Medisave voluntary contribution in 2018.

I updated a blog on the CPF-MA yesterday:

"For those under 65, the Basic Healthcare Sum next year will be S$54,500, up from S$52,000 previously, the authorities said."
Source:
CNA, 16 November 2017





And here are some comments on my Facebook wall:

Reader #1:
Interest $52k @ 4% = $2080.
total $54080
New amount $54500.
Still need to top up $420.

Reader #2:
4% interest will bring the total to $54,000.
Meaning we can only top up $250?





There seems to be some confusion as to how much we can contribute to our CPF-MA at the start of the new year.

So, I am doing a quick blog here on the matter.

If our CPF-MA has hit the BHS in 2017, the interest earned in 2017 will be transferred to our CPF-SA or CPF-OA (if our CPF-SA has hit FRS like in my case).






So, at the the start of 2018, our CPF-MA will have $52,000 only (i.e. the BHS in 2017).

This will allow us to do a voluntary contribution of $2,500 to our CPF-MA (to hit the 2018 BHS of $54,500) at the start of 2018 and get an "ang bao" of $100 for the year.

For anyone who is paying income tax, note that the recipient of a voluntary contribution to the CPF-MA will get income tax relief.

HUAT AH!

I like. You like?





Related posts:
1. Do online contribution to CPF-MA.
2. 4 ways to beef up CPF savings.

What is our goal and is debt unavoidable?

Reader says...
I am one of those silent readers following your blog and i greatly appreciate your thoughts and wisdom regarding a multitude of issues.

I am currently facing a dilemma of whether to pursue a post graduate education and i was wondering you could knock some sense into me :)




I am a 29yo engineering graduate who developed an interest in finance and was fortunate enough to make an internal switch to a business and financial analyst role within my company.

I was able to pick up the job requirements for my current role but i feel the need to gain more knowledge on the finance side of things and hence i am considering taking up a part time masters in finance.





I would think that this is a form of good debt by investing in myself and having this paper qualification could possibly open up more opportunities in the future but at the same time, this will put me $40k in debt and part of me thinks that this money could be put to use by income investing.

Could you kindly advice what your younger self would have done in this case?

Thank you for hearing me rant.





AK says...
It is very simple. ;)

Ask if this is a need or a want? 

If you need this, go do it even if it puts you in debt.

Having said this, ask if there is another way to get what you want without going into massive debt?

I decided that I needed some knowledge of business when I left teaching to go into sales. 

So, I did a part time diploma in business for about 2 years. (See related post at the end of this blog.)

I didn't have to go into debt to do it.

It probably cost me less than two thousand dollars to do the whole course back in those days.




I decided what I needed was knowledge and learning in a structured manner to speed up the process. 

I didn't need a prestigious degree for my purpose.

So, ask yourself what are you trying to achieve and if debt is unavoidable?
------------------

Although I try to avoid debt in life, it is not because debt is an absolutely bad thing.

Used judiciously, debt can be a good thing if it helps us to generate more income.

Always remember that even with good debt, it is important not to over-leverage because things do go horribly wrong like they sometimes do.





When do we know we are over-leveraged?

There is no precise measure of over-leverage but if we are unable to service our debt for even a short period of time (i.e. 6 months to 24 months) if we should lose our jobs, I would consider us to be over-leveraged.

Of course, this will bring us to another favorite topic of mine which is the importance of having an adequate emergency fund. (See related post #2.)






Related posts:
1. What should I study to be a good investor?
2. How much should we have in emergency funds?

Religare Health Trust to be bought for $966m.

Religare Health Trust's unit price spiked after news that Fortis is seeking to delist the business trust was released earlier this morning.

Surging to as high as 96.5c a unit, it was a 19% increase from the previous trading session in a matter of minutes.





"In an exchange filing on Wed morning (Nov 15), RHT Health Trust Manager Pte Ltd said it has received a proposal from Fortis to acquire all the sale securities held by RHT Singapore's wholly-owned subsidiaries, Fortis Global Healthcare Infrastructure Pte Ltd and RHT Healthtrust Services Pte Ltd.

"The trustee-manager has not declared a distribution for the six months ended Sept 30, as it has not received certain service fees and interest income on the CCDs from the relevant Fortis entities; Fortis is proposing for these to be paid alongside the purchase consideration."

Read article here:
Fortis proposes to buy RHT Health Trust's entire asset portfolio for S$966m





With about 810 million units in issue, if this goes through, a back of the envelope calculation shows that each unit could be getting more than a dollar.

Although it seems that I will be losing another passive income generator, I cannot really complain if it is a more than fair offer.

For those who are thinking of punting, please remember the risk involved.

If the purchase should fail, unit price would probably take a dive back down.




Related post:
Increased investment in RHT by 150%.

Accordia Golf Trust DPU plunged 32.7%.

I checked my Facebook account earlier this morning and was greeted by a deluge of messages regarding Accordia Golf Trust.

Alamak.

How like that?





Reader #1:
hey AK can i ask you something regarding Accordia's latest results? One thing I didn't understand was, why is the DPU down so much from last year despite the profit and revenue being higher?

AK:
Due to repayment of membership deposit.

Reader #1:
hm I see.
meaning more of its members are withdrawing their deposits, i.e. revoking their membership.

AK:
At this moment, I am treating this as a one off event.
Management said it is unusual.

Reader #1:
yeah probably a large number of it hit the due date for withdrawals or something.

AK:
Probably the case. 🙂

Reader #2:
Hi AK, like to ask you about accordia golf trust. 

In their recent results, they mentioned that "Total distributable income available during 1H FY17/18 was JPY 1,471 million, which was 27.3% lower than 1H FY16/17. 

The decrease of distributable cash flow was due to payment of borrowing upfront fee and unusually large repayment of membership deposit.". 

Any idea what the "unusually large repayment of membership deposit" refers to?

AK:
Members can call for repayment of membership deposits after a lock-up period of a certain number of years.

I am treating this as a one off event since the management said it is unusual.

If I have put all or most of my money in Accordia Golf Trust, this could be depressing.

Since I have a portfolio of many businesses generating income for me, I am able to look at this development with equanimity.

What now?

It is back to K-drama and MMORPGs for me.

Bad AK! Bad AK!




See slides presentation: HERE.