Singapore Inflation and Real GDP Growth Rate - A Graphical Presentation

Historical

Historical	Inflation	GDP growth
High	22.3% (1974)	13.7% (1790)
Low	-1.9% (1976)	-3.8% (1964)
Average	2.7%	7.7%

10-year

10-year average for inflation rate: 1.4%
10-year average for GDP growth rate: 5.6%

Forecast for 2009 (by Ministry of Trade and Industry)
Inflation rate: -1.0 to 0.0%
GDP growth: -5.0% to -2.0%

= = = = =

Consumer Price Index

measures the average change in the price of a fixed basket of goods and services consumed by the households over time.

Weightage for Singapore CPI in 2008
(Base year 2004)
23% - Food
22% - Transport and communication
21% - Housing
17% - Recreation & Others
8% - Education & stationery
5% - Healthcare
4% - Clothing & footwear

According to the latest press release (dated 21 January 2009) from Singapore Department of Statistics, the weights for CPI were compiled based on the results of the Household Expenditure Survey (HES) conducted from October 2002 to September 2003 and updated to 2004. It covers the expenditure records of some 5,400 households and includes a total of 5,170 brands and varieties.

The index is compiled on a monthly basis and the full-year CPI is calculated by taking the simple average of the 12 months' indices for the year.

Source: Singapore Department of Statistics
Infation rate data: http://www.singstat.gov.sg/stats/themes/economy/hist/cpi.html
GDP growth rate date: http://www.singstat.gov.sg/stats/themes/economy/hist/gdp1.html

Forecast figures: http://www.singstat.gov.sg/news/news/pregdp4q2008.pdf
CPI weightage: http://www.singstat.gov.sg/news/news/cpidec2008.pdf

Path to Wealth

My summary:

Path to Wealth
1. Stay healthy
2. Work dilligently
3. Save religiously
4. Insure adequately
5. Invest wisely
6. If still can't attain wealth, at least be happy! =)

Posted the above as a comment on La Papillion's blog. It's the summary of the words of wisdom from d.o.g. (see blog post, W.O.W. D.O.G.). Since I'm at it, I thought I might as well jot down my "philo" for the topic.

Before striving frantically for more money...
Know where you are
Know where you want to go*
Know how to get there
(see blog post dated 16 Jan 09)

* Knowing where you want to go can also mean determining how much money you need in order to be happy. Many people want to be a millionaire. Do you really need $1,000,000.00 to be happy?

Some people define it as the point where they work because they choose to, not because they have to. As to precisely how much, it varies from person to person and with the stage of life-cycle that one is in.

To me, the "where" is the amount of wealth that leaves me financially worry-free. According to Roger Hamilton, wealth is "how much you are left with when you are strip off everything" or, what you are when you have nothing.

To illustrate, say, you are a very good business builder. One day, you are robbed of all your monetary assets. You know you are not doomed, for you are confident of making a comeback quickly with your talent, knowledge, skills and network.

So, I'd say, above all, INVEST IN YOURSELF!

Identify your passion
Develop your talents.
Deepen the knowledge
Sharpen your skills
Build your character (i.e traits that you wish to be identified with eg. integrity, positive, kind, etc.)
Do not be rude to other people

= = = = =

From a post in my shut-down blog:

Monday, November 01, 2004

My Internal Values

1. My Talents
What I naturally do well? What I can do better than most without thinking about it, whether it is getting on with people, giving constructive criticism, building sandcastles or reading a bus timetable.

2. My Passions
What really lights me up, gives me a buzz or gets me excited? Whether it is seeing a project successfully completed, brainstorming a new idea, meeting new people or caring for my pet turtle.

3. My Purpose
What drives me forward and brings meaning to what I do? The real reason I believe I am doing what I do, and meeting the people I meet. What is the reason that would drive me to make even more of every day?

4. My Knowledge
What special knowledge I have that can be of benefit to others? What I have learnt from my education and employment that makes me an expert to any wealth creator.

5. My Contacts
Who I know? Who they know? Who would be an asset to others? The people who I have come into contact with that have strong internal values that I have noticed.

6. My Character
The positive words that I would use to describe myself. The things that other people notice in me, that makes me unique. The positive words that others are most likely to use to describe me.


"Everyone has talent. What is rare is the courage to follow the talent to the dark place where it leads" - Erica Jong

"If you follow your passion, doors will open for you that wouldn't have opened for anyone else." - Joseph Campbell

Do You Understand Your Interest?

Attended a seminar by Mr. T. G. Tay last year on "Being SAVVY With Your $$$" organised by MoneySENSE. Here're the notes I've taken.

Understanding Loans
Suppose you are buying a life insurance, you can choose to pay either annual premium of $1,000 or semi-annual premium of $510.
Question: How much interest are you paying if you choose to pay semi-premium of $510?
(Answer is at the end of this post.)

Other money savvy tips...

Know where you are
Know where you want to go
Know how to get there

Cashflow Quadrant (from Robert Kiyosaki):
Quadrant I: Employee (have a job)
Quadrant II: Self-employed (own a job)
Quadrant III: Business owner (own a system)
Quadrant IV: Investor (money works for you)

Quadrant I & II are active income, Quadrant III & IV are passive income.

The key is not about which quadrant you belong to but whether you can maintian positive cashflow regardless of the quadrant you are in!

Content - makes a person rich
Discontent - makes a person poor
"Contentment is knowing how to control your spending when you cannot control your income."



Answer: 8% p.a.
$1,000 - ($510 x 2) = $20 for delayed payment of $490.
This works out to about 4% (20/490), ie. about 8% p.a.

D.O.G. W.O.W

Came across some words of wisdom from a thread on a defunct investment forum, mainly from someone by the nick of "d.o.g.", acronym for "disciple of Graham". He's a fund manager, I think.

"Read The Millionaire Mind and it will be abundantly clear that - at least for those in the survey - their wealth came primarily from hard work - in their own careers, or in their own business. Only a very few credited successful stock/bond investment with creating their wealth, although many indicated that they had some money in the stock market. Most had assets of multiple types, including stocks, bonds, property and partial ownership in businesses, as places to "park" their idle money. But the way to "grow" their money was primarily:
1) working hard at their job or their business to grow their income; and
2) saving money to buy their assets.

...

Work hard, but save harder, insure against disaster, and invest wisely, in that order. Only after safeguarding against financial disaster should you aim for financial security (buy term and invest the rest). And the more you can save, the more you can invest. The more investment capital you start with, the less unreasonable your demands on it, and thus the better its chances of preservation and growth instead of shrinkage or even total loss. MARGIN OF SAFETY!" - d.o.g.

"1. Work hard to maximize income (from job or business)
2. Save hard to maximize investment capital
3. Insure appropriately to guard against financial disaster
4. Invest wisely to maximize returns" - d.o.g.

"Happiness is a state of mind and the best things in life need not be expensive." - teachme

"Wealth and happiness are not correlated, but neither are they exclusive. Aim to be rich AND happy, but if you can't attain wealth, at least be happy." - d.o.g.

"Traders treat stocks like inventory - they buy in order to resell. Investors treat stocks like assets - they buy in order to use. For inventory, the selling price is of prime importance. For assets, the utility (cash generation) is of prime importance." - d.o.g.


Source: http://www.wallstraits.com/community/viewthread.php?tid=59#pid447

Historical CPF-OA Interest Rates - A Graphical Presentation

The interest rate for CPF Ordinary Account is computed quarterly based on 80% of 12-month fixed deposit rate and 20% saving rate (for amount less than S$50,000) published by DBS, OCBS and UOB, subject to a guranteed minimum of 2.50%.

From 1 January 2008, savings in the Special, Medisave and Retirement Account is pegged to the 12-month average yield of the 10-year Singapore Government Securities plus 1%.

You can find a list of the historical rates here.

Source:

CPF Board - www.cpf.gov.sg

Personal Financial Review - Ended 31 Dec 2008

I just sorted out my finances for December 2008 and found that my expenditure for the month was about $500 less than budgeted. Happy.

The habit of updating my personal income statement and balance sheet was just adopted in November last year. Before that, I relied on bills and bank statements to keep track of my finances, which provided me with a vague idea of my financial health but I could never achieve such clarity on my financial standing had I not started active management.

From the last I tabulated, the ratio of my equity investment (market value) to cash is 13%:87%. Ridiculously conservative, I know. The cash is held for the following purposes (in descending order of priority):
- Family emergency fund
- Parents' allowance (12 months - to be dispenses during CNY)
- Short-term needs (wedding + new flat & renovation)
- Personal emergency fund (9 months of personal expenses)

Besides the short-term needs which account for the largest proportion, I view the rest as essential liquidity cushion, I don't want $$$ issue to add to the stress during rainy (stormy) days. All savings in excess of the above requirements will go into my investible fund.

The good thing is, my investible fund has turned positive - a grand $228.86! (Yeah!!)

Now, my investment portfolio consists of only Singapore equities, of which E&E accounted for over 50%. My investment plan for 2009 is to build up on ETFs and global equity index fund (unit trust) to achieve diversification.