take that with a pinch of salt. here are the URA landed index 1 year draw down


1977: -5%
1984: -5.9%
1985: -15.97%
1996: -2.6%
1997: -11.31%
1998: -37%
2000: -1.6%
2001:-10%
2002:-2%
2003:-2%
2008:-2%
2014:-5%

the biggest drawdown is 37%. out of the 12 drawdowns 8 is less than 6%.

what makes him so sure about the magnitude.

thanks starlight for posting this.


the idea of this stages of wealth is firstly, to satisfy our yearning to measure where we are, or where our friends are in a prudent manner.

secondly it is to pace our wealth progression.

notice there isn’t a retirement in this meter. I don’t think retirement is the right way to look at things, if you research up the history why there is retirement in the first place.

it is usually replaced with financial independence or freedom

the sad thing is, don’t demonize stock investing.


if you buy an ipad at $2000, no matter how you justify it, its hard to see you getting what you pay for out of it.

if you overpay for an asset, you wait for a long time for the price to come back. this is especially so for those who bought their condo in 1997 and had to wait till 2010 to break even on price appreciation.

when you overpay, your capital may permanently impaired. by that we mean its hard to see the busienss generating cash flows that allows it to trade at your cost price.

it goes the same whether its forex, properties, options or stocks.

the sad thing is, if you failed to build competency and do things prudently, you will get it.

part of investing success is a system/process of continous learning and reflecting. its not without work. its a job. if you are not willing to put in work to prospect, learn and execute, then its better not to do anything.

fluffyboy:

kyith:

Stocks and a mixture of cash in short term accounts, and preference shares, bonds if they are attractive.

Its owning listed businesses which are cash flow generative, and what I am able to understand at acceptable valuations.

I am currently holding 300k cash entirely in fix deposit. I am unemployed currently and relies on the fix depost interest income for my daily living expenses. Any advice how to make my money work harder yet at the same time low/zero risks? Reason being these are my entire life savings and I cant afford to lose the capital.

Hi FluffyBoy, sorry to hear that.

I think if you are willing to share more information, the forumers may be able to advice better.

You stated that you are unemployed but could you tell us what were you train in, whether you are married or single.

Also how much is your basic survival expenses.

If you want low to zero risks, then i am afraid i don't have much solutions.

Property - buy at the wrong value, it http://www.investmentmoats.com/stock-market-commentary/value-investing/property-investing/

Bonds - comes in different grade some higher quality more senior which are less likely to default, but those that yield higher always run the potential to default

Low Cost Exchange Traded Funds that follows the STI Index - technically a good tool to build wealth as it mirrors the straits times index, and gives a current 4% dividend yield if i am not wrong, but over the short term there is volatility. this year its down 15%. so if u dump 300k in its value will deduct 45k.

Stocks - same as low cost exchange traded funds that follows the STI index but subject to business risk and governance risk.

in short there are not many stuff that have zero to low risk.

depending on your age, there may be Insurance Endowments that distributes yearly cash flow after you put in a single lump sum premium for 5 years. One example is Premier Life from OCBC > http://www.ocbc.com/personal-banking/pr ... emier-plg/

This legacy planning policy works by you putting in a lump sum of e.g. 350k and then 5 years later they pay out 1k/mth. note that the 1k/mth is not guaranteed and subject to their investment returns.

i think there is an entry age, and do note! I am not saying this is no risk or low risk, i am just providing perspective

at the end of the day, there is no free lunch.

LEE_YL provides a good idea but you got to tell us more as in where you are staying currently.

If you are in a hard place, you got to make some tough choices. one of my reader in the past share with me an account of http://www.investmentmoats.com/budgeting/how-a-couple-rented-out-all-3-rooms-of-their-hdb-stay-in-it-and-borrow-to-pay-the-downpayment/.

tough times u need to think out of the box.

hophlng:

personal accident is important because during our financial productive years (hope no one pan tang) the chances to die from accident means is the highest. And for couple of hundreds of dollars you can get a few hundred K of coverage.


But the other important thing in PA is the medical coverage. If you are the clumsy type who always fell and trip and like to visit Chinese physician like Eu Yang Sang, PA Medical coverage is god send.

are you sure that the chances of you claiming this is higher than the chances of hospitalization?

wouldn't a hospitalization plan be more important than a personal accident plan?

there is no free lunch. endowment http://www.investmentmoats.com/budgeting/do-your-insurance-saving-plans-endowment-give-you-3-to-5-returns/ based on some of the past policies provided by readers.


the only advantage of endowment is force saving for folks that feels its not important to have wealth building competency.

you have to pay for a distribution cost for that unfortunately. having said that prefernce shars and bonds may not be accessible and needs to be evaluated as well

Jennifer:

kyith:

there is a part of me seeming to think we couldnt get the money out.

:rotflmao:

Have you submitted the nomination form?

Can opt to pass the money in your CPF accounts in cash to your beneficiaries.

what i meant is that the money borrowed to the government will not be seeing the daylights.

this is one of the best insurance as well as personal accident for the insurance company because the payout as a cohort versus the premiums earned is so so so attractive.


which also means the probability of claims is very low.

having said that, it is better if you are renting out an investment property to purchase since you are not in control.

not just that, one month that you cannot rent out is loss income or loss opportunity cost, which affects your net rental yield for the year.

honestly i wonder how much the tax relief will drop the taxes by. cause its not everyone if you drop 7k or so it will go to the lower bracket.


if you are earning around the range of 60k and you save 20k, to move to 40k, the tax diff you pay is $850 to get your money tied up.

never always be a fan of the CPF as a pure government tool even though i talk about its benefits so much. there is a part of me seeming to think we couldnt get the money out.

janet88:

hubby took a loan and paid for his own uni studies.

I would prefer my kids to take a loan (if they can make it to the U) and repay when they finish their studies...this way, they have a sense of responsibility. right after their studies, they have no other commitment...so it should be possible for them to repay their loans and at the same time learn to save.

i was thinking wouldnt it be better to get the child to work for it, instead of taking a loan. i always find that this is a problem with why the USA have a spiraling tuition loan crisis: the kids do not link what they study with technical viability for working, they have no idea of debt and interest responsibility. when it hits them, they grow resentful why no one actually educate them in this aspect.