Self Care and Wealth Management

June 29, 2020

by Chengkok with 6 Comments General Economy Money Management Money Mindset Retirement

I was catching up with a friend wanting to find out how well he was coping with the COVID-19. I knew COVID-19 had a major impact to his job. His bonus was cut, his workload increased tremendously and he is praying that he would not have a pay cut.

“Fortunately, I still have a job.” He said with a bitter snigger. His facial expression was stiff as I looked at him over zoom.

Over the next 30mins, we chat on other things like where do we want to eat after all these is over, etc. Then, he mentioned.

“Have you been taking care of yourself? You know? Self-care. It is a difficult period of time. We should take care of ourselves.”

He then proceeded to show me a long list of things he had bought from Lazada, Shoppee, etc.

————————————————————-

If you have spent some time on Instagram, you might be familiar with the new trend of hashtags #selfcare #selflove. Most of the post feature beautiful young ladies enjoying themselves in a bubble bath with a caption similar to this.

“Just had to getting away for a while to take care of myself. #selflove #gratitude #blessed”

I smile as I can imagine their partners probably spend more than 2 hours taking 200 over photos just to make it look natural.

Self love is very powerful. In our Wealth Management Framework, we believe that Self-Love is necessary and vital in a person’s financial journey. However, Self Love was quickly corrupted by people’s narcissism and has became an excuse for indulgence. “Oh, why did I spend $3,000 on spa weekends last year? You know, self-care.” Meanwhile, their retirement account is doomed.

I’m not saying we shouldn’t spend money to have enjoyment. I just feel that it is not necessary a luxurious spa retreat or an over the top vacation (we can’t travel anyway now). To emphasize it again, spending money for self care is okay. I just feel there is another dimension to it.

Self love is not easy

Self love could be saving money for emergency. Self love could be going back to school to get your Masters. Self love could be reading a book to upgrade yourself. Self love could be letting a toxic friend go and not letting him/her affect your life anymore. Self love is getting yourself fit so that you won’t fall sick easily.

Financial Self Love is one of the hardest way to love yourself. I acknowledge that money adds stress to our life. That’s why we want to explore whether we can have it within our control. I believe that Financial Self Love isn’t about your net worth, but about taking control of your financial knowledge and, if possible, financial situation.

Financial Self Love could be…

Creating an emergency fund so that you can have a peace of mind when you need money.

Setting aside a budget for retirement and also for pleasure (Fun Goal).

Creating an adequate insurance program so that your loved ones can pay the mortgage, bills, even education costs, after you are gone or suffer from critical illness.

Learning how to invest so that you don’t make the mistakes so that you don’t need to work forever (Get Educated).

The list goes on.

Conclusion: It is okay to spend money for self love =)

Take care of yourself during this tough period. See you at another article.

No one will care about your money as much as you do.

In Wealth Management, it is important to Pay yourself first. Beware of scams. Before you invest in any company or popular investment opportunity, be sure to do your own due diligence. If you wish to learn more about investment, 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! Or subscribe to our newsletter now!

Can You Afford Cancer Without Insurance?

June 24, 2020

by Chengkok with 9 Comments Insurance Money Mindset

The Cancer War destroyed many families wealth management and robbed people of their loved ones for centuries until now…

Because of medical advancement, we have a second chance. Let’s see if we can afford cancer without insurance.

Cancer Statistics

39 People diagnosed with Cancer everyday
15 people die of Cancer everyday
1 out of 4 people may develop Cancer in their lifetime

In other words, we have around 25% chance of developing cancer in our lifetime (Source: Common Types of Cancer, Singapore Cancer Society). Let’s put some fun facts as a probability comparison.

Dying in a car accident in Singapore – 0.0148% (2016 Figure: Probability of Getting in a Car Accident in Singapore)
Dying because of a lightning strike – 0.000349% (Source: CNA Insider)
Getting hit by bird shit – 0.000975% (Source: Reddit Estimate)
Winning a TOTO Jackpot – 0.00000714285% (Source: Singapore Pools)
Developing Cancer – 25%

Enough said. So now I know the chances of developing cancer is high, what are the cost?

Treatment Cost

It really depends on what cancer we are talking about here. MOH now provide fee benchmarks and fee information for the treatments in public hospital and private hospitals. There are 3 main things that biopsy, surgery or treatment.

I have extracted the most common form of cancer in Singapore in a private hospital. (Data Extracted: 24 June 2020)

Breast Cancer treatment (conservation of breast, removal of cancerous growth with removal of underarm lymph nodes) will cost $23,423
Cervical cancer (female reproductive tract, scope of the cervix with removal of growth (<2am): $7,075 to $8,261
Colon cancer (lower abdomen, scope of large intestine for diagnosis with removal of growth (multiple or >1cm): $3,755
Prostate cancer (male reproductive tract, removal of entire prostate and surroundings): $53,326
Pancreatic cancer (upper abdomen, scope of bile duct and pancreatic duct with treatment): $1,412 to $2,984

You can find out more about MOH fee benchmark here.

The conclusion here is that the cost varies wildly and depends on the stage at which the cancer is discovered and the size of the tumor.

Outpatient Cost

The 3 common outpatient treatment for Cancer is Chemotherapy, Radiotherapy and Immunotherapy. Like treatment cost, outpatient cost also varies wildly.

In Singapore, the average cost of Chemotherapy is $1500 per cycle. It really depends on the stage of cancer to determine the number of cycle needed. Depend on the drugs used, an article from David mentioned an average of 2 chemotherapy session a month may cost up to $10,000 (Source: MOH New Highlights). Would you be prepared to pay $3000/month (average cost x 2 session) for chemotherapy?

The average cost of Radiotherapy ranges from $25,000 to $30,000. (Source: Precision cancer treatment expected by 2020). There is a new treatment called Proton Bean Therapy that is just being approve by MOH. The cost could go up to three times as much and require about the same number of sessions.

Immunotherapy is the most “expensive” method because it is one of the newer treatment available. It cost around $9000 per dose. If we assume that the dose is needed very 2 weeks, the total cost could be $234,000 per year. (Source: Immune System Unplugged: Releasing Cancer’s Grip on Immune Cells with Checkpoint Inhibitors)

Are you afford Cancer?

Given a typical medium income of $56,550, (Source: SingStat: Key Household Income Trend), the outpatient cost will easily wipe away a person’s annual salary or more. Most likely, they will be digging deep into their saving to afford cancer.

This also assumes that the person is able to continue working during cancer. There is a possibility that you might be asked to stop work to undergo treatment. This lost income not only impact the ability to afford cancer but also the ability to afford your current lifestyle to provide for your family.

What should you do?

The problem will still be there even if you don’t face it.

Firstly, check if you have adequate critical illness coverage and hospitalisation coverage. Follow up with your financial consultant or you can contact me if you don’t have one. Your coverage amount will be determined by your age, whether you have a family, number of dependents, etc.

Do it before 26 August 2020, After 26 August 2020, all critical illness policies in Singapore will have to follow the new definition as stated by the LIA.

Take Care and Stay Safe!

No one will care about your money as much as you do.

Critical Illness Definition Changes Aug 2020

Critical Illness Definition Change Aug 2020: Should You get CI Coverage now?

May 21, 2020

by Chengkok with One Comment General Economy Insurance Money Mindset

Have you been thinking of getting a Critical Illness (CI) Coverage for a while but haven’t done so? In Wealth Management, insurance is one key element of planning and we have talked about Life Insurers to change definition of Critical Illness in 2019. In 3 months time, there will be new definition for critical illness coverage. Will it affect you? Should you get a CI coverage now?

What’s happening?

Like it or not, it is happening. Life Insurers in Singapore will have to comply with the new set of critical illness coverage as set by the Life Insurance Association (LIA). Previously, the definition of the 37 critical illness was standardized so that the coverage is consistent across the industry.

This review on the common definitions is to bring the definition up to date and aligned with advances made in medical technology and medical practice as well as to address areas of ambiguity based on insights gained from the past five years of experience.

(Source: LIA 2019 Framework)

What are the changes?

In total, 21 of the critical illness definition will be changed while 16 remains the same.

Critical Illness Definition Changes Aug 2020 Table

Does this mean it is harder to claim in future?

After looking at the definitions, I believe there are pros and cons to the new definitions.

Pros

Those suffering from Thalassaemia Major or Haemophilia can now get covered under the HIV CI condition.
Viral Encephalitis: Previously, viral infection has to be the cause for it. Now, scope is expanded to include all causes, not just viral infection.

Cons

Stricter, more exclusions for Benign Brain Tumor, Coma, Stroke, Aplastic Anaemia, Heart Attack, and Major Cancers among other things.
The addition of ‘irreversible‘ to deafness, blindness, aplastic anaemia.

Personally, I believe the cons outweighs the pros because the more major cancer, heart attack and stroke have a higher occurrence rate in Singapore. (Source: Top 10 Conditions for Hospitalisation In Singapore). See point 2, 4, 6, 9.

Critical Illness Definition Changes Aug 2020 Top Causes of Hospitalisation

What should you do?

You have time. But, not long. After 26 August 2020, all critical illness policies in Singapore will have to follow the new definition as stated by the LIA.

Review your policies during these few months. Follow up with your financial consultant or you can contact me if you don’t have one.

Stay safe!

No one will care about your money as much as you do.

Should you buy DBS Group Holdings Ltd (SGX: D05) now?

May 16, 2020

by Chengkok with 3 Comments General Economy Investment Accumulation Money Management Money Mindset Stock Analysis

Should you buy DBS Group Holdings Ltd (SGX D05) now? $19 seems to be a popular price that people will talk about DBS Group Holding. In wealth management, investing in good companies are essential to build up the capital to achieve our financial freedom. This article will hold some of my thoughts I have regarding DBS Group and some of it will shock you. Is it a mistake or will we have regrets? (Read all the way down).

Is DBS Group a Good Company and Undervalued?

Should you buy DBS Group Holdings Ltd (SGX D05) now numbers — Should you buy DBS Group Holdings Ltd (SGX D05) now?

These are the numbers that I look for in a banking stock. You can find this numbers from the annual report of DBS Group. We want to analyse whether the bank is first a profitable and efficient bank.

To look at profitability, we want to look at the Net Interest Margin (NIM) to be as high as possible. Banks earns a spread by borrowing money from people like me and you and giving them out as loan. We also want to see non-performing loans (NPL) to be as low as possible. There will be people who will default on their loans given various situation, we want to see it as low as possible.

Next we want to see the efficiency of the bank in terms of operations and per dollar invested. We have used the cost to income ratio which we want as low as possible. A lower cost to income ratio means their expense is low as compared to the revenue. Return on equity (ROE) we want it as high as possible.

Personally, I think it is quite a good company based on these set of numbers.

The valuation is also attractive at PB 0.99. This means you are buying it at 99 cents for every dollar it is worth. On dividends, it gives a 6.95% dividends based on previous dividends.

Verdict

It really looks not bad isn’t it.

The Forgotten Track Record

As investors, we like to talk about track record. I realised that this only applies to numbers, valuations and also share prices. There are numerous things we forget and we are more forgiving and tolerant to these companies who have better numbers. Let’s talk about the forgotten track record that DBS Group has.

2020: Hin Leong Trading

DBS has the highest loan exposure to HLT at US$290 million, while OCBC and UOB are owed US$220 million and US$100 million, respectively. The sharp plunge in oil prices, along with the COVID-19 pandemic, had brought one of Asia’s largest oil traders to its knees. (Source: The Business Times: DBS, OCBC, UOB faced with over US$600m total exposure to Hin Leong)

The exposure is considered immaterial to DBS Group’s Profits.

2017: Energy Saga

DBS Group Holdings Ltd. reported a surprise drop in third-quarter profit as Southeast Asia’s largest bank boosted bad-loan allowances more than sixfold in an effort to deal with its problem lending to the regional oil and gas services sector. (Source: Yahoo Finance: DBS Profit Sinks as Bank Tries to Put Bad Energy Loans Behind It)

Allowances for bad assets of S$1.66 billion compared with S$261 million in the year-earlier period.

This would easily be blamed on the cyclical energy market when oil and gas services first got the worse hit.

2007: Lehman Brother Mini Bonds

Following the collapse of the Lehman Brothers, about 10,000 retail investors in Singapore lost all or a large part of their investments total-ling over S$500 million in structured investment products linked to the American investment bank. They were mis-sold these relatively high-risk products to investors, many of whom were the elderly and less educated. (Source: NLB: Lehman Brothers Minibond saga)

There are perhaps many more examples but forgotten with time.

The Way Forward

This section is my own personal opinion. While it may or may not contribute to the bottom line of DBS Group, I strongly believe it will contribute to a great brand which is largely intangible.

$500 minimum deposit of a fine of $2 will apply

I struggle to accept that DBS bank, our people’s bank have such a rule. The people who are most needy will be those with less than $500 as their minimum deposit. These people are from the lower income group and would need as much liquidity as they can get. I also struggle to accept that additional dormant accounts would cost the bank money. In my limited knowledge, I can only guess it will take extremely huge number of dormant accounts to really make a dent in the bottom line of the company.

Legacy Issues

DBS remains the bank to have the longest queue for its’ ATM or for bank tellers. I can only guess vast amount of paperwork that still continues to be done today. I’m also unsure of any technological advance in the company as we are only exposed to the mobile app and internet banking features which largely remains the same since 3 years ago.

Fintech

Fintech has disrupted lives around the world. I haven’t seen much in this space for DBS Group. The one that is most impressive on their website is was dated July 2018 for projects in 2017. (Source: Case study: DBS – the edge)

Negative Interest Rates

With the world moving towards negative interest rates, will we follow suit? Will our NIM will be affected in the future.

No one will care about your money as much as you do.

Before you invest in any company or popular investment opportunity, be sure to do your own due diligence. If you wish to learn more about investing, 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! Or subscribe to our newsletter now!

Are SIM Only plans really better than Phone Contract Plans in 2020?

May 14, 2020

by Chengkok with One Comment General Economy Money Management Money Mindset

During the M1 broadband outrage on 13 May 2020, I resorted to use my mobile data to attend a zoom meeting. In 2 hours, I used 1.86 GB worth of data. The little deer my heart started to leap around. I remember vaguely my mobile data limit is 3GB and this would have used up half of my data for the month. *panics*

(Read this if you need help during COVID19: A special message during COVID19)

During my wealth management journey last year, I have already converted to a SIM-Only plan which has 30 GB limit a month. Thank god.

As much as I wish that chart looks like my investment portfolio, it is not. Hahaha. Instead, I began to think about my current mobile plans to see whether I have “optimized” my decisions.

Are SIM Only plans really better than Phone Contract Plans in 2020?

The difference between a SIM only plan and a Phone Contract plan is simple.

In the SIM only plan, you do not have a contract. You pay as you go. You can cancel if you want. You are free to switch from telco to telco if you are unhappy with the service. The monthly bills tend to be cheaper. You do not get a subsidies on the phone you want to buy.

In the Phone Contract plan you have a contract for a duration. It is common to have a contract for 2 years. During this 2 years, you will not be terminate your contract unless you want to incur high fees. The monthly bills tend to be slightly more expensive than SIM-only. However, you get a subsidies on the phone prices.

The Assumptions

Like all comparisons, we need to have a few assumptions. In this case, we will be taking the iPhone SE 128GB (SGD$719) as a comparison and a M1 mobile plan with around 30GB data.

SIM only VS Phone Contract

In the SIM only plan, the total cost is $25/month. This works out to be $600 for 2 years. If we add the cost of the iPhone into the picture, the total cost will be $1319. It includes 30GB/month which is a decent data coverage.

In the phone contract plan, the total cost is $78/month. This works out to be $1872 for 2 years. Special note to the 42 GB of mobile data in the contract plan.

This means the contract plan is $553 more expensive than the sim only plan. Putting things into perspective, you can almost buy another iPhone SE 128 GB by not signing the contract plan. In my humble opinion, not a lot of thought has been given in the pricing for the contract plan. What a scam. (Actually, it is not a scam lah. It is Wealth Management)

Here’s another bonus for some of you who asked what will happen if you remove the add-on. In this phone contract plan, the total cost is $40/month. This works out to be $1250 for 2 years inclusive of the additional $290 for buying a “lower” plan.

This means this contract plan is $69 cheaper than the sim only plan BUT you get less than half the data and the 2 years lock in period.

The Verdict

We have used the iPhone SE 128 GB as a comparison because it is the latest phone in town and I believe there will be interest in this phone soon. The conclusion is that the SIM-Only plan is the clear victor in this scenario.

Personally, we feel that getting half our data and having a 2 years lock in period is not worth $69. This works out to be a saving of $2.88 a month over 2 years. However, if you only need the 12 GB of data and a new phone and don’t mind having a 2 years contract, contract plans might be more worth it for you.

We have not compared between Starhub and Singtel as we believe it would not be of further value add to the readers.

The price subsidies for phone set are nothing but an illusion in today’s context.

PS: This might not hold true for other phone models.

No one will care about your money as much as you do.

Wealthdojo

Posts in category: Money Mindset

Self Care and Wealth Management

Self love is not easy

Financial Self Love could be…

Conclusion: It is okay to spend money for self love =)

Can You Afford Cancer Without Insurance?

Cancer Statistics

Treatment Cost

Outpatient Cost

Are you afford Cancer?

What should you do?

Critical Illness Definition Change Aug 2020: Should You get CI Coverage now?

What’s happening?

What are the changes?

Does this mean it is harder to claim in future?

Pros

Cons

What should you do?

Should you buy DBS Group Holdings Ltd (SGX: D05) now?

Is DBS Group a Good Company and Undervalued?

Verdict