Wuhan Coronavirus: Lessons we can learn from SARS

January 23, 2020

by Chengkok with 2 Comments General Economy

I woke up today to find my Facebook feed occupied by Wuhan’s Coronavirus incident. It sent a shiver down my spine to think that in this developed world that we are living in, this virus could be potentially have more impact as compared to the major plagues (The Black Death, 1918 Spanish Flu, Ebola etc) as we are becoming more and more connected around the world with air travel.

It is also unfortunate that we are in the beginning of a festive period and especially for China. I pray for those travelling and those friends in China and around the region to be healthy and safe. I salute the Chinese efforts to contain the virus in Wuhan. Personally, I don’t think it is a harsh but necessary one. (Read more: 4 things to know about the China coronavirus)

I feel that as we move into the future, we can learn from incidences from the past. This article is a working article that will be constantly updated as we draw on experiences from SARS and seeing how it is similar to Wuhan. If any, we will like to find if there are any opportunities in our investing journey.

Edited: 22/01/2020: First Case of deadly Wuhan coronavirus in USA

Edited: 23/01/2020: First Case in Singapore

Edited: 24/01/2020: Singapore confirms 2 more Wuhan virus cases, bringing total to 3 infected

Edited: 26/01/2020: 4th confirmed case in Singapore

Edited: 28/01/2020: 2 new confirmed cases in Singapore, bringing total to 7

Edited: 30/01/2020: Singapore confirms 3 more Wuhan virus cases, bringing total to 10; all are from Wuhan / Wuhan virus: 3 more confirmed cases in Singapore, total at 13

Edited: 02/02/2020: Singapore confirms 2 more Wuhan virus cases, including 2nd Singaporean woman on Scoot flight from Wuhan

Editied: 04/02/202: First Locally Transmitted Cases in Singapore

Brief History of SARs, 2003

SARs first reached Singapore in late February 2003 with the return of three Singaporean women from Hong Kong. They were hospitalised for pneumonia between 1 and 3 March. Five persons were classified as super-spreaders of the SARs outbreak in Singapore. Most of those infected during the outbreak were healthcare workers (40.8 percent) and family members (23.8 percent). The last SARS case was isolated in early May and Singapore was removed from the World Health Organization’s list of SARS-affected areas on 31 May.

For Singapore, Visitor arrivals and hotel occupancy rates plunged, revenues at retail shops and restaurants dived, taxi drivers reported fewer passengers, stock prices fell, and more people lost their jobs. The economy contracted sharply by 4.2 percent year-on-year.

Sars killed 774 people worldwide, including China (349 deaths), Hong Kong (299 deaths), Canada (43 deaths), Taiwan (37 deaths) and Singapore (33 deaths).

The SARS-hit services sectors are recovering. The economy should resume a modest recovery path in H2 2003, etc.

(Source: Severe acute respiratory syndrome (SARS) outbreak, 2003, Sars in Singapore: Timeline, MAS Monetary Policy Statement – July 2003 )

Making Sense of SARs: Some numbers

3 months: To get SARs under control in 2003 in Singapore

4.2%: Singapore Economy contracted y-o-y with hotel occupancy and retail affected the most

33: Deaths in Singapore

238: Reported SARs cases in Singapore

5: Super spreaders in Singapore

10%: Mortality Rate

4%: Tourism contribution to GDP (Source: Singapore Tourism Board)

Wuhan Coronavirus Learning From SARS STI

The Singapore market was shaky from February to May, It eventually recovered and broke a new high that year.

Situation of Wuhan Coronavirus, 2020

The outbreak is believed to have originated in December in a seafood and meat market in Wuhan. A Chinese national who arrived in Singapore on Jan 20 has tested positive for the coronavirus, the first confirmed case in the Republic.

(Source: Singapore confirms first imported case, UPDATES ON LOCAL SITUATION)

Making Sense of Wuhan Coronavirus in Singapore: Some Numbers

58: Confirmed Cases (as of 14/02/2020)

0: Deaths

20 Jan: Believed to be the first case that arrived on Singapore shores

8: Companions that were with case #1

3%: Mortality Rate (Source: What We Know About the Wuhan Coronavirus)

Brief Opportunity

If there is a correction of more than 4% from the STI, I personally think it will be an over-reaction of the market in the market.
If your strategy is of value investing nature, look at listed hotels and retail companies (to be added at the next section)
If your strategy is of opportunistic gains, look at listed companies selling protective gear such as face masks, gloves and gowns

Genting Singapore

Genting Singapore Plc (GENS) operates Resorts World Singapore (RWS) which is one of the largest fully integrated resorts in SEA. RWS consist of convention facilities, hotels, food & beverage and retail outlets, Universal Studios Singapore and a casino. According to STB, Chinese Tourist contributes to 12% of overall tourist to Singapore.

As of current writing, Genting Singapore (G13) is $0.92. In a layman opportunistic valuation, I feel there is an overreaction if share prices is below 0.86 (if Chinese tourist numbers were to fall by 50%) and if share prices is below 0.8 (if Chinese tourist numbers were to fall by 100%), ceteris paribus.

Note: We are assuming Chinese Tourist spend the same proportion of money as compared to other tourists.

SATS

SATS Ltd., commonly abbreviated as SATS is the chief ground-handling and in-flight catering service provider at Singapore Changi Airport. SATS controls about 80% of Changi Airport’s ground handling and catering business.

As of current writing, SATS (S58) is $4.92. In a layman opportunistic valuation, I feel there is an overreaction if share prices is below 4.62 (if Chinese tourist numbers were to fall by 50%) and if share prices is below 4.32 (if Chinese tourist numbers were to fall by 100%), ceteris paribus. Note that if share price is $4.32, SATS will have a dividend yield of close to 4% assuming SATS is giving dividends of 0.17.

Shangri-La Hotels and Resorts

Shangri-La (S07) has 5 brands across different market segments including Shangri-La Hotels, Shangri-La Resorts, Traders Hotels, Kerry Hotels and Hotel Jen. The five-star luxury lodgings of the chain can be found across Africa, Asia, the Middle East, Canada, Oceania and Europe. This comes as an easy one to identify since the first incident in Singapore stayed at Shangri-La’s Rasa Sentosa Resort.

I first thought about this on 25 Jan 2020 where the share price is $7.80. On 20 Jan 2020, the price was $8.34. Share price has already fallen by 6%. It will be good to note that there are many hotels under the name of Shangri-La in China. I feel that Shangri-La will affected for more than 2 quarters and the impact to the company will be material this year.

Wuhan Coronavirus Shangri La China: Source Wikipedia Shangri-La Hotels

EC World Reit

EC World REIT is a Singapore real estate investment trust (“REIT”) established with the investment strategy of investing principally, directly or indirectly, in a diversified portfolio of income-producing real estate which is used primarily for e-commerce, supply-chain management and logistics purposes, as well as real estate-related assets, with an initial geographical focus on the People’s Republic of China (the “PRC”)

As at 05 August 2019, the portfolio comprise eight quality properties located predominantly in largest e-commerce clusters in the Yangtze River Delta, Hangzhou and Wuhan, China. Seven properties are located in Hangzhou, and one in Wuhan. (Source: EC World Reit)

With a deeper dive into Wuhan, the warehouse is leased to leased to reputable logistics and e-commerce tenants in the PRC including Dangdang and JD. (Source: EC World Wuhan Meiluote)

Personally, I don’t expect E-commerce to stop in this crisis. I also note the Chinese Government has lock down a few cities to contain the spread of the coronavirus. This too will come to pass.

Share price at the time of writing is $0.74. We also note that the price has not reacted much.

Wuhan Coronavirus Meiluote EC World Reit

Oil and Gas

In 2003, SARS reduced demand for jet fuel and through reduced regional economic growth and petroleum product consumption. The International Air Transport Association estimated there was a drop of 8% in annual traffic for Asian airlines during the SARS outbreak. Oil prices fell nearly 20% during the 2002-2003 SARS outbreak, but the impact was relatively short-lived as the outbreak was brought under control.

However, we also note that 2003 was the period of Iraq war. The 2003 invasion of Iraq marked a significant event for oil markets because Iraq contains a large amount of global oil reserves. Therefore, the drop of 20% may include the effects of the Iraq invasion.

A simple assumption (and very over simplistic yet conservative) we can make is that our of the 20%, only 8% is attributed to the SARS outbreak. On 21 Jan 2020, the XOP index closed at 21.63. On 27 Jan 2020, the XOP index opened at 19.82. This represents a 8% drop since the “beginning” of the Wuhan Coronavirus. Furthermore, XOP have already reached a significant support level. We believe it is fair to have a put option position collecting premium of 4%. We will monitor this index for the next month.

Straco Corporation

Straco has been one of the first few foreign companies that has managed to build up significant presence and influence in the tourism industry in China. It owns and manage the Singapore Flyer, Shanghai Ocean Aquarium, Underwater World Xiamen, The Lixing cable-car service. Source: Straco Corporation Limited

Straco Corporation, which secures around 73 per cent of annual revenue from China, faces a downturn in its business; the tourist attractions it runs, such as the Shanghai Ocean Aquarium, Lintong Lixing Cable Car and Underwater World Xiamen, were shut last Saturday (25Jan) in a bid to contain the spread of the bug.

Straco share price at time of writing is $0.56. If has already fell from $0.67 or 15% to the current level.

Drawing reference to the 2008/2009 financial crisis, Straco experience a drop of 69% during that period. (I have taken an arbitrarily time stamp for reference). We are unable to compare data during the SARs period as the company is only listed in 20 Feb 2004.

I’m positive that Shanghai Ocean Aquarium will remain a strong revenue stream for Straco in the years to come. If Straco remains to give a steady dividend of $0.02 per share, you can achieve a dividend yield of 5% once the price reach $0.4. It will be a steal if the price reaches $0.30 (as it would meant that the share price have already dropped by 70% from $0.67).

Songcheng Performance Development

I got to know of this company while travelling in Hainan in 2019. Songcheng (300144) operates in the performing arts industry. The company is engaged in the operation of theme parks and tourism cultural shows in China. It has developed dozens of cultural entertainment projects including Songcheng Six Rooms and China Performing Arts Valley.

I have to admit that I had no expectation before watching the performance as I thought it would be like any other “tourist performance”. I was so wrong. Songcheng impressed me with the cultural plot, the engagement and also various stage effects. I could tell that it would have taken years of practice for performers to be competent. In the internet age, I feel the arts industry is one that will not or cannot be replaced. Every year, they perform to over 35,000,000 people. (Source: Songcheng Bio)

Given that the Chinese population is 1.44 Billion (Source: World Population Review), Songcheng is only performing to around 2% of the Chinese population every single year. As of 02/02/2020, share price is 26.94CNY. It has already fallen by 11.3% from 30.40CNY on the 20/01/2020. In the last 5 years, the average PE for this company is 40.70 and the current PE is 27.65. In the last 3 years, the EPS of the company has been growing at 25.52%. We believe that there will be an opportunity of a fair value buy when PE is < 25 which is around 24CNY.

[Last worked on: 02 Feb 2020]

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Companies with high percentage of revenue in China.

Singapore Companies with Big Revenue Percentage in China

Source: Singapore-listed companies with China exposure feel the heat

Closing Note

An epidemic generally not good news. We pray for the people in Wuhan and people travelling this period to be safe. Take care of yourself. Remember that Health is your most important asset.

This is what you can do to protect yourself from the virus.

Reduce your risk of infection by avoiding people who are sick
Avoid touching your eyes, nose and mouth
Wash your hands often with soap and water and for at least 20 seconds
Cover your mouth and nose when you cough or sneeze, and disinfect the objects and surfaces you touch.
If you’re traveling to China, (Nanning City) steer clear of live animals.

If you read until here, thank you again for your patience and your support over in 2019. I hope that in 2020, Wealthdojo can continue to value add you. Let us know what you think in the comments below. This is a working article. The above doesn’t represent my stock recommendation in anyway. Please read our disclaimer for more information.

I hope to nurture genuine relationships with all of my readers. Please feel free to contact me on my Instagram (@chengkokoh) or Facebook Page or my Telegram Channel!

Quit these few things this year

January 23, 2020

by Chengkok with No Comment General Economy Investment Accumulation Money Mindset

2020 started with a BANG. At least, it seemed that way for people on Facebook. There were many posts about eating healthy, saving properly and also books to read for 2020. In the posts that was shared, I realised something in common. They were all very positive!

I have been a fan for positive messages. I like reading articles that are motivating because I get motivated just by reading them (Let’s do it people!). However, I noticed that while it works. It only works in a while. (Damn. Don’t you wish it lasted longer?)

Meet Adam (you probably know a version on him in office). Adam is an average office worker who goes to work from 9am to 5pm. After Christmas, Adam folded his arms and realised to his horror that his stomach has gotten bigger. He don’t remember it being that big the last Christmas. Looking at the calendar, Adam sees that it is just 7 more days into the new year and decides that he will start to exercise ONCE the new year begins.

As the year begins, he is MOTIVATED. He starts eating at salad joint. He finishes his work at 5pm and go for a run at night. He tells his colleagues that everything is working well and he has just lost 2 kg in the last 2 weeks. If he is on track, he will reach his fitness goal by the end of June.

In February, work starts to pile up and he starts to do overtime (OT). He barely have time for lunch so he eats chicken rice as it is a quick fix. When he goes home, he feels so tired and just want to sleep.

Guess what. By March, Adam has given up on his fitness goals. (I hope he has done his reflections)

Adam is motivated. However, it is only for the start of the year. Sometimes, life throws us a spanner and things get out of control. Today, instead of talking about positively like all other posts on Facebook, I want to start the year together with you by telling you TO QUIT.

Yes. I want you start the year by QUITTING. I want to share you 3 things to quit this year so that you can improve your life for the better. The below 3 tips are my personal experience and I hope it can be valuable and relevant to you.

Quit Finishing Books

This is massive. I’m an avid reader. I practically eat books for lunch. However, this has been one of my most painful lessons that I had to learn last year. I had to QUIT FINISHING BOOKS.

Imagine this: you start watching a new TV show. It has four seasons and nearly 50 episodes of content. You get four episodes into the show and are not enjoying it. Would you force yourself to plow through the show, finishing all four seasons? Or would you just quit?

Most of us quit. Yet, when faced with the same situation with a book, most of us feel as though we should POWER THROUGH and finish 500 pages. This makes no sense at all! Last year, I bought several investment books that I wanted to read. I was all excited when the books arrived from book depository. It has take 3 weeks to arrive and I practically rip the package to dig out the book. After reading for 5 minutes, I felt that there was this huge disconnect between the author and I.

Did you think I gave up?

NO! I POWER THROUGH ALL 500 PAGES SPENDING 3 MONTHS OF UNPRODUCTIVE READING.

Quit These Things This Year What Have I Done

Our ability to read quickly mostly depends on FOCUS. Our ability to retain information mostly depends on memory. Humans focus on things they enjoy. They also remember things they enjoy. Therefore, the first and most obvious rule of reading and retaining more information is to be ruthless and only reading books you truly enjoy reading.

My personal guide is to give a book a chance. I will give it 10% of its length to win me over (500 page book means I read the first 50 pages, 250 pages means I read the first 25, etc.) If I’m not won over by 10%, I check the table of contents to see if I want to skip to a later chapter that looks interesting. If that chapter doesn’t grab me, then I QUIT.

Quitting books goes for chapters or even sections. Investing books repeat themselves a lot (A.K.A Definition of PE Ratio/The power of compound effect etc). If I’m reading a book I’m already familiar with that chapter… I QUIT that chapter! No regrets. Books are meant to serve you, not the other way around.

QUIT CHASING RESULTS (OTHERS)

At the start of the year, I saw many of these results on Facebook. 39% is an respectable return on investment. If we take the rule of 72, it will just take slightly less than 2 years to double your money! That’s incredible. Imagine you have $100,000 and it becomes $200,000 in less than 2 years. For someone new to investing, this might seem like the holy grail to your financial freedom. That’s fantastic results. Before you get light headed, let’s look at a research done by Bank Of America.

Bank of America Research Profitable Years

This shows that in 2019, the entire stock market is expected to be up 30% to 40% anyway! If you see their ROI is 39%, it doesn’t mean their results is exceptional and in fact it is expected! To be a great investor, he should have to perform ABOVE the market norm.

We might be seeing people chasing a 39% return this year as people already feel that they can get it last year. QUIT CHASING RESULTS (without knowing the context).

This could apply to many things to life as well. I know people who are chasing after a nice Condominium, a nice Mercedes Ben or a nice trip to U.S.A. It is usually all over Instagram. Personally, I believe that life is short and we should enjoy every moment of it. However, CHASING AFTER THINGS WON”T MAKE YOU HAPPY.

If you are chasing after what other people have, if you are chasing an unrealistic goal which you set for yourself, QUIT CHASING THEM. Find out what truly make you happy.

QUIT SIDETRACKING

I woke up this morning and plan to go for a run. This year, my fitness goal is to get GOLD in my IPPT. I then decided to go to the kitchen to fill my bottle up. 2 hours later, I’m out meeting my clients.

Did I run? NO.

Why is that so? Because, my mind was occupied by other things. (I need to fill my bottle up now)

Have this happen to you before? You wanted to do something but then life suddenly takes over and the opportunity to do is gone. I was having a chat with my friend, Christina Ho (who is obsessed with productivity) and we were sharing on things that we plan but DID NOT DO. If you meet Christina, she’s one of the most enthusiastic person who will scrub all the seashells on the beach to prove her point. We were frustrated and sometimes discouraged when we were unable to achieve what we set out to do. We don’t have the lack of motivation. But why does this happen to us?

From a corner of Yakun that I met her, a young father blurted out to his son “You have to pull up your sock“.

Whatever context the young father has said it in, the phrase “PULL UP YOUR SOCK” was stuck to me. I decided to experiment on myself and that experiment helped me achieve my fitness goal last year. It is very simple. When I want to run, I will PUT ON ONE SOCK. That awkward sock on my feet helped me remember that I have to go running and it kept me from constantly being sidetracked!

It worked so well, that I decided to use this in various aspect of life!

If you have goals this year that you really want to achieve, QUIT SIDETRACKING and PULL ON ONE SOCK!

Conclusion

I QUIT! Today, make it a point to quit 1 of the above.

By the way, we are having the first Wealthdojo Seminar in 2020. We hope to see you and your friends in this seminar. Seats are limited and available on a first come first serve basis. You can find more information regarding the seminar here.

-> R.E.V. v2: Create Passive Income without Financial Knowledge <-

We will be having a 16% discount for readers of this post. Simply quote “IQUIT” to be eligible for the promotion price for the seminar.

I hope to nurture genuine relationships with all of my readers. Please feel free to contact me on my Instagram (@chengkokoh) or Facebook Page!

What you can do about price hikes for public transport in Singapore

October 8, 2019

by Chengkok with One Comment General Economy Money Management Money Mindset

Price hikes for public transportation in Singapore is set to increase. This will include the buses and trains fares that majority of Singapore takes every day to work or school. The public transport counsel has hinted the fares could go up by 7% after they have conducted their fare review exercise. (Read More: Fare Exercise Review)

The reasons cited for the rates increase has been put on the increase in energy prices, rail reliability and also introduction of new buses and MRT over the last few years. This isn’t a shock to me at least. Over the years, fare price hikes has been slowly increasing. (Read more: Public Transport Counsel Chronology). As a nation progress, there will be need for a more reliable public transportation and this will result in higher cost of maintenance over time.

Price Hikes Public Transportation Singapore: Source: Straits Times

For majority of us, the amount of money we spend on public transportation will soon increase in December 2019. We can either lament all we want about the $0.09 increase per journey or we always do something about it. (Read More: Sandwich Generation: Is it still possible to be rich?)

Money Maximization: Transportation

Readers of Wealthdojo are in luck. We were just exploring on ways to save on transportation in the previous article. (Read more: Save Money on Transportation Singapore).

We have created a system to help an individual save up to 5% a year on transportation cost. This comes in timely as it can “cancel out” the effect of increase just by following this system.

If you can’t beat them, join them

I’m always excited about companies that are able to increase their prices even during a recession. While we are somewhat in a economy that is slowing down, there are a few companies that are STILL ABLE to raise prices and people have no choice but to pay for it! This is what we called Pricing Power. Investing in companies with pricing power are the ones that can survive and thrive. As Wealthdojo believes in dealing with real life situations, please refer to our disclaimer section for more information.

Everyone in Singapore probably knows of this company called SBS Transit (SGX: S61)

Basically, they are our train and bus providers in Singapore. Over the last 1 year, this humble share has increase 57%. I have talked about in our Facebook Closed Group (Contact Us to be invited to the Facebook Group). It is a simple business, easy to understand and has a certain pricing power in Singapore. Just to point out an illustration, will you walk all the way to Changi Airport by foot just because your bus fare has increase by $0.09? 99.99% will definitely continue using this service.

In addition to the 57% increase this year, the dividend yield is at 3.52% right now. While it isn’t the highest yielding dividend stock out there, this is clear about our inflation rate this year.

I recommend everyone to study more into this stock before making a decision. This is not a buy/sell recommendation.

We wish you the best in your financial journey.

In Wealthdojo, we believe in bespoke financial planning. Whether it is money maximization, insurance or investing, we believe that everyone is different and the planning should be suited for you.

All opinions above are my own. Please view our disclaimer page to understand more.

I hope to nurture genuine relationships with all of my readers. Please feel free to contact me on my Instagram (@chengkokoh) or Facebook Page!

Now that you’ve read about learnt about how to benefit from What you can do about price hikes for public transport in Singapore. I challenge you to read this article (Things To Consider Before Investing In Foreign Dividend Stocks )to push your understanding further!

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How to Benefit from the Enhanced CPF Housing Grant

September 13, 2019

by Chengkok with 3 Comments CPF Accumulation General Economy Insurance Property Investment

When the government announced the Enhanced CPF Housing Grant, it was a mixed reaction. Those in the sandwich generation cheered, some were disappointed. The question is, how do you benefit from the Enhanced CPF Housing Grant?

Let’s first start by asking ourselves, what is the Enhanced CPF Housing Grant all about? (Read more: Make The Most Of Your CPF)

HDB Eligibility

The Enhanced CPF Housing Grant that is going to streamline current Additional and Special CPF Housing Grants as an attempt to make public housing affordable and available for everyone.

Firstly, the income ceiling for buying the HDB has increase to $14,000. This means that HDB will be available for more people to buy. Currently, those that are “earning too much” is not eligible to buy a HDB. To put it really simply, if your average gross monthly household income is less than $14,000, you are eligible to buy a HDB.

Enhanced CPF Housing Grant Income Ceiling — Source: HDB Website

Enhanced CPF Housing Grant Eligibility

Now that you know you are eligible to buy a HDB, the question is how much grant are you entitled to for the new Enhanced CPF Housing Grant. The answer is, it depends. It will depend on the followings.

Average Monthly Household Income (The higher your Household Income, the lower the grant)
Lease Coverage (To get full grant amount, the flat must have enough lease life until you and your spouse is 95)

Enhanced CPF Housing Grant Table — Source: HDB Website

Typically, the average monthly household income in Singapore for First-Timer Families (Assuming a couple who graduated from an University and working now) will be around $5000, this brings the grant amount to $40,000.

There are many permutations as to how this new Enhanced CPF Housing Grant will affect people. There will definitely be people who will compare between the old scheme and the new one. For Wealthdojo, we believe that it is better to well understand your own situation rather than compare your grant to everyone else. You could always consult the HDB Board to better understand your situation.

How will this affect Property Prices?

In Wealthdojo, we are a platform for people to make informed financial decisions. We want to understand how this Enhanced CPF Housing Grant will impact our financial journey as a whole. The below are my personal opinions and strictly my own.

There will be an increase in property prices. A grant makes buying the property affordable for a selected group of people. It doesn’t mean the price has dropped. Loosely speaking, we are not taking into account location and various other consideration for buying a property. An isolated trend table for Punggol shows that over the years, there has been an increase in price for BTO flats.
Enhanced CPF Housing Grant BTO Price Changes
Private Property Prices will increase. A simple chart like this show that there a simple positive correlation between private and HDB prices. Logically, if we compare a similar size HDB and a Private Property in the same area, the price of a private property will be higher.
Correlation HDB Private Properties

Insurance for Properties

Buying a property might be the biggest purchase for most people, it is also important to plan for insurance for your properties. (Read more: Insurance for Investors). In a simple nutshell, these are the 3 insurance that you have to get for your property.

Fire Insurance

If you are living in a HDB, it is compulsory to get a fire insurance. As the name suggest, it covers for fire BUT the scope of the coverage is very small. HDB fire insurance compensates for damage to the building (ONLY). As a general rule of thumb: If it wasn’t already there when you got your house keys, then it’s not covered by HDB fire insurance. That’s why we need to have content insurance.

Home Content Insurance

In a fire, naturally the items in the house will get damaged. This will include items like Air-Con, the fridge, the television, the sofa, the bed, etc. Not only do you need to purchase these items again, you will need to renovate the house again to bring it back to living conditions. Most home content insurance covers for renovation and also home content.

Mortgage Interest Insurance

Most people will get a loan from a bank to finance their property. For banks, they will need an assurance that you will be able to pay for the loan. That’s why they assess the loan amount from your salary. The biggest risk a bank (and yourself) will take is if a person is unable to finance the loan. What happens in an event of a critical illness (Read More: Life Insurers to change definition of Critical Illness) such as heart attack and it robs away the ability for a person to earn money? Would this be extra burden on your partner? The bank has the right to claim back the property leaving your family on the streets. Would you want that to happen?

In summary, there will be new changes in the future too. Some things will change while others will remain the same.

In Wealthdojo, we believe in bespoke financial planning. Whether it is money maximization, insurance or investing, we believe that everyone is different and the planning should be suited for you.

All opinions above are my own. Please view our disclaimer page to understand more.

I hope to nurture genuine relationships with all of my readers. Please feel free to contact me on my Instagram (@chengkokoh) or Facebook Page!

Now that you’ve read about learnt about how to benefit from the Enhanced CPF Housing Grant , I challenge you to read this article (Careshield Life: Disability Insurance Singapore) to push your understanding further!

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National Day Rally 2019: Retirement Impact

August 19, 2019

by Chengkok with One Comment General Economy Investment Accumulation

PM Lee delivered his National Day Rally 2019 on the 18 August 2019. He talked about many issues ranging from climate changes to Singapore economic changes. In Wealthdojo, we want to focus on the potential impacts on could happen to our retirement.

Here’s what we feel will affect our retirement and investing decisions as reflected in the rally.

Increase In Retirement Age And Re-Employment Age From 2022

Singapore’s mortality age has been increasing over the years due to advancement in medical technology. This means there are many Singaporeans who are living longer and maybe outliving their savings. Older Singaporeans whom have not adequately done their retirement planning in the past may welcome this change as this means they will be able to work until 65. (Many have their salary reduced and placed on contract basis when they reach the age of 62).

PM Lee announced that the statutory retirement age will be gradually increased from 62 to 65, while the re-employment age will be increased from 67 to 70. This increase will be done gradually starting in 2022, where both the employment and re-employment ages will be increased by one year, and the full increase will be completed in 2030.

Increase In CPF Contributions For Older Workers

CPF remains one of the most popular vehicle for retirement. While CPF has it’s own set of merits and demerits, it remains relevant to most people due to the nature of “forced saving”.

In July 2018, Mrs Josephine Teo, Minister for Manpower replied that about 53% of active members met their Full Retirement Sum in cash and pledge at age 55 in 2016. (Source: Parliamentary Question on CPF withdrawals at age 55) . We can interpret that there are 47% of Singaporeans/PR are unable to meet their FRS. There could be a number of reasons like property speculation, long period of joblessness or having a low paying job. I welcome the increase in CPF contribution for them as it is able to help them further fund their Retirement Account giving them a retirement sum at 65. That being said, everyone’s situation is different and this blanket policy will probably a certain group of people more than another.

(Read more: Make The Most Of Your CPF)

Property Investment Opportunities

About 9,000 housing units – both public and private – will be built on the site of Keppel Club as part of the future Greater Southern Waterfront (GSW), said Prime Minister Lee Hsien Loong.

We always want to look at the changes in the Singapore Landscape over the next 5 to 10 years. In this rally, we noticed the direction to be in the development of the GSW. (Read more: URA: Greater Southern Waterfront). We expect there will be a surge in interest in the properties in that area. There will be property investment opportunities. However, we also believe that a premium will be factored in for properties in that region.

National Rally 2019 Greater Southern Waterfront

Economic growth slowed significantly

Singapore’s economic growth may have slowed significantly this year but the current situation does not warrant stimulus measures just yet, Prime Minister Lee Hsien Loong.

To those that are investing in the Singapore economy, it will be best to remain defensive. This slow down is not new. Multiple economies around the world such as US, China, UK have reported reducing their economic growth projection and have been “repairing” their economies with respective stimulus. Being an small open economy and also a financial hub, Singapore will definitely be affected by slowdowns of global economies.

For the record, Singapore’s GDP projected to grow between 0% and 1% this year. (Source: Straits Times Singapore slashes growth forecast)

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Brief History of SARs, 2003

Making Sense of SARs: Some numbers

Situation of Wuhan Coronavirus, 2020

Making Sense of Wuhan Coronavirus in Singapore: Some Numbers

Brief Opportunity

Genting Singapore

SATS

Shangri-La Hotels and Resorts

EC World Reit

Oil and Gas

Straco Corporation

Songcheng Performance Development

Companies with high percentage of revenue in China.

Closing Note

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Economic growth slowed significantly

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