Beef up financially to attain financial freedom sooner.

Reader says...

First stop, thanks again for sharing your knowledge on financial literacy. I have made progress again, lol! 

The best part is the progress is very tangible and someone could actually see these effects within months.






Anyway, I have a question on the topping up of our CPF. 

As much as I do understand that topping up the SA account is important, given the 4% risk free interest rate coupled with 0 re-investment risk, this is just too good to ignore. 

However, what do you think of topping up the medisave account to its mms before putting money into SA instead?

Therefore, once the amount in medisave hits the ceiling , the amount that is supposed to be allocated into the medisave would go into our OA in which then one could subsequently transfer into the SA account. 

In this way, this will result in a higher contribution into the SA account per year. Do correct me if I'm wrong.






Something else which I would like to ask you is, what do you think is a good amount for Singaporean to set aside in the OA account assuming that they haven't bought their flat.

Just to share, I used to have this habit of wasting money on the latest gadgets released. 

After knowing you (technically yes, since a blog post is almost like a one-to-one conversation), whenever such thoughts of spending money crosses my mind, I transfer half of this money into CPF and the remaining half into a separate savings account.

Without money being accessible, no money to spend, no money to waste! Best part, money is saved! Thanks again!

Learn from the squirrels?

AK says...

I am very happy to learn that you are beefing up financially. 

Having financial muscles early in life will set the stage for, ultimately, achieving financial freedom later on in life. ;)

Should someone in his 20s top up his CPF-SA or the CPF-MA first? 

Well, my preference is to top up the CPF-SA first because the first $40K in the CPF-SA will earn 5% per annum. 

Topping up the CPF-MA has more practical considerations, of course. 

So, perhaps, after reaching $40K in the CPF-SA, switch to topping up the CPF-MA instead. :)





How much should we accumulate in the CPF-OA before buying a flat? 

I think this is rather subjective. 

So, please remember that this is just my opinion and I am going off tangent to share what I feel is more important.

I will try to use as little of my CPF-OA money as possible in the purchase of my home. 

This is because it earns a risk free 2.5% to 3.5% per annum. 





In the future, when I sell my home, I will have to pay interest to my CPF-OA (i.e. the accrued interest for the money in the CPF-OA I used). 

This was how I approached the subject on the use of my savings in the CPF-OA in the purchase of my first home donkey years ago.

I like how you ended your email. 

Yes, don't see money, won't spend money. 

I told this to a spendthrift friend before too. Haha... ;)

Where did our money go?

Reader says...

Indeed, and learning that each step we take is bringing us closer towards financial freedom just makes things feel so much more joyful.

On the part of frugality, being frugal has made me happier as a person in total as I learnt to be contented with what I have while balancing the equation of needs and wants.

Sadly, as my generation of folks (gen y) are largely exposed to new age media content, its hard not to be taken in by those fancy marketing campaigns for the latest product and service offerings that are largely wants but hardly needs. 

Unfortunately, the result of which is more expenses incurred on an individual, worse still, these things hardly produce much tangible benefits to warrant the expenditure.





However, the best part is, we all have choices. 

As opposed to spending, we could instead save this amount of money, and subsequently making them work harder for us through investments. 

If one has the discipline and is regularly putting aside income into savings while investing for a sensible return via both cash and the CPF-SA, financial freedom is not as far fetched as it sounds, and is in fact very achievable for a commoner like myself.

On that front, I started out by reminding myself of the opportunity costs incurred for this purchase which would potentially set me back from my eventual goal. 

Now, I don't even have to post mental reminders to myself anymore, it has been infused into my habits. 





I hope I don't sound like a drug addict who has just successfully undergone rehabilitation. =P

Noted on the point you have made on the CPF-SA. 

Right before I started to type this email, 

I have already transferred a proportion of my CPF-OA into CPF-SA, resulting in a $40k amount in my CPF-SA. 





And upon keying some numbers into the calculator, I finally understand why $40k is seemingly the "magic" number and why the government has provided additional incentives in the form of an additional 1% interest rate on the CPF-SA account of below $40k. 

Yet another blessing for Singaporeans to count!

Yes! Money saved = money earned. You shared that before too.

I should be the one thanking you as your sharing has changed me and I'm sure many others as well. =)





Related posts:
1. Do the right things and transform our lives.
2. How did AK amass so much in his CPF-OA?
3. Don't see money, won't spend money.
4. Money management: Needs and wants.
5. A dollar saved is a dollar earned.

Is there a secret formula to getting rich? (Wealth is attracted or repelled by habits.)

WARNING (Added on 6 Jan 17):


If you are a "jin satki" (very capable) person, you might want to skip this blog because you might find AK's peasant mentality to wealth building distasteful. 

You have been warned.




As my blog becomes more popular, it disturbs me that people think that I am some investment guru. 

Of course, I am not. 

I might be a bigger retail investor than most of my readers but I think that is where the difference mostly ends.

Regular readers know not to expect magic from AK. 

I don't even have a working crystal ball. 

Well, I try to get my bowling ball to talk to me sometimes but I haven't had much success, have I?





Is there a secret formula to getting rich?

To me, there is no secret formula to getting rich. 

Honestly, to be financially secure and, then, financially free later on, it all starts with being financially prudent and that is where a big part of my level of rather attainable wealth by the common man has its source. 

It is about being sensible when it comes to personal finance matters. 

A dollar saved is a dollar earned and, believe me, it adds up.

Dinner for $2.80.

Even as I make more money in life, I try my best to keep my needs simple and my wants few. 

I try not to be frivolous with money. 

If we do a good job of this, money will stay with us. 




In the last five years, I have heard from readers who changed their habits including one who gave up having Starbucks coffee every day and one who convinced the whole family to cut back on restaurant visits. 

They saw how, in just a matter of weeks and months, the changes they made in their money habits improved their personal balance sheets.




Wealth is attracted or repelled by our habits. 

If we want to attract wealth, then, we have to make sure we have the right habits. 

The results might seem magical but, really, magic is not the reason. 

Discipline is.



-------------------------------------
Added on 6 January 2017:

I saw on Facebook and I had to kaypoh.

The statement above which I took issue with:

"Skipping Starbucks to get rich is really bad advice, my view. It give (sic) you a poverty mindset that I can't afford it..."

OK, I must say I rarely comment on other people's FB wall or even blogs.

If people want to drink Starbucks kopi, it is their choice. 

I might nag but it is their choice.

However, when I read the claim that skipping Starbucks kopi to get rich is bad advice because it gives us a poverty mindset, that, to me, was a judgement which I could not agree with.

A frugal mindset is not a poverty mindset.

We can make a lot of money but if we are careless with money, it will only set us back if we are working towards financial freedom.

Related post:
How to recession proof your life?

QAF Limited: $1.14 a share is cheaper than 93c a share?

One year ago, when QAF Limited's stock was trading at 93c a share, I observed that the PE ratio was 16.6x and I said that to buy in at that price would be making an assumption that earnings could improve dramatically in the future. 

There were pertinent concerns such as rising costs of doing business as well as the weak Australian Dollar and how these could continue to weigh down performance.



Video added in November 2016.

Well, for the full year 2014, QAF Limited has exceeded expectations as earnings per share (EPS) improved 46.4% from 5.6c to 8.2c, year on year. With the Australian Dollar having weakened further against the Singapore Dollar, how did this happen?

There was a one off contribution by Oxdale Dairy through the sale of its dairy business. Group operating profit, thus, received a boost of $1.6m. This will not be repeated, of course. However, considering the fact that Group profit improved some $15.7m (before tax), not having this one off contribution in the current year would still mean that QAF Limited would do very well, everything else remaining equal.

All business segments did well but the lion share of the improvement came from Rivalea, an Australian business segment. Operating profits improved threefold although revenue stayed flat because of higher selling prices, better product mix, productivity gains and lower raw material costs.

Lower finance costs also helped QAF Limited to do better in 2014 as borrowings were pared down. Interest expense decreased $0.9m from $4.1m to $3.2m last year.

Today, QAF Limited's stock closed at $1.14 a share and based on an EPS of 8.2c, we are looking at a PE ratio of some 14x. Even if we remove the one off divestment gain by Oxdale Dairy, we would be looking at a PE ratio of 14.5x, thereabouts.

So, although QAF Limited's stock is priced higher now, compared to buying at 93c a share a year ago, it is actually cheaper at $1.14 a share. This is what I meant when I said that a stock could actually be cheaper although its price could be higher. It is about value, not price.

QAF Limited has made their first foray into China in October 2014. With operations in Singapore, Malaysia, Philippines and Australia stable and doing well, if their Chinese operations should prove successful, we could see things looking even better in the next few years. After all, the Chinese market is huge and bread is an accepted staple as well as convenience food.

A final dividend of 4c per share has been declared for a full year DPS of 5c. This DPS is probably sustainable and I look forward to receiving free bread again in future.

Related post:
QAF Limited: Rising 5c to 93c a share.

How to get $50K in passive income by investing in stocks?

Extracted from a reader's email:

Hey there ak,

I was just wondering if your willing to answer some of my questions.

A little background, I'm 32 this year. Yet to marry, planning to.

I was always interested in trading, have tiny experience while working part time in a stock training center. 

Anyway, I seriously want to achieve financial freedom. And stumbling upon your blog was super!! And I want to be an income investor!!






Been reading up and giving myself till 2018 to start investing. There is still so much to learn. I'm still currently "know nothing" phase. Haha.. 

I don't have much cash. Since my wedding is around the corner. Most of it is tied up. 

So I decided to take up the POSB invest plan, 500 for the next 4 years. Should end up with 20k roughly. Which I intend to invest in 4 counters (by 2018).






My aim is to get 50k passive income.  But from my calculation, (assumption on 2014 dpu) I need 800k. No idea what I'm doing wrong. 

Anyway, since I can't amass such an amount, I was planning to, POSB invest plan to 20k (withdraw full), invest in 4 counters by 2018. 

And start OCBC BCIP 1.2k per month for 4 years get roughly 70k, invest as per my plan (counters to have by 2022) and again start another OCBC BCIP to amass cash for investing. (800k will kill me le :( , sianz)






From your view point, do you think I should do this way? As in invest every few years?  

My concern is, this will take me very long to achieve my 50k target. Your advice please.

Thank so much for blog, it's in line with my goals. And I'm reading it everyday at work.

Fellow investor (to be),




P

AK's reply:

Hi P,

Welcome to my blog and I am happy to read that you are inspired to invest for income. 

Investing for income does help to provide a sense of well-being and therein lies part of its attractiveness. :)

OK, firstly, if you are going to put money in the OCBC BCIP or the POSB Invest Saver Plan, you have to understand that these are with long term investors in mind. 

They are investments too but in a basket of stocks. 





So, what about the idea of taking out the money in 2018 to invest in specific stocks? 

Be warned that there is no guarantee that the stock market won't be lower than what it is today in 2018.

(When the time comes and if we need the money, we would have to take whatever price Mr. Market offers.)





The ETFs are not meant to be places where we keep our war chests or emergency funds. 

They are investments.






I would suggest that you continue to spend time reading up and also to concentrate on your career move and your upcoming wedding for now. 

Congratulations, by the way. :)

Be frugal, save money and wait for opportunities to buy income producing stocks on the cheap. 

Hey, you could be buying the STI ETF on the cheap too. Of course, you could start nibbling at some stocks in the meantime. 





It is important to remember that there is really no rush. The stock market will always be there. ;)

How to achieve $50K in passive income from investing in stocks? I think I blogged about this before many times in the past but not in recent times. 

There is really no magic. 






In summary:

1. Increase our earned income.

2. Do not increase our expenses beyond what is reasonable.

3. Save the rest and invest for income.

4. Save the income from investments and invest again.






We can make money in many ways. As long as they are legal and ethical, we want to think of seizing opportunities to make more money. 

People often upgrade their lifestyles as their incomes are upgraded. 

Be meticulous in distinguishing between consumption and investment. Yes, people often mix them up.





A reader told me that he hopes to achieve a third of what I have achieved by the time he is my age because his circumstances are different from mine. 

He wants to have children and his wife stays at home. This is an important thing to remember. 

Our circumstances are all different from one another's.





So, I remind readers not to be fixated with numbers.

The important thing is that their quality of life improves. 

The important thing is that they feel financially more secure, year after year. 

Investing for income will help to do this for them and it will do it for you too. :)





Best wishes,
AK

Related posts:
1. $1m in liquid assets or $120K in passive income?
2. To retire by 45, start with a plan.
3. Seven steps to passive income from the stock market.
4. OCBC Blue Chip Investment Plan.
5. POSB Invest Saver Account.

SembCorp Industries: Partial divestment.

Yesterday, a reader asked me if I would be selling my investment in SembCorp Industries. 

I replied that if I thought SembCorp Industries was fairly valued at $5.00 when I made my first purchase a few months ago, would I sell at a lower price?






Honestly, the investor in me said to stay invested while the trader in me said to look at possibly selling at least part of my investment. 

Let me talk to myself and throw some light on the matter.

As SembCorp Industries' stock price fell in recent months, I added to my position at various price levels: $4.80+, $4.50+, $4.20+, $4.10+. 

My memory is a bit patchy but something like this. 

I believe that SembCorp Industries is a good company and that Mr. Market was overly pessimistic as the stock kept falling in price.

Then, whether I would sell or not would depend on whether the investor or the trader in me wins. 






Finally, the trader won but only after giving a concession to the investor. 

What do I mean?

I initiated a position in SembCorp Industries at what I thought was a fair price and I said so in a blog post soon after the purchase. 

I went in with my eyes open and knew what I was getting for the price I paid. 

However, given a choice, the investor in me would prefer to purchase an undervalued stock.






So, having added at lower prices as well, recovering the capital utilised for purchases made at higher prices which fairly valued SembCorp Industries, retaining the purchases made at lower prices which undervalued the conglomerate somewhat is a palatable proposition.

After looking at the charts this morning, I determined that there should be stronger resistance at $4.84 if the stock price continued its ascent today.

So, I put in sell orders at $4.82 and $4.83.







I still like SembCorp Industries and if its stock price were to weaken to retest its lows in the last few months, I would probably be adding to my position again. 

If its stock price should rally after taking a breather, I would stand to gain with my remaining investment in the conglomerate.

Related posts:
1. SembCorp Industries: A safe price.
2. AK went shopping in the stock market.
3. Investing for income and position sizing.

ST Engineering: A letter from a reader.

We are supposed to be emotionless as investors. This is not easy to achieve. Well, at least I am still working on it. I am a poor candidate for a ninja, er, I mean, investor.


Dear AK,

I went to your last seminar because of a friend. I have been investing for a year but I never make money. After your seminar and reading your blog, I understand why my friend said you are good.

At the seminar, you and the audience discussed ST engineering. I was inspired by your own story about your first lot at $1.55 almost 20 years ago and holding till now. I was excited that the stock pays you every year.

Some people said they know the business and also bought the stock. I remember one guy said he keeps buying every year. You gave me confidence when you said you bought again at around $3.30 and $3.40. You said it was not expensive. So, I bought that week.

Today, it is $3.77. I am very happy. Don't worry. I know you will say bu yao hai wo. You said to understand price and value. I have been reading your old blog posts. I know price can go lower in crisis. But I just feel happy. So, many thanks. You are a good person.

Yours sincerely,
W

I think we discussed STE at the 3rd "Evening with AK and friends"

Hi W,

Your last paragraph saved me from having to write you an email on the difference between price and value. Sounds like you have emerged from a fog and are beginning to plot your route in the stock market as an income investor.

It is, of course, normal to feel happy that our investments are doing well. However, please be mentally prepared that we might see prices sink one day. Knowing something could happen and being prepared for it are two different things. Apart from being mentally prepared, we should be financially prepared as well. So, have a war chest ready too.

I am glad that you have found my blog useful and that one of my chit chat sessions (not seminars) started you on your journey as an investor for income. Stay the course and, I believe, you will do well enough over time. Gambatte!

Best wishes,
AK

Related posts:
1. Seven steps to creating passive income.
2. 2014 full year income from non-REITs.
3. The mystical art of wealth accumulation.

Buy that second residential property and pay the ABSD?

UPDATE: 5 July 2018.

ABSD is going up 5% and LTV is being tightened as well.

Factor in this additional 5% when reading this blog.

---------------------------------------


UPDATED (20 DEC 16):
How to calculate BSD and ABSD?
---------------------------------------



A friend recently bought a second residential property and had to pay a 7% ABSD which amounted to quite a bit of money. 

He asked why wasn't I considering buying another property as I seem to have the financial ability to do so. 

Well, apart from the fact that I think that Singapore's residential property market is facing a glut and will continue to face a glut for a few years, I am reluctant to pay the ABSD.




ABSD stands for Additional Buyer Stamp Duty. This is at 7% for Singaporeans who buy a second residential property and is paid in addition to the regular 3% Buyer Stamp Duty (that has to be paid anytime a residential property is purchased).

For Singaporeans who buy a third residential property, the ABSD is 10%. 





Imagine buying a $800,000 property and having to pay the taxman an additional $80,000! 

That is enough to buy a 3 year old Japanese make family sedan in Singapore or a brand new Mercedes Benz E-200 in the USA with a fair bit of money left over.

My friend sent me this in an SMS:

"If it (the ABSD) goes down, then, people will rush in to buy again. Developers and sellers will raise the price. So, in the end, the overall paid is still the same... 

"If without this ABSD to artificially suppress the demand, the prices would have been super high and just keep rising. So, it helps to suppress the price but I must pay the ABSD.

"If the ABSD didn't exist, we would still have to pay a higher price."




See how the belief that property prices in Singapore can only go higher is firmly embedded in the message?

My reply:

"That is what property agents are saying to encourage buying (even if buyers must pay an ABSD). 

"I don't think anyone knows for sure (that prices will only go up). It is a lot of money. So, I rather stay cautious since I already have a property (i.e. my home). No hurry.

"It is called ABSD for a reason and when it is removed, it will be because the market has cooled enough and liquidity has dried up. In such an instance, developers would be shooting themselves in the foot by raising prices."

I am reminded not to ask a barber if I need a haircut.

Try to remember the Rule of 15. 

The ABSD raises the buying price significantly for anyone who is buying a second or third property. 

This has to be considered as part of the price tag of the property. 




If we could only eke out a 3% yield from a purchase, in a rising interest rate environment, I would hardly consider that a good investment.

The ABSD has helped to keep out investors and allowed first time buyers a chance to buy private residential real estate at more reasonable prices. 




Apart from the ABSD, investors should also be deterred from investing in residential real estate here by the fact that the oversupply situation seems set to worsen in the next few years.

Honestly, I would tell people to buy a piece of private residential real estate in Singapore now only if they want to make it their home. 

As an investment, for anyone who decides to buy now, private residential real estate in Singapore might be rather disappointing a choice in the coming years.



Related posts:
1. The Rule of 15.
2. Disastrous investments in the property market.

To be richer, do not indulge in creature comforts (Part 2).

Some readers might remember that I had a blog post in January with a similar title. In that blog post, I revealed that I was probably one of Starbucks' least favourite people. I know, I am putting it ever so nicely.

Unless it is free or heavily discounted in price, I don't drink Starbucks' coffee.

Now, what about Coffee Bean & Tea Leaf?

Alamak! AK is taking a pot shot at Coffee Bean & Tea Leaf next?

Aiyoh, do you really think I am so bad? No lah! I am just sharing here how I am going to get a free coffee from them lah.

Yes, I know. I am terrible.

Related post:
To be richer, do not indulge in creature comforts. Really?

Eat wholemeal bread and win a $6,000 holiday plus cash!

I will almost always choose wholemeal bread over white bread as it is a healthier choice although it costs more:

Wholemeal bread is nutritious because it is made from whole wheat flour produced from milling the entire wheat grain. 

You get all the nutrients – dietary fibre, antioxidants such as vitamins A and E, essential minerals and B vitamins (B1, B2, B3, folic acid) from the bran (the grain’s outer layer) and germ (inner layer).

In addition, whole grains also contain phytochemicals which may help to reduce risk for conditions such as heart disease and certain types of cancer. 

(Source: healthxchange.com.sg)

Now, there is an added incentive for me to choose wholemeal bread from Gardenia. What is it? OK lah. Got good lobang must share.

Gardenia Wholemeal Bread packaging.

Closing date: 15 June 2015.

1st Prize: $6,000 Holiday Package + $2,000 cash!

Made some sandwiches:

Tuna, cheese and margarine sandwich.
I always make at least 4 at one go.
Keep refrigerated and bring one to work each day.

If I don't win, I hope one of you do. Good luck. :)

Disclosure: 
Buying Gardenia bread will benefit AK as he is a shareholder of QAF's.

Related posts:
1. Supporting my companies.
2. QAF: Rising 5c to 93c a share.

Six questions to ask about your insurance.

My dad bought for me my first life insurance policy when I was just 18 years old. When I started life as a working adult, of course, it was only right that I took on the responsibility of paying the quarterly premium. It costs me slightly more than $1,000 a year for what I now know is a miserable $50,000 sum assured on my life plus coverage for critical illnesses till age 50.

My dad bought the policy for me from a friend who said that he should get a policy for his teenage son because because it was cheaper to buy whole life policies at a younger age. This, I know now, is quite a standard sales pitch. The fact that his friend was a high achiever (ahem, made a lot of money) who led a team of agents meant that he must be dishing out advice that was right for us.

If I had known the stuff I know today, I would have stopped my dad from buying that proposed insurance product for me. $1,000 a year was a lot of money almost 30 years ago. I know that my dad bought the policy for me because he loved me but, really, all my dad had to get for me was Hospitalisation and Surgical (H&S) insurance in case I was hospitalised.

See what I mean?
Taken from DIYInsurance on Life Stage Planning.

Anyway, I am glad to say that things have changed over the years and for the better too. Matters regarding personal finance which were once regarded as esoteric have become clearer as the internet removed barriers, making information readily available to the general public. Many who are in the know willingly share their knowledge and experience in cyberspace. This is a good thing because, till today, I still hear horror stories from people regarding insurance agents.

To be fair, there are good insurance agents out there who are ethical and genuinely care about their clients' welfare. Hard to find but not impossible. If we have to rely on someone, make sure that someone is trustworthy. This, of course, requires us to take a leap of faith.

So, the best thing to do is still to be educated. With education, we will know very clearly what are the options available to us and which options will best serve our needs at different stages of our lives. Then, the next thing to do is to go online and buy the insurance products we need at lower prices. What? Is this possible? Sounds too good to be true?

When I read about DIYInsurance, I thought that this service should have been available sooner. They aim to educate the public, helping them make better choices and save money in the process. What's there not to like?

The good people at DIYInsurance start by asking us to ask ourselves 6 questions:

6 questions you MUST ask yourself about your insurance.

1. Did you purchase Term insurance instead of Whole-life insurance?

The only way to be sufficiently covered by insurance is to purchase Term insurance.  Term insurance is a low-cost insurance in which you only pay for the amount of coverage you require, providing maximum protection at a minimum cost. Most of us will require at least $500,000 and up to $1million when we have a family with kids.

Purchasing term insurance means we are able to sufficiently provide for our dependents livelihood on our unfortunate demise. Not having sufficient coverage means our dependents may have trouble paying off our housing loan, education fees and to maintain their lifestyle. Having $1million coverage would cost less than $200 per month with term insurance. Find out how much life insurance coverage you need here. Compare term insurance products from different insurers here.

2. What is break-even point?

The “Break-even point” is widely referred to in Whole Life and Endowment Insurance (Savings) plans as a point of time in future (Eg. 20 years) when the:

Total amount of premiums paid = Cash value which can be obtained if the policy is surrendered.

While this may seem that we are getting “free” insurance coverage at the break-even point which could be in 20 years time, it is vital to note that the same amount of money now will differ significantly in value in 20 years due to inflation. Which means the value of us paying $10,000 in insurance coverage over 10 years cannot be compared to the value of $10,000 which you only receive in 20 years time. The value of $10,000 is much smaller in year 2035. Our chicken rice used to cost $1 and the same plate may cost $6 in 20 years time. Hence, we have not “broken-even” and are in fact paying for additional commissions, insurer’s costs, insurance coverage and savings element from the loss in insurance coverage in whole-life insurance plans.

3. Have you compared?

Comparing allows you to purchase an insurance product at the best value. The cost savings can be significantly higher.  Insurance web aggregators are popular and widely used in the United Kingdom and Australia. Singapore’s 1^st Life Insurance Comparison Web Portal, DIYInsurance, allows you to compare products for your Protection, Savings and Retirement needs from a wide range of companies. Learn more about using web aggregators, there is a complimentary event by DIYInsurance, Plan, Compare & Save on Insurance: Using Web Aggregators on 25 April 2015. Register here.

4. Have you received commission rebates?

Insurance agents are paid a handsome sum of commissions for insurance products they sell. Up to 1.5 years of the cost (premiums) you pay may have contributed to the fees of your insurance agent. This means you are insufficiently insured for the large sums you may be paying. DIYInsurance rebates 30% of the agent’s commissions back to you in cash, providing greater cost savings to you.

5. Do you know how is your insurance agent paid?

Singapore’s insurance industry is predominantly remunerated by commissions. Earning by commissions for a living means your financial planner may have a greater tendency to sell you products which provide them with higher commissions. This means you may be exposed to products which you may not need and pay a higher cost for them. A large part for what you are paying for is channeled to the fees for your financial planner. Buying through DIYInsurance and for you to receive 30% commission rebates means you will know how much DIYInsurance is paid.  DIYInsurance is transparent with every product's commission’s structure so that you know exactly what you are paying for.

6. Do you know how independent your insurance agent is?

To ensure there is no conflict of interest, it is important to ensure that your financial planner is paid on a fixed fee and not by commissions based on their product sales to you. All staff from DIYInsurance are paid a fixed salary and do not participate in sales-based compensation or incentives of any kind. Not being remunerated on a commission-basis means the staff at DIYInsurance are independent and are able to focus on doing their best to fulfill your needs. There is no hard-selling and no over-selling.

Pay less for your insurance today.

AK agrees.