This has been a scheme that have been around for a few years but I did not really knew about it till I was browsing through the CPF website a few years back.
This basically allows you to claim up to 3 days of parenthood child care leave from the government. We are granted 6 parenthood child care leave per annum but the government is only going to pay for 3 days. The awareness of this scheme is basically more applicable for those self employed. For those employed, your HR department will handle the claim.
The limit you can claim per day is $500. You can go to the CPF website and under the self employed section, you should be able to find the on-line claim for parenthood child care leave.
For self employed, other things to take note is to try to contribute to your SRS and CPF to reduce your tax liabilities which have been widely covered. For your CPF, you can use it finance your house mortgage payments so I don't see any huge disadvantage in contributing.
As for SRS, you can use it to buy blue chips stocks or unit trust and would be a good supplement to your retirement fund.
The current cap for CPF contribution for self employed is around $30,000 and for SRS will be around $11,500.
Lee
Sunday 22 September 2013
Wednesday 21 August 2013
Beware of Leveraged and Representative Exchange Traded Funds
With the evolution of the ETFs market, they now covered numerous products and varieties. You are able to go long or short and you are able to take a leverage position of up to 3X. There is even a Bitcoin ETF in the making.
Most of the interesting ETFs are listed in the US markets whereby some are seriously just not suitable for the normal retail investors due to their structure.
The advantages of the ETFs have been widely preached with empirical studies showing most fund managers are not able to out-beat the market. So a passive approach with lower management fees and expense fees would be considered a more effective way of getting exposure to the markets. However, with the sales charges of most unit trust being cut to close to 0.5%-0.75% and if you chance upon a promotion, it could be even zero percent.
So this brings unit trust to be on a more level playing field. The spread of ETFs plus the brokerage commission could be equivalent to the 0.5%-0.75%. This brings it in line with the sales charge of unit trust. So the only thing that ETFs stand out will be the management fee which usually gives it an edge of around 0.5%-1% per annum.
However, some of us would not mind paying the extra in the quest to find the next Warren Buffet or Peter Lynch whom are able to give us market beating returns.
ETFs are mainly divided into replication and representative types. Replication types usually will buy the physical underlying to replicate the performance of the markets. On the other hand, Representative types are usually structured using derivatives products.
For those who are dealing with Representative ETFs and with added leverage feature, you have to be "Ready to Trade" rather than have a "Buy and Hold mentality". Most Representative ETFs make use of futures products to create a proxy for the underlying. Most futures exhibit Contango characteristics which means longer term futures contract are trading at a higher price than shorter term futures contracts which are usually traded as they are the most liquid.
So whenever the shorter term contracts expired, the ETFs managers would have to roll over to the next contract which they have to get at a higher price so it will lead to an erosion of the Net Asset Value since he can only buy fewer contracts. If you add leverage to the picture, it is definitely not an exciting proposition for buy and hold investors.
Citing an example, Ultra Short Vix ETF (UVXY) which has a leverage of 2X and was trading at around $11-$12 when Vix was near their range low of around 12 in Febuary 2013. Recently, VIX is back to around the 12 level and the same ETF is trading at around $3.5 (Not taking into consideration the 10 for 1 consolidation). Enough Said I Guess.
To conclude, for buy and hold investors, just stick to the normal replication ETFs with no leverage. For those into leverage and representative ETFs, do take it as a trading instrument which I personally will not hold for more than a month, unless it is moving in sync with your intended direction.
Lee
Most of the interesting ETFs are listed in the US markets whereby some are seriously just not suitable for the normal retail investors due to their structure.
The advantages of the ETFs have been widely preached with empirical studies showing most fund managers are not able to out-beat the market. So a passive approach with lower management fees and expense fees would be considered a more effective way of getting exposure to the markets. However, with the sales charges of most unit trust being cut to close to 0.5%-0.75% and if you chance upon a promotion, it could be even zero percent.
So this brings unit trust to be on a more level playing field. The spread of ETFs plus the brokerage commission could be equivalent to the 0.5%-0.75%. This brings it in line with the sales charge of unit trust. So the only thing that ETFs stand out will be the management fee which usually gives it an edge of around 0.5%-1% per annum.
However, some of us would not mind paying the extra in the quest to find the next Warren Buffet or Peter Lynch whom are able to give us market beating returns.
ETFs are mainly divided into replication and representative types. Replication types usually will buy the physical underlying to replicate the performance of the markets. On the other hand, Representative types are usually structured using derivatives products.
For those who are dealing with Representative ETFs and with added leverage feature, you have to be "Ready to Trade" rather than have a "Buy and Hold mentality". Most Representative ETFs make use of futures products to create a proxy for the underlying. Most futures exhibit Contango characteristics which means longer term futures contract are trading at a higher price than shorter term futures contracts which are usually traded as they are the most liquid.
So whenever the shorter term contracts expired, the ETFs managers would have to roll over to the next contract which they have to get at a higher price so it will lead to an erosion of the Net Asset Value since he can only buy fewer contracts. If you add leverage to the picture, it is definitely not an exciting proposition for buy and hold investors.
Citing an example, Ultra Short Vix ETF (UVXY) which has a leverage of 2X and was trading at around $11-$12 when Vix was near their range low of around 12 in Febuary 2013. Recently, VIX is back to around the 12 level and the same ETF is trading at around $3.5 (Not taking into consideration the 10 for 1 consolidation). Enough Said I Guess.
To conclude, for buy and hold investors, just stick to the normal replication ETFs with no leverage. For those into leverage and representative ETFs, do take it as a trading instrument which I personally will not hold for more than a month, unless it is moving in sync with your intended direction.
Lee
Wednesday 14 August 2013
Van Gogh The Life
Being one of the most famous impressionist artists of the 19th century, this book provide insights and depict in great details on the life of Van Gogh. He lived from 1853 to 1890 and die at a young age of 37. He is more of a loner from young and was never well liked.
This biography touches on the special relationship between his younger brother and himself which indirectly led to his mental condition in the later stages of his life. He started selling art prints at his uncle's art gallery and he only started seriously painting during his late twenties.
As his style differed from the conventional art style which is of the renaissance era, so it was never widely accepted. Monet is part of this new revolution of the impressionist movement.
He led a tough life and depended on his younger brother for allowance as his paintings simply don't sell. He even married a prostitute as a wife who bore him a child. He was a total outcast and spend his later years in an asylum. This was where some of the greatest works were painted.
It is a very sad biography whereby he never reap any benefits from his masterpieces during his lifetime. He was eventually shot and die from the wound. It is still a mystery if he was trying to commit suicide or he was accidentally shot.
This book is around 900 pages and so it took me some time to finish it. After reading the book, it seems that the life of an artist is definitely not as glamorous during those days. Even in today's context, I guess it is still not a preferred route that parents would want their child to take.
Lee
Sunday 11 August 2013
National Day Staycation
My family have just recently came back from a staycation at Ritz Carlton. We have booked the room hoping to get a room with a view of the National Day Celebrations.
We wanted to go and take the flyer but guess it will be really crowded so we give it a miss.
It was a great short staycation for the long weekend. Hope everyone have enjoyed your long weekend too.
Lee
Monday 5 August 2013
Dollar and Cents- Repairing a Car in JB (Is it Worth it?)
My current ride is coming to the 6 years mark and is starting to show problems due to wear and tear. I will just like to share my experience of repairing and replacing the different parts due to wear and tear through these past two months. For a start, I am driving a Toyota Altis 07 model.
I have re-sprayed the car earlier this year and have changed the colour. Due to the sky high COE price, I am likely going to drive it all the way till this car's COE expiry. Therefore, I guess this is a worthwhile investment to make me feel that I am driving a new car :). The cost of this vanity is around 1300 dollars.
The car started showing problems 2 months back with the battery first to go. I was unable to start the engine at all, I managed to find someone to come over to my place and replaced my car with an Amaron battery for around 150 dollars.
Next, my side mirror started to give a hissing sound and the root cause was a problem with the motor mechanism which means you have to change the whole side mirror. My fan belt is also starting to show cracks. The cost of replacing for the side mirror was 200 dollars and the fanbelt was 100 dollars.
After which I went to JB to do my servicing, it cost around 80 sgd whereas it cost from 140-160 sgd in Singapore. Thus, you can save about 50 percent. Also, I changed my air-con and engine filter plus a spark plug. On top of that, I change my car's auto transmission oil. All in, it comes up to around 200 sgd.
The mechanic advised me to change my front absorber but even though I did find the ride a bit bumpy but thought I can drag it for a while more. An important point to note, if your front absorber is starting to leak oil, do try not to jack it up as it will lead to the front absorbers getting spoiled at an accelerated pace. After the servicing, the car's front absorbers totally give way but as I have an engagement in Singapore so I was not able to do the change in JB. I was quoted around 220 to 250 sgd.
The ride was totally bumpy and feel like a boat ride after the front absorbers give way. I checked with a few Singapore workshop and decided to go with one that charges around 300 dollars for the original parts as it is not far off from the rate quoted by the JB workshop. There was one which quoted 588 dollars as they say they have to change the mounting rubber and etc while another quoted 445 dollars. All are before GST.
After I reached the workshop, I found out that the quote was without labour and so plus the labour and GST, the cost was around 385 dollars. Since I am already there, I guess I have to just go ahead and the car was in urgent need of a pair of brand new front absorbers.
I did some research while at the workshop and found that the cheapest cost is to get the parts from the stockist and get the workshop to fix it for you. I check with the stockist and found that a pair of original front absorbers was just 150 dollars. The workshop quoted me 300 dollars for it. Based on a simple calculation, with the labour cost at around 80 to 100 dollars, the total cost using this approach will be similar to the JB workshop quote and I can save around 100 dollars.
This is a sum up of the recent repair costs for my Altis:
1) Battery 150
2) Side Mirror 200
3) Fanbelt 100
4) Servicing in JB 200
5) Front Absorbers 385
Total costs $ 1035
To conclude, it is advisable to do your servicing in JB if you know any good workshops provided your car is a normal and not a luxury car as you can easily save 50 percent. For repairs and replacing parts, if you get from the stockist, the pricing will be quite similar to what is quoted by the JB workshops. I feel it is more prudent to change parts in Singapore. If you let the Singapore workshop get the parts for you, the total cost is likely to be 50 percent more than getting them from the stockist. If you happen to go to a workshop that is trying to make you a carrot head, it could be 80-100 percent more.
Lee
I have re-sprayed the car earlier this year and have changed the colour. Due to the sky high COE price, I am likely going to drive it all the way till this car's COE expiry. Therefore, I guess this is a worthwhile investment to make me feel that I am driving a new car :). The cost of this vanity is around 1300 dollars.
The car started showing problems 2 months back with the battery first to go. I was unable to start the engine at all, I managed to find someone to come over to my place and replaced my car with an Amaron battery for around 150 dollars.
Next, my side mirror started to give a hissing sound and the root cause was a problem with the motor mechanism which means you have to change the whole side mirror. My fan belt is also starting to show cracks. The cost of replacing for the side mirror was 200 dollars and the fanbelt was 100 dollars.
After which I went to JB to do my servicing, it cost around 80 sgd whereas it cost from 140-160 sgd in Singapore. Thus, you can save about 50 percent. Also, I changed my air-con and engine filter plus a spark plug. On top of that, I change my car's auto transmission oil. All in, it comes up to around 200 sgd.
The mechanic advised me to change my front absorber but even though I did find the ride a bit bumpy but thought I can drag it for a while more. An important point to note, if your front absorber is starting to leak oil, do try not to jack it up as it will lead to the front absorbers getting spoiled at an accelerated pace. After the servicing, the car's front absorbers totally give way but as I have an engagement in Singapore so I was not able to do the change in JB. I was quoted around 220 to 250 sgd.
The ride was totally bumpy and feel like a boat ride after the front absorbers give way. I checked with a few Singapore workshop and decided to go with one that charges around 300 dollars for the original parts as it is not far off from the rate quoted by the JB workshop. There was one which quoted 588 dollars as they say they have to change the mounting rubber and etc while another quoted 445 dollars. All are before GST.
After I reached the workshop, I found out that the quote was without labour and so plus the labour and GST, the cost was around 385 dollars. Since I am already there, I guess I have to just go ahead and the car was in urgent need of a pair of brand new front absorbers.
I did some research while at the workshop and found that the cheapest cost is to get the parts from the stockist and get the workshop to fix it for you. I check with the stockist and found that a pair of original front absorbers was just 150 dollars. The workshop quoted me 300 dollars for it. Based on a simple calculation, with the labour cost at around 80 to 100 dollars, the total cost using this approach will be similar to the JB workshop quote and I can save around 100 dollars.
This is a sum up of the recent repair costs for my Altis:
1) Battery 150
2) Side Mirror 200
3) Fanbelt 100
4) Servicing in JB 200
5) Front Absorbers 385
Total costs $ 1035
To conclude, it is advisable to do your servicing in JB if you know any good workshops provided your car is a normal and not a luxury car as you can easily save 50 percent. For repairs and replacing parts, if you get from the stockist, the pricing will be quite similar to what is quoted by the JB workshops. I feel it is more prudent to change parts in Singapore. If you let the Singapore workshop get the parts for you, the total cost is likely to be 50 percent more than getting them from the stockist. If you happen to go to a workshop that is trying to make you a carrot head, it could be 80-100 percent more.
Lee
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