Top 3 Money Wasters At The Supermarket.

Top 3 Money Wasters At The Supermarket.

During the Lunar New Year, I was spending more time in the supermarkets to buy my Chinese New Year goodies. As I am price sensitive in nature, I cannot help but noticed that there are many items that are “extremely” marked up in the supermarket. While this article is probably going to minimally affect your Wealth Management journey, I hope this awareness can save you hundred of dollars in the future.

Top 3 Money Wasters At The Supermarket.

Top 3 Money Wasters At The Supermarket. Source

 

#1: Herbs and Spices

Herbs, Spices and Seasonings are the most common culprits. If you are like me, I tend to cook in the spur of the moment. As most of us do not really have the full set of herbs and spices at home, we head over to the supermarkets to purchase our herbs and spices which we may only use once/twice.

In the supermarket, prices of herbs and spices range between $3 to $10 from the common pepper to saffron. We probably would have bought a few of those and it was left on our shelves ever since.

Top 3 Money Wasters At The Supermarket Herbs And Spices

Top 3 Money Wasters At The Supermarket Herbs And Spices

The long story short, these spices can be easily found in the local markets such as Chong Pang Wet Market. Most of the spices are available and can be bought at $1 per packet.

Save yourself some money and head down to your local markets if you have a cooking spur.

 

#2: Pasta Sauce

If you are like me (again), the first dish we learn to cook and be impressed with ourselves is the pasta. After graduating from cooking maggie noodles, cooking pasta has a more “atas feeling” to it. Throw in some sausage now!

Similarly, pasta sauce cost between $4 to $8 a jar depending on which brand you decided on. Health aside (read the labels, they contain a lot of added sugar and salt), I learnt from a Italian chef in my travels that pasta sauce can be easily made with diced tomato, olive oil, garlic and salt. Diced tomato cost around $1 and if you are into pasta, this trick is going to save you your health and your money.

Top 3 Money Wasters At The Supermarket Pasta Sauce

Top 3 Money Wasters At The Supermarket Pasta Sauce: Source

 

#3 This Refreshing Beverage

It might be forgivable if you need to buy this overseas. But if you are in Singapore, drinkable water is everywhere. I know it is for convenience that people just take water off the shelves. All it takes is your water bottle and you can bring whatever you need out. Some shopping malls (like NEX) do have water coolers for you to top up.

Enough nagging.

Top 3 Money Wasters At The Supermarket Water

Top 3 Money Wasters At The Supermarket Water. Source.

Final thoughts by Wealthdojo

Save yourself some money. There are more things you can do with the money that you have saved. You can either impact the next generation, accumulate your emergency funds or the good old self care.

We wish you a Happy Lunar New Year!

 

 

Join my Telegram Channel for a tip a day! In Wealthdojo, we dedicate a small amount of time daily for learning new things. Continuous learning is one of the greatest secrets of success.

For those of you who want to turbocharge your journey, contact me at chengkokoh@gmail.com. I would like to hear from you what your experiences are currently and from there, we develop a plan specially catered just for your journey.

We wish you all the best! Stay Safe and Take Care!

Chengkok, Sensei of Wealthdojo.

What To Do With Your Children's Hong Bao Money

What To Do With Your Children’s Hong Bao Money?

Happy Lunar New Year! Wishing everyone here good health and may your wealth multiply in the years to come. Hopefully, the last 4 days have been one where you have been giving/receiving or your child has been receiving hongbao. One common question that I go from parents with regards to financial planning is what they should do with the money. Most of them are keeping it for their children as emergency funds. This is a good initiative. That being said, is this an opportunity to share money lessons with your children?

What To Do With Your Children's Hong Bao Money

What To Do With Your Children’s Hong Bao Money (Source)

 

Your intention sets the tone

What do you want your child to learn from receiving the hongbao? Is it gratitude? Is it charity? Is it spending? Is it emergency funds? Your intention sets your child’s tone. By default, people will stick to the easiest thing of all: Not doing anything. This is precisely why most parents are keeping their children’s money as emergency funds. (PS: I’m not saying that emergency funds is a bad thing. It is also important.)

However, as the child do not have much ownership of the funds, they do not really learn from that concept. To them, it is their parents are keeping their money for them.

So what can you do this year to inspire your children to take charge of their money. This may or may not be applicable and felt by you depending on your relationship with money. Here are some suggestions.

 

Happiness of Spending Money

Wait a minute. A finance blog asking me to spend money? Yes. It came to my attention that “saving money” or “spending money” has became such a pain for people. As our education on money commonly involves parents screaming at us to save money (or that they don’t have money), it has become very hard for some people to spend mentality. Each time you spend, you will feel a pinch when you see your bank balance drop. That’s commonly known as the poverty or scarcity mindset. Eventually, you might grow up with enough money in your bank but feeling miserable that you don’t have enough.

What To Do With Your Children's Hong Bao Money Spend It

What To Do With Your Children’s Hong Bao Money Spend It

As parents, one of the best thing you can do for them is let them buy something that they have already wanted for a long time. Take 20%, $30 or whatever amount (be reasonable) in their hongbao money and bring them to the shopping center. Let them buy whatever they want. Let them feel the happiness of what money can buy. You will be surprised that some children will buy books, stationaries and of course toys. You can take this chance to introduce to them the 4 Quadrants Shopping Guide.

Let them take charge of their finances, the earlier they do, the more responsible they will become.

 

Delayed Gratification

To balance it up with spending, delayed gratification is next. A simple game you can play with your children is called The Marshmallow Test. I won’t explain too much here. Wait this hilarious video on how children wrestle with waiting to eat a marshmallow in hopes of a bigger prize (more marshmallows).

In finance, the timeline would be longer than this test. The intention is to get the children to save their hongbao money for a longer period of time so that they can get back more at a certain age. This could be done by a simple endowment plan or just Singapore Government Bonds that matures after a set period. When they receive the money after xx years, you can calculate with them (do it with them) how much they have put in and compare it to how much they have received. This can be done with your financial advisor.

 

Investing Lessons

This opens up many lessons for young children. You can share with them about volatility, about index (example if you invests in a Country ETF), about companies (example: when apple makes money, you “make” money too), about value or about growth.

One of the easiest way is to invest in companies that they already know. For illustration, my example will be SBS Transits.

Disclaimer: Not a buy/sell recommendation here.

For children, they probably will be familiar with certain products such as the IPhone, Bus services, Netflix etc. When you invest their money (they can only open a brokerage account when they are 18) for them, they get to see if their money grows in terms of capital appreciation or dividends. You can consider investing for them once a year as a dollar cost averaging approach for them to build up their portfolio.

For those of you would like to have something simpler, consider investing into country ETF like the STI Index, China ETF or S&P500. When the particular country does well, they are able to see the value of their investment grow as well. Similarly, do consider a dollar cost averaging approach for your children and invite them to ask questions. This is a great opportunity to for your children to learn about investing either with yourself or your trusted financial advisor.

What To Do With Your Children's Hong Bao Money Investing

What To Do With Your Children’s Hong Bao Money Investing (Source)

Final thoughts by Wealthdojo

I cannot imagine how much of a head start your children will have if they start learn these money lessons as some adults take decades to learn these. Let me know what you guys think in the comments below.

We wish you a Happy Lunar New Year!

 

 

Join my Telegram Channel for a tip a day! In Wealthdojo, we dedicate a small amount of time daily for learning new things. Continuous learning is one of the greatest secrets of success.

For those of you who want to turbocharge your journey, contact me at chengkokoh@gmail.com. I would like to hear from you what your experiences are currently and from there, we develop a plan specially catered just for your journey.

We wish you all the best! Stay Safe and Take Care!

Chengkok, Sensei of Wealthdojo.

Should You Invest Your Emergency Funds

Should You Invest Your Emergency Funds?

Interest rate in the bank is at the all time low. The time where you are able to get 2% per annum in high interest account is over. With the market at all time high, one question I get is if you should invest your emergency funds?

Should You Invest Your Emergency Funds

Should You Invest Your Emergency Funds

“The interest in the bank is so low. I should use the power of compounding and invest in the stock market”.

This is the current narration in Singapore right now and I don’t blame them. Most of us are literally looking at our money stagnant. If you are like me, you might feel frustrations keeping the money in the banks which is “not doing anything”. Here is a quick introduction of compound interest.

 

Compound Interest

Let’s assume that we have $50,000 that we are keeping as emergency funds. We will be using the following numbers for our illustration.

The S&P500 10 years historical returns: 13.6%

The STI 10 years historical returns: 1.97%

Current OCBC Account EIR (Salary Only): 0.7%

Should You Invest Your Emergency Funds Comparison

Should You Invest Your Emergency Funds Comparison

As you can see on the above future value formulation, the difference is simply ridiculous on a 30 years time horizon. If you have invested the $50,000 in the S&P500, you would have gotten $2.29 million (think about that for a moment). If you invested in the STI, you would have got $89K and if you just leave it in your multiplier account, you would have gotten $61K.

How is it not tempting to invest your emergency funds?

 

So why not invest and keep it as cash?

In life there are many what ifs, that’s the reason why you buy insurance in the first place. By having an emergency fund, you are preventing your life from being a roller-coaster. There are certain things that are unpredictable and could affect your family drastically.

If you desperately need cash then and if the market is NOT in your favor. That would mean that you will need to take a loss without giving it time to bounce back. Ask yourself, do you want to sell at an unfavorable time?

Should You Invest Your Emergency Funds and Sell Here

Should You Invest Your Emergency Funds and Sell Here

Some reasons to have emergency funds are job loss, medical emergencies (especially with the changes in the hospital plans: Co-payments), your family member’s medical emergencies, car repairs or home repairs.

“You will never know when you need the money”

 

Your emergency fund is not designed to be a wealth builder

Not everything is designed to be a wealth builder. Sometimes you need the liquidity as a “personal insurance policy” for yourself and your family. I know some that uses credit cards (which might be suitable credit card for emergency) to design their emergency funds, but that’s another topic all together.

 

Final Thoughts By Wealthdojo

Your emergency fund is not designed to be a wealth builder. For those that wish to read about how I spend my money, you can read one of my best article: The Ultimate 4 Quadrants Shopping Guide Especially If You Are 28 and Older.

Till next time!

 

For those of you who want to kick start your Wealth Management journey in 2021, why not consider joining my telegram channel?

Join my Telegram Channel for a tip a day! In Wealthdojo, we dedicate a small amount of time daily for learning new things. Continuous learning is one of the greatest secrets of success.

For those of you who want to turbocharge your journey, contact me at chengkokoh@gmail.com. I would like to hear from you what your experiences are currently and from there, we develop a plan specially catered just for your journey.

We wish you all the best! Stay Safe and Take Care!

Chengkok, Sensei of Wealthdojo.

Open Electric Market Singapore

2021 Open Market Electricity Cost Saving Guide

In April 2018, Singapore decided to open up the electric market to allow retailers to provide electricity to households. There are cost savings yet the adoption rate wasn’t very high. In June 2019, around 34% of household consumers have made the switch. In Oct 2020, 48 per cent of all households have switched to a retailer. This means that there is still >50% of household that have not made the switch.

If news of this haven’t reached you, let this year be a cost saving one for you.

Open Electric Market Singapore

Open Electric Market Singapore

 

Some Background

Since 2001, the Energy Market Authority (EMA) has been opening up the retail electricity market to competition. This is to increase competitiveness and also give more choices to consumers. It is for you to choose what make sense for you.

 

Some Assurance

There are some rumors out there which I would like to put to rest (especially for point 3). Changing to a retailer doesn’t mean that your electricity will be “unstable“. SP Group will continue to deliver to you.

  1. It is not compulsory to switch (No one is forcing you but I will explain why it might be better)
  2. There is no deadline (You can take as long as you want to consider. But please don’t do that)
  3. Regardless of who you buy your electricity from, your electricity supply will stay the same. This is because SP Group will continue to operate the national power grid and deliver electricity to everyone.
  4. If you are eligible for U-Save rebates, you will still be able to use them to offset your electricity bill after switching to a retailer.

 

What can I choose from?

To make it simple, there is only ONE website for you to go to. Everything ranging from price comparison (I know you are looking for this) to the retailers profile can be found here.

Open Electricity Market 

Step #1: Find your Average Monthly Consumption

To see what is best suitable for you, just find out what is your Average Monthly Consumption (in kilowatt-hours, kWh) from your current SP bills. I will be using 300 kWh for illustration purposes.

Step #2: Choose between Fixed Rate VS Discount Off the Regulated Tariff

Choosing this is akin to choosing between Sim Only VS Contract Mobile plans, there is no right answer except which system you prefer.

OEM Fixed Rate

OEM Fixed Rate

Fixed rate is rather simple to understand. You would be paying the same rate for the next XXX years no matter how much the regulated tariff were to change. If you are someone who likes the consistency of bills, this might be suitable for you. There will be times you are paying higher than the regulated tariff but there will be times you are paying lesser than the regulated tariff.

OEM Discount Off Tarrifs

OEM Discount Off Tariffs

Discount off tariff just means a simple percentage discount off the current regulated tariff at that moment of time. A key risk to this is simply when the regulated tariff keeps increasing, your bills will be increasing as well. Looking at the trend of tariff, it seems to be coming down. As 95% of Singapore’s electricity is produced from natural gas, I leave it up to you to think of the future trend of the tariff.

Regulated Tariff

Regulated Tariff

 

Step #3: Select Your Duration

Plans comes in 6 months, 12 months, 24 months. For those that are planning/considering to sell your houses in the next few months, I would suggest the shorter period. For those that will be staying for a while, especially those who are servicing your MOP (minimum occupancy period), you can consider the longer term period.

Like step #2, there is really no “correct” answer to this except which makes sense to you at this period of time.

 

Step #4: Select The Retailer

By now, you would have the retailer. For pure illustration sake (using 300kWh), you can see that there will be cost saving either from the Fixed price plan (~20% discount) or the Discount Off Tariff (23.6% discount). I estimate a cost saving of $400 for 2 years which is around the price of 2 Omakase Dinner with a partner.

Open Electricity Market Comparison

Open Electricity Market Comparison

Final Thoughts By Wealthdojo

Start your 2021 right, some cost savings will go a long way. For those that wish to read about how I spend my money, you can read one of my best article: The Ultimate 4 Quadrants Shopping Guide Especially If You Are 28 and Older, and how to save money on big ticket purchases

Till next time!

 

For those of you who want to kick start your Wealth Management journey in 2021, why not consider joining my telegram channel?

Join my Telegram Channel for a tip a day! In Wealthdojo, we dedicate a small amount of time daily for learning new things. Continuous learning is one of the greatest secrets of success.

For those of you who want to turbocharge your journey, contact me at chengkokoh@gmail.com. I would like to hear from you what your experiences are currently and from there, we develop a plan specially catered just for your journey.

We wish you all the best! Stay Safe and Take Care!

Chengkok, Sensei of Wealthdojo.

2021 New Year Revolution

Start a Financial Revolution Not Resolution in 2021

It is 2021. I find it annoying that there are still tons of articles out there will tell you to write down New Year Resolutions such as paying off debts, spend less than you earn, set a budget, drink less Starbucks etc. It is 2021. You already know that. In the new era, it is not about finding information. It is also not just about finding the right information (6 Steps Wealth Karate). In the new era, it is making use of the right information easily.

Some of readers have shared with me they fall short of their 2020 financial resolution because they have the lack of clarity or strategy. I wish to take this one step deeper. It is not that you did not know what to do. It is also not that you did not know how to do. However, psychologically it is not easy.

In this article, I will be writing how to start a financial revolution so that you can create the right environment to win psychologically.

Now, all this can only be done after done this: You can only start 2021 properly after doing these 3 things. Start here first.

 

2021 New Year Revolution

2021 New Year Revolution

2021 New Year Revolution. Photo from Huffpost.

To put yourself in the right environment, you need to first understand yourself. I summarized this by a quote that I frequently used.

There are three things extremely hard: steel, a diamond, and to know one’s self. ~ Benjamin Franklin

After understanding yourself, then you can create the right environment for success. You want to create a system that is psychologically easy to win. Here are 4 ways to put things in your favor psychologically. I bet you will not be able to find this easily elsewhere.

 

#1: Set Weekly Budgets Instead of Monthly Budgets

Ever wonder how we could save so much when we were students but not now? The trick is that most of the students are given a weekly allowance instead of a monthly one. When students then track their budget on a frequent basis, this creates a saliency effect. The more we noticed something, the more we are aware about it, the more we will review it.

For majority of us, we are now following a monthly budget. We don’t review it as often and so become surprised when we overspend during the 3rd or 4th week of the month. If budgeting is an issue for you (psychologically), set weekly budgets.

If you are planning for big ticket items, you can consider using this to help you. If you have spending issues, do read our Ultimate 4 Quadrants Shopping Guide.

 

#2: Audit Your Finances

Just like teachers marking the examinations paper for students, or MAS checking the quality of consultant’s advice, we feel a certain pressure and would want to make sure that our work is correct. It is the same for finances. It has came to my attention that most people don’t audit their finances at all. This means we will not know if we are on the right track when it comes to finances.

Auditing your finances is very simple. Just like a teacher marking each question, ask yourself if an expenditure is reasonable. Notice that I mentioned reasonable rather than “correct”.

For example, one of my friend have been subscribing to Spotify for $9.99 a month. He initially subscribed to Spotify because he wanted to listen to ads-free music on the way to work (I think that’s pretty reasonable). However, in March 2020 he has started to worked from home and he realised he has forgotten about it and is continuing to pay for Spotify but have not been using the service for the past 7 to 8 months. He has now stopped the payment but will be taking it up again when he needs to travel to work again.

I recommend you to audit your finances once every half a year. Spot those that are “unreasonable”. They could help you save a lot in the long run.

Financial Revolution 2021 Audit

Financial Revolution 2021 Audit: Source: CIA

 

#3: Allocate More

Do this only after you have already prepared your emergency funds. After that, yes. Allocate more.

It is very natural to feel happy when you see your bank account increasing. However, you will only realised the effects of inflation after many years. I strongly recommend you to allocate more when you have the opportunity. Whether it is an insurance policy, an endowment policy, an investment policy or buying into stocks or property, I encourage you to add more when the time is right.

To psychologically help you, you can employ certain tools such as regular saving plans to deduct a similar amount every month. This automation will help you allocate more and yes be on your journey to financial freedom.

 

#4: Sell Things That Are New That You Don’t Want

Look around your house right now, I believe that there will be some items that have been there sitting in the cupboard for a while. Be it a gift from a friend or a book that have not been touched or a lucky draw that you have won, there will be some item that has been around but have not been used.

Take this opportunity to do some spring cleaning and make some money. Put it on carousel. You will be surprised at how much money you can make out of your own room.

Before selling them, ask yourself 3 questions.

  1. Have you used it for the last 3 months?
  2. Will you use it for the next 3 months?
  3. Does it have sentimental value?

If those answers are no, those items will not be missed. This is where I personally sell my own items. Check out my Carousell items to give yourself an idea.

 

Final Thoughts By Wealthdojo

Don’t start a resolution, start a revolution! If you haven’t been successful in your financial journey, just pick one of the above and commit to it for the next 3 months. I assure you that you will look back at 2021 and be proud of yourself.

For those of you who want to kick start your Wealth Management journey in 2021, why not consider joining my telegram channel?

Join my Telegram Channel for a tip a day! In Wealthdojo, we dedicate a small amount of time daily for learning new things. Continuous learning is one of the greatest secrets of success.

For those of you who want to turbocharge your journey, contact me at chengkokoh@gmail.com. I would like to hear from you what your experiences are currently and from there, we develop a plan specially catered just for your journey.

We wish you all the best! Stay Safe and Take Care!

Chengkok, Sensei of Wealthdojo.