Thursday, April 13, 2017

How to plan for your baby's future? (My Complete List versus CPF article)

CPF interviewed me and the article was published on Feb 27. 2017.

The link is shown below.

https://www.areyouready.sg/YourInfoHub/Pages/Views-How-to-plan-for-your-babys-future.aspx?utm_source=Outbrain&utm_medium=Article36&utm_term=Retirement&utm_content=Headline2&utm_campaign=CPF_BAU_1701

How to plan for your baby's future?

Some of my points are not published at CPF website. This is the complete version. 


(1)   Do not touch your child CPF MA account (S$4,000 now) that was given by the government.

CPF Medisave account (MA) has 5% interest (cap at the first S$60,000 and 4% thereafter). Use all your CDA account money (S$12,000) as it attracts only max 1.20% interest from the bank, not child CPF.

Note (1):
http://jkfund.blogspot.sg/2015/05/cpf-versus-whole-life-insurance-for-kids.html


(2)   Buy Whole Life Insurance while he/she was 1 day old.


The earlier you purchase, the cheaper it is. The shorter payout period, the cheaper it is.

S$500,000 sum assured whole life insurance with 5 years payout period cost me total S$33,010. Good money spent! My child does not need to purchase whole life insurance when he starts to work. If he wants more coverage, he can buy himself.

Note (2):
http://jkfund.blogspot.sg/2012/10/buy-life-insurance-as-early-as-possible.html

(3)   Contribute S$2,000 annually into your child CPF SA account.

CPF Special account (SA) has 5% interest (cap at the first S$60,000 and 4% thereafter). This can be your child’s Chinese New Year red packets. This is to help to build a strong head start for your kid in CPF accumulation. His/Her full retirement sum (FRS) can be easily above S$500,000 in the future. 


For me, it would be S$250,000, 18 years from now (year 2035).

Note (3):

http://jkfund.blogspot.sg/2015/03/age-1-baby-has-cpf-account-do-you-know.html

(4) Buy Investment-Linked Plan (ILP)   

Many people do not like whole life insurance, investment-linked plan and endowment plan.


This is something extra I did for my little one. I bought one ILP, monthly payment of $100 (S$1,200 per year) into Singapore Growth Fund and Emerging Market Fund (50% allocations each). As ILP has a 7 years break-even threshold, he has all the time to witness the compound growth of the surrender values. This is one good retirement income for him especially Singapore and emerging countries will do great in the next 20, 50 years.

Note (4):
http://jkfund.blogspot.sg/2012/10/investment-linked-fund-for-infant.html

(5) Buy equities (stocks)

I have not done that just yet for the little one but I will do so by Q1 next year :)

In fact, I invested equities for myself for income through SRS account and cash.

For child, we should buy solid blue chip counters only, DBS, OCBC, ST Engineering, SPH, SINGTEL or even REITs, CapitaLand Mall Trust, Cache Logistics Trust, SUNTEC REIT, etc. We buy the shares, frame the stock purchase certificates and hang them nicely at his/her bedroom. I read this idea from magazine. It is a pretty cool thought. :)

We can witness the capital appreciation of the good stocks, at the same time, enjoy the stable fat dividend payouts. Such dividend yield is easily in the range from 3.5% (stocks) to 8% (REITs).

Raising kids in Singapore is fun. It shall never be a burden or pressure for the parents. 
Enjoy the process and be happy. God blessed and good luck!





Tuesday, December 20, 2016

Contents


Hot topics in Singapore:
(copy and paste the URL if the direct link is not possible)

(1) CPF (Central Provident Fund) 

http://jkfund.blogspot.sg/2014/08/moment-of-truth-cpf-having-good_51.html

(2) SRS (Supplementary Retirement Scheme) 

http://jkfund.blogspot.sg/2014/09/retirement-planning-in-singapore-srs.html

(3) HDB De-coupling:

http://jkfund.blogspot.sg/2014/06/hdb-decouple-topic-spr-sc-household.html

(4) Investment Linked Plan Insurance (for baby)

http://jkfund.blogspot.sg/2012/10/investment-linked-fund-for-infant.html

(5) Whole Life Insurance Plan (for baby)

http://jkfund.blogspot.sg/2012/10/buy-life-insurance-as-early-as-possible.html

(6) CPF (Central Provident Fund) for baby (2 blogs)

http://jkfund.blogspot.sg/2015/05/cpf-versus-whole-life-insurance-for-kids.html

http://jkfund.blogspot.sg/2015/03/age-1-baby-has-cpf-account-do-you-know.html

(7) Singapore Insurance Summary (2 blogs)

http://jkfund.blogspot.sg/2015/06/summary-investment-linked-plan.html

http://jkfund.blogspot.sg/2012/10/classical-example-of-life-insurance.html

(8) Whole Life Insurance

http://jkfund.blogspot.sg/2015/06/whole-life-insurance.html

(9) Endowment Plan Insurance

http://jkfund.blogspot.sg/2015/06/endowment-plan.html

(10) Investment Linked Plan Insurance (2 blogs)

http://jkfund.blogspot.sg/2015/06/my-investment-linked-plan-ilp-journey.html

http://jkfund.blogspot.sg/2012/03/lets-talk-about-investment-linked.html

(11) H&S (Hospitalization & Surgical) Insurance

http://jkfund.blogspot.sg/2015/03/h-hospitalization-surgical-insurance.html

(12)Travel Insurance

http://jkfund.blogspot.sg/2016/07/travel-insurance-tokio-marine-tm-xplora.html

(13) Singapore Housing Loan Interest

http://jkfund.blogspot.sg/2011/10/how-much-interest-you-pay-to-your.html

(14) Singaporean Benefits (2 blogs)

http://jkfund.blogspot.sg/2014/07/singapoerean-benefits-private.html

http://jkfund.blogspot.sg/2012/10/singaporean-benefits.html

(15) Singapore Credit Card (2 blogs)

http://jkfund.blogspot.sg/2014/08/i-love-using-credit-cards.html

http://jkfund.blogspot.sg/2012/05/who-say-credit-card-is-not-good.html

(16) Singtel TV Plan

http://jkfund.blogspot.sg/2014/09/why-i-love-singtel-my-mio-tv-is.html

(17) Singapore Cars

http://jkfund.blogspot.sg/2015/12/good-used-car-honda-civic-brand-new-car.html

(18) Singapore Krisflyer & SQ Business Class Experience

http://jkfund.blogspot.sg/2015/03/exclusively-for-sia-krisflyer-member.html

(19) Singapore Stocks (2 blogs)

http://jkfund.blogspot.sg/2015/03/stock-watch-list-cheat-sheet.html

http://jkfund.blogspot.sg/2012/10/buy-religare-health-trust.html

(20) Singapore Real Estate Guru notes

http://jkfund.blogspot.sg/2014/11/my-notes-and-views-after-watching.html

(21) Waterfront @ Faber (Clementi, Singapore)

http://jkfund.blogspot.sg/2014/05/waterfront-faber.html
 
(22) Singapore Education 

http://jkfund.blogspot.sg/2016/02/year-2016-tuition-fees-at-local.html 

(23) Amanah Saham Wawasan 2020 (Malaysia)

http://jkfund.blogspot.sg/2014/10/exclusively-for-malaysian-amanah-saham.html

(24) Sunway Iskandar Malaysia

http://jkfund.blogspot.sg/2014/10/why-i-bought-first-residential-project.html

(25) Nusaheights Service Apartment, Iskandar Malaysia

http://jkfund.blogspot.sg/2016/08/nusa-heights-service-apartment-my-first.html

(26) Malaysia i-flexi Housing Loan

http://jkfund.blogspot.sg/2014/10/cimb-homeflexi-malaysia-housing-loan.html

(27) Horizon Hills, Iskandar Malaysia (2 blogs)

http://jkfund.blogspot.sg/2015/11/horizon-hills-reap-low-sell-high.html

http://jkfund.blogspot.sg/2012/05/why-i-give-horizon-hill-miss.html

(28) Pay Yourself First

http://jkfund.blogspot.sg/2016/09/pay-yourself-first.html

(29) My Exit Strategy on Singapore Real Estates: 99 years leasehold & 99 years lease

http://jkfund.blogspot.sg/2016/10/my-strategy-to-exit-on-singapore-real.html

(30) Engineering Change Order (ECO)

http://jkfund.blogspot.sg/2016/11/engineering-change-order.html

(31) True Living Cost in Singapore

http://jkfund.blogspot.sg/2016/11/true-living-cost-in-singapore.html

Saturday, November 19, 2016

TRUE Living Cost in Singapore


CNN rated Singapore as the world’s MOST EXPENSIVE city to live in year 2016.
It is even more expensive than Zurich, Switzerland. Are you sure, CNN news?


I have worked and stayed in Singapore since year 2004 and I definitely can tell you the living cost in Singapore is not that bad. In fact, it is much lower than Kuala Lumpur, Malaysia. Let me share with you my true living cost in Singapore in great details. Here you go!

I break down the cost into few categories as follow:
 
(1) Utilities bill - S$119.

Below shown are my past 13 months of utilities bill (that includes electricity, gas & water). In average for the past 13 months, my utilities bill was S$119 per month only for a family of 3. We switch on the air con every night at 25 degree C, FYI. Government gives quite a fair bit of free rebate in this bill (S$220 per year), if not, the true electricity cost is at S$150 maximum per month for my household.
 
 
 
 
(2) SingTel Internet broadband / house phone line (FREE) / cable TV and mobile phone- S$122.
 
The breakdown is as following:
That comes with Fibre Home Bundle with 300 MB speed at S$46.64.
Cable TV Entertainment Bundle: Family Starter (including CNN / Bloomberg, Disney Kid Channels, etc..) at $34.40. The sub-total is S$81.04.

My mobile phone Combo 2 Plan (with 2 GB local data):$40.09 before 30% discount.

Caller ID is additional S$5.00, mobile phone per month is S$33.06. Above total cost with 7% GST, that’s S$122.09 per month.
 
 
 

 
(3) Foods expenses - S$600

Foods expenses: for our household, we can say it is easily less than S$10 per day (weekday lunch and dinner, can you believe it? ). 

As me and my wife work full time, we decided to engage foods delivery to our home directly at S$214 per month. Well, we surely have no time to cook for ourselves and for the little 4 years old boy and to cook such a portion is not very practical too. I also found out the foods delivery quality is not bad or better than hawker centre as it is less oily and have good varieties too, you don’t have to worry what to eat everyday.

 We usually ordered 3 months services and it comes with S$150 discount! How good can it be?
 
3 month S$214 x 3 (months) = S$642 – S$150 (discount) = S$492 / 3 (person)= S$164 /20 (days)= S$8.20 per day.
 
The food is enough for us and the little one and, that’s like S$8.20 per day for 3 persons. Of course, in certain days, I will buy more food if I see some dishes that I do not like, ha ha. That’s about 1 or 2 times per week, and I can easily just top up some mixed rice items from the hawker centres downstairs. I cook rice myself. It is an easy job.
 
 
 
 
 
There are many hawker centres in Singapore. Just below my home, there are 3x hawker centres within 10 minutes walk. You basically can get all the food you want, from chicken rice to noodles soup and mixed rice. The price range is from S$2.50 to S$5.00. Most of the Singaporean settled their meal at hawker centres as you can have all the varieties, easy to access and it is affordable.  

We spend more at weekend as we usually dine at restaurants on weekend, if not, cook at home (that's very seldom). In average, the bill comes to S$50-70 per meals (be it lunch or dinner). So, average out, one person S$600 maximum per month on foods is surely more than enough.

Below are the restaurants that we visit very often in Singapore. That's me and my boy beloved eatery places. You got to try them all when you visit Singapore!



 

The milk powder consumption is about S$1,000 per year. I got all my milk powder from AEON at Bukit Indah. :)
 
(4) Medical Cost - $0
We have medical and dental cost coverage from our employer up to S$3,000 per year (combined) for the entire family. We never fork out extra for medical cost in Singapore, which is very good.

(5) Transportation Cost - S$100 (if you don't drive)
or S$1,700 (for my case).

Taking public transport is dirt cheap in Singapore. I take a bus from my home to Jurong East MRT station (3 bus stops away) and transit to the MRT train to Raffles Place (CBD), that cost me less than S$1.60 (that's 25 minutes train journey). I used public transport in Singapore until I have kid. I can survive with public transportation too.

All right, car in Singapore is the most expensive in the world, Malaysia is the second most expensive country to own a car too. A brand new Toyota Corolla Altis costs you S$110,000 for 10 years, then, you will take back S$10,000 after you scrap your car after 10 years. So, I pay monthly car loan of S$1,200, new HDB monthly car park would be S$120, and car patrol, $200 , with all the car insurance and road tax, in average, I am paying S$1,700 for my car to ferry around my family. I do not need to pay ERP as I don't have to pass through those ERP gates. :)

If you want to save costs in Singapore, obviously you can cut the expenses here by taking the public transport and taxi services. Don't complain!

(6) Domestic helper - S$0

I do not have domestic helper. I love doing housework myself. I have all the time to do it myself too. It is a form of exercise for me and my expectation of cleanliness is very high. I rather to do it myself. If you hire one domestic helper, it shall be around S$900 per month (to include additional expenses you need to pay for them)

(7) Childcare - S$750
 
For those who have kid, unless your wife is not working, else, you will surely either to have a domestic helper to look after your kid or sending him/her to full day childcare. I love the childcare concept here. It opens from 7 am to 7 pm. I usually send him to the school at 7.30 am and pick him up at 6.10 pm. You can send your 2 months infant until age 6 (K2) to the childcare. The kid will learn massively in the childcare and they will also build up immune system. S$750 per month for full day childcare is good money spent. I would not complain about this cost.

Of course, there are also additional cost for the excursion or enrichment class if you sign up. For example, the swimming class, gym class, drama & speech class, excursion trip to play centre, etc. The fees can be ranging from S$30 to S$70 per trip.

We bring our 4 years old boy to art class as he has talents in drawing. He has the skills from his mum and maybe he can become an architect too. :) The art class is S$30 per session.

We also expose him to keyboard class (piano class). It is about S$25 per session. He does not show interest in music class so we will stop the course after the 12 sessions are completed.

 

 
 
 
 

 
(8) Housing loan - S$0
 
We are lucky to pay off our HDB housing loan 3 years ago. It has the market valuation price of S$460,000. To buy a 4 rooms flat at good location (Toh Guan, Jurong East), it was S$355,000. With 80% loan, 30 years of tenure, and interest rate of 2%, the monthly mortgage is only S$1,049. You can easily pay this amount off by using the CPF. You do not need to fork out any cash.
 
In fact, if you like, you can rent out your room at S$750 per month, 2 rooms will give you extra S$1,500 cash per month even! How crazy is that? S$1,500 can fully pay all your monthly expenses in Singapore!
 
 
(9) HDB town council fees - S$46.25
 
Jurong East monthly town council fees is S$55.50. Government has consistently waived 2 months of charges every single year. So, the monthly commitment now is S$46.25.
 
 
 
Having say all these, do you really think the living cost in Singapore is the highest in the world?
 
Surely NOT. That is for the foreign expats who stay in Singapore la ! They love to rent the expensive private property, go fine dining , pub drinking and a lot of entertainment costs too.

Few words for Malaysians
====================

I am a Malaysian too. I was born in year 1980. My friends in Malaysia always converting the expenses in Singapore from SGD to RM. If you want to do that, make sure you do not forget to convert the income too!

As a fresh graduate in Singapore in year 2004 (during my time), it was S$2,500 per month, comparably it was RM 2,500 in Malaysia too. Vice versa, assuming after 12 years of work, you are now earning S$8,000 per month in Singapore, that also means you are earning RM8,000 in Malaysia too. I told them, by then, if I minus off all my Singapore expenses, the balance I have in SGD, if I covert them back to Ringgit, it will be surely more than the gross income earned in Malaysia! (It actually means, for a monthly income of S$8,000minus the expenses in Singapore say, S$5,000 a month, you will have a balance of S$3,000 which is RM9,000 a month. That is still more than the monthly gross income of RM8,000 in Malaysia)  Not to mention, the personal income tax in Singapore is so much lower than Malaysia as well.

Last but not least, the SGD had appreciated almost 200% towards RM since year 1986. It could touch RM4.0 by year 2026. Who knows?


 

Tuesday, November 15, 2016

Engineering Change Order


In FDA regulated health care life science manufacturing industry, 21 CFR Part 820 Quality System Regulation is very important for good manufacturing practise for the medical device.

Engineering Change is an important topic. I would like to pen down my experiences before all faded away.

Engineering Change Order (ECO) will trigger the following requirements:

(1) Input Optimization Concept to elaborate the changes description/ benefits and impacts.

(2) Release Engineering Change Order (ECO) to manufacturing plant.

(3) Document list changes to have respective department representatives to review the changes impact on R&D/LCM, GPS, SCM, PE, V&V, RA, etc.

(4) Change form LCM (Life Cycle Management) instrumentation should be filled too.

If the ECO cannot be released at the short period of time, a temporary deviation form can be raised, for example: ANF- Approval /Notification Form.

Most of the engineering changes are due to:

(1) Correction of the engineering drawings (be it drawing errors/discrepancy), production documentation (update on assembly build instruction), BOM correction (part quantities mismatch between the BOM and the exact usage on the production line, for example the screws quantities, etc.), packing list updates.

(2) End of life (EOL) part proposed by the vendor/manufacturer that leads to new MPN change. RoHS and REACH compliances must be declared. Electrical characteristics shall be reviewed. Critical changes like photomultiplier tube (PMT), rotor coupling, stepper motor will require trial report and evaluation report for careful studies and comparison. Such change will also impact the SP (Specification) document. It has DHF (Device History File) impact.

DHF impacted changes will also required re-validation. It depends from the scope of the change and impact to the end results. Such change can also impact the application side (chemistry, reagents and assays).

There will be no change in form, fit and functional.
FDA auditors always like to see such statement stated in the Engineering Change Order. It implies that you have gone through the changes carefully, thoroughly.

(3) Escalated customer complaints (from Global Product support) leads to investigation of the problem. Design change/ improvement will eliminate or reduce the occur rate of the incidents. For example, the cable bending for too long causes intermittent. It shall be replaced by higher class of cable materials that can hold millions of bending cycles.

(4) Production software updates. User manual CD, software updates (on the BOM level) or spare part changes, new spare part added into the list.

(5) New OEM implementation. (Different label information and cover colour for example).

(6) Cost reduction project. For example to reduce the instrument 48 hours burn in test to 8 hours run in test.

(7) Refurbish protocol update (for exhibition pool, demo units)

(8) Production transfer, for example from California to Malaysia. The Production Release report must be assessed and completed then an Engineering Change Order can be released accordingly.

Monday, October 31, 2016

My Exit Strategy on Singapore Real Estates: 99 years leasehold & 99 years lease


There are different types of real estate in Singapore, namely, freehold, 999 years leasehold, 99 years leasehold and 99 years lease.

Freehold is clear. You own it forever.

999 years leasehold, as the figure had indicated, it is yours for 999 years, that’s like 10 generations?

All right, let’s talk about the exit strategy on 99 years leasehold private property and the 99 years lease HDB. It is made clear by the government that once your 99 years lease is expired, we have to return our unit to the state and our property value will be ZERO value. We have to be mindful about this. So, what should we do?

Personally, this is what I will teach my children to do.
 
In the event the property reaches 50 years old, it is time to market to sell off the properties.
 
Unlike Malaysia, we were informed that we might be paying a small sum to extend the lease once the lease is expired. In my hometown at Sibu, Sarawak, almost all the properties are 60 years lease and we will see how all these leases are extended when time dues. It is near impossible that all houses will be returned back to the state while the 60 years lease is expired. I do not think so.

 
Anyway, back to Singapore. Singapore history is young too. There are no projects reaching the expiry of 99 years lease just yet but it will come one day for sure.

I like to give the example of Lakepoint condominium (99 years leasehold) at Lakeside. Even though it is a 35 years old condo, but it is still fetching a rocket high price today. The 4 bedrooms units at 12th floor (highest floor) are still transacted at S$1,600,000 level at today market while the price of the units in year 2006 was a mere S$530,000. I was the tenant by then in year 2006.

The interesting question is, what would be the market price when Lakepoint condominium reaches 50 years old, 70 years old, etc. I am pretty sure the price would still hold or increase by the time it reaches 50 years. But I would be concerned when it reaches 70 years old as the property value shall start to drop by then, not to mention, when the 99 years leasehold is up, it will become S$0 value. But , this condo is in good position for en-bloc. It has huge compounds and less units, I am pretty sure the condo will be demolished for a good buck before it really goes all the way to 99 years! That is my bet. Hence, the location plays an important role too.

So, a fact check myself, my HDB is 16 years old and the private property is 5 years old.

I would strategize to sell off my HDB unit 35 years later, by then I would be age 71.

I also will plan to sell off the private property 45 years later, by then, I would be age 81.

Both properties would still have 50 years on lease by then. Both units located at strategic locations at Jurong East and Clementi. I would seriously think there is still an upside of 150% to 200% at least by the time both units reached the 50% of the lease. Why? It is because it would be a mature second CBD area in Singapore and the bullet train station at Jurong East shall be a busy hub too after 40 years!

That does not mean you definitely MUST buy freehold or 999 years leasehold. Location still counts after all. So, that is my exit strategy on 99 years leasehold and 99 years lease. What is yours?

Below are the information taken from parliamentary debates official report dated on 20 January 2014.

Value of HDB Flats on 99-Year Leases and Flats Undergoing Redevelopment under the SERS Programme

Mr Gerald Giam Yean Song asked the Minister for National Development (a) how many HDB blocks are more than 40 years into their 99-year lease; (b) what will be the value of an HDB flat once it reaches the end of its 99-year lease; (c) what is the average number of flats undergoing redevelopment under the Selective En Bloc Redevelopment Scheme (SERS) each year for the past 10 years; and (d) whether the pace of SERS is fast enough to redevelop all HDB blocks before they reach the end of their lease.
Mr Khaw Boon Wan : The Selective En bloc Redevelopment Scheme (SERS) is part of the Government’s estate renewal strategy for older estates. It allows intensification of land use and revitalises such estates through new developments. At the same time, it offers an opportunity for flat owners to buy a new replacement flat with a fresh 99 year lease.

In the last 10 years, SERS has benefited the owners of about 18,000 flats. As the name suggests, the identification of suitable precincts for SERS is selective. The selection of sites and pace of SERS will depend on factors such as their redevelopment potential, and the availability of replacement sites for rehousing and other resources.

Currently, there are about 300 HDB blocks with 31,000 flats which are more than 40 years into their 99-year flat leases.
Like all leasehold properties, HDB flats will revert to HDB, the landowner, upon expiry of their leases. HDB will in turn surrender the land to the State. 

Monday, September 19, 2016

Pay Yourself First


I watched one short video clip by Ken Chee talking about this concept called, “Pay Yourself First”. Video is here: https://www.facebook.com/ken.chee/videos/10154042215248722/ I would like to take down notes on what he said first, then followed by my own comments (PLEASE read until the last paragraph).

Below is exactly what the trainer said, not me. Here it goes.

The school teaches us that the income we earned minus the expenses (paying off our bills) and if we manage expenses well, we should have good savings. And this is the wrong concept. Please do not teach that to your children.

+ INCOME

-  EXPENSES

+ SAVING

The key concept is very simple, it is called, Pay Yourself First”.

We should change the sequence. Whenever we receive the income, we should pay ourselves first. Saving comes first. We should pay ourselves and put the money into an untouchable account (pay myself account). Whatever left over, I then to decide what to pay.

+ INCOME

+ SAVING

- EXPENSES

This is what we called the one degree tweak (one degree difference). You will discover two interesting points after you diligently exercise “pay yourself first”.

Point 1: You will have a sizeable saving in your so called asset account. The money here is able for you to start to deploy at assets. (Asset is anything that generates cash flow).

Point 2: You will form a long term habit in your spending. Once you pay yourself first, you will decide carefully how to spend your remaining, how to stretch your dollars and once you survive, it forms a habit.

Please teach this to your children.

We will use the money in the untouchable account on assets. Once the assets generates cash flow, we deploy the” pay yourself first” rules again and it will become a very powerful compounding machine.

Of course, if you do not know how to invest in the right assets, you also will loss money, that is why you must know how to manage the assets well, then the trainer goes on to invite you to attend his workshop on how to manage the assets, called Value Growth workshop.

 That’ is it.

All right, below are my comments.

As a trainer, you always need to come up with new ideology so that people are attracted at first glance. I am not against it but most of us are already doing it without our notice. It is a nice idea actually. I will teach that to my kid, simply because it sounds logic and it sounds cool too.

Take myself as an example, when I started to work in Singapore, my salary is as well close to S$3,000 per month and yet I have also exercised “pay myself first” concept. When the salary was banked into my saving account, immediately the incomes are automatically deducted (GIRO) to pay my “savings”, which is Investment Linked plan (ILP), Endowment plan (EP) and Whole Life plan (WLP). (For me, I treated these three instruments as my long term saving plan). I have been paying these 3 plans since year 2004. All right, of course, there is argument on how much returns are these plans are worth after 50 years, etc. But that’s not the discussion here. At least I am doing the savings part too!

I also started to pay myself even more 4 years ago by contributing additional S$7,000 into CPF SA account as well as S$15,300 into SRS account (to buy blue chip stocks that generates dividends and good growth). Both attract a sizeable amount of tax savings plus savings with good interest for SA account (4% to 5%).

So literally, my flow would be:

+ INCOME

+ SAVING (ILP, EP, WLP)

+ SAVING (CPF SA)

+ SAVING (SA)

- EXPENSES

+ SAVING (remaining)


Now here comes the interesting part.

  1. How to manage the savings in the untouchable account that the trainer is talking about?
     
  2. What assets are we choosing?

It can’t run away from stocks (that includes ETF, REITS, warrants etc.), real estate properties (be it Singapore, Malaysia, Australia, UK, etc.), bonds (fixed income assets), GOLD, oil commodities index, etc. And I am sure experts are digging into each asset and tell you how to select the best among the best.

But, life is not always about me, myself and I.

I would like to share one of the revelation I have in recent years. I know you are here for financial information but probably, this is the most important blog that you must read in your life. I started my tithing journey on November 30, 2014. If you do not have revelation, don’t tithe.


Tithing simply means take 10% of our income and give to our mighty God as 100% of ours are from God anyway, don’t you think so?


Offer our 10% to our God and He will sanctify the rest of our money (90%). Our God is faithful and He knows how to give us the best, not only in the heaven but on the earth as well. I am not here to preach you gospel but I am sharing my revelation to you. If you want to know more about it, you should visit our lovely church at the Star, Buana Vista.

 So, my sequence is actually looks like this. It is called, “Pay Jesus First”.

+ INCOME

- JESUS (10%)

+ SAVING (ILP, EP, WLP)

+ SAVING (CPF SA)

+ SAVING (SA)

- EXPENSES

+ SAVING (remaining)

I am more than happy to share more breakthroughs in my life (if any, ha ha..) in the many “revisions” to come and I am anticipating it too! May all the glories go to the mighty one, our lovely God !

“Bring all the tithes into the storehouse, that there may be food in My house, and try Me now in this, “ says the Lord of hosts, “If I will not open for you the windows of heaven and pour out for you such blessing that there will not be room enough to receive it.” Malachi 3:10.

 

Thursday, August 25, 2016

Nusa Heights Service Apartment - My first Iskandar property investment

I bought a FREEHOLD , 3 bedrooms service apartment unit at Nusa Heights, Block A, on 18 February 2012.

The size is 1,050 sq ft and it is a high floor unit, east sun facing, corner unit with 2 car parks.

The SPA price was RM 392,000
The developer gave 8% discount, hence the Net Selling Price was RM 360,640.

I paid 2% down payment RM 7,840 to secure the unit.

I took a 90% loan and capitalized MRTT Premium RM3,220 into the loan, the total loan amount was RM 356,020. I spread the loan tenure year to maximum at 38 years and monthly mortgage payment is RM 1,564.






How is the project doing so far?

Let's talk about the spending first.

(1) I started to pay loan interest only in November 2012 all the way until May 2015 while collecting the keys. So, the total loan interest I had paid was RM 21,485. That is rather a big sum of interest paid. If you buy the unit at the resale market, say in June 2015, you literally save this amount of RM 21,485! And guess what, the loan interest paid will continue to grow with years.

(2) I got 1 month rental + 1.5 month rental + 12 months rental. The total 10% agent fees I have paid was RM 2,325

(3) I spent RM 12,411 on furnishing (see the details below) as well as some miscl. furnishing cost up to RM 714 (to cater for short term stay of 1 month ).

(4) I also paid Assessment Tax to the Johor state, we call it Cukai Pintu or Cukai Harta. It is RM 714 per year.

With the above 4 items, I have spent RM 37,649.


The unit is tastefully renovated and furnished, don't you think so?



The entire unit comes with the false ceiling with down lights.




Now, let's talk about the receivables.


(1) The developer paid me the late delivery interest (they are late for few days only) of RM 751.78.


(2) I received FREE renovation, commission from renovation contractor and the real estate agent while I am doing the marketing, total amount of RM 25,625.


(3) I also received 1 month rental (RM 2,500) , 1.5 months rental (RM 3,750) & 12 months rental secured (RM 20,400), total rental : RM 26,650.


With the above 3 items receivable, total amount is RM 53,027.

So, total receivable of RM 53,027 - total spending of RM 37,649
= RM 15,378 ( a mere net profit).

The unit has a current bank valuation of RM 470,000 only. That is pretty sad. I am aiming for RM 650,000 at least one day.

The developer is giving 3 years FREE maintenance fees.


My monthly loan payment is RM 1,564 and the rental is RM 1,700 per month. So long your rental can cover the monthly loan payment, you shall be doing fine.


The rental yield is 5.66%, nothing too great to shout.


My second investment property in Iskandar will be completed by 4th quarter next year (2017). It is the first service apartment at Sunway Iskandar. I am targeting to market the Sunway Citrine service apartment unit at Airbnb platform when it is completed and fully furnished.