3. Recommended - Accidental Insurance

Here's why I recommended Accidental Insurance:

• I recommends accidental insurance for those people that are currently not holding a full time job that gives you such coverage. This is an important policy be it housewife or children, etc as it will cover our bills in the event of accidents that might occur in unforeseen events:
• Accidental Death
• Accidental Medical Expenses (this is good when it comes to treatment that doesn't requires hospitalization, usually unless it's major accidents, the chances of staying in hospital due to accidents may not be very high, which means, your normal medishield may not be able to cover such bills)
• Minor accidents includes but are not limited to falls, sprains, non-hazardous sports injuries, cuts, scalds etc.
  
• Food Poisoning (Medical bills for such event is rather high especially if it happens at night and you mostly will visit either hospital emergency department or 24 hours clinic.)

Let's continue on Travel Insurance portion in the upcoming post. :)

2. Recommended - MediShield Insurance

Here's why I recommends MediShield Insurance:

• Medical Shield Plans are good as you can pay for the plan using your CPF Medisave account, of which the money is not really yours as you can only use the money in your medisave for things like medical bills, MediShields etc and you can never withdraw it anyway. Only your kins get the money in the event that you passed on.
• It's recommended that you also get the MediShield rider that comes with it as it helps to either cover 100% of your hospitalization bills or at least the main bulk of your hospitalization bills so that you only pay a fixed amount of the bill. (See my MediShield article for more info)
• Please take note that in order to make a claim, you need to at least stay in the hospital for at least 8 hours except for day surgery.

The following topic will be on Accidental Insurance.

1. Recommended - Term Insurance

Here's why I personally recommends Term Insurance

• [Buy Term and Invest the Rest] If I can set aside $100 - 200 / mth for insurance cum investment, I'll prefer to get a term insurance with critical illness coverage (add-on) at least till age 65. The cost now may be higher than short term 5 / 10 years plan but in the long run, it's more value for money. If possible, I'll love to get a term insurance plan that coverage till age 99 so that I know that I won't need to worry for the rest of my life. Then I'll use the rest of the money to invest in stocks and shares or even property. As the best possible returns actually comes from stocks or property investment, provided you know how to invest in them. If you are not sure about how to invest in that, you may want to educate yourself. Alternatively, you can also invest in mutual funds / unit trust using the balance of the money.
• If possible, get a female / male specific rider (add-on) to protect yourself in the occurrence of gender specific illness.
• As for how to have invest the rest of the funds that you are willing to set aside, just keep it in an account and invest in your desired investment every time you have about $1000. For unit trust investment, after the 1st $1000 is invested, you should be able to set a monthly or quarterly investment amount for automated investment. 

In my next post, I'll be sharing about MediShield Insurance.

4 Types of Insurance I Recommend

Here's the type of insurance I personally recommends:

1. Term Insurance
2. MediShield Insurance
3. Accidental Insurance
4. Travel Insurance

As for the amount of coverage recommended, it depends on how much you would want your family to get to continue with their life and yet be able to take care of you and pay off all the medical bills and other expenses. General guideline is about 2 years worth of your monthly pay plus all the possible expenses that might be incurred (about $50 - 150K, it will be higher for private hospital, even if your bills are covered, you have to consider the taxi fares and nutritious food you need to take in the event). For your family to not worry about their life anymore, you will need a much higher coverage amount. Just calculate to the period that you want this money to last your family. :)

Btw, I'm not an insurance agent so you can't buy anything from me as I really don't sell them. The main reason what I'm sharing all these is to help those that ever read my blog to benefit from it, instead of buying all those costly and yet not really beneficial policies, why not just get something cheap and good?

I'll share more about why I recommends each type in the next few days...

Intrinsic Value

Basically, intrinsic value of a company / asset is the estimate of the true underlying value of the company / asset based on fundamental analysis. It's usually calculated using the discounted cash flow model and / or valuation of the underlying net asset (all valuable assets such as cash, deposits and good properties, less all borrowings). Usually this value is different from the company / asset's market value as the market value is depending on market sentiments (aka mood swings).

Reference:

1. Investopedia - Intrinsic Value
2. Wikipedia - Intrinsic Value 

Do let me know if there's anything I can do to simplify the explanation further. Let us all improve together. :)

Plan for yourself

Financial planning, Asset planning and other stuff related to the financial aspect of your life is very important in today's era, if you do want to leave a legacy behind for your loved ones. But how many of you take action to find out more about how you can plan for yourself and your loved ones?
Here's some areas you may want to consider planning:-

• Career / Business Planning
• This is the most important portion of the entire planning. About what is it that you would love to do as your career or business for the rest of your life. Perhaps some of you may want to work for the sake of money, if you are working for just money and in a job that you hates, think about it again. 
• It's actually best to work in some form of career or business that you won't mind doing, even if it's for free. And you are motivated enough to do that for the rest of your life, as you just enjoy doing it. Think along that line and think of ways to monetize that. It'll help you in the long run, as it's a lot easier to do things that you like and enjoy doing as a form of livelihood. Remember, you only live once, so why not enjoy your life?
• Insurance Coverage
• There are various areas in term of insurance that you may want to consider covering:-
• Term life insurance with critical illness coverage as well. 
• Travel insurance whenever you go travelling. Sometimes when you do travel frequent enough, you may want to consider getting an annual travel insurance plan instead.
• Medical insurance to cover your hospital bills and if possible, outpatient bills as well just in case.
• Accidental insurance to ensure that whichever happens to you by accident, you are well covered and your family don't have to worry at all.
• Contact your financial advisor for more info on the various type of coverage but for me, I recommend pure term insurance coverage for most of the above mentioned items and invest the rest in other forms of investment, such as stocks and shares as well as property for higher capital appreciation as well as regular passive income in terms of dividends and rental yields. Do keep this in mind. But of course, such plans comes with risk and you should think of educating yourself to minimize the risk in such planning..
• Property Management
• Basic things about property management includes tax planning, buying the right property so that you make money the moment you purchase it, know what to buy etc. See Property Investment Program for more info..
• Stock Investment
• Stock investment is about investing the right company, right management and right price. How to do it is actually the most important part to attain success. See Millionaire Investor Program for more info.
• Retirement Planning
• This is something you may want to plan with the help of your financial advisor so that you are clear on what is it that you want to do upon retirement as the activities you plan to do will affect the amount of money you require to retire comfortably. So think again and be clear on what you wish to do during your retirement period. Also, take note that we live longer and longer with the advancement in medical facilities and technology so we still have a long way to go after the actual retirement. Do plan for a longer term as well. :)
• Estate Planning
• Estate planning is about planning who to give your assets in the event that you happened to pass on. This is something that I would recommend you to look for a lawyer to write a simple will to decide who to give your assets to, as well as who to manage your assets and facilitate the transferring process. Fortunately, in Singapore, Estate Tax has be waived so, there's actually no tax on whatever you left behind you. About whether there's any other fees such as handling over fee or even administrative fee in the process, the best person to advise you is a lawyer. But before all those, it's best to write a will whether or not you are rich to ensure that your assets are allocated the way you want it to be, to avoid unnecessary complications in the process.

How to Achieve your Financial Goal!

Well, after deciding what is it that you wish to attain in terms of financial success, and you've set your financial goal, you will need to work towards your goal. There are basically 5 simple steps that you need to implement:

1. Write your goal onto a piece of paper and paste it somewhere obvious that you will see everyday
2. Imagine how it feels like to have achieved your goal
3. Start your intuitive engine and antenna to receive the opportunities towards achieving your goal
4. Do all it takes to achieve your goals, legally, ethically and morally
5. Most importantly, educate yourself so that you are able to achieve it better and easier!

Enjoy Yourself in the entire process. Have Fun!

Courses you may want to attend...

Here are some of the courses that you may want to attend:

• Entrepreneur Action Program
• You will learn how to start your own business with little or no money, how to design flyers effectively, how to market and improve your business etc.
• If you are thinking of starting your own business but not sure how to, started your own business and wants to take it to greater heights, leverage on the network to expand your business further.
• Millionaire Investor Program
• You will learn how to read financial reports, understand the fundamentals of stocks, to discover the intrinsic value of stocks so that you know when to buy and sell stocks the investor way. With this, you will be able to maximize your potential returns and minimize the risk so that you can sleep well at night and even smile in your dreams.
• If you are interested in stocks and shares investment but not sure how to, wants to compound / multiply your money the safest way, so that you can sleep well at night, find out more about value investing.
• Property Investment Program
• You will learn how to find out if a property is suitable for investment within 10 seconds, understand the current market conditions, know how to market your property better as well as to find how how to ensure that you have made money from the moment you buy your property. Discover the insights of property investment and find out how you can buy property with little or no money!
• If you are interested in buying your own property for investment but not sure how to, wants to compound / multiply your money through property investment, find out how to buy property with little or no money, find out how to spot undervalued property and feel safe about the properties that you have invested in after attending this program.

I only recommend programs that I've attended myself and find that it's useful to me. I can only share what I've experience and not about what I've not experienced.

My Comments on The Villages of Aina Le’a, Hawaii

I've came to know of this particular Joint Venture scheme through a friend I've met recently. What I felt about the investment itself is that it's a relatively safe investment scheme as the returns is pretty normal and does make sense, yet a lot higher than most of the bond / fixed deposit returns out there. Here's what I felt are the pros and cons of the investment itself:

What's good about this investment?

• Assurance of 30% returns within 2.5 years (In the contract, the developer gives this assurance)
• Holding of title deed (Your name will be written on the title deed should you purchase the investment)
• Development is expected to be completed by Nov 2011
• There's a chance to get back your returns at a shorter time frame supposed the entire terrace houses on the area that your land is located are fully bought up by the buyers much earlier (this will increase your returns p.a.)
• There's a pool of ready buyers for the properties on your investment
• World largest construction risk management company - HILL INTERNATIONAL INC. (HRD TRUST SERVICES INC.) is appointed as your oversight Trustee
• Honesty of my friend that sells the investment plan

Disadvantages:

• Worse case of 12% p.a. return
• Negative rumours on the project itself can be found on the net (yet the friend of mine that sells this investment plan is willing to tell us about it)

It's up to you to decide and comment on the investment itself. Should you be interested to hear more about it, do drop me a mail at peiru27@gmail.com so that I can pass you the relevant contact, if possible just send me your number so that I can get him to contact you directly. :)

Suggestions for the Recent Flooding Event

After the flooding incident about 1 month ago, here comes another wave of flood at Orchard Road recently. I seriously feel that the areas vulnerable to floods especially Orchard Road areas must improve on their drainage system as soon as possible. As this not only affects our countries reputation, it might also affect our tourism in one way or another.


I feel that we should look at affected malls for upcoming opportunities and more into drainage and/or construction related companies. Why is it so? Because our government and the affected malls will certainly have to consider improving the drainage system as well as construction of barriers around the area in front of the affected malls to prevent the rainwater from those flash floods to enter into the malls that fast.

I personally would suggest better and more drainage in the areas in front of the affected malls and construction of barriers to prevent water from entering rapidly into the mall, i.e. construct a barrier and 2 drainage system, 1 in front of the barrier to drain off most of the water, this should be at least twice the current size both in terms of width and depth, with 1 behind the barrier to drain off any remaining water that managed to enter despite the barrier. Also, the roads that are flooded often should be elevated, i.e. the roads should be constructed in such as way that it's higher than the ground next to it with very good drainage system next to the lower ground beside the road to prevent possible undesirable effects. :)

More about Flooding on our beloved Orchard Road:

Channel News Asia: Businesses at Newton, Orchard Road area affected due to flash floods

Flash floods stain Singapore's urban paradise reputation

Heavy morning showers flood S'pore 

More Comments on Orchard Flooding 

Reference: Images from http://stomp.com.sg

Interested in playing Cashflow Game?

If you have heard about Robert Kiyosaki, you probably have heard about his CASHFLOW 101. The game helps to open our mind and teaches us the key towards achieving financial freedom (getting out of the rat race). Only upon understanding how the game works, can we get out of the rat race and get on fast track. At times, it depends a bit on luck but the major part of it is more about whether or not we grab good opportunities that comes along our way. Well in order for us to know whether the opportunity is a good one, it also requires some form of skills and understanding.
To understand more, you may want to join us in the upcoming cashflow game that we will be conducting:-
Date:           29 Jul 2010 (Thursday)
Time:           7pm to 10pm (registration starts at 6.30pm)
Location:     International Plaza #10-26 (Singapore)
Investment:  $25 per pax
FREE if you come along with your Cash Flow game board…
Note: Light refreshments will be provided
To register, drop me an email (peiru27@gmail.com) with subject "Cashflow Game 29th Jul 2010" with your name, email and handphone as well as whether you will be coming with your cash flow game board. :)

What you wish to achieve in terms of financial success?

Have you ever pondered over what does financial success means to you? In which area would you like to be successful in financially? e.g. Getting a highly paid career, having a successful business that generates lots of income for you, having 1 million dollars, having millions or even billions of dollars in terms of cash or networth, or even having a constant passive income that gives you financial freedom.

In order for you to achieve the level of financial success you would love to have, first, you have to be clear on what is it that you wish to achieve. Think of something more specific, e.g. I would like to make S$1 million with S$50K passive income per month by Jun 2011, etc. Things you need to have in your dream goal is that there must be an absolute amount of money that you wish to get, and there must be a deadline to it. So that you know if you are on track.

Set your Financial Goal TODAY!

Tips on Investing your funds towards Financial Freedom

Here's some tips that you may want to consider with regards to investing the money you've set aside towards achieving financial freedom.

1. Ensure that you have 6-12 months worth of expenses in terms of savings in either money market fund / savings / current account so that it is safe enough and easily available when you might need it. For funds put in money market fund. These money must be in a separate account that you will not touch unless in times of emergency. (Adjust the 6-12 months according to how much security you will want to have, with 6 months being the normal standard and 12 months being more secured / safer.)
   
2. Alternatively to step 1, you can also keep 3-9 months worth of income in terms of savings, provided that your income is at least 30-50% above your expenses. (Adjust this by the amount of security you need)
3. For the above savings, you will need to at least keep about 1 month worth of expenses at all times in cash just in case and put the rest of this fund in somewhere safe, yet easy to withdraw, such as money market fund, high interest savings account, fixed deposit account without premature withdrawal penalty, etc.
4. Invest 90% of the balance in investment instruments that you understand and will be holding for long term, such as undervalued stocks, good dividend yield stocks that has high upside potential, index equity mutual fund, or any trustworthy equity mutual fund, good investment grade property that gives your great rental income.
5. For the remaining 10%, you may invest in high risk / high return instruments, that gives you high potential gain but very high risk as well. This is the amount of money that you are ok to risk with, which means either you get a lot of return or you may lose everything, and you are fine with that idea. E.g. of such investments might be things like property options that you may want to flip, 99 years highly speculated property bought for high potential capital gains, bird nest investment, certain type of gold investment (e.g. genneva gold), land banking, and other types of alternative investment etc. But if you don't like the idea, you may consider putting 100% of the balanced after setting aside point 1, in instruments mentioned in point 2.

Manage Your Cash Flow

Here's some suggestion on how you can manage your own cash flow condition:

1. You will need to track your expenses for about 3 months to find out exactly what's your expenses per month so that you can find out if you can cut down your expenses. Keep 1 month worth of expenses in cash in a separate spending account just for spending every month and stick to that budget.
2. You need to pay yourself first and put aside at least 20% of your income per month to a separate savings account towards achieving financial freedom. Increase this percentage whenever possible.
3. Set aside about 8-10% to invest in your own education so that you can improve your income actively or passively.
4. Donate about 5-10% of your income to any charity you like, such as world vision, red cross etc, so that you share your wealth with the universe, as sharing will help you achieve more!
5. Set aside 5-10% of your income towards insurance of any form. Try not to stretch yourself too much on this and that's why I prefer to buy term insurance rather than any other form of insurance. This is to ensure that you are well protected should anything happen.
6. Set aside about 5-10% as for long term spending on bigger items, e.g. tour, car, big plasma tv, laptop, etc
7. Spend  about 5-10% of your income to pamper yourself, use this to splurge on things that you love and is fun, spa package, 5 star hotel stay, high class dinner etc. Make yourself happy. This it to keep you motivated in life and recharge your energy.
8. Keep your required expenses to < 40% of your income.

Here are some tools I've created that you may want to use to help in the management of your cash flow:

• Track your Networth - This excel file helps you track your current networth so that you can understand more about your current financial condition and find out exactly how long can your current savings last you.
• Expense Tracker - This excel file helps you track your expenses on a daily basis. You'll need to add in the monthly part yourself by copying the current worksheet to a new month. But with this tool, you'll be able to find out exactly where does your money goes to so that you know where you can cut down your expenses.

Financial Freedom

Perhaps you may be wondering what exactly is this Financial Freedom thing that I'm always mentioning and talking about. Here's some lights to it...

Financial freedom is something that I would very much look forward to, i.e. my passive income is able to pay for all my expenses, so whichever amount I earned on top of that will only improve my life further and I no longer need to worry about paying off my bills, my expenses, etc. As even if I'm not working, I'll still be able to afford to pay off all my expenses.

Then you may be wondering so what's this passive income thing about? Well passive income is an income source that you will get no matter what happened and you do not need to work actively (everyday) for it. Examples are: rental income, interest, dividends, etc.

Now that you've understand what is all these about, would you love to pursue and strive for financial freedom so that you can then be free to do whichever you wish to do in life and no longer need to worry about your job / career / business. If you are interested in having financial freedom, it's now time to think of how you wish to achieve it, i.e. through what means, stocks / shares, property investment, business, passive internet marketing, royalties from songs / books etc?

When you are clear on how you wish to achieve it, do drop me a comment, wherever possible, I would like to lend you a helping hand on that. :)

CO Pharm Analysis - July 2010

Here's my take on the company CO Pharm:
Buy Price: <= $0.15
Hold Price: >$0.15 but < $0.37
Sell Price: >= $0.37

Current Price: $0.45

So I personally won't invest in this company as of now because:
1. It's quite overvalued
2. The dividend yield don't seem very high
3. The P/E is already 15.6 (The normal at value P/E is usually 10-15, but varies among different industries)
4. They don't have a lot of debt but doesn't have very high earnings ratio as well.

Mortgage Loan

The main source that you can get mortgage loan from is the bank. For overseas property, you may want to utilize their local banks for the loan as those banks in Singapore won't allow you to pledge overseas property for their loan.

For HDB, you have the choice of taking it from HDB itself, which charges a flat rate of 2.6% per annum. As for the various banks, they normally charge a fix rate for like 1-2 years then they will increase the rate for the rest of the loaning period. And that's when you know it might be time to re-finance your loan or re-price your loan. For the difference between refinance and reprice, please click here.

Interest rates varies from bank to bank. So far from my analysis, UOB seems to be offering the best interest rate and Standard Charted has a unique feature of offsetting your interest with the cash that you keep with them. It sounds a bit strange but you may want to find out more and see which works better for you.

And for places like geylang, you can't get a loan from Standard Chartered or OCBC. So that's quite a lot of factors and stuff that you may want to consider before taking up a mortgage loan. Whatever you do, think twice and do a basic research before taking up anything. :)

New Haircut

Well, for today, let's take a break :) I know this is out of the topic but here's my new haircut. Most of the people that saw me yesterday says that it's nice. I guess due to the lighting and the camera, somehow my haircolor looks a bit off in the photo. It should look a bit more red than what's shown. And with the new makeover, my face looks quite smooth in the photo actually. But I still think that I need to improve more. But I'm still quite satisfied with my new look. :D

Mortgage Loan - Refinance VS Reprice

What's the difference between Refinance and Reprice? Well perhaps some of you may not even have heard of the word repricing.

Refinance means that you change your mortgage loan on your existing property to a different bank so as to enjoy a lower interest rate.

Repricing means that you change to a better mortgage loan package on your existing property with the same bank to enjoy a better interest rate.

So basically, it's actually a similar thing except for whether you use back the same bank or you use a different bank for the mortgage loan in order to get the lower interest rate. But you generally can't do that within a certain lock in period (usually within the 1st 1-2 years where you get the fixed low interest rate). This may vary with your bank so do check them out. Usually repricing is easier as your bank will certainly want to retain you as their customer.

If you don't do anything, you'll definitely pay a higher interest the longer you are servicing your loan with your existing bank. But if you do something, the interest you pay will certainly be better than if you do nothing at all. So TAKE ACTION NOW! Call your bank for a repricing if you have not done so in the pass 1-2 years that you are servicing your mortgage loan.

3 Tips on Investing Regardless of Market Condition

Often people are confused not sure which way to go, what to invest. I hope the following tips would help you.

Here are some investment tips:

1. Stay focus and invested
No matter what you do, you must always understand what is it that you are doing. If you have already bought an undervalued stock or any unit trust or any other investing tool that does not have any threat of being closed down, keep them. Never sell them away during bad times and buy at good times! You are supposed to buy more at bad times and sell at super good times so that it's buy low and sell high!

2. Right Company, Right Management and Right Price
Ensure that you've bought the right company with the right management at the right price. The right company with the right management is one that everyone dreams of becoming their boss, such as companies like SMRT, Singpost etc, one that will always be in business and continue to make money no matter what market condition it is. The right price means that when you buy the stock, you know that you'll definitely make money as the price you paid for is about at least 20-50% below the price that company is worth.

3. Diversify your exposure
Buy a few companies from different industries that you know of and understands. Try not to put all your eggs into 1 basket unless you are 100% sure that it's the best basket to put and you will definitely make more money that way. Otherwise, it's best to spread it over a 5-8 baskets. Try not to go beyond that as it's hard to managed that way.