Financial security in Singapore plain and simple.

Singapore retrenchment: Will Malaysia share the same fate?






Reader:

I found your blog over the past week, and I have been looking your posts when I have the time.  

I don’t want to be a slave to my job when I am in my late 40s or 50s. 

I know that being an average salaried employee, it is quite difficult to ever be financially free.

Some facts about me:

• Working since 2013, earning $5.7k a month
• 
  
• Save about $900/month in cash
• 
  
• Invest $300/month in STI ETF (I read blogs for beginner investors that said STI ETF as a low risk, simple, long term investment that seemed to be ideal for young investors without much capital)

I have just bought a 3 room BTO for my mom and myself. 

Hence, I have emptied out my OA for house payment and spent my cash savings for renovation. 

In a way, I am starting over from scratch again, with $0 in CPF OA and very little in cash savings.

I understand that since my loan interest rate is much higher than the OA interest rate of 2.5%, I should look to repay the loan as soon as possible (assuming I don't re-finance with a bank loan).
(Parts of the email omitted.)

For only $300, you gain instant diversification.

AK:
What you do depends on what you want to achieve but what you do should also depend on the resources available and your ability to stomach volatility and some risk.

Investing through an STI ETF is good for someone who does not have the inclination nor time to research into specific stocks. 

It is a long term strategy that should yield decent results over a 20 to 30 years period. 

This is your exposure to the local stock market.
http://singaporeanstocksinvestor.blogspot.sg/2013/07/tea-with-matthew-seah-posb-invest-saver.html







You can think of the CPF as your exposure to an investment grade sovereign bond. 

In this respect, you might want to use less of your CPF money for housing loan repayment and use more cash instead. 

This will give you better returns than leaving your savings in the bank right away. 

Remember, this is a long term savings tool and you won't be able to access the money till you are 55 and, later, 65.
http://singaporeanstocksinvestor.blogspot.sg/2015/11/retire-with-investment-grade-bond-and.html







Of course, please ensure that you have an emergency fund first. 

How big should it be? Read this:
http://singaporeanstocksinvestor.blogspot.sg/2015/05/how-much-should-we-have-in-our.html

Also, you want to be adequately insured because you have to take care of your mom. 

I would suggest buying a term life insurance for yourself.
http://singaporeanstocksinvestor.blogspot.sg/2014/09/term-life-insurance-why-buy-term-how.html







We don't need some magic formula or complicated strategies to be more financially secure in Singapore.

Of course, if you decide to become an active investor or trader, you could make more money but you should know if you have the temperament for this. 

That is all I will say. :)







Related post:
Taking steps towards financial security.

See: PMET took a 30% pay cut but thankful.

5 reasons why PMET who took 30% pay cut is thankful (UPDATED).

This is an email from a 37 year old PMET, sharing his experience and thoughts on getting a pay cut:

Reader says...

I recently took up a job offer that pay me 30% less than my previous employment.

I had to look for a new job as my current job is in the oil and gas industry and the office in Singapore might be closing soon.

The new job is much more stable and in view of slower growth in Singapore going forward and me hitting 37, I decided to settle for this job. 

So many stories of PMET with no job I am worried.






Retrenchment On The Rise.

From here, finally I realize and understand what you say in your various blogs. 

Let me highlight a few:

1) My job in the oil and gas sector pays me well. I admit that they are over paying me for what I am doing currently. Hence, I have enjoyed the good years and looking back no regrets.

See:
Find a job that pays you at least what you are worth or better if more. 





2) However, as I have more than 6 months of emergency funds, I was quite relax about this and could take my time to look for a job. 

Just to share, I started looking actively for a new job for 4 months and I only have 2 interviews so far. 

This tell me the economy is not good. 

I realized the prudent habit of myself finally was useful here.

See:
Taking a 30% pay cut is a lot but... 






3) I think you mention before in your blog that even if you don't invest but live prudently, you will not be in a too bad shape if something drastic happens. 

If I no emergency funds then I sure stress. No peace of mind!

See:
Attributes of a wealthy peasant.

4) I have no debt or loans to pay. This gives me peace of mind too.


See:
Becoming richer!






5) I have dividend income from my stocks & REITS. Income investing is important.

With the pay cut, I definitely need to watch my expenses even more but this will not kill me. 

I cannot imagine if I have over stretch my finances what is going to happen to me?

I just like to share and hopefully people will be aware and be more vigilant on their finances.

Lastly thank you for your blog and I have learn so much from you.

See:
Best insurance in life!





Related post:
Holistic approach to a secure future.