Interest Earned in Oct - Time Deposit vs. Money Market Fund

Putting cash in the bank erodes wealth. However, I have a good portion of my cash in bank because I foresee liquidity needs in near term.

Anyway, here's a little emprical observation about money placed in Maybank time deposit vs. money in MMF with Phillip Capital over the last 3 months:

3 months time deposit of $10,000 placed in Maybank at the rate of 0.5%.
Interest = $12.50

According to Phillip Capital MMF, 3 months return = 0.2927%
That means, $10,000 will give a return of about $29.27
An excess of $16.67, or 132%, over 3-month time deposit.

From my own account, I received $17.45 for approximately the same amount of principal for the past 1.5 month. Ignoring any compounding effect and volatility in the returns, that means the same amount of prinicpal could possibly earn about $34.90 in 3 months.

If government guarantee is the reason for putting money in the bank, are you willing to take up more risk by forgoing the assurance for this excess return?

Buying a Used Car in Singapore? - Do Your Maths

(This is a sponsored blog post)

According to "The Millionaire Next Door" by Thomas Stanley and William Danko, half of the millionaires in the US buy used cars. Can I afford to buy a used car Singapore? Say, a used Chery QQ? Correct me if I am wrong, from what I know, Chery QQ is the cheapest car to own in Singapore.

A quick research on ST701 Cars, a reputable classified website for Singapore used cars, indicates that the price of Chery QQ ranges from $34,999 to $42,999 for a new car and $10,800 to $20,800 for a used car.

Let's assume I am interested in a used Chery QQ 0.8(A) that is listed on the website. By clicking on it, I get the following details:

Price = $20,800

Engine Capacity = 812 cc

OMV = $6,781

Depreciation $2,328 per year

Registration Date = 09/02/2007

COE = $11,489

Next, I need to work out the financing part. I think I am comfortable with 30% down payment and paying the balance over 5 years. Currently, UOB is charging an interest rate of 3.875% pa for used car for loan period of less than 5 years. Using the loan calculator provided on the website, my monthly payment amount works out to be $289.68. That is, $3,476.16 per year.

Using the road tax calculator, the road tax for 812 cc cars is $356 for 12 months.

Other expenses include insurance, fuel cost, ERP, parking, servicing and maintenance.
Here are my own estimates:

Insurance:
According to an article by The Business Times dated 3 June 2009, the average premium for private cars is about $1,050. I will assume that I pay this amount for the moment.

Petrol:
Chery QQ is relatively light in fuel consumption and I don't expect to travel much other than going to and from work. I will budget about $50 per month (i.e. $600 per year)

ERP:

There is only one ERP gantry from my home to my office and it's only $0.50. So total ERP charges will be about $20 per month ($240 per year).

Servicing and maintenance:
$100 per year sounds reasonable?

Parking:
About $250 per month ($3,000 per year)

All in all, estimated annual car-related expenses is about $8,822.16. That is, $735.18 per month.


No, I am not buying a car now. I am just doing my Maths. But if you are, it is advisable to do your own maths. You may wish to visit ST701 Cars for some useful information since it is one of Singapore's largest classified website for Singapore cars. Remember to compare prices, download the latest guide on car cost and check out the latest car promotion events.