Seed Of Prosperity

Seed of Prosperity: Money Values for Children

I have a confession to make. In the last few weeks, I was creating a new website called Seed of Prosperity to talk about money values for children. As a result, there has been a lack of update on wealthdojo.

Seed Of Prosperity
Seed Of Prosperity

Why Children?

In wealthdojo, I have focused on the techniques and the navigation of personal finances in Singapore. In my conversation with many people this year, I realised that we aren’t doing as much as we can to have this conversation with our next generation. Consider the following:

  1. When was the last time you had a conversation about financial planning with your parents? (the conversation that you don’t have money / general complaining that things are getting expensive doesn’t count)
  2. When was the first time you actually seriously start to think about money?
  3. Was savings the only conversation with your parents that you had regarding money?

In our culture, it may be unnatural to have a conversation on financial planning with our parents (just consider if you ever discussed delayed gratification with them before). As a result, most of us start to seriously think about money only when we started working.

There is a late start for financial education in Singapore and I aim to change that in the years following with my new project Seed of Prosperity.

Why Money Values?

Why money values? While wealthdojo focuses on techniques, it dawn to me that there is something more powerful than techniques. Our beliefs and our mindset drives decision and without having a strong foundation in money values, it is very hard to achieve the result that you want.

Hence, the focus on Seed of Prosperity will be money values that parents can communicate effectively with their children. It will be activities that parents can do along with their children to equip their children with vital money values and habits. I believe that with such a foundation, these children will be able to achieve their financial freedom faster than us.

What will happen to Wealthdojo?

Wealthdojo will continue to write about personal finances in Singapore. The focus will still be on topics like CPF, SRS, insurance and investment that people can do to achieve their financial goals.

Final Thoughts By Wealthdojo

We hope you will be able to support Seed Of Prosperity as much as wealthdojo. We will be launching the first ever bilingual children book that focuses on money values. Please look out for it and support this new project if you can.

Wishing you all the best in the year ahead!

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

Individual Income Tax Season 2023 Singapore

Individual Income Tax Season 2023 Singapore

Individual Income Tax Season 2023 is here. The period that you can file your income tax will be from 1 March 2023 to 18 April 2023. There will be some changes this year which will only be affecting the top 1% of Singapore which I will be sharing below.

Individual Income Tax Season 2023 Singapore
Individual Income Tax Season 2023 Singapore

Introduction to Income Taxes

We pay a certain amount of income taxes to Singapore every year as contribution. They are used to fund public services, pay government obligations, and provide goods (think about the roads and traffic lights or even our military force) for citizens.

We are taxed on our income and it is a progressive tax nature. This means that as you earn more, you will taxed at a higher rate. This doesn’t mean you should relax and earn less. I would rather you earn more and get taxed more. It is a happy problem. (Would you like to earn $30,000 and be taxed $200 or earn $1,000,000 and be taxed $199,150? I will take the latter at any time)

Income Tax Rates 2023

Singapore Budget 2022 Effective Income Taxes
Singapore Budget 2022 Effective Income Taxes

As communicated in the Budget 2022, there will be a new income tax brackets after $320,000. Fortunately, it will probably only affect the top 1% of the population.

If you feel that you are paying for high taxes, you would like to know that there are certain contributions to SRS that can help to reduce your income taxes. If you haven’t done so, you might want to consider doing it for this year.

You might be on the No-Filing Services (NFS) and Auto-inclusion Schemes. This will make your life even more simpler.

Final Thoughts By Wealthdojo

Thank you for your contribution to nation building. Please always refer to the IRAS website for information related to tax issues.

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

6 Myths About Personal Finance to Stop Believing

6 Myths of Personal Finance to Stop Believing

6 Myths About Personal Finance to Stop Believing
6 Myths About Personal Finance to Stop Believing

There are so many things that we can’t believe anymore. Even the age old “Put your money in the bank is safe” no longer stand through with the collapse of Silicon Valley Bank over the weekend.

Making the correct decisions when managing your wealth is essential. To do so, you may seek advice from trusted individuals like family and friends. Unfortunately, they may be making crucial mistakes with their personal finance decisions too, leading you astray.

Here are six personal finance myths that you would want to stay away from.

#1: Financial Planning is for the wealthy

“I don’t have money to plan for the future.”

The mindset that financial planning is only for wealthy individuals is a myth many people believe. Whether you are rich or poor, it is important to take control of your finances and budget planning. If you have income and expenses, creating a plan to handle them should leave you with more to spend. In the past, barriers such as high brokerage fees made it challenging to pursue a financial plan. However, transparency and technology have made it much easier to get started in the current age.

As a general rule, purchasing every product and service you desire will quickly get you into financial trouble. Following a budget is vital when you earn or have a specific amount of money. While some individuals think that having a budget doesn’t allow you to have fun, the opposite is true. You just need to make compromises. For example, if you want to buy a new car, you may have to cut out on extra wardrobe items and restaurant outings over a defined period of time.

#2: Using Credit Cards Is Best During an Emergency

“I have 6x monthly income limit on my credit card. I should be fine”

While covering an unexpected expense using a credit card may be handy, this action can be highly detrimental. Credit card interest rates are often high. Even if you have a small debt, the interest included with each payment can slowly eat away at your funds. Creating an emergency fund for troubling times is a much better option, allowing you to pay for costs you weren’t expecting.

#3: Investing Requires a Lot of Money

“Buying Apple Shares ($148 on 13Mar23) is expensive!!”. (Owned the latest iPhone 14 SGD $1311anyway)

Investing and making money in the stock market are often associated with wealthy individuals. This is a common myth seen from the portrayal of Jordan Belfort in The Wolf of Wall Street playing on fuboTV. This movie shows Belfort’s extravagance and lifestyle fueled by his success in the stock market. While having a lot of money certainly opens up multiple avenues for investment, a lot of instruments allow the average investor to enroll – in some cases, starting with as low as $10.

You can choose your preferred instrument – be it fixed deposits, bonds, mutual funds or stocks – based on the money that you have and the risk that you are willing to take.

#4: Getting Into Debt Is Bad

“Should I take a loan for my Balenciaga T-Shirt?”

While it’s important to approach debt with caution, it can be a good decision. Borrowing money can be a handy tool to reach financial goals, such as funding a startup business or purchasing a home. While you’ll be paying interest on the amount you borrow, using debt for a positive financial pursuit can be highly cost-effective. However, using debt to finance a lavish lifestyle could lead you down the wrong path, forcing you to pay high interest. Choosing the appropriate debt tools is critical when borrowing, and the timing is also essential.

Different sectors of the economy have cycles where the values of assets go up and down. In the housing sector, if you purchase a home when values are high, thinking you can save money by deducting mortgage interest on your taxes, it may not be best. Renting allows you to wait for lower home prices. Owning a home can be a dream for many individuals. However, purchasing at the top of a cycle can become a nightmare if you have to pay high installments for an extended period. Choosing the appropriate time to get into mortgage debt can be vital if you want to benefit.

#5: Paying Off High-Interest Debt First Is Best

“Which credit card debts should I pay off first?”

If you’re following mathematics, paying off debt with high-interest rates first will lower the amount of fees you pay quicker once you close out these types of debts. While this action is a good approach, it may take a significant amount of time, making you feel frustrated.

I have found that it is helpful and motivating to pay off accounts containing a small debt (anything less than $1000) first. Once you knock a few out, you’ll have fewer accounts to deal with and can focus on paying debts with the highest interest rates.

#6: Retirement Planning Can Be Done Later

“I will plan for retirement when I’m 65”.

Another common myth relating to personal finance is that retirement planning is usually completed later in life. While starting a retirement account may be the last thing on your mind if you’ve recently graduated from college and started a new job, it can be the best time to begin this pursuit. Saving for retirement early allows you to accumulate wealth over a larger number of years. Doing so can have a significant impact on the money you have to spend when you retire.

Final Thoughts

Don’t let these myths get into your way of financial success. Discern between the noise and what make sense to you.

March Forward!

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

CPF Changes 2023 Budget Highlight Impacts

CPF Changes 2023 Budget Highlight Impacts

CPF Changes 2023 Budget Highlight Impacts
CPF Changes 2023 Budget Highlight Impacts

In Singapore’s Budget 2023, Deputy Prime Minister and Minister for Finance Lawrence Wong announced the changes in CPF moving forward. He have highlighted 5 changes that will impact Singaporeans. In this article, I will give some insights on the changes and how it will impact your journey to retire confidently.

Increase in monthly CPF salary ceiling to $8000

This is the most talked about among my peers as I guess this impacts them the most. There will be 4 years of adjustment (until 2026) to realised the full impact of this increase. The annual salary ceiling of $102K will not be changed for now.

CPF Changes 2023 Budget Highlight Impacts CPF Monthly Salary Cap
CPF Changes 2023 Budget Highlight Impacts CPF Monthly Salary Cap

You will feel this impact if you are earning between $72,000 to $102,000 annually. There are 3 obvious impacts from this change. Firstly, our take home pay will be lower. Secondly, our total CPF contribution will be higher. Thirdly, our overall package will be higher.

CPF Changes 2023 Budget Highlight Impacts CPF Monthly Salary Cap Difference
CPF Changes 2023 Budget Highlight Impacts CPF Monthly Salary Cap Difference

This will directly raise our ability to fulfill the Full Retirement Sum (FRS) as there will be more contributions. In 2021, 66% of CPF members have hit their Basic Retirement Sum (BRS). While this is a good sign, this will increase the number of people hitting BRS or even FRS.

If we were to go one step deeper into the analysis, this might be the first of many steps to address prolong inflation. As we see the prices of goods and services increase in the last 2 years, our current BRS / FRS may not be able to allow people to retire with confidence. By increasing the monthly salary cap upwards to $8000, this will give some leeway to increase the rate of increase of BRS / FRS in the years to come so that there is enough CPF monies to allow you to retire with confidence.

Senior Workers Initiative

Increase in CPF Contributions

There will be another increase in CPF contributions for those that are age 55 to 70. The first two steps of increases took effect on 1 January 2022 and 1 January 2023 (Read More: 4 Things From Singapore Budget 2022 That Will Affect You and Me). The Government will continue to raise the senior worker contribution rates in 2024 with a long-term target to have the full increase rolled out by 2030.

RSS (Retirement Sum Scheme) Increase Payout

From June 2023, the minimum payout from RSS will increase from $250 to $350 per month.

Easier to receive CPF-Life Payouts from CPF-OA and CPF-SA

If you have not achieve FRS and are still working (getting CPF contributions), CPF board will automatically annuitised your CPF-OA and CPF-SA for higher CPF LIFE payouts.

Some of these changes are not new. They have been around for a while and we are beginning to see the implementation of it now.

 

Final Thoughts

There are also other initiatives that are welcome. I personally like the part where there will be extra CPF grant for eligible first-time buyers to buy resale HDB flats. This will relief some pressure in the property market and at the same time give families an affordable and more “immediate” home.

Do you like the new changes? Let me know.

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

11 Classic Movies That Investors Should Watch

11 Classic Movies That Investors Should Watch

Chinese New Year is coming along the corner. This means it is perfect time to catch up on some movies that you always have been wanting to watch. Here are 11 movies that investors should watch that will keep you occupied during the Chinese New Year.

11 Classic Movies That Investors Should Watch
11 Classic Movies That Investors Should Watch

Trading Places (Rated R)

Trading Places is a hit 1983 comedy, directed by John Landis, featuring Eddie Murphy and Dan Aykroyd. Aykroyd is an investment broker while Murphy hustles to make money on the streets. They end up switching places on a bet. In the end, they team up to use their brain power to make a bundle in investments. It’s an enjoyable escape for any movie viewer that might plant seeds of inspiration.

Stream it on Prime Video, Redbox, Apple TV, and more.

The Wolf of Wall Street (Rated R)

If you’re looking for a true story that is also a cautionary tale, catch The Wolf of Wall Street. Leonardo DiCaprio plays real-life stockbroker Jordan Belfort in this 2013 film directed by Martin Scorsese. It follows his triumphs on Wall Street before his fall into corruption. Beware of where greed can take you when watching this movie that is.

**This is a wealthdojo’s favorite.

11 Classic Movies That Investors Should Watch Wolf Of Wall Street
11 Classic Movies That Investors Should Watch Wolf Of Wall Street

Stream The Wolf of Wall Street on Amazon Prime, DIRECTV STREAM, Showtime, and more.

American Psycho (Rated R)

Christian Bale is best known for his portrayal of the superhero, Batman. However, go back to the year 2000 to catch him in American Psycho, directed by Mary Harron. In this film, Bale is an investment banker by day. At night, he’s secretly a serial killer wreaking havoc on the city. The movie gives viewers a peek at what life is like for people who wheel and deal in investments where the stakes are high.

Stream it on DIRECTV STREAM, HBO Max, and more.

Rogue Trader (Rated R)

Rogue Trader, directed by James Dearden, follows Ewan McGregor on a journey as he portrays Singapore trader, Nick Leeson. He balanced on a tight wire of risk management. In the end, he caused the collapse of Barings Bank, a stellar merchant bank that ranked at the top on a global level.

Watch this 1999 film on Amazon Prime.

Wall Street (Rated R)

When you think about the stock market, you can’t help but relate it to Wall Street in New York City. This has been the heart of the financial district for the United States. The stock exchange dates back to 1792. The 1987 movie Wall Street focuses on the ambitious stockbroker played by Charlie Sheen. Directed by Oliver Stone, it’s educational for anyone who wants an inside look at analysts, brokers, and traders.

Check it out on Hulu + Live TV, Apple TV, Amazon Prime, and more.

The Wizard of Lies (Rated TV-MA)

The Wizard of Lies stars Robert DeNiro as the infamous Bernie Madoff, a businessman who turned out to be a fraud. Director Barry Levinson exposes Madoff for his criminal activity on Wall Street as he took money from investors to increase his own wealth. He ended up going to prison.

Catch this 2017 film on HBO Max, Amazon Prime, Vudu, and more.

Margin Call (Rated R)

If you’re wondering what happens behind the scenes in investment banks on Wall Street, watch Margin Call. Directed by J.C. Chandor and starring Zachary Quinto, it will give you a chance to watch 24 hours on the edge of your seat as a bank approaches the disaster of the financial crisis that struck in 2008.

Stream Margin Call on Netflix, Prime Video, and more.

The Big Short (Rated R)

The Big Short, directed by Adam McKay and starring Ryan Gosling follows a group of investors in the middle of the 2000s who wagered on the housing market before it was ready to crash.

**This is another wealthdojo’s favorite.

11 Classic Movies That Investors Should Watch The Big Short
11 Classic Movies That Investors Should Watch The Big Short

Watch it on Amazon Prime, Disney Plus, and more.

Quicksilver (Rated PG)

Quicksilver is an 80s film starring Kevin Bacon. Directed by Thomas Michael Donnelly, it follows Bacon who is a stock trader who loses it all. He starts over as a bike courier, gets mixed up in frightening intrigue, and makes his way back to the market. It’s a great tale for anyone who needs to have a new beginning.

Watch it on Tubi, Vudu, Apple TV, and more.

Working Girl (Rated R)

Working Girl, directed by Mike Nichols and starring Melanie Griffith, is a film that follows one woman’s journey from secretary to the top of the business ladder. Griffith has a brilliant idea stolen by boss, Sigourney Weaver. Griffith trades places with her for a while and launches her own career. Learn how anyone can succeed in the business world when you watch this flick.

Catch on Apple TV, Amazon Prime, and more.

Glengarry Glen Ross (Rated R)

If you want to see what’s really going on in the real estate world, catch greats like Al Pacino, Jack Lemmon, and Alec Baldwin in Glengarry Glen Ross. This film directed by James Foley paints a picture of corruption.

Watch it on Hulu, Amazon Prime, and more.

Final Thoughts

Let’s brighten the mood this Chinese new year!

These are tough times for financial markets. Everyone has had to tighten their belts and look for ways to spare their wallets. Inflation keeps going up with no end in sight. There’s no better moment to focus on investing to give yourself some peace of mind. If you know how to sock money away or make your current savings grow, it will help you to weather any storm.

Pop some popcorn, pour yourself a drink, and give yourself a day to line up your pick of films that show you what investing is all about. They will either inspire you or tell you what not to do when investing.

 

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me