Dangerous Misconceptions That Singaporeans Have About Money

Being trapped into the majority’s preconceived beliefs about money is easy. However, debunking these misconceptions will help you to reach your financial goals.

#1: ALL THE SHOPPING MALLS IN SINGAPORE ARE EXPENSIVE

Potential Danger: Risk of diving into debt as you only frequent the high-end shopping centers.

Because of the harmony between the East and West, Singapore offers endless shopping opportunities for its inhabitants. There is a wide array of products sold at the stores. There is a place for traditional and contemporary tastes as well as for foreign luxury and locally-manufactured goods. You can find just about anything in Singapore.

If your perception of shopping was boxed in the hefty category then, you must be frequenting the Orchard Road a lot! Consider heading to the funky flea markets that are starting to boom in the recent years. One of its most popular markets is the MAAD: Market of Artists and Designers.

Image Credits: museum.red-dot.sg/maad

Image Credits: museum.red-dot.sg/maad

MAAD houses pet-friendly and budget-friendly items for the whole family. Their innovative creators are from independent and are known for artsy fashion and artisan stationary pieces. Here you will find plush toys, handmade jewelry, and paintings. The price range starts from S$10 to S$50.

Related Article: Score Great Deals At Flea Markets In Just 5 Steps

#2: START WITH A HUGE EMERGENCY FUND

Potential Danger: Risk of setting yourself up for failure.

Emergency fund is an account utilized to set aside money in the event of personal financial dilemma such as unemployment or theft. Most financial planners suggest to build an emergency fund worth at least 6 months of your income. This is tough to accomplish if you are living from paycheck to paycheck.

For instance, your household spends S$5,000 each month. You managed to eliminate 10% of your expenses. Building a 6-month stash can set you back by nearly 5 years. This is too long! A better route is to start small by aiming for an emergency fund of S$1,000. This will help you cover minor financial hiccups. Once you are on track with your debts and retirement account, focus on growing your emergency fund.

#3: ONE’S CPF SAVINGS IS ENOUGH TO COVER RETIREMENT

Potential Danger: Risk of enduring an insufficient fund due to the over-reliance on a single welfare system.

Contrary to the popular belief, your Central Provident Fund (CPF) savings may not be enough to sustain the lifestyle you envision during retirement. Your CPF account is essentially a basic safety net to cushion the minimum standard of living during your golden years. Aim for other streams of income that can help grow your nest. Why?

For starters, your CPF savings depends on how much you earn during your working years. If your income is relatively low throughout the years then, you can expect to receive lesser payouts than your “higher earning” colleagues.
Furthermore, you may use your CPF savings to pay for your present necessities. If you exhausted your account to purchase an HDB flat then, you shall expect to receive lesser payouts.

Image Credits: pixabay.com

Image Credits: pixabay.com

Stop making excuses! Plan strategically for retirement, now.

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6 Significant Reasons Why You Must Plan For Retirement Now

According to a recent survey by Nielsen, 1 in 3 working Singapore adults are not planning for retirement. This is alarming because many people have curated a list of “excuses” for not saving money. Rather than adding glistening fuel to the fire, this article will give you six good reasons why you must save for your future.

1. TO DANCE TO THE BEAT OF YOUR OWN DRUM

Planning for your golden future likely ensures that you covered your living arrangements for the rest of your life. You can move freely to beat of your own drum without worrying about the perceptions and rules of other people. Believe me when I say that living in someone else’s household robs you of privacy. Discretion is one of the fruits that you can reap from your prudence.

2. TO NOT RELY TOO MUCH ON THE CPF SAVINGS

Your Central Provident Fund account (or CPF Savings) was established to provide a basic safety net to cushion the minimum standard of living during your senior years. You must aim for financial independence and not fully rely on what this welfare system can bring.

3. TO HELP YOU DEAL WITH FINANCIAL HICCUPS

As your body’s reflex interplay, hiccups occur unexpectedly. This applies to your finances too. Regardless of the financial hiccups that you will face throughout your life, a secure nest will do wonders! It can help you cope and save you from bankruptcy.

4. TO MAINTAIN YOUR CURRENT LIFESTYLE

Whether you want to admit it or not, you have stable spending habits that you cannot do away from. It is difficult to maintain these habits if your financial resources are limited. More so, the limited funding can put you at risk of barely being able to afford the necessities. This is why you must set a realistic budget to fit your lifestyle.

5. TO BUFFER COSTS DUE TO UNFORESEEN ILLNESSES

Your body will continue to deteriorate with age. Unless you find the “Fountain of Youth”, of course. Old age usually leads to elevated healthcare costs and unforeseen medical problems. Do not forget to plan for emergencies to support your Medisave account.

6. TO EARN THE COMPOUND INTEREST

Creating a bulk of savings ahead of time can help you earn the compound interest. Compound interest allows you to not only earn interest on your principal deposit, but also on any interest that is credited to your account. It helps your money to grow at an accelerating rate! The longer you keep your money invested, the greater the rate at which your initial investment produces returns.

Image Credits: pixabay.com

Image Credits: pixabay.com

Sources: 1, 2, & 3

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The Basics of Technical Analysis

A technical analyst’s best friends are charts and patterns. But to the uninitiated, these are hard to make sense of. Once you get a hang of the basics however, your new-found knowledge can be used to search for potential investment opportunities.

The Assumptions

Before we get ahead of ourselves, let’s start from the beginning. What is technical analysis anyway?

Simply put, it is a study of past price movement patterns and market data to forecast future price movement directions that is built on 3 key assumptions:

1) Key factors are accounted for
The company’s fundamentals, broader economic factors and market psychology, are all priced into the stock, removing the need to consider these factors separately.

2) Prices follow trends
After a trend has been established, prices tend to move in the same direction.

3) History tends to repeat itself
This is because market participants tend to react consistently to similar market events over time.

However, it is important to remember that past performance is not necessarily indicative of future results. New factors or market conditions may arise which deviate from past trends and patterns.

Candlesticks as Building Blocks

You can’t think about technical analysis without picturing a candlestick chart. It may surprise you to know that candlestick charts are not a modern-day invention. They have been used since the 1700s, having been introduced by Homma Munehisa, a rice merchant in Japan.

There must be something to candlesticks if they have been able to stand the test of time. And indeed, a single candlestick holds invaluable information which investors can distil at a glance:

ke1

Spotting Patterns

Individual candlesticks can be strung together to form charts which technical analysts pour over, looking for patterns which give them trading ideas. However, you will have to understand how to spot these patterns and what they mean before you can capitalise.

Here are two simple patterns to ease you into things:

ke2Putting It Into Practice

These two patterns are just the tip of the iceberg. There are many other technical analysis patterns that you can learn about that may help you spot potential trading opportunities.

But even if you know what patterns to look out for, there is an entire universe of stocks to choose from. If you have no prior interest in any stock, it would be hard to know where to begin. It simply wouldn’t be efficient to look at charts of every single stock and find actionable patterns within.

One possible option is to use stock screeners to identify stocks that meet your own criteria. For example, a stock screener can help you find stocks like the one below that exhibited a head and shoulders pattern, during a specified period of time.

Source: Technical Insight on Maybank Kim Eng's KE Trade platform

Source: Technical Insight on Maybank Kim Eng’s KE Trade platform

Technical analysis is useful for investors to understand. But like we highlighted earlier, it isn’t infallible and is built on several assumptions. Therefore, it is best to use technical analysis along with other tools in your investment toolkit, like fundamental analysis, and to practice often in order to gain a better understanding of how these strategies could help you meet your investment goals.

Disclaimer: This message is for general knowledge or information only. It is not an offer or invitation to buy or sell securities, futures or other products or services. Our products or services vary in different jurisdictions, subject to their respective terms and conditions and the licences our affiliates and us hold. This message is not an advice or recommendation for any financial planning, investment, legal, tax or other purposes and, accordingly, no responsibility or liability is assumed by us or our affiliates, whether directly or indirectly, from any person taking or not taking action

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Surefire Ways To Waste Your Money As A Parent

Many parents, including my own, are guilty of spoiling their children with affection and attention. They spend money on the things that would make their child happy. Do not get me wrong! This is a normal reaction. However, excessively giving in to these impulses can lead to serious monetary consequences.

Awareness is the first step!

Repair your spending habits by knowing the “Four Ways To Waste Money As A Parent”:

ELECTRONIC ENTERTAINMENT

Back when I was a child, coloring books and sticker albums were all the rage. My friends and I used to compare each other’s collections and artworks. Let us fast forward to the present age. The children of today are utterly obsessed with Smartphone apps and video game consoles. Downloading no-cost gaming apps are okay, but its extras come with costly price-tags. Furthermore, the unit upgrades of video game consoles are insanely rapid.

For instance, the Xbox One may potentially be the last generational console from Microsoft. The renowned brand is looking forward to re-imagining consoles by combining its features with a Windows-operated PC.

DESIGNER CLOTHING FOR CHILDREN

Children can have sudden growth spurts. Thus, it is unnecessary to purchase loads of baby or toddler clothes. This holds true for shoes and socks as well. Instead, you may ask your friends and family members if they still have their kid’s outgrown clothes.

A kid’s wardrobe is both temporary and cluttered. This is why you must not purchase designer or boutique apparel.

SPECIAL BATHROOM PRODUCTS

The people behind children’s bathroom products lure you with the vibrant array of cartoon characters in their packaging. Barbie bath bombs and Angry Birds toothpaste sounds attractive in theory. However, they may contain chemicals that are harmful to your beloved child. Look at the ingredients rather than focusing on the pictures.

If you really care for the well-being of your child, you will take care of his or her health first.

INFANT FORMULA

Breastfeeding is among the most empowering gifts that women can offer to their babies. As much as you can, opt for breastfeeding because it will not only be healthy but also be able to save you as low as S$1,500 per year.

You may also borrow a breast pump from your friends or family members, but ensure that you change the plastic attachments. You can buy those for far less than a brand new pump.

Image Credits: pixabay.com

Image Credits: pixabay.com

Whether you want to throw an extravagant birthday party or to purchase a domestic pet for your child, there are different ways to flush your money down the drain. It is time to make better choices for your family and your finances!

Sources: 1 & 2

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Start 2017 Right By Creating A Year-End Financial Checklist

As we reach the end of the year, there are several things that you need to pay attention to.

DETOXIFY YOUR WALLET WITH THE DEBT DIET

The Yuletide season is all about merriment and festivities. Due to the overall positive spirit that it exudes, you may want to shy away from the looming shadows of your debt. I suggest that you pause for a moment. Now is a good time to acknowledge your credit score and to cut back on your spending.

Debt takes a toll on your relationships, your family, and your future. It is only hurting your financial health. You do not want this suffering to roll over the next year. This is why you must consider to go on the “debt diet”. The debt diet uses practical ways to help you get back on the right track. Read about it, here.

OPT FOR GROWING YOUR WEALTH

It comes as no surprise that the newbie investors are apprehensive when it comes to the timing of their initial stock purchases. However, it is important to realize that time is your ally whenever you first invest.

The compound interests of your strategic investments will add up despite the current condition of the market. You will most likely have time to recover. This idea may seem like common sense to you, but there are many Singaporeans who wish that they started investing earlier on.

KEEP YOUR INSURANCE POLICIES IN ONE PLACE

Insurance is your safeguard against unforeseen and unpleasant events. It is a way to minimize your risks and cushion your potential losses. If you are a client of several insurance companies, it is a chore to hold all the policy documents. This is where PolicyPal app comes in. It is an app that allows you to keep all your insurance policies in one place.

After collating your policies, get a summary of your overall coverage. This will help you to decide if you have too much or too little policies. For example, you may avail the AIA GLOW OF LIFE (Critical Illness Insurance) instead of adding a special rider to cover female-focused diseases.

AUTOMATE THE PAYMENT OF YOUR BILLS

December is a hectic month! To save valuable time and effort, consider automating the payment of your bills. Schedule electronic transfers thru your internet banking feature.

You may also set up a bank GIRO. GIRO payments take a substantial amount of time. This is why your money must be available at least 3 working days before the bill’s due date.

Image Credits: pixabay.com

Image Credits: pixabay.com

Doing an annual review of your finances can help you spend and invest wisely for the upcoming year. Take the pro-active route to financial wealth!

Sources:1, 2, & 3

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