these policies are putting a cap on my returns.

2. Too many fees involved.

Commissions to agents for buying/selling/renting.

Then there's maintenance, conservancy, property tax, etc.

With stocks, I pay no capital gains tax, no dividend tax, & I don't even need to manage anything.

Of course, this is just my point of view.

You can have your point of view on why properties are such great investment.

Conclusion

A great property agent is not a great financial or investment adviser.

If the Agent can get your house sold easily, GREAT!

But financial or investment advice from them, take it with a pinch of salt.

There are more to come as a slowly breakdown crazy stuff the property agent said.

Subscribe to us so you will be notified once we published it 😉.

Recommended Read: Complicated Steps To Pay $10 DBS Stock Brokerage Commission

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Dumb Sh!t My Property Agent Said - Part 1

08:30 Others 1 comment

My family recently went shopping for a new house.

After we visited one of the homes, we had a conversation with the seller-side property agent.

The agent was explaining how to earn money in Singapore's property market.

Needless to say, I thought half of what the agent said was completely crazy or stupid.

To quote Uncle Roger, "Different people have different opinions, just some people are wrong".

Dumb Thing the Agent Said

"We should make our money work for us. That's why I recommend my clients if they have the chance to sell their 2 homes and upgrade to a landed."

Not the agent's exact words, but that's the gist of it.

My Inner Thoughts

If you have 2 houses, you can stay in one, rent out the other one, and essentially live off rental income for the rest of your life - if it is sufficient.

That's the real "making money work for you".

If you sold the 2 houses to buy 1 landed and stayed in that landed.

Where you going to get your monthly (rental) income if you don't work?

You basically cannot retire or live off your rental income.

You going to break that landed into different segments and rent it out to different families while your own family stays in it?

To me, that was just the Agent making a sales pitch.

The commission from selling 2 houses and then buying a landed is HUGE!

Not a good investment or property advise.

Conclusion

A great property agent is not a great financial or investment adviser.

If the Agent can get your house sold easily, GREAT!

But financial or investment advice from them, take it with a pinch of salt.

There are more to come as a slowly breakdown crazy stuff the property agent said.

Subscribe to us so you will be notified once we published it 😉.

Recommended Read: Complicated Steps To Pay $10 DBS Stock Brokerage Commission

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Complicated Steps To Pay $10 DBS Stock Brokerage Commission

08:44 Investment-Related 1 comment

I signed up for DBS Vickers trading account recently after I saw the minimum $10* trading fee.

The standard fee is $25++ so naturally, it made sense to switch over to DBS Vickers from my current broker.

In addition, investing via DBS Vickers qualifies as 1 of the eligible transactions to earn higher interest for our savings in the DBS Multiplier account.

It is one of the things that we wrote about in the previous article: 3 Tips To Earn More Interest With DBS Multiplier.

But, it is not as straight forward as it seems.

I tried to trade with the $10 fee, and I ended up paying the $25 standard trading fee.

And so this article is to help you not have to go through what I went through 👍.

Applying for Cash Upfront Trading

There's a ton of guides online on how to set it up.

Go read them.

Or, read this one from DBS 😉.

Logging Into Vickers

If you want to pay the $10* rate, DON'T LOGIN TO VICKERS!

Yes, DON'T!

You won't see the 'Cash Upfront' payment option, you will only see the 'Cash' option in 'Settlement Mode', which is not the same as 'Cash Upfront'.

Paying the $10* Rate

After you have got the cash upfront account set up, now it is time to select that option when making your investment purchase.

NO!

It is not as simple as logging in to your DBS Vickers account and simply click 'Buy'.

You can't do that even though it should be that intuitive.

There are steps involved 🤷‍♂️.

If you just logged in straight to DBS Vickers to make your purchase, you are going to be charged for $25++ standard trading fees, just like how I got charged that much for my trade.

To get the $10 rate, these are the following steps:

1. Log in to your DBS/POSB Internet Banking

2. Go to 'Invest' > 'DBS Vickers Online Trading Services'

3. Go to 'Trade' > 'Place Order'

4. Under 'Settlement Mode', choose 'Cash Upfront'

And that's how you get the $10 trading fee.

Side Note

Make sure you have previously linked your DBS eMulti-Currency Account or Multiplier Account.

Make sure you also have sufficient funds of the currency inside to pay for your trade.

Ie; if you are buying stocks paid in USD, make sure you have USD in your account.

Actual Cost of Trade

The minimum cost of a trade is $10, or 0.12% of the whole trade, whichever is higher.

Source: DBS

To view the actual cost of trade via Cash Upfront, click HERE.

Conclusion

So hard to save money on trade commission.

We hope you don't have to make this mistake that we did.

Recommended Read: Why You Should Max Your CPF Retirement Sum Early

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3 Tips To Earn More Interest With DBS Multiplier

08:23 Personal Finance No comments

We looked at our own DBS Multipler account and started questioning how the interest tier works and how to maximise our interest.

After reading the FAQs and thinking hard, we (kind of) found 3 tips that are quite worth sharing with you 😉

A New Tool

Before we dive into the DBS Multiplier tips, we want to let you know a new tool we've built here at Investment Stab.

If you're like us, always wondering how much more should I spend in which category in order to maximise the interest I will earn, FRET NOT!

We've took the time to build a DBS Multiplier Account Interest Estimator.

Now we can know how much more to spend in 1 category so as to earn more interest from the DBS Multiplier Account.

Let us know in the comment below which other bank's saving account you would like us to build a calculator for 😉

Alright, and now for the tips.

Tip 1: Combine your Salaries into a Joint Account

Your salary: $3,000 per month

Your spouse salary: $3,500 per month

If you both credit your salary into your individual accounts, your Multiplier account will record your 'Income' as $3,000.

Your spouse's Multiplier account will record their 'Income' as $3,500.

But, if you both credit it into a joint DBS/POSB account that you both own, both of your Multiplier accounts will record your 'Income' as $6,500!

That's like an extra $3,500 income for you and an extra $3,000 income for your spouse, to hit the Multiplier criteria.

Recommended Read: Cannot Withdraw CPF Money If Never Hit CPF Retirement Sum?

Tip 2: Invest in DBS Invest-Savers

The DBS Invest-Savers is a Regular Shares Savings (RSS) plan.

The lowest amount to invest in the RSS is $100.

If spending an extra $100 yields you additional interest that is more than $100 because you added another category, then why not.

Furthermore, it is low in fees and buying the STI ETF means you are buying the top 30 companies in Singapore.

Sounds pretty worthwhile.

The downside is that the contributions are recognised as "Investment" for only a year after you start the Invest-Saver plan with a Multiplier account.

After that, the RSS investment no longer qualifies as the "Investment" category.

Tip 3: Be Joint Borrowers of DBS/POSB Home Loan

Your monthly mortgage payment is $2,000.

If you are the only name on that mortgage, your Multiplier account will get $2,000 under the 'Mortgage' category.

But, if you add your partner's name into the mortgage, both of your Multiplier accounts will record your 'Mortgage' category as $2,000!

That's like an extra $2,000 mortgage for your partner to earn higher interest.

And you don't actually have to really pay another extra $2,000 to earn that qualifying sum ✌

FAQ

For more on the FAQs about DBS Multiplier account, you can click HERE.

Conclusion

We hope these tips are good enough for you.

If you got any more tips you want to share, let us know in the comments below 👍

Recommended Read: Why You Should Max Your CPF Retirement Sum Early

Promos & Referrals
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Investment Stab

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

Monday, 21 December 2020

Monthly Housing Installment: Use CPF or Use Cash?

Saturday, 19 December 2020

Free $8+ With Google Pay

Wednesday, 4 November 2020

History Predicts Who Will Win The US Presidency

Monday, 19 October 2020

Dumb Sh!t My Property Agent Said - Part 2

Monday, 12 October 2020

Dumb Sh!t My Property Agent Said - Part 1

Thursday, 1 October 2020

Complicated Steps To Pay $10 DBS Stock Brokerage Commission

Wednesday, 2 September 2020

3 Tips To Earn More Interest With DBS Multiplier