Looking for a way to preserve capital and enjoy dividends.

I always say that I don't know everything there is to know. I am not humble. I am just being honest. I am also not a very good investor. Again, I am not humble. I am just being honest.

So, when I get very difficult questions, I like to share the questions and hope that I will learn from other people who might have answers.

Here is a message from a reader:

Dear AK,

Hope all is well with you. I attended the second chit chat session that you organised. If you remember, I was the one who asked you about Malaysian Ringgit. I had some back then and eventually I remitted it out to Sg in US$ as I hope I can make some forex gain eventually.

If I were to ask any relationship managers what to invest in, they will advice that I buy products like bonds or funds that give out dividends. If I were to suggest US bank stocks, they will suggest products like structure notes which band 3 bank stocks and gets too complicating for me. My experience with relationship managers have never been good and most of the time I ended up losing or ended in positive territory after taking interest earned into account.

I am thinking of putting it in stocks and since with US$, I can only either purchase stocks listed in NYSE /Nasdaq or US$ denominated stock in SGX. I have shortlisted a few US$ counters in SGX and am of course leaning more towards the first two that give much higher dividend and perhaps GM. I would love if I can hear your view and advice especially on HPHT.

At this stage, I don't want too much risk and am more into capital preservation and hoping to get good dividends. Please feel free to make any other suggestions.

SGX Hutchinson Port Holdings Trust 9% Mandarin Oriental International 4.33% Jardine Strategic Holdings 0-89% Jardine Matheson Holdings 2.68% HongKong Land Holdings 2.36% Dairy Farm Internationals. 2,64%

NYSE General Motors 4.58% General Electrics 3.5%

Source: Bloomberg.

I had meant to write to you weeks ago but was kinda pei she to trouble you and to pick your brain but I know you have always been most generous with your sharing and so I have finally done it ! Thanks for sparing me some of your time smile emoticon

Second "Evening with AK and friends" early this year.

My reply:

I am sure you gave the matter much thought before converting your Ringgit to US$. I am happy for you.

With regards to your question on what to invest in, I believe you are right to avoid bond funds.

I don't know about the other stuff you asked about apart from HPH Trust. You could do a search in my blog for this and you will see what I think of it.

If you like, I could extract some bits of your message to me and share them on my blog to see what others have to say. I don't know everything there is to know, for sure.

If you are interested in dividends and you want to make sure you are doing it properly so as not to put your capital in jeopardy, you might want to consider signing up for Dividend Machines. See: A second chance to create your own Dividend Machines.

So, if anyone has any good ideas to share, please feel free to do so in the comments section.

Related posts:
1. Second "Evening with AK and friends".
2. Nobody cares more about our money than we do.
3. HPH Trust: Storm clouds over a safe harbour?

Should I sell my HDB flat to fund my condo purchase?

All of us aspire to a better life, to give our families a better life. 

This is only normal.

In Singapore, part of this aspiration to a better life for many is characterised by a desire to live in a condominium with full facilities and security.

For HDB upgraders, they might wonder if they should sell their HDB flats or hold on to them as income properties. 

The case to keep their HDB flats for rental income has been quite strong in recent years due to the buoyant rental market and the very low interest rate environment. 

It would be prudent to ask if such a scenario is going to last?

I replied to a reader who has the same question:

AK said...

You have rightly identified the two main considerations which will help you in making a decision.

1. Interest rates have been very low for many years. 

They could stay low for a while more but they cannot stay so low forever. 

The very low interest rates of the last few years are abnormal. 

When interest rates normalise in future, the logical direction they will go is up.
...




...
2. How much we get in rental income, if any, like many things is a function of supply and demand. 

The oversupply situation in residential properties is not getting any better in Singapore and it will take years to correct (and we are assuming that they would). 

The slower growth in the foreign working population is not going to drive rental demand for residential properties like it did in recent times.

Would you be able to rent out your 4rm flat in Sengkang for $2.2K a month (if you could find a renter at all) in 2017? 

I do know it has been getting harder to find renters in recent months. 

I don't think anyone knows for sure what it is going to be like in 2017.
...




...

In life, I like to go for low hanging fruits. 

I try not to climb trees and if I do, I try not to climb too high up into the trees. 

I go for the benefits which I know I will be able to secure with greater certainty.
...

 Leverage is able to deliver benefits to investors if used correctly and if the conditions are favourable. 

The last few years saw households in Singapore leveraging more liberally because of the very low interest rates. 

Things still look OK now but a recent study showed that if interest rates were to normalise and rise by only 2%, 15% to 20% of households in Singapore could become over-leveraged.
...




...
An over-leveraged individual uses more than 60% of his income to service his debt burden. 

So, someone could be using just under 60% of his income now to service his debt burden but when interest rates rise, which they will sooner than later, all else remaining equal, he could end up using more than 60% of his income to service his debt burden.

Reading your email, I get the feeling that your preference is to sell your HDB flat when your condo is ready in 2017 so as to avoid paying a 7% ABSD (and also end up servicing a bigger home loan). 

Well, I would say to keep your ear to the ground and see how things develop in the next two years.

If the residential real estate market worsens and if interest rates go up much more, the case for keeping your HDB flat as an income property will weaken. 






We cannot project current day rates into 2017 and think that things will not change.

Leveraging to fund prudent investments is a good idea. 

Leveraging to fund consumption is generally a bad idea. 







Interest rates have been too low for too long and many people have grown a bit too adventurous.

Best wishes,
AK

Related posts:
1. Buy that second property and pay the ABSD?
2. Should we buy a shoebox unit in NE Singapore?

Get someone qualified to fix the sorry state of our MRT.

I have said before in my blog I am not averse to companies I am invested in paying their top executives top dollar if they are worth the money. However, when it is obvious they are not worth the money, we should replace them.

I have been ranting a bit on my FB wall recently regarding SMRT after the massive breakdown a few days ago. It has gone beyond being a bit of an embarrassment and mere inconvenience. I think it is really unacceptable.

From my FB wall:

"Highest pay for SMRT CEO ever = Largest MRT breakdown ever?
What is LTA going to do? Slap SMRT with a big fine again?
Who is bearing the burden of the fines? SMRT shareholders!
Why not consider slapping the CEO with a fine?"

Enough is enough. It is time we get someone who can do the job properly to lead SMRT. It might have to be a foreign talent if no Singaporean has the knowledge or experience to do the job well.

Which is less embarrassing? Admitting that we need foreign talent or having a MRT system that keeps breaking down?

Related post:
MRT nightmare at Bugis.

SRS account, CPF account and rights issues.

I always avoid using money in my SRS or CPF accounts to buy stocks of companies which I think might need to do equity fund raising in future. 

So, no REITs or business trusts, for examples.




Here are a couple of conversations I had recently:

Reader #1...

this is the first time i'm writing, and I'm hoping you can spare a few minutes to share your knowledge and experience with me. 

i bought a counter through my CPF-IS long ago, and I have maxed out my CPF-IS. 

this counter has an on-going rights issue (190 for every 100 owned). 




i would like to sell the rights (as i don't have the "capacity" in my CPF-IS to buy the rights. 

assuming i owned 2000 shares, do i sell 2000 rights, or 3800 rights?

i tried asking my broker, but my broker doesnt seem to know the answer.

I know you have blogged about rights a number of occasions, so i figured you probably know better than most people. 

AK says...
I am not a licensed financial adviser or broker, so, take what I say with a pinch of salt. 

Disclaimer applies. ;)

First, find out if the rights are renounceable. 

If they are renounceable, then, you are allowed to sell the nil-paid rights given to you when they start trading.




If you are given 190 rights for 100 shares owned, if you owned 2,000 shares, you should be given 3,800 rights units (nil-paid) and that is what you can sell.

Oh, you might want to consider firing your broker. ;p

Reader #2...

Hope all is well.

Have been Following your blog silently for the past 5 years & invested quite a bit on reits. 

Thanks for the education.

Recently OUE Com Reit issued rights.
I bought some using SRS.

How do I subscribe to my entitled rights using my SRS?

If my SRS has no excess funds, what can I do?




AK says...
I only use my SRS money to buy stocks which I am pretty sure will not have rights issue precisely to avoid a situation like the one you have described.

If you do not have extra funds in your SRS account, then, you are caught in a difficult situation. 

You might want to call the bank your SRS account is maintained with and ask them for advice.




As an aside, in case there are people who are wondering why AK is not blogging as much as before, this is another recent conversation:

I need to learn how to break and blog. :)

Related post:
High yielding business trusts: A discussion.

A second chance to create your own Dividend Machines.

I received this message last month from a reader who is very interested in learning more about investing for income:

"... dividendmachine is no longer accepting members. Aiayh!!!! Your advertorial too good already lar, every time sell out. The dividendmachine is mostly modules that are done at the member's own time. Can ask them if possible to open just the module part if they are too busy to organize life classes as well as the weekly discussion? Merci!!!"

No longer accepting members?

OMG!

How come like that?

Well, there is good news for the reader and others out there who missed "Dividend Machines" the first time round. Yes, the second round is now full steam ahead and they are ready to accept new applications!

I have said before that my methods are more opportunistic than structured. For readers who wish to have more guidance and who feel that they would benefit from a more structured learning environment on how to more successfully invest for income, signing up for "Dividend Machines" is the best value for money option that I know of.

AK at one of Dividend Machines' workshops.

So, if you are thinking of investing for income, you might want to sign up for "Dividend Machines" and, in case you are wondering, no, you don't have to pay $X,XXX for this. It is unbelievably affordable.

Don't take my word for it. Find out more for yourself by following the link provided below and I think you will be pretty amazed just like I was. Go to: Dividend Machines.




Dividend Machines by The Fifth Person.

I have been told that the deadline for application is 24 July 2015 and, after that, Dividend Machines will not be available again for the rest of the year. So, if you are interested, you want to act fast too.

Regular dividends are not just comforting for regular folks like me. They are necessary if we wish for greater peace of mind in a world where goods and services are getting more expensive by the day.

Building our own Dividend Machines will help us move towards financial freedom more quickly. Yes, financial freedom could be closer to us than we think.

Remember, if AK can do it, so can you!

Related post:
Listen to AK and create Dividend Machines!

Nil-paid rights and excess rights. (Case study: My strategy in IREIT's 45 for 100 rights issue.)

IREIT's 45 for 100 rights issue is priced at $0.468 per rights unit. Links to the full details of the rights issue have been provided at the end of this blog post. 

So, I will only blog about the more interesting bits and my strategy.





As I am investing for income, I am first and foremost interested in the DPU, post acquisition. It is important to note that the DPU hardly improves, post acquisition.

An important consideration in IREIT's case is the foreign exchange rate, specifically, between the EURO and the Singapore Dollar.

In my last blog post on IREIT in February this year, the exchange rate was 1 Euro to S$1.54. Now, it is 1 Euro to S$1.50. So, the Euro has weakened a lot from 1 Euro to about S$1.70 from the middle of 2014 when IREIT had its IPO.

Read the notes. Read the details in the announcement.

Back in February, I also said that to get an 8% distribution yield, the unit price had to be 75c.
The promised 8% yield based on the IPO price of 88c per unit was no longer possible.

Based on the understanding that the DPU would hardly improve post acquisition and that the Euro has weakened since the REIT's IPO last year, if we believe that 75c per unit now is what makes investing in IREIT worthwhile, then, the theoretical ex-rights price (TERP) has to be 66c or so.





For investors who got in at the IPO price of 88c and participating in the rights issue at $0.468 per rights unit, their TERP is 75.2c, not taking into consideration any successful excess rights application. 

They, most likely, would not get an 8% distribution yield even now.

For those who have yet to invest in IREIT, however, they could get a distribution yield in excess of 8% if they play their cards right. 

This is where I talk to myself about my strategy.

This rights issue is renounceable. This means that nil-paid rights will be traded in due course and there will always be people who cannot or will not take part in rights issues. 

They could sell their nil-paid rights.





If nil-paid rights in this case should be sold at a price of 19.5c or less a piece, buying them would give me a TERP of 66.3c or less when I exercise them by paying $0.468 per rights unit. This will give me a distribution yield which I find more acceptable and, perhaps, more sustainable.

For those who don't know, nil-paid rights are bought or sold in the stock market like regular stocks. 

We could sell our rights entitlement or we could buy from someone who is selling. These are nil-paid rights.

I could also buy some IREIT units while they are still trading cum rights (CR). The motivation is not to be entitled to the rights units as they will not do anything to improve distribution yield. 

The motivation is to be eligible to apply for excess rights.

Only eligible shareholders are allowed to apply for excess rights. Application can be made at ATMs of participating banks before the closing date.





Getting more excess rights will give me a higher distribution yield. This is, of course, due to the fact that excess rights will have the highest yield. 

The cost, in this case, is only $0.468 per rights unit. The yield is estimated at 11% or so.

Specifically, my strategy is to buy enough IREIT units so that the total number of units plus my entitled rights units will allow me to get more guaranteed excess rights units. 

Guaranteed? How so?

For example, buying 2100 units would entitle me to 945 rights units. 

Unitholders with odd lots will have priority to get excess rights units which means 955 excess rights units are in the bag in this example.





The average distribution yield in this example would work out to be approximately 8.3% if the 2100 units were bought at 82c a unit, assuming that excess rights application for anything more than what was required to round up odd lots failed to be successful.

Being opportunistic, with this strategy, IREIT makes a decent enough investment for income although a gearing level of 43.7% after all this is over suggests that this might not be the last time we see some fund raising activity from IREIT.

Full details of rights issue:
1. Announcement.
2. Presentation.

Related post:
IREIT: What is a more realistic yield?

Earlier examples of rights issues:
1. First REIT: A simple way to a double digit yield.
2. AIMS AMP Capital Industrial REIT: XR.

Starhub: A nibble at $3.85 a share.

Friends would remember that I looked at possibly investing in Starhub a couple of years ago but its high level of borrowings frightened me.

Of course, Starhub has chugged along quite nicely since then and it was only later that I discovered how its very predictable and strong cashflow was able to accommodate its high level of borrowings.

So, I have been waiting for a chance to get some since...

Starhub's stock price plunged today, hitting a price (of $3.70 a share) not seen since late 2012. The big movement downwards was unexpected, of course, although the charts show the 150% Fibo line to be at $3.70, a golden ratio and supposedly a strong support.

I was more expecting a slow drift downwards in price and thought I could, perhaps, buy if the share price hits the 200 week moving average (200W MA) which is currently at $3.87. This is a long term support and should be quite strong.

So, looking at the chart when its share price had already recovered from $3.70 to $3.85, I wondered what to do because breaking the 200W MA is a bearish signal.

The widening of the Bollinger Bands indicates increased volatility. The OBV shows selling pressure. The MACD is declining and shows no sign of a positive divergence. These are all on the weekly chart which suggests that continuing weakness in the longer term should not surprise us.

In the near term, however, share price could rebound as they sometimes do. In fact, the higher low on the MACD in the daily chart suggests that this is a distinct possibility. Such a big one day movement in price should have attracted short sellers and shorts have to be covered eventually.

In terms of fundamentals, it won't be wrong to say that Starhub has challenges. Like SingTel and M1, the other two local Telcos, Starhub must deal with loss of revenue from the more and more popular use of apps such as Whatsapp (please pardon me if I did not get the name right as I don't use this) instead of voice calls and SMS.

Fortunately, Starhub has Cable TV but that business has not been growing much recently. Anecdotal evidence shows that more people are watching free online streaming content. I do that too on my iPad. Japanese anime, remember?

Of course, now, the new threat is the introduction of a fourth Telco in Singapore and this is probably "da bomb". How badly would Starhub's business be affected? I don't know. Would Starhub's ability to pay 20c in dividend per share (DPS) annually be affected? I don't know.

I do know that paying 20c per share annually in dividend means distributing almost all of its earnings to shareholders. So, if its business should suffer a decline in earnings per share (EPS) and this is a real possibility, we could see a reduction in DPS.

I could get a 5% dividend yield if I were to invest in SPH now. Of course, Starhub is not SPH. They are different animals but paying out almost all their earnings as dividends to shareholders make them similar in that respect. They could see earnings come under pressure for different reasons but that makes them similar too as the challenges are very real.

I would like to have some buffer in terms of dividend yield buying into SPH and Starhub because I am investing in them primarily for income and not growth. A more or less predictable 5% dividend yield might be attractive to me but to have a buffer means getting in with a higher yield which means a lower entry price.

Anyway, I decided to nibble at Starhub at $3.85 a share. That gives me a prospective dividend yield of 5.19% which provides a very thin cushion. This is really nothing to shout about and, definitely, I am not expecting to make a lot money with this entry price. From here on, I could, however, buy more if its stock should see more price weakness.

Related post:
How much to invest? Nibbles and gobbles.

Is it bad to receive regular dividends and to sit on cash?

Many times, I have been asked what is the yield on my total portfolio. I have never bothered to answer the question for various reasons and because I don't ever answer such questions, I don't bother to find out what the answer might be.

I know more or less what are the dividend yields and distribution yields of my various investments in my portfolio but I have never really calculated what is the average yield.

A friend recently told me that the average yield of my total portfolio including cash must be much lower and he wondered if I was beating some kind of benchmark. I could see where the conversation was going and I gave a loud sigh.

I know there are some people who are like my friend, who are obsessed with measuring their performance and worried that, if they hold too much cash, they might under-perform the benchmark which in many instances is the STI. 

So, consequently, they are constantly on the lookout for assets to put money into in order to prevent their portfolio's performance from declining. It sounds stressful and I am stressed out just imagining this.

I am pretty simple minded when it comes to investments. I use some common sense and ask some questions which I think matter in that investment. If I am satisfied that I am not overpaying and the stock is likely to do pretty well in future, I buy some. Regular readers would know what I have been nibbling on in recent months.

Yes, some of the nibbles have been poorly timed but we can rarely buy at the lowest prices or sell at the highest prices. We can use some technical analysis to provide insights but if we did buy at the lowest or sell at the highest, we were lucky. I believe in holding on to investments that have good bones. Anyway, I sleep well at night because I "eat bread with ink slowly". Remember?

"When stocks are attractive, you buy them. Sure, they can go lower. I've bought stocks at $12 and went to $2, but then they later went to $30." Peter Lynch.

"I buy on the assumption that they could close the market the next day and not reopen it for five years." Warren Buffett

Frankly, if prices did not come down, I would not have nibbled at anything. I would most probably just be growing my war chest.

Why should there be an urgency to buy something just because cash is going to be a drag on the overall performance of our portfolio? 

Is the overall performance of our portfolio so crucial? 

It could be to some, I guess.

I told my friend I am probably about 70% to 80% invested. So, I have 20% to 30% in cash. I don't know the exact percentage because I don't measure but it is about there. My investments are generating income in excess of $100,000 a year for me. Again, how much is it exactly, I don't know. I will know at the end of the year.

Even if I were to retire from active employment and not have an earned income, I guess I would be quite comfortable living off just a portion of my passive income. The rest, I could invest with when opportunities present themselves. If there should be nothing I fancy, I would just continue to build my cash position. Even if my cash position should be 50% or more of my portfolio, it wouldn't bother me.

AK is the proverbial frog in a well. There are many things in this world AK doesn't understand but AK knows that he feels good when he has more cash in his bank accounts. 

I am not a professional fund manager who has to answer to unit holders who might ask, "Why are we paying you just to sit on so much cash?"

Well, I understand that it could be that my friend and others like him imagine themselves to be pseudo professional fund managers. I understand that but it doesn't mean that I have to be like that. I am just a regular retail investor.

I would like to end this blog post with something Charlie Munger said before but it is probably a bit overused in my blog by now. Hint: It has something to do with some character sitting on something. So, I will end with a couple of quotations from Peter Lynch instead:

"In this business, if you're good, you're right six times out of ten. You're never going to be right nine times out of ten."
"If you can't find any companies that you think are attractive, put your money in the bank until you discover some."

I am not a professional fund manager and thank goodness I am not or I might be kept busy answering calls from irate unit holders. 

"Whose money is it anyway?" 

(Oops, I think that sounded like a question from a member of the opposition in local politics. Getting a bit mixed up in my old age. Cham.)

Related posts:
1. How did AK create a 6 digits passive income?
2. How did STE married with kids retire at age 44?
3. 5 revelations from a regular retail investor.

Should we buy a shoebox apartment in NE Singapore?

I was talking to someone who said he bought a second property for investment, a shoebox apartment in NE Singapore and said that he should be able to get a bit more than a 4% yield. He seemed quite pleased with himself and said that any yield lesser than 4%, he wouldn't consider.

Singapore Real Estate Exchange said before that 4% represents a psychological barrier when it comes to rental yields for investors seeking income from residential properties. There seems to be some truth in this. However, if we subscribe to the Rule of 15, 4% looks less attractive and does not provide a sufficient margin of safety.

There are many things that should be considered but basing our expectation of future rental performance on what are currently the market rates could lead to disappointment as more supply to the Singapore non-landed residential real estate market is on the way.

With vacancy rate at 7.2%, some experts are expecting vacancy rate to hit 10% by 2016. Wonder why? See this chart:

Source: URA.

A vacancy rate of 10% in the next few years is plausible as the inflow of foreign workers to Singapore has slowed down dramatically while more private non-landed properties are completed.

Experts have observed that there will be more completed condo units in the suburbs in particular and this will depress rents in OCR further.

"Between H2 2014 and 2015 alone, close to 30,000 units are expected to be completed, substantially greater than the previous two years' supply of 23,000 units. Of this, about 56 per cent will be in the suburban areas, and is thus likely to exert a further strain on rents as potential tenants will have greater bargaining power," said Ms Lee Lay Keng.

"The imminent supply glut could lead to a flight to quality, as some tenants will be able to move closer to the CBD for the same rental budget. The result is that the OCR (outside central region) residential landlords may get the short end of the stick," added Mr Nicholas Mak.

Source: The Business Times.

I have an inkling that Mr. Mak is right and it would mean higher vacancy rates in OCR in future. It might not just be a problem of depressed rents in OCR but depressed resale prices as well.

Remember also that ABSD is part of the total cost of buying that second or third property. ABSD, therefore, depresses the rental yield of these properties, all else being equal. The person I spoke with did not consider ABSD as part of the cost of the property. "It is an expense", he said. Sounded like an accountant.

Unless a residential property is able to offer a higher rental yield and, by that, I mean 5% to 6% which doesn't satisfy the Rule of 15 either, it really isn't a very good investment in an environment of worsening oversupply and impending interest rate hike.

In District 19 - which encompasses Punggol, Sengkang and Hougang - 2,300 new units have hit the suburban precinct in the past year.

This will be followed by a further 3,000 condo units over the next 12 months, with the completion of projects such as Sim Lian's 882-unit A Treasure Trove and Keppel Land's 622-unit The Luxurie.

"Because these areas have seen the largest increase in the supply of non-landed units in the past year, they are likely to see the most rental pressure as tenants would have a wider selection of options, increasing their bargaining power," said DTZ research director Lee Lay Keng.

Source: The Straits Times.

I know that a shoebox apartment in NE Singapore now might seem attractive from a price point. However, if we have done our homework, we might feel less confident about its prospects.

Related posts:
1. Rule of 15.
2. Pay the ABSD?
3. Where to buy shoebox apartment?

Curious about how life is like in a shoebox apartment? Read:
Home is a hut in the sky.

Do you know if your parents have (enough) H&S coverage?

There are certain topics that many people avoid talking about at home. 

Money is one such topic.

Sometimes, due to this reticence, we discover too late that someone in the family might be heading for a financial disaster or that someone in the family might not have certain necessary insurance protection.

In such instances, other family members might have to help out financially if they are able to. 

What if they do not have the ability to do so? 

That is one scary thought, isn't it?





This is taken from a recent conversation with a reader:

Hello AK,

It's me again, the one who got in touch with you via Facebook recently :D

I am currently reviewing my insurance plans, fueled by my recent visit to the CPF board for my dad's CPF Life inquiries. 

One thing lead to another and I realized that he only has Eldershield on and no H&S plans at all. Thus I'm inclined to grab one for him.

The plan (hah!) I have for my dad is to have to maximize his $800 cap to pay for his private insurance, with any additional necessary cash top-ups to be done on my end, which can be part of my tax-relief(ed) contributions towards his Medisave.

As much as I want the best for him, question is, given his age and thus the increasing premiums, should I go for the highest possible plan or exercise prudence by going with what I can afford? 

If it's the latter, what's the bare minimum then for me to effectively not worry to a large extent should he be hospitalized?

Hear from you soon, AK :)

Sincerely,

F

What? No H&S plan? Alamak!

Firstly, I must apologise to F because I forgot to mention to him that contributing to his father's CPF-MA does not give him any income tax relief. 

I believe that a voluntary contribution to the CPF-MA gives income tax relief to the recipient only. 

He might want to check with the CPF Board on this to be sure.






My reply to F:

Hi F,

H&S is very important and a must have for everyone. Very lucky that you discovered your dad has no H&S coverage. 

He should definitely get coverage ASAP!

A long, long time ago when I first compared H&S plans, I decided to go with Incomeshield from NTUC and I have stuck with them since, upgrading my plan over the years. 

I got my mom in on this as well and, like you observed, upgraded her plan not too long ago too.

It is true that the yearly premium will get more expensive as we age and for my mom who is almost 70 years old, it is more than $2,000 a year. 

She finds it expensive but I told her it isn't and I will pay for her. I want her to be comfortable if she should be hospitalised and I want to be worry free when it comes to my share of the cost. 

10% of the bill with an annual cap of $3,000? That's OK. :)






Which H&S plan should you get for your dad? You have to compare the different options available and decide for yourself, of course. 

Remember, insurance is there to help us deal with bad things that might happen to us. 

It is to help us to cope with costs which we might not be able to deal with ourselves. 

As we bear this in mind, we also want to keep the cost of insurance low.

Of course, if we can afford to pay for better healthcare for our parents, why not? 

I think they deserve it. 

To make better healthcare more affordable for us, we need a good H&S policy. :) 

The yearly premium is predictable and is something we can budget for. 

The cost of hospitalisation is not predictable. ;)

Best wishes,

AK

I have talked to myself about the importance of having a good H&S plan from time to time here in my blog, of course. 

This is not something new.

However, the conversation with F nudged me to once again remind readers, especially those new to my blog, to have a conversation with family members, especially our elders, to ensure that they have H&S coverage and if they do have coverage, we want to check if the coverage is adequate when considering the types of hospital and ward preferred.





We shouldn't drag our feet when it comes to something like this. 

The weekend is upon us. 

Go talk.

Related posts:
1. Enhanced Incomeshield for my mom.
2. Eldershield: Is it really necessary?
3. Eldershield: What does it shield us from?
4. Save money and have better H&S for parents?
5. Voluntary contributions to CPF.
"My dad is still working and paying income tax. So, with regular voluntary contributions to his Medisave Account from me, he will pay less income tax too. Yes, it is tax-deductible for the recipient only."