Savings account with higher than FD interest till June 2020 (first 100k to 200k)

1M SOR rates has turned negative (https://www.businesstimes.com.sg/banking-finance/singapore-sees-negative-rates-creep-in-with-flush-liquidity). The latest Tbills auction closed near zero yield. As monetary base expand across the developed countries, savers are penalised as the printing of money force down the price and value of money. 

Looking at the current environment, some banks provide above average deposit rates:

Hong Leong Bank first 200k = 1.5975% 

CIMB first 100k = 1.43% (not stated valid till when)

RHB High Yield first 100k = 1.4125% (not stated valid till when)

Maybank Isavvy first 200k = 1.3%

SCB Esaver first 200k = 0.7% (till July)

Out of the 4 malaysian banks, I have 3 accounts with them. They do need a lot of patience to work with. HL bank does not even have a banking app (if you downloaded one, its the Malaysia's version). Maybank is actually the best among them in terms of online banking, recently improved interface sees them assimilating to our local banking digital expectations. 

As local banks with huge liquidity from locals and foreign funds are unlikely to match their rates, savers unfortunately have to put up with some inconvenience of having multiple accounts with sometimes frustrating digital banking experience.

Hong Leong Bank does not even provide estatements. You need to pay then to generate a statement of account standing. I do not think it will cultivate any customer loyalty as deposit rates becomes commoditized - ie the highest rates take all. But given the rates are higher than all new mortgages rates now, unfortunately, we would have to take it, even if there is no internet banking!

Miles or cash back? An opportunity cost perspective

I used to be a 100% cash back credit card chaser as it is hassle free and cash is always better than a captive currency like miles.

Recently, I have been reading quite a bit on miles blogs. Apparently, there is strong interest in chasing the miles to redeem for premium flights. But do they actually make sense? The value per miles as advocated by some blogs is 1.9 cents per mile. Hence even paying 2% admin fees to buy miles make sense for some.

I would probably value it at no more than ~1.57 cents, which I will illustrate simply below, base on my personal circumstance.

As I spend 3k per month, I usually split up 2k on UOB one card (5%) cash back and 1k on OCBC 365 cash back card (averages 3.5% or so). For simplicity, the cash back I get back is roughly $135 per month. This works out to be 4.5% blended spending cash back.

If I were to spend it on miles, I probably would apportion my spending on 3 cards: $1k UOB Visa pay wave (4 miles), Maybank horizon (3.2 miles) $1k, miscellaneous $1k spending on UOB privi miles card @ 1.4 miles/dollar earn rate. I can earn approximately 8600 miles monthly.  

Hence the opportunity cost to earn the miles is to give up cash back of $135 which works out to be 1.57 cents per miles. The true opportunity cost should be even higher since cash is paid frequently  to offset bills and miles can expire (or even devalued).  

The attractive part of miles redemption is that business class tickets actually cost roughly only 30%-70% of outright purchase price when redeemed using miles. It is almost similar to earning a premium flight ticket discount coupon by using miles card.

For instance Sin-HCM-Sin business class ticket costs $1075 or 43k miles (opportunity cost $675 cash back from spending. 37% discount on ticket).

Business class ticket Sin-HK-Sin route costs $1800 but or 61,000 miles (opportunity cost $958 cash back, 46% discount on ticket).

The further the distance, the more value is derived from miles. Sin-Auk-Sin cost $5800 or 124,000 miles (opportunity cost $1947 cash back, 66.4% discount on ticket).   

It is actually uncomfortable for me to abandon cash back card altogether and earn delay gratification on business class travel. However, given that I am unwilling to pay for business class tickets, I would probably give miles cards a try.

Signs up are probably much faster to earn then spending. Hence, I am likely keeping my UOB one card for the 5% cash back but earning miles sign up bonuses to kick start the discounted business class travels.

Hence I applied for the SCB X card 100k miles for a start. That actually costs me $700 annual fee + $300 opportunity cost of using 5% cash back card = 1k. Hence my miles cost me 1 cent/mile.

In summary, it means that miles should be valued base on the cash back you give up (opportunity costs) and not on the advertised rates on blogs (base on the cost of business class travel – you wouldn’t spend cash on the tickets anyway).

Redeem miles on business class travel make some sense otherwise just stick to cash back cards to earn the cash and pay for economy class tickets.

It is possible to stick to 1 card for cash back (eg if spending is around $900/mth stick to OCBC/Citi cash back; $2,000/mth stick to UOB one card).

For miles chasers, a lot more planning is required on which card to use in order to stretch the miles rate.

You shouldn’t accumulate miles on your own and your partner should preferably share your obsession in chasing miles.  

A hybrid approach will stretch your dollars more; using miles card that earn 3.2-4 miles per dollar targeted spend; general spending to earn 3%-5% cash back is preferred over 1.4-1.5 general spending miles.  

It makes life a bit more fun, brains a lot more thinking to use a miles card!

M1 Good Service

I am really impressed by M1. I made a call to them today and wanted to change my subscription plan. Initially, there was a $20 charge and I casually mention to them to waive it, they acceded to my request without any objection.

Thereafter, they informed my that as I am on corporate plan, my new plan costs only $20.54. I replied that I was not aware I should be enjoying corporate rates and the phone officer volunteered to give me a $5 rebate on my phone bill for the next 6 months as goodwill compensation.

I decided that my data plan was going to waste as I seldom use the internet other than checking emails. Besides my company provides a state of the art smartphone that has everything to keep me working 24 hours. I can't be surfing internet on both phones together right? Hence I decide to withdraw my personal data plan from M1.

More savings for me ahead, though I still prefer the days when apple and blackberry are just fruits.

Highest Fixed Deposit Rates in Singapore

Just realised that local banks fixed deposit rates are really crazily low. Effective interest rates after all those interest on interest, free vouchers and loyalty bonus gimmicks never breach 1% PA.

But wait, check this out..

Not some Ponzi scheme but fresh rates given by ICIC bank. BUT, they only have one pathetic branch at Raffles Quay. Still not a bad deal for most people!

Their Aussie rates, my favourite currency is as follows:

No link to their websites as this is not an advert.

Stretch you dollars series: Preferred Banking Standard Chartered Bank

Just receive the preferred banking package. The package sent was quite delightful, considering that I only applied for a credit card and current account.

The card comes with 25,000 points upon first transaction.

There is an overdraft facility that is interest free (without processing fees) for the first $3,000 drawn upon. The current account comes with a debit card that comes with 2% cashback on mastercard spending.

Spending gives 1.5x reward points for $1,500 of spending and below; 2.5x reward points for purchases above that.

Different account categories earn points monthly. For example, a current account, time deposit and investment account earn 250 points monthly or 750 points in total. Online payment of credit card also yield 250 points.

The package comes with some 1-1 vouchers.

I have enquired that there is no termination fees AFTER 6 months for preferred banking account. Before that there is a $30 early account closure fee.

Not a bad deal.

Qualifying criteria: Earn more than $6000 monthly or have $50,000 with SCB. If you have a mortgage with more than $600,000 in value, you also qualify.

The new American Express Rewards Card

One of my colleagues is deciding to buy a 5 year savings plan that costs $20,000 upfront. At the end of the 5^th year, he will receive $1,000 and at the 10^th year, he will get $25,000. In total, his yield is a miserly 3% (average).

This return is better than our 0.15% banks’ interest rate though.

The good thing about his savings plan is that one can pay using any credit card.

Since the new American express rewards card (ARC) advertisements can be seen anywhere, let me do a simple calculation to see if paying $20,000 using this card actually increases his yield.

ARC gives 100% points on spending for the 1^st 90 days. Thus my friend will get 40,000 points upon paying his premium.

He spends $20,000 on a calendar year, thus entitled to 50% bonus points. This is another 10,000 points.

In total, he gets 50,000 points, which allows him to exchange for $250 of cash.

If he adds that up to his total endowment return, his average return is 3.125%.

My friend has a visa infinite card from StandChart. It gives him 2.5x reward points on spending. Thus spending $20,000 gives him 50,000 points. This again works out to a payout of $250 spending credit, similar to ARC.

Hypothetically, if he gets a card that gives him 10% cash back ($2,000) on his spending, he will get 4% return on his endowment plan. Unfortunately, there is no such plan at the moment.

If he uses the Manhattan Card, he will get a $300 rebate. If he pays the bill through NETS using his X tra saver card spread over 2 months, he gets a $100 rebate, a total of $400. This brings his endowment yield to 3.2%.

I am extremely impressed by ARC marketing. I seem to see if everywhere, on papers, buses and even MRT floors! However, there is really nothing much to shout about, considering the points are merely 1.25% cash back on spending (at most).

I almost applied for the card when I was at Ion Orchard, but a mental calculation made me realize that I am better off holding the current cards I have now.

I firmly believe that cashback credit cards are more superior products than points/miles accruing ones. Thus readers should note that points are merely gimmicks to entice spending.

Best Credit Card in Singapore

This issue of stretch your dollars series is definitely worth a read for all who qualify for credit card applications.

My colleague and I went shopping for a car last week. He liked the car and decided to pay for the booking fee. As he didn’t have a credit card, I offered to pay for him. The booking fee costs $16,000 thus I have to split payment between 2 cards. The first card I used was the Manhattan Card. It gives me a cash rebate of 5% on spending, with a cap of $300 every quarter. Good choice, I just earned $300.

The 2^nd card I used was an Xtra Saver Debit card by Standard Chartered Bank (SCB). As I have more than $6,000 in the account, I am eligible for a 2% cash rebate on my MasterCard transactions. Not bad, I will be getting $160 cash rebate.

As I rarely use my cards, SCB sent a mailer saying that I qualify for a 5% retail rebate, up to a cap of $50 for my purchases. Coincidentally, I earned another $50.

The Xtra Saver card gave me another 0.5% on NETS payment (cap at $50). Hence I will be using the Xtra Saver card to pay my Manhattan Card bill ($8,000). This gives me $40 cash back.

My total gain was $550, for helping my colleague out. He transferred the money back to me this morning.

I did not do my “homework” on which card to use before going shopping but when I came back and search the web on the “best credit card” to use for the $16,000 purchase, it turned out that no matter how many points you chalk up, the returns can hardly be as good as the above combination.

The best combination, perhaps is to use 3 different (holders of) Manhattan cards to clock a $800 rebate ($16,000x5%) plus paying 3 cards using Xtra Saver NETS ($80 rebate) which gives a grand total of $880.

However, it will be too much of a hassle to do that. Currently, even with American Express 100% bonus points or SCB Visa Infinite 2.5x points system, the total vouchers value will not be close to $300. Don't even bother about airmiles or POSB everyday card's 0.3% cash rebate.

Typically, credit card gives 0.5% rebates in voucher values on spending. For example if I spend $10,000 on the card, I can redeem around $50 of vouchers. Even with 3x points on spending, I can only get $150 of vouchers. This is a far cry from pure 5% cash rebates from Manhattan Card.

The only drawback for Manhattan Card is that it only gives 5% rebates when spending exceeds $3,000. But readers can consider using this card to pay your annual insurance premiums, wedding banquet or any other purchases that exceeds $3,000. Do not be fool by marketing gimmicks of 2x or 5x points. They are at most 1% to 2.5% rebates of your spending.

Selecting a gym membership with swimming pool

Due to work and studies commitments, I have become rather unhealthy, as I sit on the chair for long hours without knowing and moving. Hence, I decided to look for a gym membership that would best serve my needs.

Basically, I would need a gym membership that is near my workplace or home that comes with a swimming pool. I intend to spend 45 minutes to an hour each time.

My budget is only $40 monthly.

One reputable gym got back to me and offered me a promotion: 36 months of gym membership (all gym access with pool at Suntec) and 6 months free, together with 3 complimentary sessions of workout with a personal trainer. It costs an average of $48 monthly. The only drawback is that I have to commit for 3 years at one go and the pool at Suntec is quite far (though within walking distance) from the gym.

Another gym membership costs roughly twice the price but there is no “lock in” period. It also comes with an integrated pool beside the gym but is too far from my workplace. Besides, it is way above my budget.

Registration fees were waived for the above 2 gyms.

I enquired on the SAFRA (Energy First) gym package and was appalled that it costs almost $60 per month after registration fees and monthly fees were factored in. If you have been to SAFRA gyms, you know it is only a slight tad better than the community sports centre ones.

The SAFRA membership was given by my company and we sometimes conduct our meetings there. My only impression of the facilities and environment is “minimalist” theme and a heaven for teenage kids. The bowling allies and pool centres are remembered to be packed with teenagers in the afternoons. However for less than $4 a month membership and an additional 7% off caltex petrol, I do not expect the sky.

After much consideration, I decided to go for the cheapo and convenient way of signing up for my community centre gym instead. It costs me a mere $10 monthly and comes with a treadmill and a few weights machine. It is only a 5 minutes walk from my home and this translates to savings on car parking and time. I will go for a swim in SAFRA clubs twice a week (which is free for members) and hit the treadmill twice in my community centre for 45 minutes. The drawbacks are it can be rather crowded in the evening and some people there can be boorish and vulgar. Not recommended for ladies though!

Hence my total cost for the healthy lifestyle cost a mere $18 a month inclusive of parking fees. Not bad for 4 workout sessions a week. The good thing of spending way below my initial budget is that I do not feel pressurised to go the gym or pool as my “sunk costs” are low. Even if I reduce the frequency of the exercises by 50%, I do not feel wasteful as I got a pretty good DIY hybrid deal.

Healthy lifestyle, here I come!

Starhub 50% cable TV promotion

It has been quite some time since I found some money saving tips!

Last month I passed by a shopping mall and was approached by a Starhub cable TV promoter. My natural response was "have already". He was persistent and replied how about 50% off your bill for one year?

Now that's enticing! My cable TV set me back by $50 monthly, including the rental of hubstation. How is that possible? Starhub never offers recontract offers for loyal customers. My loyalty is worth only $50!

Well, just return your set up box today, clear your outstanding bill and sign up with me tomorrow. I will report you as a new subscriber! You just need to sign a 1 year contract and get a 50% off your channels and hubstation.

Knowing the promoter is commission based, I took his word and sign up! Today I received the bill and true enough, I got 50% off for my bill and for the next 11 months!

I do think it is a silly idea to pay out unnecessary commission to the promoters while inconveniencing existing subscribers. Is Starhub aware that their glaring loopholes are eroding shareholder value day by day?

Loyal customers are not retained; new customers are pursued while incurring high costs of acquisitions. As a shareholder of Starhub, I am unimpressed with their marketing strategy.

Is there a need to report "new" subscribers for pay TV when 90% of new subscribers were loyal customers yesterday? Because of the need to manipulate the numbers, fulfill KPIs, money spent on advertising and marketing are wasted down the drain through the loophole.

Time to wake up and value loyal customers, revamp your marketing strategy and retrain your sales officers, Starhub!

My loyalty is only worth $50 voucher

I called up Starhub recently to enquire about re-contracting my mobile line. Being a faithful 4 year starhub user, I wanted to request for a voucher to offset the purchase price for my next mobile phone.

After 3 days, an advisor called me and told me I am entitled to get a $50 handset voucher which will follow my registered number up to 1 month. I will not get a mailed voucher and neither will I get a cent more.

Compared to M1, which I have been a subscriber before switching to Starhub corporate plan, M1 had rewarded me with $100 vouchers without fail every 2 years. Upon termination notice, it offered a 30% cut to my mobile bill to retain their service.

Also, M1 offers a $100 discount to new sign ups now, even for corporate plans. I guess its time to switch back to M1. Moreover, the cheapest corporate plan is only $15 monthly, which is more than enough to serve my needs, giving me a $10 savings monthly. Caller ID and auto roaming will be free for 2 years.

I urge readers to check out corporate plans over the phone with the telcos. They are not advertising such plans and you will need to call them up personally to check. You could possibly make substantial savings of few hundred dollars if you are entitled to sign up on corporate plan.

Time to say goodbye to Starhub!

Stretch the dollars series: Terminate your broadband and get a free home line

I am beginning to enjoy $35 of monthly savings after terminating my Singnet broadband. I have switched to using the starhub hubstation (additional $4 monthly, as compared to digital setup box), which provided 1MPS free internet. The catch is that your computer has to be near the hubstation before connection can be made. Alternatively, you can also fix up a router for wireless home access. However, connection may be much slower.

I see little speed differences between Singnet’s 1MPS paid subscription and the hubstation connection. Best of all, I am able to get a free home line from starhub with my old number being port over to them. There is free incoming and outgoing local calls and no monthly fees.

Singtel made a last attempt to waive off my home line fees if I sign up a 2 year 3 MPS plan @ $30 monthly with them.

Too bad, it wasn’t appealing enough.

Goodbye Singtel. No more fines from you again!

Stretch your dollars series: The case of buying a washing machine

My washing machine broke down on Sunday and I was in a frantic search to buy one as I did not want my mother to use her bare hands to wash all our clothes. Immediately, I took out Saturday’s papers and scanned through for promotions.

COURTS advertisement caught my attention. A LG front loading washing machine cost only $450 and they are also giving out $50 GIANT and $50 COURTS vouchers. Together, the washing machine on offer seems a steal. However, when I went over to enquire, the staff told me the promotion was only 1 day and there is only $50 vouchers given by the brand distributor.

I felt rather cheated on a Sunday morning.

I decided to look for another brand and saw a Samsung washing machine. It is sleek looking with digital thermostat functions. It cost $550 together with a $50 GIANT voucher. However, if I were to purchase the 5 years extended warranty, it will cost an additional $150. Together with a delivery charge of $20 (for members), it will cost me $720 for a China made, Korean brand washing machine. The sales staff was also quite impatient to close the deal which actually let me rethink the “offer”.

I decided to walk over to NTUC at Ang Mo Kia HUB to search for bargains.

The exact modal was selling for $470 at NTUC (vouchers included)! However, there wasn’t anybody there to help me. No sales staff to enquire about the functions, warranty and delivery dates.

I was not impressed by their sloppy service and thus drove to Katong Mall. Over there, the same machine was selling for $600. Initially, I regretted that I did not purchase the item at NTUC.

Then, I walked over to parkway Harvey Norman. It was the smartest choice. The same modal cost only $460 (after a $100 rebate) together with the $50 shopping vouchers. The sales agent explained to me patiently the differences between front and top loading washing machines and operations of the machine. In the end, I purchased it and added a 5 year warranty, costing me $85.

Including a $30 delivery charge, I paid merely $575 for a brand new washing machine with 5 years warranty. It was delivered on Monday afternoon.

Kudos Harvey Norman! Excellent service!

On hindsight, I actually had the impulse to buy the machine when I was in COURTS. However, I feel rather silly to pay almost 30% warranty premium. I do find it rather “aunty” to do such nitty gritty comparisons, but it really pays to source for the cheapest deal around. Not only did I manage to save $145 this time round, my future purchases will revolve around “comparing comparables” before I buy bigger ticket items. I think it is a good practice to know how much others are selling.

We notice that all businesses have different pricing strategies, profits margins, cost pressures, warehouse sizes and also sales quotas from manufacturer. This will ultimately translate to different pricings on all items. Sometimes the difference can be quite big. Also, I always try t buy items I need that are on sale. Again, this is applicable to the stock market. We definitely need to invest but we will only buy businesses when they are on sale.

Stretch your dollar series: Commission Rebates

THIS POST IS GOING TO GET AGENTS REALLY MAD. Apologies in advance!

Many car and insurance salesman argued that (prospective) clients should not request for a commission rebate. It is unfair to request a portion of one’s salary when they work for you. Sounds correct?

In a way, yes. But in my way, NO.

I personally have experience buying insurance and cars. I too ask for commission rebates in CASH, rather than vouchers, sports rims, solar film, sound proofing and other non-cash items.

Am I being unfair to them? After all, they derive their main income from their sale of cars and insurance. Essentially, customers who buy from them, pay them their salary. If everyone were to request rebates from them, they might end up robbing the banks to make ends meet. (Thus some unscrupulous agents resort to just robbing you, if you know what I mean).

Customers who purchase the cars or policies also exercise authority, decisions (to purchase) based on the recommendations/ advice of the sales agent. WOW, sounds like my boss.

My boss decides my salary. If I am not willing to do the job at his stipulated salary, someone else would. By the same token, if the sales agent is not willing to give me cash rebates to make my purchase cheaper, I will look for someone else. Somebody out there wanting to make just a little from my sales is more than willing to give me a $1,000 rebate for my car purchase; a 40% rebate on my life policy.

Wait wait. Will they starve? Let’s take a look at one car agent’s and one insurance agent’s sales commission. The below illustrations were given by my agents:

Car Agent Rob working in Brother Motors, sells 15 cars per month.

Basic pay: $500 monthly

Commission for selling a normal sedan: $500

Insurance: 12% of motor insurance

Loan: 0.5%-2% of loan amount, depending on loan amount and tenure.

Trade-in vehicle: Depending on make, modal, age: $0-$1000.

John bought a car from Rob, trading in his 3 year old car for a new one.

His insurance premium is $1500 and his loan tenure is $50,000 for 7 years.

Rob earns: $500 (Bro Co. commission) + $180 (insurance commission) + $ 1% of $50,000+ $200 (trade in car commission) = $1380.

How accurate is the figure? Rob is my university classmate. I am quite sure he did not lie to me. The figure should at least 80% correct. It can be less, but it can be MORE as well.

How much did Rob gave John in cash rebate? John asked for $1,000 cash back and he gave him, happily.

Why?

Even earning $380 per car will yield him $5,700 monthly before his basic salary. The paperwork he has to do is simple.

In reality, only 30% of his customers “squeeze” him. Most of them are just happy with few hundred dollars worth of paint protection, rims or solar film.

No wonder he has 2 condominiums.

From John’s and my perspective, we choose the person who can lower our purchase price to the minimum, stretching our hard earned dollar.

As for commissioned insurance agents, selling a life policy will yield them 50% of premium paid for the first year (assuming a traditional whole life). My policy cost me $3000 annually. A rebate of $1,500 was given to me.

Why?

This is because for the 2nd, 3rd and up to the 6th year, the agent will still able to derive a percentage of your premium as his income. If I am not wrong, it goes something like this:

Year 1: 50% (of premium)
Year 2: 30%
Year 3; 20%
Year 4: 10%
Year 5: 6%
Year 6: 5%

Again, the figure might not be 100% accurate, but it is at least 70% correct. ILPs also allocate a similar percentage of premiums (as commission) to the financial advisor. No prizes to guess why agents are pushing such products aggressively.

My agent earned nothing for Year 1, but for the next 5 years, he has a recurring income from my policy. My agent, a primary school friend, earns $8,000 a month.

My car and insurance agent will not starve at all. In fact, I am more likely to starve than they are!

The point I am coming from is not to say that since they earn a high salary, hence we should get something back from them. My point is both parties should aspire to be in a win-win situation. I choose the product and pay the price I want.

Of course there are intangible benefits like sales and customer service. However for me, I rarely look beyond dollars and cents when it comes to purchasing commercial products.

Disclaimer: The purpose of writing this entry is not to encourage prospective clients to ask for cash rebates. You should work something out with your agent to acheive a win-win situation. The figures illustrated may not be 100% accurate.

Stretch your dollars series: Get $58 for applying HSBC platinum card

While surfing today, I came across HSBC promotion. Apparently by answering 6 simple questions correctly, one will get $18 credited into his/her new credit card. If you apply for HSBC’s platinum card, you will also get $40 cash rebate, on top of the $18.

The questions are easier than you think!

I think this is much better than getting so silly spa vouchers or bag as signing up gifts.

Cash is the most welcome, anytime!

$58 is just a few clicks away!

Link below:

http://www.hsbc.com.sg/1/2/personal/cards/hsbc-platinum-card

Stretch your dollars series: Borrowing to invest

I received a mailer advertisement with my UOB cashplus statement. Initially I thought it was the usual 0% interest fund transfer with a 5% processing fee.

Nope, this time the processing fee is only 1.5% with 6 months 0% interest rate.

The minimum amount to borrow is $10,000. The website is here: http://www.uobgroup.com/pages/promotions/promo_cashplus_funds.html

(According to my mailer, the promotion ends 15 July, not June 30 stated on the website.)

A quick calculation shows that the annualized interest rate is roughly 3.4%, 2% higher than SIBOR.

This is certainly enticing to me!

The interest accrued is actually $150 upfront. If you have read my stretch your dollar series here, I have planned to use $1000 to pay my starhub bills in advance, together with my usual definite expenses. In this way, I can get a 10% rebate of $100. Now, even if I just leave $9000 in the fundsupermart cash fund for 6 months, at a conservative yield of 1% PA, I can get back $45 after 6 months. Which means the cost of borrowing is only $5 for 6 months!

Of course I still have to pay back a minimum sum of 3% (roughly $300) per month for 6 months before the 18% PA interest rate is reverted. Hence the borrowing cost is at most $10 for 6 months.

What’s the plan now?

I am actually planning to use the $10,000 this manner:

1) $1,000 for advance payments to obtain cashback of 10%
2) Invest $9,000 into Singpost before XD. In this way, by December 2008, the total dividends I have collected will be 5 cents per share, yielding roughly $450.

My total gain will be $550. After interest deduction of $150, my yield will be $400. By December I will be able to repay the remaining amount of $8200 (estimated) as my year end bonus is usually above $10,000.

In a way, I see it as advancing my year end bonus to invest into Singpost business now.

However, my current credit limit is only $8000, based on my payslip 2 years ago. Hence I need to send them a written mail and latest payslip to “upsize” my credit limit.

I hope they can increase my credit limit to $10,000 in time or else I will not take up the fund transfer promotion at any higher rates.

If I get lucky, I can win an Audi R8 too! Though I will definitely put up for sale to buy more Singapore Blue Chips!

Stretch your dollar series: 5% rebate on your income tax

Maybank is currently having a promotion. By depositing $3000 and above into the SaveUp account and arrange for GIRO payments on your income tax, you are entitled up to 5% income tax rebate. The condition is to maintain at least $3000 in your account or 24 times your monthly GIRO payment, whichever is higher.

Example:

Income tax payable $1200

Monthly payments: $100

To be eligible for $5 (5%) rebate monthly, you need to maintain $3000+$100(income tax installment) in your SaveUp account.

Unless your income tax payable is $1501 or more, you do not need to maintain more than $3000+income tax installment.

I have to remind readers that a 5% rebate on your income tax is NOT equal to 5% return.

With reference to the above example, by depositing $4200 in the SaveUp account, you will eventually get a $60 rebate one year later. This works out to be roughly 1.4% return. The return will be higher if you maintain the minimum deposit of $3100 monthly. However, the return will not exceed 2%. (60/3000 X 100%)

Take note that you will also be entitled a 0.5% interest on your deposit in the SaveUp account.

Is it worth it?

I believe the 5% rebate is a steal for those who already have an existing GIRO arrangement. You just need to bring your income assessment slip to Maybank and they will help you with the rest.

If you are like me who usually pay your income tax using Diners credit card, it might not worth the trouble, time, paperwork and opportunity cost to get a 1.4% return. I read it as a fixed deposit package instead. I prefer to invest idle cash!

Also, the rebate is a promotion, hence if it ceases next year, I will need to take time off to terminate the account and make new arrangements.

To each his own!

The link is here:

http://info.maybank2u.com.sg/personal/deposits/incometax_giro_promo.htm

Stretch your dollar series: Standard Chartered Bank 10% cashback

I just received a mailer from Standard Chartered Bank (SCB) stating that I will be eligible for a 10% cashback (of up to $100) for all retail purchases charged to my credit card (CC).

I was elated as I have 2 credit card accounts with SCB and that means I can get up to $200 rebates by spending $1000 on each card.

In order to confirm the offer, I made a call to their platinum hotline. Luckily, I checked and it was then I realized that only my VISA Platinum was eligible for the GSS promotion. The promotion has started and will end on 20th July. The cashback will be credited to my CC account by end August.

This is still good news! Last year when I applied for the Master card, I was given the 10% rebate a month later promptly. I merely spent on necessities such as petrol, coupons and Starhub bills.

For Starhub bills, I went down to Starhub centre and paid the bills 10 months in advance. I remembered paying $300 for my phone bill, $400 for my cable TV, together with some arrears. (I usually pay Starhub after getting repeated reminders. I cannot do that for Singtel though, as it levies at $0.50 reminder fine!)

This is as good as earning a 10% interest by depositing $1000 into my Starhub account! On top of that, I get to earn CC and Starhub points!

Alternatively, I can splurge on a new desktop at a 10% discount. However, I hope I can resist the temptation of IT fair!

Check your postal box now!

Take note that only customers who have received the mailers are eligible for this promotion.

Stretch your dollars series: Reach your destination early

I understand that many peers my age like to spend/shop whenever they get their pay cheques. They feel that it is a reward of their hard work, tolerance to bitchy/domineering bosses and to relax one’s mind and body. However, I do not obtain pleasure from shopping and buying goods that are not necessary. If you take a close look of my expenditure, I rarely splurge on things that are not necessary. In fact, I derive pleasure from reading good books, jogging around my neighbourhood, watching cable drama serials with intriguing plots, deriving income from investments, talking to wiser people on life, taking an afternoon nap, driving down to neighbourhood central for a good meal and meeting up with friends working in different occupations at McDonalds or starbucks.

It does not cost me much to obtain pleasures in life. I have often reasoned that it is easier to spend than to save. It is harder to derive pleasure cheaply than to spend and derive it. Hence, I am doing things the difficult way (relatively) to get the same outcome. Does that mean that I am intellectually less competent than people who choose the easier way to get the same outcome?

It does not matter to me. In fact, I am relieved that simple things in life can keep me motivated and positive to face life’s challenges. Most importantly, if I can retire earlier than my peers, I do not mind to be intellectually handicapped all the way.

At least I can reach the finishing point earlier.

On a personal note, I would like to thank all the encouragements given by members from Sgfunds forum. I have received encouraging private messages and positive suggestions on my investment strategies.

Thank you!