Wa! Markets like that! Buay tahan.. I want to ……

Unless you have been living in a cave, not read the papers at all, not on social media or don't watch the news.. you will have noticed the economy is in a sea of red, currency is falling, interest rate seems to be increasing and commodities is falling.

So in a situation like this what have happened to you emotionally. If you have monies invested, how do you feel? From the sea of red we have seen, alot of people have panicked and sold off their positions in the markets. Are they really investing or speculatiing

As of last night, markets in the US have rallied and most markets in Asia today rallied once it opened. How do you feel now? Probably sad if you had decided to sell to 'cut loss', because you heard somebody tell you that the crisis is coming...

You probably feel happy if you did not sell, at least now there is a glimmer of hope that your losses can be recovered. You probably be happiest when you saw the past few days as discounted price to invest into the market.

So is the rally sustainable? Is this the calm before the storm? I do not know. But I do know that if you have really decided to invest then these small distractions in the market is just a 'glitch in the matrix'. What I do know is that almost every country in the world, (probably other than Greece, just kidding) wants their economy to be good and growing. Every countrt will try their best to be competitive in the world to boost their economy. They will take measures to ensure the economy will not take a straight line southwards and never come back up.

For example, China, the RMB had to be devalued to ensure their goods become cheaper to drive export. Singapore dollar have to go down too to ensure our currency is not too strong that our goods and services becomes too expensive relative to our neighbours or competitors. China has put in measures to ensure the stock market does not crash too much.

With all that said I do know that in a longer term, your returns on your investments WILL make money but following some simple rules:

- Always stay invested
- Do not let your sentiments get the better of you
- When the market is down, hold your investment or invest more
- Have a proper asset allocation strategy, diversify
- Do a balance sheet for yourself and family (eg. Net worth, cash flow)
- Speak to a reliable adviser

Its always tempting that when you hear someone has made heaps of money in the markets and you want a piece of the pie. When that happens the good times are already over.

Its also tempting when you hear 'inside information' and invest. Hoping to make heaps if money in a short time. That's specualtion and not investing. Speculation is almost gambling.

I has an experience at the turf club once. I am not a gambler and I do not know what horses to buy. We had an event at the turf club and while standing around one of the horse trainer came and told us to buy Flying Stallion (really cannot remember the name but horses names in these races tends to be cheesy) for the last race. Wow! 'Inside information' from the horse trainer! We bought the horse and waited and waited and waited.... finally its the last race!

The gates flew open the horses came out of the starting line. My heart was pounding, the crowd was going wild! I looked for the horse I have placed my bets on. Its in second place! Yes its a good chance now!

Then 3rd place.. it ain't over to the fat lady sings! Come on you can do it! 4th.... 5th... crap.. inside information my ass! I can't believe I have waited for the last race just to see my horse lose..

In summary, its about time in the market and not timing the market that will ensure that you will be profitable in investments. So relax, have faith in the markets and invest.

Sabah 2015 Earthquake. Singapore?

So when did we last hear of an earthquake happening in Sabah, Malaysia? Never! At least not in my life time. This morning a 6.0 magnitude earthquake hit Sabah neat Mt Kinabalu leaving some climbers still stranded on the mountain.

It also peaked my interest to actually find out why will Sabah be hit by an earthquake. Earthquake hapens when rocks underground breaks suddenly and the sudden release of energy creates earthquakes.

But as I googled it dawned on me that even though Singapore has been relatively earthquake free, it does not mean its not going to happen. If you look at the photo attached, we sit very close to the Eurasian plate and Australian plate that caused the 2004 Tsunami... and Sabah is still quite a distant from the Ring of Fire. So yes there are many types of earthquakes and my fears maybe unfounded, but hearing earthquakes happening around us is unsettling.

Hope everybody in Sabah is alright..

Tze Wei Growing Up

Its been an amazing 3 years already since my daughter has been brought into our world.

She has made me laugh, made me cry.

I can still remember when she first started teething. She has a fever and must have felt terrible. She was lying on my lap and she looked up at me with a 'help me' look on her face. She made me feel helpless. I had to go to the balcony just so I can shed a few tears for not being to help. Well, phases of a new parent..

But now looking at this video, you cannot help but agree that all was worth it.. the tears, the sleepless nights.

And I am sure this is just the beginning tp more tears and sleepless nights... but moments like these, priceless!

https://youtu.be/tTJPJtCZ5L4

Meritocracy

So the past week what have we learnt? I know I have learnt much more of the man that is so respected around the world. I learnt how he and his team built this mud flats to what it is today. Many may argue that it is not just him who have built Singapore, but it was his ideology, vision and foresight to make what Singapore what it is today. It took careful planning, meticulous execution and constant monitoring to ensure the peace and freedom we have today. Its having a purpose in life! And Mr Lee dedicated his whole life to that purpose.

But more importantly, it is about meritocracy. Its about efforts put in by individuals to ensure their own success. It is about creating equal opportunities for all gender, race and religion. It is creating these opportunities so that efforts can be rewarded. And its understanding that education is so important in a country like ours that does not have natural resources. 

But that also have a downside, with education the entrepreneurial spirit is lost. In the beginning when having a degree is something to look up upon, the few roles in upper management are taken by these degree holders. But when more and more people graduate with a degree, the few roles are now being competed by many. And with few supply for the higher demand of higher paying jobs and roles, it boils down to much frustration. And too many Singaporeans have also been indoctrinated by the Poor Dad syndrome that we fail to see other opportunities. 

For those who ain't familiar with Robert Kiosaki's 'Rich Dad, Poor Dad' book, let me just briefly explain it as best as I can. Robert Kiosaki had his own dad who believes that as long as you study hard, you will get a good job and good pay and you will stay employed for the rest of your life. He is poor dad. Robert Kiosaki also has a Rich Dad who is actually a friend's dad that is a business man who taught him the way with money and to let money work for you. Robert Kiosaki learnt a lot from his rich dad and the rest is history.

Many have also complained about how things are getting more expensive, about how difficult its going to retire in Singapore. Economics 101 tells us that inflation is an indicator of the health of an economy (Naysayers will say it is something we are all led into believing, then read my Conspiracy Theory post) and so if we know that fact then don't we all know things WILL be more expensive in future? So instead of complaining, ask yourself what have you done to your best capabilities to ensure your retirement is safe guarded? Is your best capabilities enough? What other positive actions can you do to ensure it is enough? There are things you can do today to ensure your retirement is secure. 

Please speak to me and we can explore all the things that can be done today. Do something today so that yourself tomorrow will thank.

So meritocracy, the effort you are going to take today to speak to me will ensure your succeeful retirement in future. 

With a Heavy Heart

And with a heavy heart, Singapore woke up to the news that our founding father has passed. A chapter of our history has closed but not forgotten. Though I have never met Lee Kuan Yew personally but everywhere you go you see the things that have been accomplished by him and his team.

A little red dot on the world map yet our economy challenges the big boys. Our passport, amazing! Our currency stable. Safety, unsurpassed.

And yet, everyday somebody out there curses all the things that have been done. Reading the FB post on people's wall, I am heartened to know that many is still appreciative.

I only wish I can be a fraction of what he is, to have touched so many lives in Singapore and the world. As a financial consultant my vision is to be able to touch as many lives as possible to help families understand the importance of financial planning. But the going is not always easy. People still scorn us, they think we are trying to sell them a product. Some will accept, some will not

Just like the policies of Singapore, not everybody will accept. The magnitude of how many lives LKY has touched is enormous and his legend will continue.

Now it is up to us to keep this going...

The Journey Of A Thousand Mile Begins With A Single Step

There has been much talk on retirement on the news papers recently. It seems that everybody knows its going to be expensive to retire here but none has done much about it. A quick calculation will tell you that you will need about $1.3 million if your expenses are $2,000 and you intend to retire in 20 years time and your years of retirement is 20 years. The calculations has taken an inflation of 3% into consideration. 

So if $1.3 million is what you will need to retire then what are you doing today to achieve it? Many have told me that they are saving every month. That's great! But too many did not consider the effects of inflation on their monies when they save. Lets take for example a savings instrument that gives us 0.5%, we save $1,000 for the next 20 years. You will get $253,000 after 20 years. 

Save in an instrument that gives you 2% for the next 20 years, $297,400. That is $44,400 more just by increasing your rate of return. 

The above assumes that whatever goods and services you pay for $1,000 today does not change in 20 years time. But if we take inflation into consideration, the value of your money, if you save in an instrument of 0.5% will be $185,942 and the value of your money in the the instrument that gives 2% will be $216,326.

Huh? Tang .. cheem leh! Ok, lets use an example which I have used in a previous post. Kopi o. 10 years ago, kopi o, $0.60. Today kopi o $1.00. So if we know that in 20 years time the cost of goods will also be increasing then we know that the same $253,000 that is saved will not buy us $253,000 worth of good in 20 years time. It will only get us $185,942 worth of goods and services in 20 years time. 

So how should we accumulate wealth so that we can buy the same amount of goods and services in 20 years time as we are spending today? There are few solutions:

1. Spend less

2. Save more

3. Save in a higher rate rate of return instrument

1. Spend Less

If you think you can sacrifice your lifestyle and not spend as much as what you are spending now during your retirement then, make a plan so you are sure of the expenses you want to cut at retirement. 

2. Save more

Lets use the example above, if you put $1,000 in the instrument that gives you 0.5% and get $253,000 in 20 years time. You want the same value in 20 years time, you will have to save $1,360 per month for the next 20 years in the same instrument. The extra $360 saved will offset the increase in the price of goods and service caused by inflation in 20 years time.

3. Save in higher rate of return instrument

You can also start saving in an instrument that will offset the inflation of 3% or invest in instruments that give you more than 3%. So depending on your risk profile, if you put the same $1,000 in an instrument that gives 5%, you will get $416,631 in 20 years time! An increase of about 60% from $253,000 with just an increase in 4.5% rate of return over 20 years!

There are many other strategies like delaying retirement, not retiring, ask children to support, work part time, collect tin can to sell, but importantly, whatever strategy you decide to take, talk to your financial consultant first. Your financial consultant can do up a retirement plan for you. He/She can calculate the figures for you so that you have a clearer picture of what to aim for. With that figure then you can make Specific and Measurable plans to achieve it. We will help you make Achievable and Relevant financial decision so that we will be in Time for your retirement.

So make a SMART choice today. Call your financial consultant if not email me for a no obligation consultation. tngjinyau@gmail.com Like they say, nobody plans to fail, but many fail to plan. Start your journey to your retirement with me today! The journey of a thousand mile begins with a single step.