Friday, 16 August 2019

Our 7 Simple Family Finance Habits

This is a continuation from my last postMy family follows 7 simple habits to improve our family finances. Most can be easily achieved and have helped us over the years.

Habit 1: Always check our receipts
My wife has a habit to check our receipts after paying at supermarket and restaurants. Several times, we discovered errors and promptly asked for a review in the payment. We should never pay extra for something that we should not. Do remember to check your receipts on the spot rather than doing it back home!

Habit 2: Only buy what we need
It is easy to be distracted by “special discounts” or “Buy 3 get 1 free” when you don’t really need the item or the bulk. Interestingly, there are times when “special discounts” are indeed special as they are pricier than the price from another store. Buying in bulk at times can be more expensive than buying individually from another store. No matter what, it is best to only buy what we need rather than choke up your house with more clutter.

Habit 3: Compare prices
A simple price comparison between nearby similar stores could save us some money. We had the habit of checking prices from both Watsons and Guardian, or between departmental stores before buying what we need. The price difference for similar items can be much more than we think.

Habit 4: Use discounts and cashbacks
Store discounts, Credit card miles/cashback, GrabPay discounts, Shopback cashback? Nowadays, there are many discounts and cashbacks which we can easily leverage on. Simply pay with credit card to gain miles/cashbacks or automatically gain cash back when you use a registered credit card at Shopback’s merchants. Why resist bringing in some cash back into your pocket!

Habit 5: Pay our bills promptly
Not paying our bills promptly will result in additional interest payment which will really burn our pocket bigger every month. We always aim to pay up our bills in advance at times before the statement comes in.

Habit 6: Bring own water bottle instead of order drinks
We developed the habit of bringing our own water bottle along. Drinking plain water keeps us well-hydrated and helps us to reduce the excessive sugar intake from soft drinks. Each drink cost around S$1.50-2 (US$1.10-1.50) and we could easily save around S$90 (US$66) a month per pax.

Habit 7: Stay healthy
Falling sick costs money and time. Better to stay healthy by eating right, sleeping well, exercise regularly. We make sure our breakfast is simple and nutritious – oats, wholemeal bread, 8hrs of sleep, regular jogging, etc.

Having good financial habits enabled our family to build up more cash over time. We can use the cash in many meaningful ways including spending time with family on a good holiday! What are some of your interesting family finance habits? Feel free to share!


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Friday, 9 August 2019

Happy 54th Birthday Singapore!!


To live in Singapore is the greatest blessing for my family. There are many things for us to be appreciative of. We have a green and safe country as well as the ingredients for basic family needs such as clean water, 3 daily meals, a roof over our head, medical, etc.

We had the opportunity to stay in overseas over extended periods. The experiences are humbling and opened our eyes to the differences between cultures. Singapore remains the only country in our heart. 

Admittedly, there are areas to strive for improvements e.g. many bemoan the high cost of living and intense work conditions, elderlies working in unpleasant jobs despite their age, etc. We got to remind ourselves not to take our present success for granted. Stay humble, be willing to learn and strive to improve.

On this day, Family-Finance-Savvy wishes our country Happy Birthday. Sharing this year’s national day theme song:

Source: YouTube


Saturday, 3 August 2019

Market Watch 2019 – SG Banks

In our previous post, we shared our plans to diversify our investment portfolio. Since then, my wife and I sold half of our OCBC shares at $11.50 and CPFIS’s STI ETF at around $3.41 to build up investment war-chest as well as protect overall profits in our CPF portfolio.

We kept a constant look out for trigger news e.g SG banks’ Q3 financial results this week, to gather information to help us assess the general impact from the trade war climate. Key points from CEOs of the three banks

DBS CEO - Source: Business Times

OCBC CEO - Source: Business Times

UOB CEO - Source: Business Times

To us, it is important to understand how the banks position themselves. We are keen on their strategy to support new business models and shifts in supply chain e.g. market positioning, shift in loan strategy, etc. Overall, we remained positive on the prospects in the Greater China and ASEAN market. To this end, my view is that OCBC and UOB are better positioned.

OCBC have strong exposure in Greater China, Malaysia and Indonesia. There were reports on their plans to increase stakes in Bank of Ningbo. If this materialises, OCBC’s deeper presence in Greater China could open up more opportunities to the wider Chinese market and position them well for China’s One Belt One Road initiative.

UOB have a good presence in Thailand and broad network in Malaysia, Indonesia and China. After setting up their digital bank in Thailand, there were reports of UOB considering to launch digital bank in Vietnam or Indonesia too. Both countries possess abundant opportunities. They are likely to come from the shift in supply chain from China to Vietnam, as well as from Indonesia's plans to shift their Capital which would require significant amount of infrastructure loans and investments. 

Trump’s tariff hike on Chinese imports had came in rather abruptly and have caused a stir to the stock market.

This looks like a buying opportunity... and our war-chest stands ready to fire.


Related Post
1.       Signs of market downturn coming?

Sunday, 28 July 2019

A risk mitigation framework to design our family emergency funds

This is a continuation from my previous post. What is the purpose for an emergency fund? Emergency funds is to help our family weather through urgent and sudden financial needs. The biggest challenge is to estimate how much we need as it is difficult to anticipate what it needs to be used for. We should put in time to think through our emergency funds as it will reduce our investment war-chest to achieve better returns.

First is to really ask when and what do we urgently need the money for? We assessed that key family emergencies might include:

·    Sudden loss of job income which affects payment of monthly expenses such as utilities, phone bills, food, transportation costs
·       Emergency medical treatment among family members
·       Unexpected home repairs
·       Replacement of household items that broke down suddenly
·       Unexpected car repairs

Adopting a simple framework to assess our family’s risks and come up with risk mitigation measures:

Impact to Family
Likelihood of Occurrence
Risk Mitigation Measures
Sudden loss of job income
Create secondary income stream to minimally support basic monthly household expenses. Set aside 6 months of household expenses.
Emergency medical treatment
Set aside for immediate, urgent medical treatment in case insurance unavailable.
Unexpected home repairs
Set aside home repair budget that sufficient to replace 2 critical household items

Risk Mitigation Matrix
High-High-High, H-M-M, H-L-M
Medium-High-Medium, M-M-M, M-L-L
Low-High-Medium, L-M-L, L-L-L

The higher the risk, the higher the priority for emergency fund allocation. We decided to set aside around 12 months household income based on past household annual expenses and to address our risk mitigation measures above. For medical risks, we planned using MOH’s historical bill and report.

My wife and I had aimed for 1 of us to be capable of supporting our annual family expenses entirely. In this way, there will be less pressure if either one decides to take a long-term break from our career. With this aim, we kept watch of our family expenses instead of allowing it to rise in tandem with our salary increase. To us, most importantly is to achieve family happiness by spending quality time together. Recall our earlier post, the key for happy family financial relationship is really to listen more, understand better, involve each other.

Hope you enjoyed this post!

Saturday, 20 July 2019

A Definition of Success by a Millennial Family

I came across several posts that discussed how millennial define success including today's report on Business Times:

This inspired me to think through my family's definition of success, and that is to achieve family financial freedom. 

Money is required for basic daily needs such as paying for our meals, as well as electrical, water, gas bills. To support these needs, we have to work very hard to earn our paycheck. Gradually work becomes a priority and later on, we regretted  not spending enough time with our family.

Financial freedom offers a choice to escape this rat race and allow us to focus on things that we believe should be our priorities. Many people might think that financial freedom requires a lot of money.

But... is it true that financial freedom equate to being wealthy? Need not be!

It simply means having constant cash inflow that can comfortably cover our expenditure. Hence if your monthly family expenditure is low, you would require lesser cash inflow to achieve financial freedom.

So how does our family plan to achieve this? Through 3 steps:

1st is to follow good family financial habits. Will elaborate more in our subsequent blog post.

2nd is to maintain family lifestyle spending even as salaries grew each year. This can also help mitigate some family financial risks. Again, will share more soon.

3rd is to generate more passive cash inflow through investment e.g stocks, fixed deposit, etc. There are many choices and considerations e.g. market outlook, inflation etc. So we should adopt an approach that best fit our investment needs, profile and goals. It is important to do the math and assess the length of time needed to realistically achieve your goals, level of investment risks versus its reward and your risk mitigation measures. 

Hope you enjoyed this post. Would be keen to find out what is your family's definition of success. Feel free to share!


Related Post

1.      How have our financial perspective changed over the years?

Friday, 19 July 2019

Enjoying our Gains with a Heart

Amidst the fast pace of living and demand for cash, our family saw the importance of taking time off to count our blessings. 

There are many things that we can be grateful about. This can be as plain as having a roof to stay in, having 3 full meals to eat, clothes to wear, harmonious family relationship with our families and siblings. These are some areas that we tend to take them for granted and only realise it on hind-sight.

My wife and I believed in giving back to society including quarterly blood donation, monthly cash donations, etc. We had considered volunteering but have yet to find a suitable cause and will keep looking for one. 

We had achieved some gains in our investments and work performance bonus . Hence decided to contribute some token to charity. We then spent some time to screen through the charity organisations before making our choice. Though our token is not that significant, we hoped that it could still benefit those who really needs it. May those who receive it be well and happy! 

Enjoying our gains with a heart 😊


Saturday, 13 July 2019

Is now a good time to buy RMB Yuan for your portfolio?

Our family’s cash are broadly categorised into:
(1)   Near-term and daily needs in high deposit bank accounts
(2)  Emergency funds in short-term fixed deposits
(3)  Stocks
(4) Investment Warchest in Singapore Savings Bonds and high deposit bank accounts.
(5)  Currency – NEW!

In our previous post, we shared our decision to buy RMB Yuan. We considered several investment possibilities such as options, currency, bonds, gold to diversify our portfolio before finally deciding to go for RMB Yuan first. 

Our key assessments include (1) RMB Yuan is now part of IMF’s reserve currency bucket. This means that more international contracts could transact using Yuan which would spur currency demand. (2) Yuan will likely be well-supported by China and global forces to eventually become an option to challenge USD as the global currency. (3) At ground-level, ICBC Singapore offered a good fixed deposit ranging 2.75-4.5%. This is better than Singapore Savings bond or fixed deposits.

We have been steadily building up our position in RMB Yuan. The currency is facing some near-term volatility against SGD. 

In our view, this presents a good buying opportunity. I remained optimistic that Yuan should strengthen in the near or medium-term given my assessments above. I also expect the Singapore dollar to gradually pause strengthening or weaken in order to help our exports become more competitive during this trade war climate. 

Will our investment in RMB Yuan turn out well? I certainly hope so!


Related Posts

Tuesday, 9 July 2019

Signs of market downturn coming?

Global banks are often the front-runners for a market downturn (e.g. bad debts, poor loan repayment, staff retrenchment, etc). Over the past 2 days, three news caught my eye:
  • Deutsche Bank staff sent home as 18,000 job cuts begin (The Guardian, CNBC, 8 & 9 Jul 2019)
  • Yield on the benchmark 30-year US Treasury bond briefly dipped below 2.5%, yielding less than the Federal Reserve’s short-term federal fund rate (CNN, 8 Jul 2019)
  • Temasek Holdings one-year return for shareholders came in at 1.49%, down from 12.19% in the previous financial year (Straits Times, 9 Jul 2019)

The warning signs of a global market downturn have grown even stronger. For the past 2 years, our Singapore leaders have been warning the people to be more conservative through policies such as property cooling measures and public speeches. 

Even if a market downturn is more likely now, it is still impossible to time when it would actually take place. My best guess is to be around the U.S. Presidential mid-term election period (Oct-Nov 2020 time-frame). But surely many people out there would also share similar thoughts. So how accurate would this guess be? 

Instead of timing the market, my wife and I decided to diversify our investment portfolio from stocks. We considered buying currency, gold, bonds or simply build up our investment war-chest. For gold, we were doubtful if the returns were worthwhile as the US$ would likely weaken when global economy tanks. For corporate bonds, most bond returns seems unattractive with its risks. In the end, we chose to buy currency - RMB Yuan. We will elaborate more on our decision in our next post.

Do you think that a market downturn is coming soon? Feel free to share your thoughts!


Friday, 5 July 2019

Can investment help us to stay discipline and keep emotions in check? Yes it can!

My biggest lesson in investment is to learn how to constantly keep my emotions in check. Whenever emotions take over, we tend to easily lose discipline from our original gameplan. 

Sounds familiar? 

I made many “emotional” mistakes at the start of my investment journey. In 2011, I bought SGX when its share price rose suddenly. But after my purchase, the price dropped. Ok, my luck. Thankfully, the dividends were not too bad and the price recovered 3 years later. Twice I bought SIA and both ended in similar fate. I sold them within months at a loss when news on sharp reduction in global oil supply circulated. Then, I justified to myself that it was just a “cut-loss”. Was this part of my plan? Honestly, no. And I did not have a better answer why I did so. Thinking back, it was simply reacting based on emotions.

So how did I keep my emotions in check now? As a fundamental investor, I simply focus on numbers only i.e. to buy when price is at least 10% below its intrinsic value, and sell when the price is above its intrinsic value (usually from 20%). Using numbers has certainly helped me in making many rationale investment decisions and maintain my discipline. Sharing a quote from Mr Warren Buffett...

There might be some “feel-good” sentiments in the market including temporary easing of trade war, extension of oil supply cuts by OPEC & Russia, potential interest rate cuts by FED, etc. It might be easy to get really optimistic and buy into the market. Before deciding to go aggressive, it could be useful to first take a step back. Consider carefully whether this is part of your investment plan, or whether your remaining finances are sufficient for daily livelihood without  having to sell your stocks, even if the market crashes tomorrow. 

Returning to my investment principles, most importantly to first set aside the money for our family’s immediate needs and only invest with spare cash that I could afford to hold/lose.

Looking forward to hear from you too! 


Sunday, 30 June 2019

End of “No-Pay Leave” and back to blogging!

It has been a while since my last post. Decided that today is the end of my “no-pay leave” and a return back to blogging.

There were significant changes to my wife and my investment portfolio as we adjusted to market situations and prepare ourselves for future opportunities. While patiently waiting for our core investments to rise further, we did some short-term trading. Results have been promising thus far. We still made sure to stick closely to our investment principles, which are to only invest the amount that we can afford to lose, buy when our investment criteria are met, and buy stocks that are fundamentally under value. The idea is that even if Mr Market decides to crash tomorrow, there should be no impact to our life.

I attended the Real Estate Salesperson (RES) course last year to gain basic foundation on real estate. This is our first step to starting our property investment journey in the coming years. We were considering to acquire industrial properties. But after our market research as well as weekends walking the ground, we assessed that there was high uncertainty in the industrial property market due to trade war and new digital economy. Thus, better to do more homework before rushing in.

Work-wise has been very intensive for both of us. For myself, I had 4 back-to-back long haul overseas travels, as well as juggling with several work responsibilities concurrently. Needless to say, many late-nights and weekends burnt. Our weekend JB family trips have been life-saving 😊

Looking forward to more sharing soon!