Category: Personal Finance Series

Best time to Invest Now?

On By RistrettzIn Personal Finance Series, PsychologyLeave a comment

More often than not, I read articles and comments and many people ask about if it is the time to invest now. Markets are too high…What asset class to invest into and should I invest now? I only have $100, $500, $1000 (It doesn’t matter how much you have. It matters to start early and depending on which stage you are at. It might be better for you to start an emergency fund first before you invest)

Just this morning, I was listening to Kiss 92 radio channel and I heard that there was a miracle. A fan fell down and went into coma for 23 days. While he was a in a coma, the morning show DJs started to call and talk to him. While they wished  for a miracle, they kept it real and thought that it might not happen. This then sparked a little thought – something we all know but fail to execute.

The story is such a good one that it kind of send me teary eyed for a short while. While we know that miracles do happen, we also know that miracles don’t happen all the time. However, it is important to keep believing that thing will happen the way you want it to no matter how far it seems. Never say never. Be practical but sometimes there are no explanations.

When is it really time?

You will never know when is the time you may lose your loved ones so treat them well and shower the love. Similar to investing, we will never have the crystal ball that tells us the future. If you do have one, I think there isn’t a need to seek financial independence anymore. No matter how accurate, lucky or correct one can analyse – there are no shortcuts. All things take time.

Spend time not focus purely just on money

Spending time on your loved ones is more important than making money. Money as what I alway advocate accelerate the process to many other things. Spending that time not also allows one to connect socially with family as well as reconnect with the young and old. Crossing generations also gives you fresh perspectives and new ideas. Don’t write them off.

Investing takes up a lot of brain cells if you are always exploring for new ideas. These perceptions will provide options and aide in that journey.

Family is family

Whatever your situation is family is always family. What you represent eventually will be translated down to the next generation. There isn’t a guide or way to do it but everyone is a parent for the first time so cut some slack on yours. After all, they were in different times as we did today. Family time provides connectivity that helps one mentally while providing that support. Some may call it safety nets in the finance world but personally I prefer to call that emotional support group. Perhaps friends might be as close to family but everyone’s comfort level is different.

With a section of the mental support covered, naturally one’s focus will be freed of distraction. However, there should always be a balance.

Is it the best time to invest now?

It is hard to say all of that with so many conflicting articles that talk about an all time high and that an impending correction is coming soon. That is all technical and feel. There are no scientific rules as to why markets goes higher or lower. Only interest rates and bond prices are inversely proportional. Other than that, there are no fixed formulas and no one can single handedly control or manipulate the markets.

As always, you can choose to put in some during the initial phase and stagger the investment on a regular basis. This is what most people know as dollar cost averaging.

The other way is really to split the amount that you wish to invest into 3 or 5 parts. Every time the market drops, just diligently put some in.

What ifs?

What if the markets were to increase by another 5% or 10% and you are not invested. That would mean that you will always be missing the market rallies. A medium and long term view of the market will definitely help in the long run.

The excuse

The contradiction will always be there. When you are young, your commitments are lesser but the disposable income is lesser too. Moving into middle age, your commitments increase but your disposable income depends on what you need to spend on. When you are slightly older, your commitments decrease but your risk level should not be like 20 years ago.

The concept

The whole idea is to really to invest early and invest regularly. A miracle happened for someone today but that doesn’t mean it happens to everyone. Some people missed their chance or opportunity and that would have been too late.

Disclaimer

This is purely my own opinion after using their service and/or products. If you like what you are seeing, do remember to check they out and do your diligence. There is no one size fits all investment strategy.

If you like what I am sharing or if it resonates with you, do use my referral codes here at https://atomic-temporary-178675883.wpcomstaging.com/contact/ for the services.

The pictures were taken from website solely for the purpose of illustration. Remember not to be a slave of money but make as much as you can so that you can make use of money.

SNACK – Microinsurance

On By RistrettzIn Deals, New Ideas, Personal Finance SeriesLeave a comment

As I have said, I am a firm believer of insurance but not a firm believer of agents. I am of the mind that there are invested interest. Even the most honest guy needs to earn a living but I have yet to find anyone who is able to pass my test. More often than not, I tend to DIY on my own so most of my plans are generally bought online. The exception is that during the early years, agents used to manage those that I bought.

Why Insurance?

Let’s face it. Everyone needs to transfer their risk and that is a fact. Whether it is term or whole life plans, it is up for a debate but no best answer. You need health insurance, life insurance, disability insurance, travel insurance, car insurance and the list goes on. My only grip is that DIY stuff comes cheap but you have to figure out how to to that on your own. Nothing wrong with that but it comes in as a pain when you don’t have time to manage those stuff.

Try Microinsurance

Personally, I feel that it is fine to try out a cheaper alternative of insurance just to get yourself covered at the lowest cost possible. SNACK is by Income and recently introduced this concept of microinsurance. I find it appealing personally coming from someone who understand how these things work. It kind of like supplement what i have existingly.

I think that the Income branding is starting to change and this helps with the brand image. At least they try to speak the millenia language. Next, I find that with such low cost products – There will be less barrier to entry. The difficulty in this solution is to educate people. It is much easier to say that it is complicated than trying to find out what this is all about.

Once you sign up online and register the amount you can commit daily, every document will be sent to you via email or digitally. Quite simply, I would say.

They are 3 ways your can choose to buy insurance from (Choose 1 or whatever you need):

a. Critical Illness

b. Personal Accident

c. Life Insurance.

You can also trigger these daily costs from a few parts:

a.  Redeeming a deal from Burpple or pay for meals using a VISA card.

b. Commuting bus, train or cab and pay for it using a VISA card.

c. Through retailing and purchases using a linked VISA card.

d. Shopping for groceries using a linked VISA card.

e. Through entertainment and paying using a linked VISA card.

f. Topping up petrol and paying using a linked VISA card.

g. Pay your utilities and paying using a linked VISA card.

h. Activate your fitbit app and fulfilling your daily steps.

You may be thinking what happens if you hit every objective. There is a limit to the premiums charged to your credit or debit card depending on the weekly cap you’ve set up. Once you’ve hit this weekly cap, SNACK will no longer charge you premiums when you complete lifestyle triggers and you will not be issued any more policies for that week.

The minimum amount daily you can set is $0.30 and you can add on as many triggers as you wish.

There is also a cap on each insurance segment:

a. For Personal Accident, the cap is at $100,000

b. For Life Insurance, the cap is at $200,000

c. For Critical Illness, the cap is at $200,000

These insurance are known as non-participating policies so the moment you stop paying for these, the coverage will stop. To me it is a stop-gap kind of coverage and at an extremely low cost. If you are looking at the full suite, take time to understand and learn. You will definitely benefit from the knowledge and to suss out your new insurance agent. Whether they are in it for the long term or to hit and run. We will never know unless we experience and have the basic knowledge.

Disclaimer

This is not a sponsored post. This is purely my own opinion after using their service and/or products. If you like what you are seeing, do remember to check they out and do your diligence. There is no one size fits all investment strategy.

If you like what I am sharing or if it resonates with you, do use my referral codes here at https://atomic-temporary-178675883.wpcomstaging.com/contact/ for the services.

The pictures were taken from SNACK website for this article. If you need a referral code, please use my referral code “PAU4055” and both of us will be rewarded with additional $500 coverage for personal accident. Visit here https://www.snackbyincome.sg/ to find out more.

CardUp and getting more buck for your money?

On By RistrettzIn Alternative Income, Personal Finance SeriesLeave a comment

Do you randomly try to look up for deals on cashback and miles? I can say that I’m a true blue Singaporean. I will try my best to always look for a good deal without going out of the way and affect my time when searching for such good deals. I’ve used this service CardUp when it first launched and the first transaction was kind of like free since it was on a promotional rate with Citibank cards.

Two years on, I still find it hard to catch on this bandwagon where you actually have to pay a fee to get rewards. But who am I to say anything about if this is a good business model. They must be around here to service a group of customers who want to buy miles or get cashback for some of their payments.

I’m not exactly the kind of guy who spends more to save more but I must say it is a good marketing strategy.

What is CardUp?

From their website: “CardUp is a credit card enablement platform, which enables the payment or collection of big expenses using credit card, in places where cards are not accepted today. Examples of payments include rent, tax, invoices, payroll and more, which are still paid by cash, cheque or bank transfer.

With CardUp, individuals and businesses can now shift these big payments to their existing credit cards. This provides an unparalleled opportunity to earn credit card rewards, access interest-free credit and digitise payments – making big payments rewarding.”

Rewards or Spend more Get More

Even until today, I still find it very difficult to see if this is a reward scheme. Maybe this is a way to get more out of spending more. I stay by my own views about credit card rewards because if you have to spend more to get more. I don’t get it. I’ll say that unless there are monetary benefits to cover the initial or some of the fees that is required, I don’t find it sensible. That said, there are the miles and cashback camp who like to make sure there are benefits for every transaction.

Don’t get me wrong, these are great strategies to get the best bang for your buck. Again, different things is just for different folks. This doesn’t really work for me. Truth be told, I am 50-50 on miles and cashback but don’t agree with paying more for it. Perhaps more selectively, a good deal is something worth paying for but not all situation.

If you really want to get on this, just drop me a note for a referral code.

Disclaimer

If you like what you are seeing, do remember to check they out and do your diligence. There is no one size fits all investment strategy.

If you like what I am sharing or if it resonates with you, do use my referral codes here at https://atomic-temporary-178675883.wpcomstaging.com/contact/ for the services.

Able to write and share is my main objective is to create a community. Blogging is what I always wanted to do. Being mentally well and put down content is something I always wanted to do. Trying out new things will definitely bring one’s horizon to a different level.

Human Nature and Psychology

On By RistrettzIn Personal Finance Series, Psychology, Wealth & HealthLeave a comment

Humans are interesting. Technically and Fundamentally. There has been a lot of discussion around behavioural finance but I tend to see that as behavioural psychology. For the human mind, there is a sense/emotion that triggers a good feel or bad feel and that triggers almost every decision we make. I’m no exception but it very strange. How does this affect us? I believe it affect our decision to buy a company, invest a counter, sell a counter, buy a long-term product or even purchase a new gadget even though we don’t need one.

Needs versus Wants

The most old school human nature is the needs and wants. I kind of feel that this is forgotten after being used so extensively for so long. We are forgetful creatures so we have to be constantly reminded into the basics. As defined:

Needs – They are necessities and compulsory. These should be our main focus when living life to the greatest. As I have always said, there has to be a balance as well. Sometimes, it is good to take a step back and don’t follow the sense or what seem logical to be doing. It takes routine out of norm momentarily.

Wants – They are good to have and not mandatory. However, they are stuffs that has an alluring sense to being able to own it. It does not happen all the time but these are mostly things we want to own.

More often than not, we make our goals in order to achieve our wants. Those stuff are not sustainable. They make one feel good or even give a great sense of achievement.

Herd Theory

This is probably an ingrained set of behaviour that has always been affecting human being. If we win, we win together and if we lose, we all lose together so it isn’t that bad. But com’on, that isn’t really correct technically. Herd doesn’t give you immunity to anything. No one gains from the same damaging impact (If the end result is negative) but on the flip side the herd tends to celebrate when there is a success during the end goal.

It also doesn’t mean that by following analysts call, it is always the right call. How much of those really do impact your decision. I would like to think that most people decide to delegate the job of choosing a counter to the “experts”. However, it just means to always do your due diligence. If it matters to someone, you will take that extra effort to do so.

Investor Psychology

These days the market doesn’t just pick up everything from one big investor call. Geopolitical tensions and psychology plays a huge part in everything as well. The talk about the famous words Warren Buffett once said that it is wise for investors to be “fearful when others are greedy, and greedy when others are fearful.” This is a little overused but it makes absolute sense. However, this need to be taken into context as well. Is this the typical trader or the long term portfolio building strategy? We can’t typically pull a rabbit out of the hat and apply this to every scenario.

To date, I still find too many irrelevant quotes applied to conditions that are simply not apt for the scenarios. Even when the scenario seems apt, it may not be because of the situation every individual is in. Which is why, time and again I emphasize that there is no one size fits all strategy but building and learning from each other.

The $1 million investable asset versus the $100k versus the $10k versus the $0 can really learn from one another. It is never too late to do so but by not doing anything, that’s not doing yourself the favour to plan ahead.

Disclaimer

If you like what you are seeing, do remember to check they out and do your diligence. There is no one size fits all investment strategy.

If you like what I am sharing or if it resonates with you, do use my referral codes here at https://atomic-temporary-178675883.wpcomstaging.com/contact/ for the services.

Let me know what kind of articles resonates with you and what you would like to see or hear. I’ll try to make those more frequently. After all, the main objective is to create a community of sharing and learning from each other. The end goal is to be financially free.

Autowealth Robo Advisors – Performance (Oct 2020)

On By RistrettzIn Alternative Investments, Personal Finance Series, Robo Advisors1 Comment

So, it goes on and on for robo advisors. Many would probably be tired of hearing this. I mean, this is pretty normal. Unsexy stuff is not always exciting than the buzz of trading. Just only a couple of years back where i left the financial industry, I seem to be able to take a step back and think about what is an investing portfolio.

From where I came from, building a long term portfolio is very rare. The emotions, drive, passion and revenue counts a lot. Customers want quick and fast trade execution with low rates and high profits, sometimes it comes with terms like low duration and low risks. Let’s face it, people are a greedy bunch – most people just want guaranteed returns, beat the system, make huge profits and take low risks. I rather people show me how to make those returns guaranteed and i’ll put money with them instead.

I get it that property, gold and some asset classes do generate huge returns over the past few decades. That is history and history doesn’t mean it will return the same going forward. All these talk, there can only be a process when there is a conversation around planning, finance or even trading. Most people are just classified under the one way channel.

Investing especially in spot market is a tough business. Most people cannot accept fluctuations in their portfolio. Autowealth is yet another solution for me. Just that this time around, this is for my kid to start out her investment journey when she can. Teaching financial literacy is something I would recommend to anyone.

Why Autowealth?

My two reasons for doing so is really just (a) try out one more robo advisor and (b) segregate this fund for any other purpose other than the kid’s investment journey. We shall talk about if robos die off in the future but this is conversation for another day.

My take about the investing journey has been the same since day one. Don’t sweat the small things, the costs of robo are so low. We are talking about a 15-20 year horizon here so heck those low costs. You need to pay them to keep their lights running. For companies like Endowus and StashAway, these guys have the experience and passion and these translate into action.

Perhaps Auto Wealth is in a different segment all together but they are the ones I see positively after the other two. After signing up in June I finally got to funding the account in September and October when markets were on the downside. The idea of doing this over the long term is to really to buy in when markets drop. Down the naysayers, just take a look at this historical S&P 500 chart for the last 50 and 100 years. Markets will go up and each time it drops, just pick some up and let the robots do the work on balancing and re-balancing. As long as fees remains low, the portfolio will grow over time and over a longer period. It should remain in the black based on some backtesting.

For a 50 year horizon on S&P 500 (roughly around 1970 to 2020):

Big time hedge funds and billionaires made their market on the equity markets during US boom time. Naturally, capital market are still the source of capital funding even till today.

For a 100 year horizon on S&P 500 (roughly around 1920 to 2020):

From 1920, US markets isn’t that global and the equity markets isn’t that advanced so there is a long plateau. There are more factors than not being global as capital raising. It is not a popular medium since investors are less savvy as well.

Performance

Looking at the portfolio, it looks pretty nice ahead of the 15-20 years horizon. This is a portfolio which is set at roughly 40% equities and 60% bonds. The investment vehicles will be through ETFs. It does look like it can withstand long term peaks and troughs. What i really like is that i can switch between the SGD and USD currency performance portfolio as well as the impact on USD SGD forex on performance. I wouldn’t say this does as well as the portfolios but to be fair, markets were already slightly upwards and I would like to deploy funds out into the market in tranches over time.

+3% absolute is decent in my view and this is as at 16 Nov. If markets drop, the rule is to fund the account more. Do note that all of these will have USD exposure. Time versus DIY – it is really about what is important. I usually will want to see the ultimate end goal whenever I start anything.

Disclaimer

This is not a sponsored post. This is purely my own opinion after using their service and/or products. If you like what you are seeing, do remember to check they out and do your diligence. There is no one size fits all investment strategy.

If you like what I am sharing or if it resonates with you, do use my referral codes here at https://atomic-temporary-178675883.wpcomstaging.com/contact/ for the services.

The pictures were taken from Auto Wealth website for this article. If you need a referral code, drop me a message and you can indicate my full name during registration. From there, both of us will  get $20 each to supplement the fees.

 

Syfe – Performance (October 2020)

On By RistrettzIn Personal Finance SeriesLeave a comment

Here is yet another robo advisor that I get on my portfolio since the start of 2020. It has been quite a fun journey I’ll say.

Adding Syfe – More Robo Advisers

When the markets were down during March 2020, it was quite exciting times because those were the kind of period which I actually will put money into investments. To a certain extent, I have also put money into other robo advisors such as Endowus and StashAway. While those are more of a “global diversification”, Syfe is more of a local bias for it’s Reits+ Portfolio and truth be told I then took the plunge for a small amount just to try it out a non-DIY approach to Reits investing.

Next, what I struggled with then over the period is that there were quite a discount off many equity tickers and I didn’t really know what to buy or what to expect since the market was in a downtrend. As with every investment, making a rational or emotional decision can only be determined after the event has passed. Reits has since risen, dropped and risen yet again. Frankly, I’ve been busy to keep looking into my own portfolio.

I haven’t got around to increase the investment funds so it is only a very small initial amount. Partly, my mind tells me to do dollar cost averaging for my other investments so we still have to see how things go.

Performance (Oct 2020)

6 months has gone by and +13.60% is pretty insane in my opinion. Then again, the base that I started out with is quite a fantastic benchmark so maybe that isn’t too fair. From here, there isn’t fresh funds invested as I am think more about my overall portfolio. I do think I have enough of the local investments and typically Singapore equities are rather slow and neutral in performance. Even the STI isn’t that exciting in my opinion. If you really look at a 50 year and beyond horizon for S&P 500, it is an amazing uptrend with good returns.

Do use my referral code to get some benefits when you sign up a new account with Syfe. Referral Code: SRPTSMQ5J

You will get (Find our more about their referral scheme here https://www.syfe.com/magazine/how-can-i-invite-a-friend-to-join-syfe/) :

a. S$10 bonus if you invest S$500

b. S$50 bonus if you invest S$10,000

c. S$100 bonus if you invest S$20,000

Disclaimer

This is not a sponsored post. This is purely my own opinion after using their service and/or products. If you like what you are seeing, do remember to check they out and do your diligence. There is no one size fits all investment strategy.

If you like what I am sharing or if it resonates with you, do use my referral codes here at https://atomic-temporary-178675883.wpcomstaging.com/contact/ for the services.

The pictures were taken from Syfe website for this article.

Endowus – Performance Sep & Oct 2020

On By RistrettzIn Performance, Personal Finance Series, Robo AdvisorsLeave a comment

I should actually do this regularly on the monthly updates to reflect how effective this portfolio can be. I missed one month of record in Sep 2020 and hence this jumped forward to the Oct 2020 portfolio.

As you can see, the last period of Oct has been a pretty volatile US market which makes diversification much more important. I am beginning to see the benefits of using Endowus as it is a systematic approach. When i initially signed up for this in May 2020, I wanted to see how the CPF portfolio and SRS/Cash portfolio performs. Truth behold, there wasn’t any worries about market dropping off and if I should sell any tickers.

SRS Portfolio

This is definitely up my alley in terms of overall portfolio management as well as long term Core portfolio. Without more talk, let’s take a look at both portfolio. This is the SRS/Cash portfolio which consists of my favourite Dimension Funds in a 40% bonds/60% equity. Overall from May 2020 to 5 Nov 2020, it is a 6.86% increase in absolute terms.

 

CPF Portfolio

For the CPF portfolio, it does not come with the Dimension Funds due to the restrictive nature in what you can invest in but I think this is excellent performance compared with the 2.5% in CPF.

Just simply, 6.66% in absolute returns ever since investments were made in May 2020.

Frankly, initially when I got to know about Endowus it felt like oh gosh another robo-advisor but when I started to listen and understand what they are trying to do, I am beginning to trust that what they are doing is for the good of the community and retail investors. Their fees are arguably one of the lowest in terms of value from the way i see see.

Recently they came up with a SmartFund DIY portfolio which looks really interesting. I would definitely be looking this up when there is a market pullback.

A quick review again:

  • Endowus is the first and only robo-advisor to be approved by the CPF board to use your CPF OA excess funds to invest.
  • 100% trailer fees back to the consumer.
  • Over the months, investment content and market overview has been valuable.

Disclaimer

If you decide to sign up with Endowus, do remember to use my referral code: https://endowus.com/invite?code=EDZ8M

If you like what I am sharing or if it resonates with you, do use my referral codes for other services at https://atomic-temporary-178675883.wpcomstaging.com/contact/

These pictures were taken off Endowus website for reference.

Grab Invest (Robo)

On By RistrettzIn New Ideas, Personal Finance Series, Robo Advisors, Wealth & HealthLeave a comment

During the earlier part of 2020, Grab announced an acquisition of a wealth start-up, Bento. The have since re-branded them to be GrabInvest. It looks like they have ambitious plans to expand into South East Asia with Singapore as its base. We have seen quite a number of new services and products that Grab has been rolling out. That is the benefits of having strong backers as well as a branding that aims to disrupt some industry. I’m not too sure how big they can become but they have been throwing marketing dollars for some time to build their brand. You can read more about the acquisition here at Bento As GrabInvest.

Invest, Save and Grab

It sounds like Grab is going to bring out the brand in their app once more. They probably want to integrate this into the Super App that we often hear about. The tag line is pretty effective I say.

Almost No Barrier to Entry

It takes only a small amount to start investing. I don’t think Syfe and StashAway has a minimum amount to start investing but this set them apart from the usual investing through micro-investing. I’m not too sure about the effectiveness though.

Saving Money

Each time you use the app to do certain actions, you get to choose an amount that will be used to invest automatically. Good habit though.

Spend

There is no lock-up for your funds so you can transfer your money back to the wallet anytime. Talk about flexibility.

Underlying Investments

Okay, looking at how things are. This is similar to the other robo-advisors as to their cash solutions. The underlying funds would be Fullerton Fund and UOB asset management. My guess is the usual short duration bonds or assets as close to cash funds. Due to the nature of the expected returns projected at 1.8% p.a., it is most likely the case.

Fees are simple at 0.45% p.a. Similar or higher than other solutions. If you ask me, I’ll go for Singlife account where you can deposit up to S$10k at 2.5% p.a. and it is SDIC protected. Micro-investing versus Singlife – Singlife wins hands down but integration wise and branding, Grab edges forward a little more.

Read about my previous post on Singlife here at Where to Park Your Funds? Singlife

For excess funds of more than S$10k, get into Dash and Earn. The first year will be at 2% p.a. capped at $20k. Then go for Tiq Gigantiq at 2%p.a. (For the first year) capped at S$10k. On the options available, I’ll give grab a miss unless I have too much spare cash in their wallet that I can’t take it out.

Conclusion

It seems like it is a hype for now. Other for convenience, I can’t find much differentiation from the rest of the many options available in the market except for convenience. It doesn’t help that Grab is trying to take over the world by trying to integrate everything. I don’t support a monopoly so that is a minus. However, I do think that there are other services which will show up on the app in the near future. Coupled with the fact that digital banking license will be announced in Q4 2020 or in 2021 should there be any delay. As a consumer, we should be happy about competition.

I do see more pros than cons though, given their history of data breaches and bad marketing. Also, I don’t see that they are MAS licensed or approved nor are they working with any financial institutions other than the mentioned fund houses or asset managers. On top of that, monies are held in custody of Grab. Reading their Terms and Conditions, it seemed like they got their own ass covered as compared to the consumer so I’m not too sure about that.

I still don’t see it on my Grab App even after updating the app so I’m wondering how buggy their app can be over time.

Disclaimer

This is not a sponsored post and purely my own opinion that I am writing about in my thoughts. If you like what you are seeing, do remember to check they out and do your diligence. Don’t be too fixated with what is the best.

If you like what I am sharing or if it resonates with you, do use my referral codes for other services and products here at https://atomic-temporary-178675883.wpcomstaging.com/contact/ for the services.

Images seen in this article were take off the relevant websites for illustration purposes only.

The Price to Owning a Car

On By RistrettzIn Personal Finance Series, Wealth & HealthLeave a comment

Whenever we touch on the topic of owning cars in Singapore, there will always be a ruckus. The ambitious demands of ourselves would deem that we wish to own a car, a branded German Luxury for most. However, as much reasoning that we give, owning a car here is as good a depreciating asset or in more negative context, a liability. Owning a car isn’t exactly rocket science but there are some things to take note and the extra costs that comes in regularly. A piece of transportation that brings you from A to B, that’s something everyone appreciates if you have the luxury to do so.

Own or Grab?

Hands down, taking grab rides, gojek or comfort taxis wins owning a private car. It gives one the luxury of leaving home at any time and going anywhere without any restriction or so to say no stress. That comes with a price like any other thing.

Perhaps for a start, what are the tax and pricing related to car?

1) Open Market Value (OMV)

OMV is the price paid or payable when a vehicle is imported in Singapore. The Customs assesses the price and is inclusive of purchase price, freight, insurance and all charges. Different cars have different OMV.

2) Additional Registration Fee (ARF)

ARF is the tax payable when you register a vehicle. ARF is based on a percentage of the OMV. This is just another layer of tax on top of all other fees and taxes.

3) Excise Duty & GST

You need to pay customers excise duty to import and register a car and motorcycle or scooter. There is also a 7% GST payable to Singapore Customs based on the total cost of importing the vehicle.

4) Certificate of Entitlement (COE)

All vehicle in Singapore will require a COE. In order to register your vehicle, you need to place a bid for a COE in the different category. Once you have a successful bid, you get to own a vehicle to use on the road for a maximum period of 10 years. This is the upfront costs apart from all the taxes and fees.

5) Finally, the margins (The P&L)

After paying for all the taxes and fees, the companies who sell these cars need to cover their overheads, costs and make a margin on it.

The other costs

Now that you have paid for the car and you manage to drive it home. No, wait. Before you do that, you need to have a valid driving license.

Driving License

This costs roughly from $800 to $3000 depending on how good of a driver you are and if you take a private lessons or a driving school. The school definitely provides you with an all encompassing structured lesson but it also costs more. If you fail to get your driving license on the first try. That means more practical lessons and more cost. The upside to this is that, there is no expiry once you obtained your driving license until you are deemed too old. You will be required to complete a renewal test to ensure that you are fit to drive.

Car Insurance

In order to drive on the roads, you need to have a valid car insurance. The cost of insurance is renewed annually and depends on your age and type of car you own. You can have a comprehensive plan or a basic plan but in my opinion, you just need to go for the most comprehensive plan to get yourself covered.

Road Tax

Once you have paid for your car insurance, you will need to pay for your road tax. How is your road tax calculated?

a. Engine Capacity – The larger your engine’s capacity, the higher the amount of road tax (Payable 6 months or 12 months)

b. Age of your vehicle – Vehicles that are more than 10 years incur surcharge of 10-50% on top of the standard road tax. (For cars renewing beyond the initial 10 years of COE)

If you forget to pay your road tax, you will be liable for late payment and also for infringement since you are not allowed on the road. Yikes, more bills.

Car Loan

At the start of the article, I discussed about the price of buying a car. You can now loan up to 60% of the total cost of the sale of the car. Depending on the interest rate you can get, (Maybe around 1.88% p.a. at this point) that will be the additional interest payable on your loan amount.

Not too sure about you but it seems like the costs are piling up even before driving it on the roads.

The maintenance costs

It does seems like it doesn’t make sense to own a car anymore now but I still need to add on the maintenance cost during the 10 year life of owning the car.

Maintenance/Servicing

The initial 3 to 5 years should be an added benefit that your dealer will throw in when you buy that car. But take note that this is just purely servicing, meaning engine oil change and those point checks and tyre rotation. Any wear and tear are still liable to be charged at their retail price.

Typical servicing starts around the 1km, 5km, 10km mark or around 3-5 months depending on which comes earlier. I mean, if the car is new there wouldn’t be an issue. But if you don’t bring your car back to the dealer then the warranty that they gave you would be voided.

Inspection check

During the first 3 year of owning your car, before you renew your road tax, you do not need to bring your car to a registered inspection company such as VICOM or STA. After the third year, you have to do so to ensure that you do not change certain aspects of your car when you drive on the roads. It is a small cost but it does take some time to do so. After the initial 3 years, you have to go for an inspection once every 2 years until your 10 year mark is up. For cars more than 10 years, you have to do so annually.

Car Battery Change

If you do not own an electric car, you need to change your car battery 1.5 – 2 years regularly. Depending on what kind of car you drive, the number of batteries and type will also differ in price.

Wear and Tear/ Repairs

Any wear and tear (e.g. brake pads, windscreen wipers, tyre balding, rim change, air compressors, solenoid, repairs and more) will incur cost. After all, you need to make sure your car lasts for as long as it can given how expensive they are. Your tyres need to change every 3-5 years depending on how you drive your car and there may be small damages or even faulty electronics due to wear and tear. Also, our climate is pretty warm and heat will wear most stuff out when exposed over time.

Parking and Fines

Anywhere you stop your car, you need to enter a carpark. Parking your cars comes with a cost. You can’t just stop anywhere you want. If you get a parking ticket, that amount will pay for your 1 month’s parking budget.

Take note of red light and speeding cameras. Any breaches will set you back a few hundred dollars with demerit points. In the worst case scenario, you may be charged and your driving license taken away.

Electronic Road Pricing (ERP) and New Changes

Paying tolls have never been easier. (Sarcasm) Going through expressways and roads during peak period will set you back a few bucks per day when you drive through these to ease traffic flow. These will be replaced by a satellite distance-based ERP system in the near future.

Fuel Costs

Finally, you need fuel to run your vehicle. Basically, everyone is a price taker. You can’t not fuel up your car. Not having fuel in your car will do your vehicle more harm than good. After all, you are supposed to own some form of flexibility with a car.

Conclusion

Don’t feel that owning a car is beyond your reach now. There are different ways to do so. To always weigh the pros and cons about owning a vehicle, you will find the answer clearly but we still see a lot of vehicles on the roads. This part of our brain is unexplainable, the comfort and flexibility of owning a car outweighs all that reasoning. I have also read about the other options to owning a car but it really depends on individuals.

a. Lease (Instead of owning it, you pay a fixed cost per month for leasing the car)

b. Drive for a private hire (You get to moonlight during your free time but perhaps not so ideal during this covid-19 situation)

c. Own a car and lease it out/rent it via apps. This will cut your cost in owning a car

d. Take the public transport and Grab/Gojek. Times are different now, we are not at the mercy of Nazi Taxi Drivers.

Personally, I just am thankful during times when it rains. I get the comfort of going to somewhere at whichever time I wish without getting drenched. There isn’t any worries of price surge or cancellation. That said.

Disclaimer

This is not a sponsored post and purely my own opinion that I am writing about in my thoughts. If you like what you are seeing, do remember to check they out and do your diligence. Don’t be too fixated with what is the best.

If you like what I am sharing or if it resonates with you, do use my referral codes for other services and products here at https://atomic-temporary-178675883.wpcomstaging.com/contact/ for the services.

Images seen in this article were take off the relevant websites for illustration purposes only.

Save more when you shop more (Shopback)

On By RistrettzIn New Ideas, Personal Finance SeriesLeave a comment

Shopping for groceries, ordering food from the food apps and online shopping has taken over the world. Covid-19 has made the world to go online and digital in over a short span of time. I find the transformation amazing to the point where businesses are starting to show that they value the digital aspect of promoting their products and services. In Singapore, I do see that many businesses are transforming and redesigning their businesses to a different model as before. However, there are still those black sheep who are out there to just cheat or jack prices up to profit from scarcity.

Shopping

Speaking of shopping online. This is a really cool site to download the app into your mobile phone. This is a local company named Shopback. It gives you cashback into your account for any online spending. These days, you can link your credit card and once you spend on your credit card, the cashback automatically gets credited to your Shopback account. Talk about convenience. There is a new function that Shopback has and that is to purchase vouchers directly from Shopback. You can even use the credits from the cashback you received from previous purchases. That’s stacking more deals and more discounts.

Cashback

Each time you use your card on eligible brands and products (F&B, hotel staycation, vouchers and etc…) there will be a cash back amount allocated to you. The cash will be credited to your account ranging from 3 days to 3 months depending on when the merchant pays them for referring or recommending their products. To a certain extent, it is similar to affiliate marketing. Instead of paying out in marketing costs, the merchants pay affiliate marketers to promote their brands and Shopback gives back a portion of that commission back to the consumers as a form of incentive.

Enough said about getting more bang for your buck. Try it out and see it for yourself. We both earn a $5 bonus once you use my code and spend $20. Easy Peasy.

Save more by using ShopBack to earn Cashback. Download the app and sign up with my referral link to get $5. You can thank me later! https://app.shopback.com/OXuizVNBy9

Even More Cashback?

With the recent 9.9 sale, using a Citibank credit card seem to net you more cashback than usual. Something like additional 3% more cashback but not too sure when that would last till. Promotions don’t last forever so while stocks last. You can actually buy online vouchers from Qoo10, comfortdelgro, grab mart, grabfood, grabtaxi, pupsik, fairprice, GV and more

During random periods or campaigns, they may have upsized cashback deals which doubles the % of deals to your account once you make a transaction. From local brands to big global brands, grocery shopping and ticketing. I’ll say it is a no-brainer.

Disclaimer

This is not a sponsored post and purely my own opinion that I am writing about in my thoughts. If you like what you are seeing, do remember to check they out and do your diligence.  Don’t be too fixated with what is the best.

If you like what I am sharing or if it resonates with you, do use my referral codes for other services and products here at https://atomic-temporary-178675883.wpcomstaging.com/contact/ for the services.

Images seen in this article were take off the relevant websites for illustration purposes only.