Singapore-based financial blog that aims to educate people on personal finance, investments, retirement and their Central Provident Fund (CPF) matters.
UOB recently made the hoo-ha with their new (up to) 7.8% interest rate on savings in their UOB One Account.
Of course, a lot of people saw straight through the marketing gimmick of their high-interest rates and started flaming it online.
We are not going to comment on the mechanics used to gather eyeballs and attention.
We are going to show below what the real effective interest rates we savers are going to get from UOB One Account, removing all the marketing gimmicks and fluff.
A) Spend min. $500 (calendar month) on eligible UOB card
B) Make 3 GIRO debit transactions (calendar month)
C) Credit your salary (min. $1600) to your UOB account
We did the math and plot the interest rates you are actually going to be getting on a graph for your easy reference.
If you are interested in the math/data/calculation we used or wish to double-check against our calculations (which we really welcome since it allows us to make this story more accurate), we have attached the Google Sheet doc here.
As you can see from the graph, the maximum interest rate one can get from UOB One Account is 5%, when a minimum of $1600.00 salary is credited into the account, spent $500.00 on any eligible UOB cards, and have a bank balance of $100,000.
So if you hit any of the criteria at the top that makes you eligible for higher interest on your savings than your current bank, you might want to consider opening the UOB One Account, credit the salary in, and focus all the spending with the UOB cards.
PS*: this is not financial advise
PPS*: only consider making the switch if your current bank is not paying you better interest rates than UOB. If your bank is paying you better than UOB, stay with your existing bank.
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While these numbers may be staggering, the actual numbers might actually be far worse.
Because the reported numbers are what end-consumers are experiencing.
But what is not reported as much is how much is being absorbed by the various importers, wholesalers, and F&B outlets.
Take it from someone who has been in the wholesale food product business for the past year, and I can tell you, that prices have been increasing insanely!
Over the past year, these are the price increases we as wholesalers experienced.
MSG: +47%
Dried Seaweed: up 47%
Dried chilli: +32%
Soya bean: +31%
Ee-mee: +31%
Plain flour: +28%
Cooking oil: +24%*
Instant noodle: +23%
Refined Sugar: +17%
Salt: +14%
Various canned food: +5% ~ +10%
These are the more commonly used items by F&B stalls, although other more "niche" items also went up 5% or more.
I only included dried goods because that is the industry I am in.
But the numbers from poultry and vegetables are not any better.
*On a side note, cooking oil prices have fallen a bit recently, but it is funny how my petrol prices have not dropped.
3. Cut F&B Outlets Some Slack
Cut the hawkers and coffeeshop stalls some slack.
If they raise your prices, understand it is not their choice.
A lot of my F&B customers who I have spoken to are all afraid to raise their prices because:
1) They get scolded by their customers for raising prices.
2) If they are the first to raise prices, customers will flock to their competitors. There is always more than one chicken rice stall in a given hawker centre, and it is a perfect competition scenario.
Prices had increased dramatically over the past year, and there are no signs of slowing down.
Because of war and covid lockdowns,
1) Supplies like corn, wheat, and other raw materials are not being farmed, processed, or packaged, and that's causing a low-supply issue.
2) Supply-chain is affected with docks closed or overwhelmed, leading to a lot of goods going out of stock due to delay or any available stock going to only the highest bidder.
3) Supply-chain issues also extend to containers, where there are goods to ship but no containers to load the goods onto for shipment. This is also another cause for "out of stock" or "higher shipping cost".
As an industry; importers, wholesalers, and F&B stalls have absorbed as much of the price increases as we can.
On a whole, the industry is surviving on breakeven levels or marginal profitability.
If a whole lot of items have increased by more than 5%, but inflation is only 4.5%, that means someone has been absorbing the price increase.
Hence, please do not scream at us if we raise prices, it just means we have reached a stage where we can no longer absorb the price increase.
We have families to feed as well.
4. The Consequences
Recently, several headlines of F&B stalls closing down have been trending on various social media platforms.
The few reasons for closing down that kept surfacing during interviews with them are intense price pressure for raw materials, labour, and rents.
As much as I am all for fierce competition for business, survival of the fittest, growing to achieve economies of scale, etc; please understand that if the industry consolidates to only a few major players instead of the current set of diverse players, prices will still go up because one, demand still outstrips supply; and two, buyers have fewer options to purchase from.
1) For starters, we can be more understanding if prices have increased at the stalls that you eat or buy produce at.
Not scolding us, or even understanding that the price increase is our last resort is a great motivation for us to continue what we are doing.
2) Continue to patronise the stalls you like, even if they have increased the price.
You may complain online that the bubble tea you drink has increased in price, but you will still buy it and not scold the person serving you at the counter.
Please do the same when you are buying from the other F&B stalls - especially if the stall owners are old uncles and aunties.
3) Consider tipping if you can afford it, even at hawker centres or coffee shops.
Every cent counts and goes a long way in helping the industry stay afloat until the crisis is over.
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It has been exactly 1 year since I left my 1-year SGUnited traineeship with a local bank to embark on a new career path.
And I finally have the time to sort out and list down Part 2 of everything I've learnt and experienced during the second half of my time at said bank.
Because it is so long, I am breaking it down into multiple smaller parts for it to be an easier read, and adding a more detailed story to every lesson.
Today's lesson is from a mistake I made a few months into the job.
1. The Story
I was a product officer in the local bank.
Let's call my team "Team A".
Several months into the job, I was tasked to run some spreadsheet analysis on a new initiative we were thinking of launching.
The spreadsheet contains the customers and their transaction data.
I was supposed to analyse the data based on a financial model/framework that was developed by another department in the bank.
Let's call that department "Team B".
I was told that I could ask a senior guy in Team B for help on the framework if I had any issues.
I soon ran into problems with the framework and started asking (more like spamming) the senior guy for help cause I had a lot of questions using the framework.
Eventually, the senior guy asked me what was I doing and why I needed to know all this information about the framework.
I told the senior guy what my team was planning on doing and he asked if I could send him my spreadsheet for him to take a look at and help with my issues.
Without hesitation, I was like "Great!", and proceeded to send him the whole file.
The next day at work, my mentor called me and asked if I sent the whole file to the senior guy.
Below is a rough recap of the whole conversation.
Mentor: Did you send 'senior guy' the Excel document you were working on?
Me: Yup.
Mentor: Aiyo! Why did you send him the whole file instead of just a few customers' data?
Me: Why?
Mentor: This morning he called to scold our director cause of what we were thinking of doing.
Me: Huh? What we were planning to do will affect him?
Mentor: Ya, the program we were thinking of launching is something that will benefit our customers and our team's P&L. But the side-effect is it will negatively affect his team's P&L. Of course he will call to scold us.
Me: But net-net the bank still makes the same (or more) money and the customers will benefit more. Isn't it better? And this is just money moving from the right pocket to the left pocket.
Mentor: From the big picture, yes. But the reality is no, cause our P&L will affect our bonus.
The next thing I know, I was off the program without any formal notice.
I was just tasked to do other stuff and never heard of the program again.
Either because Team A proceeded without me, or I had successfully single-handedly ended the program with my mistake (pretty sure it was the latter😅).
With every mistake made, there were lessons to be learnt.
Here are some of them.
1) Don't disclose too much information
I didn't ask around to find out that the Team B I was speaking to, was the "competitor" team, and that I shouldn't have divulged too much information,
Heck, I shouldn't even divulge too much information to another team, even if it is not the competitor team.
Sometimes, having a bit of secrecy helps, and this applies to work and personal life - you want to be careful who you are being transparent with.
2) There is no such thing as a 'One Big Family' organisation.
Even though we are in the same organisation, it is almost every department for themselves.
There is no right or wrong to be "every department/team for themselves", it is just the way the culture is structured, and every organisation is different.
It is just that in order to survive in this particular culture, one has to position themselves nicely to avoid getting into the cross-fire.
3. Final Words
I'll end off this story with one of my favourite scenes and the second favourite quote from a movie that I like - Cold War, 寒战.
It literally explains what I did wrong.
Translation:
"Every organisation, every department, every role, has their own set of rules, written and unwritten.
The first step is to always learn all of them. But most people are dead before they finished this step.
The second step is the find rules' boundaries are, and lines where when stepped on will trigger the rules' repercussions. Then try your best not to step on those lines. Learn how to play within those boundaries and you will be able to stay alive."
Needless to say, I was "dead" before I finished Step 1.
I didn't learn about the written and unwritten rules of the game I was in.
If you have a money-related story about you or your relatives' that you want to share, let us know in the comments below or email us at investmentstab@gmail.com. Alternative, you could fill in the form below for us to contact you. Story Form
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This idea is from a random thought that flashed through my mind while I was stuck on the Apple website, thinking about which MacBook should I buy (which I'm happy to know if you have a suggestion for me -> M1 or M2 MacBook Air?).
It cost $1969.00 to buy it, or $82.04/month for 24 months (which works out to $1968.96, a 4-cents discount 😉).
Re-selling it on a second-hand market, one can earn back $1758.00.
It is a $211, or 12% discount.
If you think about it, it can sort of be interpreted as a 12% interest loan, but technically it is interest-free if you can sell it without offering a discount on the product.
Nonetheless, it is still cheaper than the 24% interest on your credit card, excluding the late fees or cash-withdrawal fees slapped on top of it, or a cashline loan.
Things to Note/Caveat:
1) Get something popular, it needs to be sell-able
You are buying a product. If you can buy it but can't sell it, you are stuck with an Apple product and a 24-month loan.
Typically, the more sellable/higher demand for the product, the lower the discount.
2) It needs to be high value
Because re-selling the product on the second-hand market requires some discount, if you bought something low value (a few hundred dollars) and need to sell at a steep discount (like a $100 discount), the difference will be vast and costly.
If you have a money related story about you or your relatives' that you want to share, let us know in the comments below or email us at investmentstab@gmail.com. Alternative, you could fill in the form below for us to contact you. Story Form
Dear Reader! As we progress towards the next phase of our journey, we would like to find out what would make you like us even more. We hope you could help us fill in a short survey of 8 questions (4 of them are MCQs) so that we can help tailor our content to you. Survey
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So we will first review our predictions, then go over our 2022 predictions.
Review of 2021 Stock Market Predictions
1. US Stock Market Will End 2021 Higher (Correct)
The US stock market, represented most accurately by the S&P500, posted a total return of 28.7% for the year 2021.
The majority of that gain was from the increase in the index price, rising from $3764 to $4766.
2. STI to Stay Flat for the Year (Wrong)
The Straits Times Index (STI) returned 9.7% in price appreciation, meaning a more than 10% total return if we were to include dividends.
That's anything but flat.
So we are wrong on this one.
3. Air Travel Will Recover (Wrong)
Well, we did not expect Omicron at the start of 2021, so I guess we got this wrong.
But, air travel did recover - slightly, given that there's more travelling now than a year before.
Just that it is far from what we had expected - a near-full recovery.
Because we expected a recovery, we predicted that SATS will reach $5 by end of 2021.
That did not happen, SATS is still hovering at where it was a year ago, ± $4.00, though it closed 31st December 2021 at $3.89.
4. SIA Will Not Pass $5 By End Of 2021(Technically Correct)
Singapore Airlines Limited (SIA) closed on 31st December 2021 at $4.99.
If we're thick-skin enough, we would say we got it right.
But it did break above $5/share in 2021, only to drop back due to Omicron.
Conclusion: 1.5/4 correct
I would say our prediction for the year 2021 kind of sucked, just like our personal stock picks for the year 2021.
2021 is probably just not our year 😥.
We get this wrong often, but our goal is to post our thoughts, views, predictions, and review them 1 year later to see which part in our analysis and thought process went wrong.
Based on historical data, the probability of a US stock market ending higher in a given year is 70%.
So by saying the market will end higher, we are 70% likely to be correct 😉.
However, the market can be up a lot (like last year), or up a little.
We predict that this year, it will be up a little (think less than 10%) because it's the second term of a US president, which tends to have muted returns for the stock market.
2. Amazon & Microsoft Reach New Highs
Disclaimer: I own shares in both of these companies.
My bet on these 2 companies reaching new highs is mainly because of my cloud bet.
Amazon owns AWS and Microsoft owns Azure, the 2 biggest cloud providers in the world.
As we continue to go digital and move the workload to the cloud because of Covid and work-from-home (WFH) arrangements, cloud usage will continue to grow at high growth rates (30%+ per annum).
What better way to capture that growth than to invest in the top cloud providers, especially since scale is extremely important in the cloud business.
PS: my personal bias is Amazon simplify because, with its stock price at USD3,000, there is potential for a stock split which would just make the share price more valuable than what it is currently worth (aka Google).
If you have a money related story about you or your relatives' that you want to share, let us know in the comments below or email us at investmentstab@gmail.com. Alternative, you could fill in the form below for us to contact you. Story Form
Dear Reader! As we progress towards the next phase of our journey, we would like to find out what would make you like us even more. We hope you could help us fill in a short survey of 8 questions (4 of them are MCQs) so that we can help tailor our content to you. Survey
Remember to offer your opinions. If you don't put your two cents in, how can you expect to get change? Have feedback? Tell us now! Follow us on Facebookand Instagram for more timely updates about finance-related articles and memes! 😁 Subscribe to our newsletter too in case social media platforms decide to stop showing you our content.
