Boring Turtle History of Cash Top-Up and Voluntary Contribution

Old Turtle is going to touch on a very sensitive and taboo topic in Singapore once again on CPF aka Central Provident Funds.

I got some really nasty comments when I wrote on the tax benefits on doing RSTU and VC to CPF but who cares?

Some people just cannot accept the truth and numbers I presented. Like that how huh? Tell them facts, they don't believe, next time I write more rubbish for you to believe k ... such as "RETURN MY CPF", "CPF is SCAM" ... "CPF is NOT YOUR MONEY" etc etc.

I will continue to write what I think its correct and whatever that makes financial sense for my fellow Singaporean.

This is probably one of my last few lengthy "loh soh" Turtle post on CPF as I will not be writing as much once I meet the FRS (Full Retirement Sum) likely to be in September 2020 based on my projection assuming I still hang on to my day job.

CPF is unreal? Scam? Pyramid Scheme? I beg your pardon again. 

Wikipedia: A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products

Lai ... Let me tell you a True Turtle story .. Once upon a time ....

My late father passed away a couple of years back leaving us a total CPF balance of $67,731.42 that was made up of his RA (Retirement Account) and MA (Medisave Account).

I am quite smart hor (or you can say I am kia-su in Singaporean's context), I did my parents CPF nomination when I was 22 years old after I came out to work.

Fast forward many years later, CPF refunded us my father's CPF monies with any interest earned to our bank account within 10 business days. 

Not a cent short and did not delay us at all. 

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What does this Turtle story tells us? Even if I couldn't use my CPF monies till I am 65 years old, they will still be there PHYSICALLY available for my CPF beneficiary after I passed on. It will be part of my gifts for my beneficiaries if I don't get to enjoy it. 前人种树后人乘凉


So are CPF monies unreal? Not our money? You make the call yourself.

Below is a history of my own CPF cash top ups and voluntary contribution over the years.

Aug 2017

VC MA: $6,845

Aug 2017
VC MA: $4,465 (Met BHS $52,000)
RSTU: $7,000

Jan 2018
RSTU: $7,000
VC MA: $3113.41 (Met BHS $54,500)

Jan 2019
RSTU: $7,000
VC MA: $2,700 (Met BHS $57,200)

Jan 2020
RSTU: $7,000
VC MA: $2,800 (Met BHS $60,000)

In total, I had made a total of $47,923.41 since 2016 when I was 33 years of age.

Since Oct 2019, I also have been transferring my OA balance to my SA as I have no use of the OA amount and wanted to speed up the pace to meet the FRS so compounding can start as early as possible.

CPF Shifting of Goal Post

We could always argue that government is shifting the CPF "goal post" annually using inflation as the reason. Inflation to me it's not a reason but a fact. $1 now will not be worth $1 after 20 years, simple reason but hard to accept it, yea I know.

The beautiful thing about hitting FRS is that government will technically take care of the shifting of goal post once you meet the ceiling. 

So far the annual increase of FRS is $5,000 ($181,000 in 2020) for the past few years and with SA annual interest rate at 4%, we will be getting back $7,240 in the form of interest assuming we already met 2020's FRS. The interest generated sufficient takes care of the shifting of goal post. Do note that FRS increase from 2021 onwards is not announced yet. 

Don't say Old Turtle never show you the "ho liao" and MAGIC hor .... !!  

Why do it earlier? Because you have more years for CPF to compound the balance, simple reason. Do an excel and you will understand what I meant. 

I am pretty late in the game I have to admit, I wished I did these actions when I was in my 20s. Reason why I did not was due to the fact that I was still paying off my HDB loan mortgage and wanted to have more cash on hand in case of emergency.

Just FYI, I had fully paid off my HDB loan within 5 years using CPF OA (Ordinary Account) in Jan 2018 so I am making full use of my OA balance for SA transfer to meet FRS. 

I am a HAPPY OLD TURTLE, don't ask me why!!

Have a great Lunar Chinese New Year. This will be my last post before welcoming the year of RAT!!!

Important Note: 

• For those readers that are considering to do RSTU and VC, please ensure that you know these actions are irreversible.

• Think about your cash flows and financial/family commitment and situation before you make the decision. 

Refer to the CPF Sources if you want to know more about RSTU and VC benefits and why I choose to top up in January.

• https://www.cpf.gov.sg/Members/Schemes/schemes/retirement/retirement-sum-topping-up-scheme 

• https://www.cpf.gov.sg/members/FAQ/schemes/other-matters/cpf-contribution-for-employees/FAQDetails?category=Other+Matters&group=CPF+Contribution+for+Employees&ajfaqid=2184960&folderid=11177

Major Cash Outflows for January 2020

From a personal and family cash outflow perspective, this January should be one of the highest I foresee as compared to the remaining of year 2020.

Seeing the RED numbers, my old Turtle heart also cannot take it, you all see yourself lah ......

1) 2 x Huawei P30 Pro

Bought these pre-loved / used phones (slightly less than 10 months old with 14 months of warranty left from Huawei) from Carousell sellers for myself and my Turtle wife to replace our Huawei Nova 3I phone that we bought in 2018.

Nova 3i (a low budget mid-tier model of Huawei) is a very reliable phone and had served us well for the past 1.5 to 2 years. 

Reason why we choose a higher spec model of P30 Pro is due to the higher definition of their in-built camera for our upcoming trips to Melbourne, Thailand and Malaysia (road trips) that we had lined up for this year before my elder child goes to primary one in 2021 whereby our vacation could only be planned in the respective June and December school holidays (much much more expensive in terms of flight and hotels).

I always like to ask myself if I had overpay for these "wants"? Lazada is currently selling the same model brand new phone for $1,098 with 2 years warranty from Huawei.

Technically I "saved" (2 x $1,098) - (2 x $665) = $866 by buying these preloved phones.

These are depreciating "assets", I will always source for the best deals available for these "wants", with carousell and other online platforms, information are much more efficient than before.

Lastly, happy wife, happy Turtle!

Net Cash Outflow: $1,330 (or average price of $665 each)

2) Upgraded my older car to an old car - $5,209

Sold 13 years old Nissan Latio - 35,638

Bought 10 years old Honda Stream - 40,847

For those interested in how much I had "saved", you can refer to my separate post.

I wanted more space for my growing family as kids are growing bigger and taller and most importantly, it "save" time and create convenience for my family.

As much as possible, I will not want to spend too much on a brand new car as the annual depreciation is at least 30% to 40% higher as compared to a used car.

https://singaporeturtleinvestor.blogspot.com/2020/01/how-did-i-saved-money-by-owning-car-in.html

Net cash outflow: $5,209

3) CPF Activities

I did my usual CPF cash top ups for Medisave and Special accounts in January to ensure I get the tax relief for this year's chargeable income and get the maximum CPF interest rate that starts accumulating from Jan/Feb onward.

Why top up in January?https://www.moneysense.gov.sg/articles/2018/10/smarthack-your-cpf 

 - VC to Medisave Account: $2,800 (To reach the BHS $60,000 for 2020)

 - RSTU to Special Account: $7,000

I will write a separate post of my CPF top ups with my meaningful content to share with the Turtle readers.

Net cash outflow: $9,800

4) Final Installment For MBA (Master of Business Administration) program

Paid off the 2nd and final installment of the MBA program. This expenses should had been paid off in 2019 but I told them I wanted to pay in installments and the school agreed. 

Why not if I could hold more cash on hand to generate more interest income.

This is really for self improvement which may or may not increase my salary in the future. 

I wanted to do the MBA since 30 years old and this had came 6 years late (took up the MBA in 2019 when I was 36 years old) due to family commitments taking care of elderly parents and 2 very young baby turtles for the past 6 years.

The company that I currently work for is willing to provide a partial sponsorship for this MBA program which comes up to between $7,000 to $14,000 depending on the length of the program. No reason stopping me now since the kids are slightly older now and my mum is currently healthy and independent (dad had passed a couple of years back).

If everything goes smooth, I should be able to graduate from the part time MBA program in 2021. Guanyinma pls bless Old turtle.

Net cash outflow: $10,137.18

Conclusion

Very exciting month in terms of cash outflow :( ..... 

Not all cash outflows were considered as expenditure for example CPF activities, basically it is a movement from liquid cash to non liquid CPF accounts for retirement planning and tax savings.

But still these are considerable amount of cash outflows so I am happy I planned for these in 2019 and now I am simply executing them per my plan.

• Personal cashflow planning is as important as corporate cashflows planning / budgeting so do plan in advance.

• If you have to spend, please find the most value product available in the market to maximize savings instead of just buying without doing any due diligence and research.

Total Cash Outflow: $26,476.18

Have a great Chinese New Year ahead - From the Old Turtle Family

Can we really "save money" by topping up cash to CPF?

老乌龟 有沒有 胡说八道?

Based on the recent seedly report "The average annual salary in Singapore is $67,152. This averages out to be $5,596 per month, inclusive of the employer’s CPF contribution."

Using this figure as an example, let's see how much tax this Singapore employee could possibly save by voluntarily top up his/her Central Provident Fund (aka CPF).

Using the IRAS tax calculator for FY2019, I am going to simulate a very simple example based on this Singaporean worker profile.

Profile:
Name: Uncle Ah Seng (UAS)
Marital Status: Single
Salary: $5,596 per month or $67,152 per year
Tax relief: 
- $1,000 (Earned income relief)
- $13,430 (CPF/Provident Fund relief)
Personal Income Tax Rebate: $200 

Scenario 1 (YOLO, don't bother to top up CPF lah, Cash is KING)

Based on UAS salary, he will be paying $1,240.54 for his FY2019 taxes to IRAS after all the standard tax relief based on his profile.

Tax payable: $1,240.54

Scenario 2 (Voluntary Contributions (VC) to Medisave account)

UAS got his annual performance bonus in cash from the company he is currently working for. With his spare cash, he decided that he wants to use part of it to VC to his Medisave account.

He decided to VC $2,800 to his medisave account  to claim the maximum amount of tax relief available to meet the Basic Healthcare Sum ceiling $60,000 for FY2020 as he had already met his BHS of $57,200 in FY2019.

Tax payable: $1,044.54

Scenario 3 (Retirement Sum Topping-Up (RSTU) to Special account)

UAS decided to just do a $7,000 RSTU to his special account to maximize his tax relief as he hasn't met the prevailing Full Retirement Sum (FRS) for FY2020 which is $181,000.

Tax payable: $750.54

Scenario 4 (Voluntary Contributions (VC) to Medisave account + Retirement Sum Topping-Up (RSTU) to Special account)

UAS decided to do a $7,000 RSTU to his special account as well as a VC of $2,800 to his medisave account maximize his overall tax relief. 

Tax payable: $554.54

Summary of the tax payable based on different scenarios:

Scenario 1: $1,240.54
Scenario 2: $1,044.54

Scenario 3: $750.54

Scenario 4: $554.54

Depending what kind of combo you are going for, we can see that there are different level of tax savings ranges from 15.7% to 55.3% when you compared to scenario 1 for Uncle Ah Seng.

Tax savings: Between 15.7% to 55.3%

This is in addition to the CPF interest of 4% to 5% that you are going to get for the Special and Medisave accounts. 

Total Returns = Tax Savings + Interest Income on additional CPF contributions.

Old Turtle love savings and the relatively good interest income from our Government.

Such a good lobang, who don't want? Old Turtle want. Tio bo? Tio bo?

Sources:

1. www.blog.seedly.sg/salary-guide-singapore/
2. www.iras.gov.sg/IRASHome/Individuals/Locals/Working-Out-Your-Taxes/Deductions-for-Individuals/Compulsory-and-Voluntary-Medisave-Contributions/#title2  
3. www.iras.gov.sg/irashome/uploadedFiles/IRASHome/Individuals/Tax%20Calculator%20-%20Residents_YA19.xlsx 
4. www.cpf.gov.sg/Members/Schemes/schemes/retirement/retirement-sum-topping-up-scheme

How did I "save money" by owning a Car in Singapore?

What am I talking about? How the heck of owning a car in Singapore related to saving money? 

老乌龟 胡说八道

This is a sure loss and pure expense, Turtle must be talking nonsense again.

As you know Old turtle is very stingy and kiasu, he is not willing to spend too much money on a depreciating asset ie a car with a limited lifespan in Singapore.

One of my immediate resolution for this year is to change to a bigger car in terms of space and seating ie from a 5 seaters to a 7 seaters. Reasons? Kids are growing up and parents and in-laws are growing old so we need more space to carry more bodies in the same car.

In Singapore, owning a car is expensive because of it's limited lifespan ie purchase of Certificate of Entitlement (COE) to own a car for 10 years or renewed another 5 or 10 years after end of first 10 years of it's life.

In 2014, I bought my first ever car (Nissan) in my life when my first baby turtle was 1 year old. The car was a old 7 years old car and cost me $36k and there was a parf/coe rebate at the end of it's 10 years life if we decided to terminate/scrap the car, this comes to around $9k and this was the cash value I will be able to get back.

I will now share my personal Turtle experience on how I "saved" money by owning a car in Singapore.

My older car depreciation per year was around $9k[($36k - $9k)/3] assuming I scrap it off. But I choose to renew it's life at the end of 10 years by renewing the COE by another 10 years, by doing this, I will need to give up the parf/coe value of the car ie $9kand pay the prevailing Quota Premium (PQP) subjected to the monthly COE value. I paid $45k for a 10 years COE renewal for my old car back in 2017 to extend it's life span till 2027.

The COE bidding price was $32889 for 10 years COE as of Dec 2019 so I actually paid around $12k more back in 2017 but obviously I do not have crystal ball to predict the the future price.

Reasons: 
(1) It was because COE value was pretty high at that point of time and I do not want to spend too much buying a new car.
(2) I have been maintaining the car pretty well.
(3) I still need the convenience of having a car.

If I keep the older car for next 10 years, the annual depreciation will be $45000 + $9000) / 10 years = $5400 per year. This is a very reasonable amount in terms of annual depreciation but of course you have to think about the higher road tax (increase 10% per year for next 5 years) and higher maintenance fees for wear and tear.

So how much did I "saved" by renewing COE and not buying a new car?
A brand new Nissan (same size) probably cost around 80-100k at least back in 2017 including COE so annual depreciation was at least 7k to 9k at least after taking into consideration of parf/coe rebates. I saved around at least 2k to 3k per year in terms of depreciation by continuing my old Nissan.

For those who are like me who needs a car for convenience and time savings can consider to renew COE as the current COE is relatively low as compare historically for the past 10 years. Thanks Uber for pulling out from Singapore ride hailing business.

Find out more here for COE renewal:
https://www.onemotoring.com.sg/content/onemotoring/home/owning/coe-renewal.html

Fast forward to Jan 2020
I traded in my older 13 years old Nissan for 35k and bought a 10 years old Honda 7 seaters for 40k, the COE was extended for 5 years COE by the car agent. This means that the old Honda cost me an annual depreciation is 40k / 5 years = 8k per year.

As compared to a brand new same model 7 seaters, it will cost me around 110k to 120k for 10 years COE and a annual depreciation of around 10k to 11k including parf/coe rebates. How much did I "saved" again? Around at least 2k to 3k per year.

This old Honda is still more expensive than my older Nissan but since they are off model and size, it is not a direct apple to apple comparison.

Lastly, I did not take any car loans for both of my older Nissan and old Honda so I am not paying any car loan interest which adds up to the cost of owning a car in Singapore.

Usually the car agent will be quite unhappy if you do not take any car loans as they are unable to earn any interest (in house loan) or referral fee from banks. Heck, everyone knew I don't like debt.

Many told me old cars lots of problem, I think it is also a matter of luck when you select the car and which car agent did you trust to buy your car from. So far, speaking from personal experience, my maintenance is just for wear and tear and nothing major and even after adding these into the annual depreciation, my cost is still lower than owning a new car.

Turtle own car tips:
(1) Consider renewing COE if your existing car is still performing well.
(2) Try not to take car loan if possible to save on interest. 
(3) Buy second hand resale car if you want to upgrade your ride to cater to your expanding family.

Of course if you can do without a car, please go ahead and save the 6k to 8k on depreciation a year. For those who need it, this is my old Turtle experience for your consideration.

Next post I will share what is my running cost of maintaining a car in Singapore excluding any car loan.

Every savings counts. "Little drops of water make a mighty ocean".

Hope you like my Turtle sharing on family and personal finance management.

Extra tips when you take over an resale car from the car agent:-Ensure that you request for such checks and servicing before they hand it over to you and ask for extra warranty over the major parts like gearbox and engine for at least 6 to 12 months. I asked for 12 months.

1. Engine: Oil change, oil filter replacement, and fine-tuning2. ATF (Gearbox Oil)3. Lights, steering, and exhaust4. Tyres5. Brakes6. Spark Plugs7. Hydraulic fluid8. Coolant levels9. Radiator, hoses, and pumps (Cooling system)10. Suspension11. Steering alignment12. Car battery 

Turtle Activities on first day of trading - 2 Jan 2020

Old and Boring Turtle kick start first, Huat ah everyone!!

As a family Turtle running a tight budget for the Turtle family, I don't have much personal savings like before, therefore part of my strategy is to recycle capital to grow the portfolio.

Sold SGX stock and recycled into HKEX. When there's "blood" in the market, there will be opportunities.

1) Took profit on trading position: $BreadTalk Grp(CTN.SI)
BUY Price: 0.62
SOLD Price: 0.655
Profit/Loss(%): 5.00%
No of days held: 30

2) New Position: $HAIDILAO(6862.HK)
BUY Price: 31.65

3) Add to Existing Position: $BABA-SW(9988.HK)
BUY Price: 210.60

4) Add to Existing Position: $TENCENT(700.HK)
BUY Price: 381

I had started to "expose" my portfolio to HKEX as traditionally, the only foreign market is only US markets ie NYSE.

Why HKEX? When there's "blood", there are meant to be "opportunities". The long lasting protest in HK has taken a toil on it's economy as well as their stock market. It is probably time to take a look at what they could offer us in terms of value.

I will try to allocate a maximum of 10% of total portfolio capital to foreign stocks as my core holdings will still with SGX.

Portfolio Review 2013

Total Portfolio value grew $57,501.23 or 15.34% to $432,315.50 as of 2013.

Dividends continue to main contributor to the growth which is in line to my long term strategy for this family portfolio.

I am hoping to grow this portfolio to at least half a million in 2014 with additional capital injection from my pocket if Mr Market gives me a good opportunity in any of the asset classes.

Current Asset allocation stands currently at 74% Equity, 7% Bonds and 19% Cash & Equivalent.
I am not in a hurry to deploy the cash until I am comfortable with the valuation of the investment I am currently eyeing. A sustainable passive cash flow is more important than growing them at all cost.

My philosophy is always to invest when I deemed there is a substantial margin of safety and when my instinct tells me to do so. Good or bad? After years of investing, I trust a lot on my instinct before decides to invest. You could see that the portfolio is considerably concentrated (less than 10 stocks) and I am not afraid to invest heavily in a single stock when I see opportunity. I trust myself more than anyone else.

Moreover, I am not seeing any FEAR currently and out of sudden so many people around me got so interested in the equity market, I sense BULLISHNESS growing among them so I am WORRIED! Maybe I worried for nothing but my instint tells me so.

Biggest Winner: Cordlife (Market returns: 118.34% + Dividends on cost: 3.68% = 122.02%)

Market leader in Singapore; Look around you, most of your friends (if they just have their first baby) if they could afford, they will definitely consider buying this product which I considered an “insurance”.

In fact, I started to notice this company when my colleagues around me started discussing which cord bank they should subscribed to store their newborn’s cord blood in Singapore.  I am not going into the FA in details; you can do your homework.

With Singapore Government pushing to increase the population growth domestically, Cordlife benefited heavily in this aspect and I believed this stock will continue to do well as it continues to diversify outside Singapore. I am not looking to add more long position since the initial investment had grown substantially unless there is a major correction. Maybe my newborn is giving me some baby’s luck?

Biggest Loser: PerennialCRT (Market returns: -6.19 % + Dividends on cost: 7.82% = 1.63%)

In line with the negative market sentiment for China as one of the worst performer in the global stock market; PCRT a business trust invest in China retail assets also got hit with negative returns for 2013.
Many of its retail asset in China will be completed in 2014 and 2015 so execution will be an important factor whether it make it or breaks it thus management leadership is extremely crucial. I am looking to add to long positions in 2014 as it continues to trade below NAV and I have very strong confident in the CEO and management as well as the China recovery. Can the worst market performer China bounce back in 2014?

Reference: http://www.abs-cbnnews.com/business/12/31/13/why-chinas-stock-market-one-2013s-worst-performers

Steady Performer: SPH (Market returns: 2.23% + Dividends on cost: 9.90 % = 12.13%)
An old guard in the portfolio and also the biggest investment so far which I held since 2009 and frankly speaking at my cost price, the capital growth is pathetic but the portfolio continues to get steady income (6-6.5% annually) as a form of dividends from this old guard every year.

In 2013, they finally decided to spin off their property asset to diversify their business to Reits in order to offset the declining revenue of their core business. With the special dividends that accounts for 4.46% of the total dividend received; I am lucky to get a few lots of SPH Reit through IPO to reinvest this dividend to continue to generate sustainable passive income.

I will continue to keep this old guard in this portfolio for a long time unless there are major shakeups in the business model. I simply love stability and believe the diversifying to become a Reit manager will benefit the company in long term. Meanwhile my family will continue to support SPH with my parents buying the hard copies Chinese papers and me subscribing to ST Online.
We try to support abit lah!

First post in 2014, I wish all fellow readers and financial bloggers a healthy and meaningful year ahead.

If you haven’t take charge of your financial health, it’s not too late to start now! No one cares more than you!

Still the old reminder, don’t work too hard for money and make an effort to spend more time with your family in 2014! Life is BIGGER than money!

Portfolio Review 2012

Just some historical data to start the first virgin post for this blog.

I started tracking the performance of the fund with a NAV of SGD$1 since start of 2012 with initial asset injection of a mixture of high yield stocks and cyclical stocks from my parents.

My on-going aim was to fine tune the asset allocation to decrease portfolio volatility and increase stability with more dividend yielding stocks since the primary goal was to generate positive cash flow to cover monthly family expenditure. I will be cutting down on cyclical stock as I am not comfortable in their high volatility and low yield.

Absolute fund returns: 19.28% vs. STI: 19.68%
Yield on portfolio: 4.96% per annum
Passive income: $15,446.90 per annum or $1,287.24 per month

Current family fixed expenditure: $6,000 per annum or $500 per month
*Fixed expenditure includes all parents household utilities and insurance coverage only*
*I am supporting my parents by giving them monthly allowance for their meal expense thus meals expenditure not included*

Exchange (SGX)	Sector	Market Price	Holdings	Market Value(SGD$)
SPH	MFG	$              4.03	27000	$              108,810.00
SGX	FIN	$              7.01	15000	$              105,150.00
HL Fin	FIN	$              2.53	6000	$               15,180.00
PerennialCRT	PROP	$              0.57	20000	$               11,300.00
Noble Grp	COM	$              1.16	13000	$               15,080.00
GLD 10US$	COM	$           196.92	20	$                 3,938.37
Olam	COM	$              1.56	10000	$               15,600.00
Cordlife	SERV	$              0.55	29000	$               15,805.00
				290,863.37
Assets
Cash	$83,950.91
Securities	$290,863.37
Total Asset	$374,814.28
Price / Unit	Units	YTD	STI	Relative
1.1928	314,230.40	19.28%	19.68%	-0.40%
	Dividends
	Stock	Date	Payout
	SGX	14-Feb-12	$      600.00
	LippoMalls	16-Mar-12	$      132.50
	ST Engg	24-Apr-12	$   1,125.00
	ComfortDelGro	15-May-12	$      594.00
	SGX	16-May-12	$      600.00
	SPH	23-May-12	$   1,890.00
	LippoMalls	24-May-12	$      172.50
	HL Fin	25-May-12	$      480.00
	LippoMalls	30-Aug-12	$      197.50
	ComfortDelGro	31-Aug-12	$      522.00
	ST Engg	13-Sep-12	$      270.00
	HL Fin	14-Sep-12	$      240.00
	LeeMetal	14-Sep-12	$      115.00
	SGX	12-Oct-12	$   2,250.00
	SGX	5-Nov-12	$      600.00
	Cordlife	14-Nov-12	$      522.00
	Olam	20-Nov-12	$      200.00
	LippoMalls	3-Dec-12	$      277.40
	LeeMetal	16-Dec-12	$        69.00
	SPH	21-Dec-12	$   4,590.00
	Total Dividends	$      15,446.90
	Dividend Yield	4.96%

2019 Total Annual Family Expense

Finally the last day of the year, it is busy and exciting time for old turtle again to tabulate the turtle annual family expenses for 3 adults plus 2 children (below 7 years old)

I have a habit of putting my family expenses in categories and then project our family budget for the following year to be as pragmatic as possible. (Aiya basically a very kiasu Turtle lor)

Reasons for doing so, I want to know exactly where we were spending money on and how much we need to sustain the current lifestyle in the event if one of us loses our active salary/job. I am a "kiasu" (conservative Turtle).

Note: Family expenditure exclude personal expenditures of Turtle and Turtle Wife, ie parental allowances, workday lunches and misc spending on individual enjoyment. Only pure family related expenses are being recorded. Why? I don't think my wife wants me to know her budget on shopping, hahaha. She earn her own upkeep so she will be responsible for her own spending as long as she contribute to the family budget on a monthly basis.

2019 Breakdown as follows:

Category	Amount (SGD)
Children (2x)	$ 15,605.32
Car	$ 10,290.83
Foreign Domestic Helper	$ 9,901.30
Holidays	$ 9,114.65
Grocery	$ 4,736.76
Festival Celebration & Gifts	$ 2,872.70
Misc Spending	$ 2,636.83
Utilities	$ 1,669.41
Eating Out	$ 1,600.91
Fengshui Consultation	$ 968.00
Home Insurance	$ 795.46
Town Council	$ 589.00
Property Tax	$ 64.00
Annual Total	$ 60,845.17
Monthly Average	$ 5,070.43

Historical Annual Family Expenses:

2019	$60,845.17 (Increased by 8%)
2018	$56,265.71 (Increased by 30%)
2017	$43,315.44

How is our annual household expenditure compared to average Singaporean's household spending?

Source: https://www.businessinsider.sg/the-average-singaporean-household-spends-s4900-monthly-with-the-most-going-to-food-and-transport-survey/

Based on a new report on Aug 2019, the average Singapore household expenditure is $4,900 monthly or $58,800 annually. Compared to them, Turtle family spent $5,070.43 monthly and $60,845.17 annually. From this aspect, I think we are doing average which is good as we are not high income earners.

Holiday spending was inflated by around $5,000 as we prepaid for our Australia vacation in 2020. But since I am true to myself for all the spending in 2019, I will choose to include as well. 2020 expenditure should be greatly reduced in terms of vacation since this was prepaid.
Nett annual expenditure should be around $60,845.17 - $5,000 = $55,845.17 or monthly $4,653.76.

Top 3 Highest Spending

2 x Children

Majority of the spending were spent on their education, pre-school (4 hours PCF) and extra enrichment classes like swimming, art and craft, Taekwondo, dance class and Chinese language lesson.
I don't think we will add on anymore lessons for the kids especially on the academic side even if many had recommended us to start maths and phonic lessons before they enter into primary one.
I like them having exposure to life skills and interest classes rather than academic lessons. They have 20 years ahead of them for academic so should we start to stress them out before they enter primary school. Old Turtle and Turtle Wife got the same understanding on this matter which is good so we have one less argument over the children's matters. (Hope my wife don't read my blog, LOL)
As much as possible, we will not cut spending on children related expenses even though it was the highest expense for the past 3 years. I am pretty sure all parents readers will understand my view and they will give their best to their children like how our parents treated us when we were growing up irregardless how poor they are.

Car

High depreciation asset, I called it an asset because I had fully paid up the car since I never like to take loan for a "liability type of asset". My car has got leftover value based on the COE that I had paid to extend the car life by 5 more years.

Me and wife used the car daily to commute to and fro work as we worked in the same area so expense per person is relatively lower than one person using the car. Well still higher than public transport, no doubts on that.

We get time savings with the car as we worked in the city and stayed in North Eastern part of Singapore, one way travel takes around 30-45 minutes depending on traffic condition. We usually get home by 7 pm, have our dinner and start engaging the kids before starting to put them to bed from 9pm onward.

Basically we are paying for the "extra time" saved with the car to spend more time with the kids as both of us are full time salaried worker.

We also enjoyed annual road trips to different parts of Malaysia, for 2019, we had traveled to Legoland, Hello Kittyland, Malacca, Desaru etc. It was very enjoyable and more cost effective as we do not have to pay for the flights (just imagine, 4 x SQ air tickets just on flight alone, phew, no joke!)

If both of us get retrenched together, the first thing we will cut definitely will be the car. No disputes on that.

Foreign Domestic Helper

3rd highest spending, actually just a little bit ahead of holidays/family outing spending. This is a need for our family since both of us are working full time without parental help from either side of the family. We are highly dependent on our very reliable helper to take care of the kids, cooking and household chores.

So far so good, she is our first helper and been with us for 1.5 years and will be returning for her first home leave in 2020.

Let's pray together to Guanyima (my god, I mean I pray to her literally at the temple, not OH MY GOD) that she will returned back to us after her home leave, heard so much horror stories that they go and never returned back. I will have big logistical headache if that happens and we have no plan B unfortunately.

Some will ask why it cost $9,901.30 annual and monthly $825 to maintain the helper when monthly salary is only $500-$700. This is because I factored in all the related expenses for the helper and technically she is my employee, I do give her annual cash bonus like how our company that we are working for would give us, red packets for X'Mas and Chinese New Year and small gifts here and there to make her happy like my own family member.

Do remember that helper cost is not only the monthly salary, there are many small components like their home leave (flight), MOM levy, bi-annual body checkup and insurance etc. These small numbers do adds up significantly.

I believed if we treat people with respect like how we would treat everyone else, the person will do the same to us and even if she don't reciprocate, she won't harm us. I pray to Guanyinma again on this aspect which I have no control on. I can never imagine why would any employers torture their helper, they are human after all. Read many of such news in Singapore and I am very disgusted by their actions.

Conclusion

I do hope that the annual expenses had reached it's peak finally and maintain at this level or around $4,500 to $5,000 a month for the next foreseeable future. Will it drop significantly? I doubt so if we maintain the current lifestyle.

As usual, as long as my family is happy, Old Turtle will be happy even if I have to continue to work until my last breath. Choy Choy Choy !!!!

Hope this gives you a bird's eye view of our household spending of 5 including 2 pre-schoolers for your own family expenditure tracking and planning.

As long as we spend within our means, we should do fine for ourselves and for our family.
Happy New Year 2020.

Final review for 2019, Welcome 2020

I have been busy with my part time MBA studies so really trying to find time to update on personal financial thoughts for this year.

I told my wife ... Orh Gui Wife ah .... do you think Lao Orh Gui is stupid, spent money to suffer every weekend.

Some old man grumbling here…. Tahan (means endure) for 12-15 more months before graduation assuming I don’t fail any modules!!!

MBA school fee is 50% sponsored by the company so no complains at all. We shouldn't really measure education but since this is 50% sponsored, it will boost my ROI since my capital outlay is much lower.

Family

Both kids are growing up very fast, for those that have kids will echoed what I said. I always tell my friends, enjoy while they are babies and take more videos and photos, the baby fats will vanish in no time. I miss their chubby cheeks!!

Just traded in my very old 12.5 years COE car for a new COE 5 years 7 seaters station wagon. In terms of cash outlay, I pay an extra 5.5k for this "upgrade" of extra 2 seats. Car is a depreciating asset and I try to manage my expenses by not spending on new cars so the annual depreciation is low. I do enjoyed the car rides with my family, bringing them for Malaysia road trips and bringing the in-laws and my mum to JB for shopping trips. The convenience car brings to our family cannot be measured by numbers so this will be part of my family budget till we don't need a car anymore, probably when the kids are in their teenager stage.

Despite having 2 young kids (below 7 years old), doing my part time MBA, full time working, I will always visit my mum once a week to have dinner with her and so far I have been very discipline to that routine. I started kissing her forehead every time I bide her good bye after dad passed away, I am worried I will lose her suddenly like how I lost my dad.

Funnily, most of the people around me told me they are "paisay" (shy) to do that to their parents but since we could do that to our children every day, why no our own parents whom did the same to us when we were young? They are surprised by my actions. LOL. Asian Culture Irony.

Verdict: As long as my family is happy, Turtle is happy. Time don't wait for us so when you say I will visit your aging parents next time when you are free, the "next time" might not come if they suddenly passed on. Do hug and kiss your old parents every time you bid them goodbye, it is worth it, trust me. Don't do it only when they are "lying there" if you understanding what I meant. Cherish your love ones like the last day, every day.

Career

Being a full time salaried 36 year old (Lao Uncle Turtle) worker in a non management role in the same company for over a decade, I can say that there are no longer any excitements in the work I am currently doing rather work becomes very stable and predictable.  Maybe age is catching up; I like being in my own comfort zone and enjoyed predictability every day whether at home or at work. Boring and lazy Turtle pattern.

I wouldn’t say I hate changes because in my industry, there’s a saying that “change is the constant” if you understand what this means. Disruption is everywhere, if you don’t evolve and change, you fade off and die.

Being a salaried worker, I am highly dependent on my salary to grow my wealth, feed my small Turtle family. Salary wise, it has been increasing annually and higher than Singapore inflation rate so I got no complains. Additionally I typically get an annual bonus of an average 2 to 2.5 months worth of salary every year except for 2008/2009 (Global Financial Crisis)

It has been a very volatile 2019 for the company I am working for, started with retrenchment, restructuring and ended with outsourcing of certain functions. Fortunately, my boss survived which means I also survived.

Am I worried I am the next to be retrenched? Very honestly speaking, I am not as worried about retrenchment as compared to when I started working a slightly more than a decade ago. Why? Probably I am doing some things right with my personal financial planning journey since my 20s and without any outstanding debt.

Verdict: Still a good year for career as I got my merit increment and my annual bonus as usual. No promotion, never mind, means less politics to handle. Guanyinma PoPi Company continue to hire Old Turtle till 45 years old so I can continue to accumulate wealth for my small turtles education and my retirement.

Health

Maintained my weight and BMI but due to full body check up soon. As part of company benefit, we have annual body check up for employee insurance. Didn’t do any this year, it’s time to check next year. I didn’t exercise but I have a relatively clean diet with occasional social drinking. Non-smoker.
The older I am, the more I scare going for body check up. Useless Turtle.

Verdict: Average for health, can be better with my exercise activities.

Wealth (As of 14 Dec 2019)

Savings rate (with CPF): 53% (Higher than previous year due to higher salary and maintain same level of expense)

Started the year with total net worth of $842,286.05 and as of 13 Dec 2019, net worth is around $967,041.55, an increase of 122,755.50 or 14.5%. This amount included my COE leftover value ($35,000) in my 12.5 year old COE car, the$150,000 CPF OA for my HDB purchase of around. HDB property valuation is not included in my total net worth.

Total CPF (OA/SA/MA): $194,615.91 (On track to meet FRS by Sep 2020 with 1 more top up to SA in Jan 2020 and OA transfers to SA)

Cash and Investment Portfolio: $578,892.27 (Increased by $59,402.98 or 11.13%)

Dividend and Interest Collected: $10,941.07 (Almost same as last year $10,103.78)

Debt/Loan Shark Borrowing: $0

Verdict: As boring as my name, Slow and Boring Turtle way of growing wealth. Continue to maintain above 50% of savings rate. Guanyinma BoPi Old Turtle and Family.

Have a plan, Execute it. Talk is cheap.

Slow and Steady, mai ganjiong (be patient).

Be discipline when you invest and Be humble when you win.

Living within means and for old turtle I live under my means, I do not inflate my lifestyle even with my salary increment and increased of networth. Being frugal became a habit over the years.

Old Turtle Wishing Everyone an advance Happy Year Year 2020.

Financial planning for my unborn child

You must be thinking this is a typical "Kiasu" Singaporean father to start planning even when baby is not borned yet!! I have to admit to my "Kiasunity" because I care!! Ho Ho Ho!!

Do note that I am not a professional financial planner. I am just using what I advocate for my own financial planning for my family and derive what I think is right for my baby.

You must and should look at your existing financial conditions before deciding what to cover for your newborn as every individual has different priorities in life.

Below are my own opinions but I will still like to hear from my financial planner as he is more experienced than me in this area. Only then I could further improve in this area in the future.

Why you should cover your newborn as quickly as possible?

The birth of a new child can be one of the most joyous experiences of your life. However, a number of serious concerns do accompany this happy occasion. One of these concerns is the question of health insurance for your child. Newborn babies face the possibility of developing health issues just like any other person.
Reference from: http://www.ehow.com/about_6685734_health-insurance-newborn-babies.html

What insurance coverage to buy?

These are a comprehensive of all 6 key areas Life, Total Permanent Disability, Critical Illnesses, Child Related Illnesses, Accident & Hospitalization Bills that you can take as reference when deciding what to cover for your newborn.

Lastly, many financial planners will definitely ask you to purchase a so called education endowment plan to set aside fixed savings to prepare your child for future education. To me, this is just a long term (15-20 years) pure fixed savings plan.

For financial savvy people, this is unnecessary as we know endowment plans returns are quite pathetic (most unable to beat inflations) and I am sure we can beat them by creating our own endowment plan which I will write a separate article on creating my own endowment plan for my child’s future education.

Depending whether you are savvy enough to invest on your own to beat the returns of the endowment plan. If not, you can buy as a form of savings for your child future education.
Listed in order of priority:

1. Upgrade to a Private Shield plan - Designed to cover major/catastrophic events related to Hospitalization & Surgery (H&S). – MUST HAVE!
2. Personal Accident plan – Designed to cover any unforeseen accidents. There are some accident plans that cover common child related illnesses like “HFMD” – Hand Foot Mouth Disease. – MUST HAVE!
3. Critical Illnesses – Good to have but not necessary at this stage.
4. Total Permanent Disability – Good to have but not necessary at this stage.
5. Whole life plan – Not necessary as I always advocate buying term and invest the rest.
6. Education Endowment Plan – Not necessary as I will create my own endowment plan.

If you can afford, please cover your child with at least the #1 H&S plan else you will definitely be poorer when the baby needs to get treatments in hospital which are not uncommon for newborns.
For #3 to 5, to me they are required when there is a need for income replacement which means they are working and since babies depends on parents to survive so they are not required. Instead, I think parents should insure themselves sufficiently in order to provide for the child when something unfortunate happens.

When the insurance coverage should starts?

Coverage should start as soon as they are able to be insured and most insurers have got waiting period like 3 weeks to 1 month after birth before they will provide coverage like hospitalization plans etc.

The earlier you cover them also means there are less chances of any exclusion in the plan. Insurance is a risk & probability game.

Who to buy from?

I suggest purchasing from the same insurance agent/financial planners that you have dealing with for many years. There are simply too many insurance plans in the market and each has its own competitive advantage.

For me I like to consolidate all family related insurances plan with the same person that had served me well all the years. This saves me a lot of time even if I need to pay a little bit more and when comes to claims (touch wood), it is also easier speaking to one person.

For those who like to DIY and understand more about insurance, I suggest you read up more online and form your own opinion as I always say “No one cares about you more than yourself”!

I personally like Mr Tan Kin Lian website as it provides a lot of insights about financial planning and insurance in local Singapore context; you may want to visit to educate yourself. http://www.tankinlian.blogspot.com

Wishing all parents or parents to be a very happy 2014 and enjoy the happiness brought to you by the newborn!! To me, money can never buy such happiness!!

As for myself, I and my wife are anxiously looking forward with excitement of becoming a first time parent in 2014!! It is going to be an exciting year for both of us!!!