If you have recently started work, here are a few tips:
a) Set aside 15% to 20% of your monthly income as your savings
b) The balance is to be used to meet your personal expenses, including contribution to your parents
c) Avoid buying a car, as it is too expensive and take away too much of your income
d) Do not borrow on credit card
e) Let your savings accumulate in your savings account to earn 1% interest
f) Later, Invest your savings in a low cost investment fund or the STI exchange traded fund.
g) Do not buy a high cost life insurance policy (as it gives a poor return).
h) Buy low cost term or accident insurance to cover your income.
Your savings will accumulate to a large sum over 5, 10 or more years. You may need it for your major financial commitments, e.g. wedding, buying a home, education and retirement. If you do not take a loan, you can save on the interest payments!
Read these FAQs:
http://www.tankinlian.com/faq/savings.html
http://www.tankinlian.com/faq/benchmark.html
Monday, March 17, 2008
Insurance premium for off-peak car
A blog reader called several insurance companies and obtained the following quote for his motor insurance:
Type: Off-peak car, after 20% NCD and excess $500:
India International: $599
Income: $618
China Insurance: $647
AIG: $889
AXA: $948
Call direct:
http://www.tankinlian.com/faq/motord.html
Type: Off-peak car, after 20% NCD and excess $500:
India International: $599
Income: $618
China Insurance: $647
AIG: $889
AXA: $948
Call direct:
http://www.tankinlian.com/faq/motord.html
Residential REIT
I wish to explain the concept of investing and living in a residential REIT:
a) As you investor, you own investment units in the residential REIT
b) You receive an annual dividend based on the net income of the REIT
c) You pay a rental for the use of a housing unit in the REIT
If you stay in the same size of housing unit as your invested sum, the net income should be slightly smaller than the rental, as there is a management charge of (say) 5%. You will benefit from the following:
a) It gives you the flexibility to rent a smaller housing unit (relative to your investment) and keep the excess income
b) You have the choice to sell off some investment units monthly to meet your living expenses. This is similar to a draw down annuity or reverse mortgage.
c) You can decide to live elsewhere and enjoy the full dividend from your investment units.
This concept is similar to timeshare, but avoids the high marketing cost, and most of the investors are likely to live in the property. I hope that this idea can be developed by a private sector developer.
a) As you investor, you own investment units in the residential REIT
b) You receive an annual dividend based on the net income of the REIT
c) You pay a rental for the use of a housing unit in the REIT
If you stay in the same size of housing unit as your invested sum, the net income should be slightly smaller than the rental, as there is a management charge of (say) 5%. You will benefit from the following:
a) It gives you the flexibility to rent a smaller housing unit (relative to your investment) and keep the excess income
b) You have the choice to sell off some investment units monthly to meet your living expenses. This is similar to a draw down annuity or reverse mortgage.
c) You can decide to live elsewhere and enjoy the full dividend from your investment units.
This concept is similar to timeshare, but avoids the high marketing cost, and most of the investors are likely to live in the property. I hope that this idea can be developed by a private sector developer.
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