What to do in Singapore on National Day?

Oh, my aching legs! Oh, my heels! Aching!

Aiyoh, it is National Day and AK is in pain?

I went walking with my mom in the neighbourhood this morning. We walked for more than 2 hours! 

OK, excluding time taken to explore surroundings new to me, to have brunch and to do a bit of shopping, maybe, 1 hour 30 minutes. 

Still, to out of shape AK, adoi! Sakit lah! It will probably be worse tomorrow.

Anyway, I remember a reader asking me to share photos of my daily life other than the food I eat, if possible. So, here are some photos I took this morning:


Anyone knows the name of this flower? Firecrackers?
Don't look impressive but when in large numbers
and from a distance, they look like fireworks.

See what I mean? Pretty!

Pretty bougainvillea flowers growing in planters above an expressway.
I have never seen them in these colors before, I told my mom.
My mom thinks I am a mountain tortoise now.

Wah! Suspension bridge in Singapore! So cool!
The last time I walked across one was in Canada almost 20 years ago!

Aiyoh, I know. Another photo of the food I eat. LOL.
Good wanton mee. About $3.40, after discount.

Oh, I said I went shopping, right?
Bought these. Really good and cheap super glue.
Used them to fix broken umbrellas, shoes, sandals and cups before.
Extended the lifespan of my sandals by 2 years already,
using a tube every few months.
Now, the soles of my walking shoes are beginning to detach.
It is going to be a 13c quick fix.
Waste not, want not.

Want to spend quality time with family? We don't have to spend a lot of money going overseas or visiting theme parks. 

There is so much to see and do in our neighbourhoods. We just have to be more aware of our surroundings. 

There is good and inexpensive food and great shopping too.

Money is just like any other resource. If we spend less of it, we will have more of it. If doing so makes us happier in the process, we have ourselves a bonus.

"Every man is rich or poor according to the proportion between his desires and his enjoyments." (Samuel Johnson)

Related posts:
1. Two questions to help build wealth.
2. Save 100% of your take home pay.
3. 5 points you ignore at your own risk.
4. Have money must also have a heart.
5. Tea with AK: 3 point turn.

Yum cha sek jiu with AK.

Quick upload:

One week old banana in the fridge.

Chinese tea.

Would you like to guess how much did my tea break cost?

What did you have for tea break?

How much did it cost you?

With that, HAPPY NATIONAL DAY!



Related posts:
1. Afternoon tea break with AK.
2. What did you drink for tea break?
3. Think we can't save $400,000?
4. Lunch made with love.
5. Gourmet sandwich by AK Deli!

Returning trays in food courts and having financial security.

I spent quite a bit of time penning a long email to a few friends recently and I would like to share a few paragraphs here because it is something I feel strongly about:

"As for the belief that many people think that they might not live long enough to see the first payment from the CPF Life, it is a pertinent concern. Personally, I also do not think that I will live very long because I am not very healthy. 

"Then, why do I bother planning for retirement? Why do I bother doing the kind of things that I do? It is all about taking responsibility for our own financial futures. It is about being socially responsible and not be a burden to society. I blogged about this before too.

"Unfortunately, it is not so easy to get everyone to think like this. 

"Just look at the campaign to get people to clear their own trays in the food courts and fast food outlets. How many people actually bother to do that? I was in McDonald's recently and I saw 12 JC kids who left their tables in a mess after eating there. These kids are our future. Socially responsible, anyone? I like to think that the next generation will be better at this and I still hope it will be so. 

"Again, education is important.

"I don't know if the government has tried this angle before but planning for a financially secure retirement is a socially responsible thing to do. Don't expect society to pay for our retirement unless we are severely disadvantaged. Is this worth mentioning? I think so."

I don't know about other people but in my extended family, there are people who are not financially prudent and think that it is only right that others in the family should help them if they run into financial difficulties. Why? Blood is thicker than water.

Yah, wait till the blood clots and we get a stroke or deep vein thrombosis.

Be educated financially.

Be socially responsible by planning well for retirement.

As a nation, I believe, we have some distance to go in these areas and those who know more should help those who know less so that they can help themselves. The government must do more in this respect and I believe that they can and will do more.

Related posts:

1. The very first step to becoming richer.

"The last thing we want to be is to be a burden to people we love or, indeed, to society as a whole. Well, I could be generalising too much but common decency would require that we think this way. Taking affirmative action to plan for self-sufficiency, avoiding dependency, is not only financially prudent, it is the responsible thing to do."

2. We are not perfect but we can improve our lives.
(A letter from a reader.)

"On the part of feeling very pessimistic, I can understand that... when they start thinking about retirement or old age it can look very bleak for our current generation. The government may look rich but they have other issues to think about as well. The countries around the world may not be as friendly as they seem to be.

 

"But through proper planning and use of excess funds, however little, or to restructure the way their resources are being used or allocated, I believe people can improve their lives. The problem is, I feel, nobody told them how to do it. So, since no ideas were planted, nothing can grow."

How to upsize $100K to $225K in 20 years? Oppa AK style! (UPDATED)

People are naturally attracted by large numbers. 

I mean if we got a 5% discount off a purchase price, we might not be very impressed but if we got a 20% discount instead, then, it could have a WOW factor.

It is the same thing with wealth. We would be more impressed with wealth in the billions than wealth in the millions. 

It is only natural. 

Of course, remember to ask what is the currency it is measured in.





Even if it should be news about some loss of wealth, we would be more likely to share the news of how a widow lost S$1 million in a year than the news of how someone lost his EZ-Link card because he was too distracted while on board a crowded bus.

So, I am not surprised that when I tell young people that the CPF-SA pays 4% to 5%, risk free, they are unimpressed. 

These are the ones who would complain about how they feel that they will not be able to meet the CPF minimum sum by the time they are 55.

When I tell them that they should consider Minimum Sum Top Ups (up to a maximum of $7,000 a year) to their CPF-SA or that they should transfer their CPF-OA money to their CPF-SA, they think I am crazy, naturally. 

(AK must be a pro-government dog. Hey, I am a pig, OK?)

Hey sexy S A! Oppa AK style!

It is only when I tell them how much I have in my CPF-SA that they start to ask questions. Something along the line of:

"Wah! How do you manage to have so much in your CPF-SA? You are only in your early 40s!"

Ah, finally, I got them interested. 

That would be when I show them the numbers "10" and "50".




Unimpressed with 4%? 

Surely, 50% is more impressive. 

The funds we have in our CPF-SA will grow 50% every 10 years even if we stop contributions today. 

That is the power of compounding at 4% per annum.

Compounding grows more powerful with the passage of time.

$100,000 today grows $50,000 and becomes $150,000 ten years later. 

That $150,000 will grow not $50,000 but $75,000 in another ten years from then. 

It would become $225,000! 

So, it continues. 




Why can't we meet the minimum sum again if we do the right things?

Well, for one thing, for most people, there is too little in their CPF-SA! 

Imagine the difference between $10,000 and $100,000 compounding at 4% per annum. 

It is that simple. 




So, voluntarily pushing more money into the CPF-SA is necessary.

Start doing this as early as possible. 

The sooner we build up a strong base in our CPF-SA, the easier it is for the magic of compounding to show its power. 

Time and the government will help us grow our retirement funds in the CPF, all without any risk.

My own experience bears this out as I transferred much of my CPF-OA money into my CPF-SA in the first 4 years of my working life. 

Then, I let the magic of compounding do the rest.

This is something that anyone, especially those in their 20s, should seriously consider doing. 






It might mean putting off marriage plans by four years for some but it would be worth it.

For those in their 30s or 40s, it might mean that they have lost 10 or 20 years of compounding magic but 65 is still years away. 

So, don't envy those in their 20s (too much).





Obviously, for those in their 50s and 60s, this blog post is more of an academic exercise but I hope they will help to share the message with their children and their grandchildren, if they have any. 

The younger ones are likely to live longer and they should plan early and plan well for their retirement.

It is not impossible to meet the CPF minimum sum.

Once we know how, all that is left to do is to make the system work for us too.

Unless severely disadvantaged in some way, we can and should make the system work for us.




Related posts:
1. Build a bigger retirement fund with CPF-SA.
2. Securing risk free returns early for retirement.
3. We do better managing our savings than the CPF does.
4. Thoughts on financial security for Singaporeans.
5. Do the right things and transform our lives.
Hey, sexy S A! Oppa AK style! ;p

Buy a car and get an annuity.

I think we have read enough articles from financial bloggers on why we should not be buying cars in Singapore. 

Although I am generally in agreement, I have also said that, for some people, a car is a need and not a want. 





Generally?

Yes, if having a car would make a person economically more productive, then, the car is actually an investment similar to a capital expenditure in a business. 

Of course, add the fact that a car would probably improve our quality of life, it becomes an even more sensible proposition. (See related post #1.)

So, whether something is a need or a want depends on a person's circumstances. 

Like with many things in life, it isn't as clear cut as some people might make it out to be. 

We must not be too dogmatic about things. There will always be exceptions.





Of course, for many people, I believe, who own cars in Singapore, it is really more a want than a need. All I have is anecdotal evidence, of course. Correct me, if you like.

If we want to have a car simply because it improves our quality of life, because we don't want to squeeze ourselves into crowded trains or buses (if we are lucky enough to actually get into one during rush hours), because we don't want to join long queues for taxis when we go shopping for grocery or bulky items, because we have children and old folks at home, for examples, and if we have the resources, then, go ahead.

What do I mean by having the resources? 

Well, it could be a bit extreme but, to me, it is not just having enough money for 50% of the price tag and taking a loan for the rest. 

To me, it is about having enough money to pay for the car in full without having to take a loan. 





A car loan is actually more expensive than it seems and I have blogged about this before. (See related post #2.)

So, when a friend told me that he is thinking of taking a 60% loan to buy a car because he has enough cash to pay 40% of the asking price, I told him he shouldn't and, of course, went on to explain why. 

Then, he said that his parents are willing to give him $60K to buy the car (the car's price tag being $100K) because it is spare money to them and not making much by way of interest income but he feels bad about taking their money. 

I told him he should consider it and that surprised him.

I told him that if he has set his mind on buying a car, then, nothing anyone says is going to stop him. 




Rather than taking a loan from a bank and paying interest, he should consider taking the money from his parents and paying them interest instead. 

That way, more money stays in the family. 

Yes, take it as a loan and not a gift.

A loan to buy a car now attracts about 2.8% in interest cost per annum. 

A $60,000 loan would attract an interest payment of $1,680 a year. 

Over a 5 year period, this amounts to $8,400.




So, if he were to pay his parents on a monthly basis over a 5 year period, it would mean paying them $1,140 a month. 

In a way, it would be like a short term annuity plan for his parents too.

Mind you, I am not saying that I support my friend's decision to buy a car when he doesn't need one. 

I am just trying to make the best of a bad situation, if you will. 





The way I look at it, my suggestion would help his family save $8,400 in interest payments to an external lender. 

This is enough to pay for 56 months of petrol, assuming an average of $150 a month.

Related post:
1. Money management: Needs and wants.
2. A car loan is different from a home loan.
3. First time car buyer? Get a Mercedes Benz!
4. Tea with AK: A new car for $75,000!
5. Tea with AK: Bought a new car.