In any self-help book, you tend to find the same suggestion: that optimism and motivational sayings are more important than actual talent (though admittedly, that does explain some managers I’ve met). For the most part, motivational cliches are just harmless, feel-good gibberish. But watch for these three, which have a tendency to keep you poor:

1.Working Outside the System Will Make You Rich

This is usually accompanied by terms like “originality” and “out of the box thinking”.

Now I won’t deny that sometimes, this kind of thinking results in getting rich. Hey, someone had to start the tablet craze, and the first auction site. But I’ll let you in on a little secret:

If an idea is so ‘outside the system’ that no one’s done it, chances are high that no one needs it.

I’m not saying you’re 100% wrong about it being a good idea, but you probably are. There’s also a kind of fallacious romance behind this: some Steve Jobs-wannabe defies convention, and manages to beat the odds. But consider the financial reality of “working outside the system”:

Apple is a multi-million dollar company that wouldn’t have collapsed, even if the iPad had failed. Remember Apple Maps?They also have a huge customer base, who would buy a hobo’s armpit drippings if Apple stamped a logo on it. Likewise, if Google or Virgin chooses to “work outside the system”, their top managers can fail at a dozen edgy projects without needing a second mortgage.

I doubt the same applies to you.

If you work outside the system, you will fail more often than you succeed. There is no “super genius” that emerges just because you’re being a rebel. The universe, contrary to self-help gurus, does not give a monkey’s ass about how individual you’re being.

Working outside the system can make you poor and keep you there, if you repeatedly throw time and money behind improbable ventures. If you want to do things outside the system, do so at reasonable cost to yourself. Don’t empty your life savings on a start-up just because an idea seems innovative. It has to relate to an actual need.

2. Your Job Should Be Your Passion

“If you follow your passion, the money will follow”.

That’s true, but notice the saying doesn’t mention how much money. If your passion is writing Twilight fan fiction, I’m sure someone out there will chuck a few dollars (or a brick in my case) your way; but don’t count on it covering the down payment for your flat.

As our sometime HR consultant Angeline Seah says: “Some passions are more lucrative than others.”

Almost every hobby can earn you some amount of money. But unless you’re lucky enough to have a hobby in demand (e.g. you like developing apps, or get a nerdgasm when discussing the Capital Asset Pricing Model), don’t assume your passion will send money running after you like an attention starved puppy.

Well I have to admit, working here has ignited my passion…for assisted suicide.

Some of the biggest money-making things you do in life will involve no passion. This is true for most people. I’ve written corporate journals about ball bearings and gotten paid tons for it, but I don’t exactly talk about it in excited squeals.

If you want to make money through passion, re-frame this saying: Your passion gives you the stamina to endure the dullest, most excruciating job. You may hate compiling reports or making Power Points. But if the income fuels a cause you love, you can probably bear it.

Never assume that directly indulging in your passion will bring you money. Sometimes, feeding your passion means doing a whole bunch of things that aren’t relevant to it. Don’t hesitate just because you want to be picky.

3. If You Just Visualize Having Money, You’ll Attract It

I’m not going to mention the bestseller that’s currently associated with this one. Suffice it to say this isn’t an original idea, and it’s been mentioned (in various forms) in a dozen NLP books.

The general idea is that, by visualizing yourself being rich, you will attract money. Never mind that studies show the opposite is more probable. Since no one reads the academic references I link to, here’s a few choice lines:

“Positive fantasies that idealize the future are found to be inversely related to achievement over time: the more positively the fantasies are experienced, the less effort do people invest in realizing these fantasies, and the lower is their success in achieving them.”

Well, maybe you could just “visualize” getting the money instead of banking it in?

The fantasizing (visualization) makes you complacent. Because you already spent all that energy imagining, you’re less likely to go and enroll in a financial awareness course. Or to start mapping prospects for your side-business, or take up certification courses to advance your career.

You feel good when you’re visualizing, but it all falls to nothing after a few months.

Now there may be some upside to positive thinking, but apply a bit of common sense here: if you could attain things by just visualizing them, you should be able to hammer out a Clapton solo on a guitar without any lessons. So instead of visualizing money, just actually go out and start getting some.

If you have no idea where to start, try asking us on Facebook. Our methods are more…drivel free.

Image Credits:
crdotx, Felixe, Alan Cleaver, liewcf

Source: http://www.moneysmart.sg/money-talks/3-common-motivational-sayings-that-keep-you-poor/

You read that right. Buying citizenship in a certain Caribbean nation costs about as much as a new car in Singapore. Hell, you might even have $20,000-$180,000+ left over, depending on whether you buy a practical Mazda 6, or a fancy BMW 5-Series. But citizenship isn’t the only thing you can “drive off” with for the price of a car in Singapore.

I can think of a couple other choices that’ll have you questioning why the hell you’re paying up to $300,000 for something that decreases 10% in value every year and costs several thousand dollars to operate annually (fuel, insurance, parking, taxes, etc.).

Here a few purchasing alternatives you that’ll have you laughing, crying, or both:

1. A New Passport: The Commonwealth of Dominica

Cost: $130,000+

You can buy “economic citizenship” in The Commonwealth of Dominica with a one-time “donation” of $130,000. I know, some of you are thinking “we can’t have dual citizenship!” Relax! I’m not proposing that you jump off Sampan 2.0 to move to a Caribbean island that’s about the same size as Singapore, but with 98.5% less people (pop. 71.6K) and numerous economic benefits.

I’m just trying to point out that buying Dominica citizenship is an outrageous purchase, especially when you consider that citizens get these benefits:

• Tax Haven Status: You don’t need to wealth taxes (capital gains, inheritance tax, etc.) or taxes on foreign income.
• Complete Discretion: Your banking and financial asset details won’t be reported to your home country. In fact, Dominica won’t even inform your home country that you’re a citizen!
• No National Service: You’re not required to serve in the military… unless you really want to sign up.
• Very Business Friendly: Your international business ventures, especially with the U.S., won’t be hindered by restrictive economic policies.
• Visa Free Travel: You can travel to more than 90 nations around the world including the U.K., Hong Kong, South Korea, and Turkey.
• You Can Reside In Your Home Country: You remain a citizen even if you’re not living in Dominica.
• English is the National Language: You won’t have to worry about learning Spanish or French (thankfully).

If you’re curious about the application process, you can check out Dominica’s citizenship application page here.

*Bonus: Can I have a house with that? – Did I mention that property in Dominica is ridiculously cheap too? You can buy a decent 3-Room home by the ocean for about $120,000 SGD+ plus taxes, duties, and fees. As a citizen, you’ll also be exempt from paying the 10% Alien Landholding License on property.

2. A Golf Trip: 44-day golfing tour across 15 destinations with the chance to WIN a car

Cost: $220,000+

Ah, golfing! The sport of kings… or is that horse racing? Anyway, I bet the cost of this little “trip” is already sending you into cardiac arrest if you’ve got a weak heart. But before you shuffle off this mortal coil, stay with me for a minute – because this isn’t just any golfing trip.

It’s a once in a lifetime experience that’s part luxurious round the world (RTW) holiday, and part PGA tour-style competition against other golfers to win guess what? A BMW Z4!

Here’s what the $220,000+ “dream” golf trip gets you:

• First-Class Travel & Accomodation: You’ll be travelling, lodging, and dining in “First Class” throughout the entirety of your golf trip. Not only that, you’ll be taken on excursions at each destination to see the sights such at each location (ex. Taj Mahal in India) or participate in activities such as wine tasting or humanitarian work.
• Golfing Round the World: You’ll be golfing in 15 exotic destinations across the globe including Las Vegas, Peru, Easter Island, Tahiti, Samoa, Fiji, New Zealand, Australia, Angkor Wat, India, Dubai, Zambia, South Africa, Buenos Aires, and St Maarten.
• The PGA Experience: If you spend more time on the “green” than you do in the office, this holiday is perfect for you. You’ll feel like you’re a PGA pro going up against 59 other participants from around the world. Not only that, the tournament will be hosted by PGA champion Keith Clearwater, who’ll be there to give golfing tips to everyone.
• You Can Win a Car: If you’re a golfer with a handicap that’s good enough to win the car, you’ll basically get the holiday “free of charge” since the BMW Z4 costs about $220,000 anyway.

Of course, if you can’t distinguish a golf club from a back scratcher, it’s probably wiser to just buy the car if that’s what you really want. But if your golfing skills are, to quote my colleagues, “power,” it might be worth joining.

If you’re interested in going on the “ultimate” golf trip, you can sign up here.

3. A New Oceanfront Condo: 3-Room/3.5-Bathrooms Penthouse in Ecuador

Cost: $280,000+

Every property investor in the world knows that the housing market in Singapore is as good as gold, especially if you’re buying a condo or landed property. But after prices grew as monstrously as kaiju from Pacific Rim, the government brought prices down with a series of cooling measures.

But lower property prices are good right?

For sellers and developers… no. But for people looking to buy a home, it’s definitely a buyer’s market. In fact, you can even buy a new 3-Room condo for around $1,200 per square foot (psf)!

A couple of years ago, such as price would’ve been unheard of – but as good as this is, the cost of a car might barely be able to cover the down payment.

But for the price of a new BMW 5-Series, you can buy a new 3-Room oceanfront condo in Ecuador. To put this ridiculously cheap purchase in perspective, let’s compare this oceanfront condo in Ecuador against an oceanfront condo in Changi Village:

I don’t know about you, but if I had a choice between buying a car and a condo by the ocean… well, the answer’s simple for three reasons: 1) its an oceanfront property 2) you can make rental income from it and 3) unlike cars, a property investment won’t drop 10% in value every year!

Final Note: You still want to buy a car? Well, I certainly won’t stop you. But I can definitely offer you some advice on how to save money on buying a car, car insurance, and petrol costs. Speaking of car insurance, make sure to check out Smartinsurance.sg to find the right policy for your budget.

Shocked? Tell us what you really think on Facebook! And to find even more useful information on everything personal finance, visit MoneySmart today!

Image Credits:
palestrina55, shoebappa,

Welcome to the world’s most expensive housing market. If you want your own house in Singapore, then you are one bank loan away from rationing individual bee hoon strands. On the upside, expensive housing can also mean big pay offs. Check out MoneySmart’s primer on private vs. public housing, before making your purchase:

Defining Private Property

In Singapore, residential properties fall into two broad categories: public housing (HDB flats), and private housing. In the context of this article, private housing refers to:

• Condominiums
• Landed Property, and
• Executive Condominiums

Executive Condominiums (ECs) are only treated as “fully” private properties from the 11th year onward. Before that, ECs are subject to some of the rules of public housing.

The most notable differences between private and public housing are:

• Home Loan Restrictions
• Resale Restrictions
• Possibility of Freehold
• Eligibility of Grants

1. Home Loan Restrictions

All forms of private housing, including ECs (even before their 11th year) can only be financed by bank loans (or financial institutions like Hong Leong Finance). There is no HDB concessionary loan. (We discussed bank loans vs. HDB loans in another article). To recap, the differences to expect are:

Down Payment And Cash Requirements:

For private housing, you can only borrow up to a maximum of 80% (of the purchase price). For that, you need to be prepared to pay an absolute minimum of 5% in cash. Minimum cash requirements can be substantially higher (up to 25%), after considering factors like your CPF balance, Debt Servicing Ratio (DSR), etc.

For public housing, you can borrow up to 90% (from HDB) and get away with $0 cash down payment (by paying everything via CPF). HDB BTOs are a good example. Option fees for HDB BTOs are also a flat amount of $2,000 regardless of the unit you are purchasing. This is different from private properties where you pay 1% for the option fee. Best of all, the money will be refunded once you exercise your option.

Home Loan Interest Rate Structures:

Banks don’t provide perpetual fixed rates, because of complex financial reasons like “So…What are you going to do about it?”

Home loan packages from banks always revert to floating (fluctuating) interest rates after three to five years. If you buy private housing, you must know the basics of home loan interest rates, and how to refinance regularly to keep them low.

If you’re still confused, the mortgage specialists at SmartLoans.sg can advise you for free.

While public housing can give you a perpetual fixed rate (through HDB loans), do note that the HDB loan has been more expensive than bank loans over the last 5 years. HDB’s current rate is 2.6%, compared to an average of around 1.7% among banks.

2. Resale Restrictions

Did you know? Resale restrictions are the leading cause of savage attacks on noisy neighbours!

Public housing comes with a Minimum Occupancy Period (MOP). You have to live in the property for five years before you can rent out the whole flat, or sell it. If you think you can leave it empty for 5 years while you are working overseas, the fine print also states you need to be based in Singapore. There is also a resale levy. This reduces the amount of your housing grants (subsidies) when you buy another public housing unit.

For private housing, the is no MOP, but your main worry is the Seller Stamp Duty (SSD). You have to pay this if you sell your private housing within the first four years:

• Sold within the 1st Year – 16% stamp duty
• Between 1st and 2nd Year – 12% stamp duty
• Between 2nd and 3rd Year – 8% stamp duty
• Between 3rd Year and 4th Year – 4% stamp duty
• More Than 4 Years – No SSD

There’s no restriction on when you can sell private property; it’s just a question of whether you can handle the SSD.

3. Freehold versus Leasehold

We’re passing everything down to you. That’s why your present is this month’s mortgage bill.

HDB flats are on a 99 year leasehold. For private property, you might find freehold land. It’s also possible for some properties, dating back to the Colonial Administration, to have a 999 year lease.

So far, few properties have come close to the 99 year lease expiry. But if your definition of home includes words like “ancestral”, then private is what you want. Some people also believe in land-scarce Singapore, freehold properties will continually rise in value over their leasehold counterparts. For details on how freehold affects property values, follow us on Facebook.

4. Eligibility of Grants

Obviously, private housing doesn’t come with government grants. Right?

Eh, kind of. This gets a bit sticky with regard to ECs.

Although ECs are financed by bank loans, and become private on the 11th year, you can still get grants for buying them. Grants from ECs range from $5,000 to $30,000, based on your income level. That’s one of the main reasons for their popularity; it’s the only form of private housing that’s subsidised by the government.

Final Two Key Points to Note

Don’t worry. If some locals are unhappy, it’ll be big enough for them to fight a civil war in.

Landed Property and Foreigners

Foreigners need the government’s permission to buy landed property. This comes from the Land Dealings (Approval) Unit (LDAU). Foreigners also cannot purchase HDB flats unless they are marrying a Singaporean.

There is no restrictions on foreigners purchasing condos. They just need to pay a hefty 15% ABSD (Additional Buyer’s Stamp Duty).

Upgrading to Private Housing Under Construction (Excluding ECs)

Let’s say you’re upgrading from a HDB flat to a private condo. And you have one massive problem: the condo is still under-construction and will only be ready for move-in 3 years later.

In order to get 80% financing for your condo, you cannot have an existing home loan so you will need to sell off your flat (bank loans are capped at 50% if you have an outstanding home loan). That’s a problem, because now you’ll have no flat, and your new condo will only be ready 3 years down the road.

This is why most people avoid upgrading to private properties that are still being developed, no matter how much the developer discounts are. Prepare to rent or move in with your folks until the condo is finished.

Note: As the header of this section states, this problem does not apply when upgrading to Executive Condominiums as banks can grant buyers a “conditional 80%” loan. This means you can be granted the full 80% today for your new EC so long as you sell of your current property within 6 months of the ECs TOP.

So whether you are upgrading to a private or executive condominium, you can speak to the friendly mortgage specialists at SmartLoans.sg who can ensure that you secure the best home loan that’s right for you.

Image Credits:
hazylium, nerdcoregirl, Phillipe Put, theambitiousdiaries, soham_pablo,

Source: http://www.moneysmart.sg/housing-property/private-vs-public-housing-in-singapore-what-are-the-main-differences/

One of the great mysteries of the Universe is Singapore’s taxis. Why are there loads of them when you don’t need them, but virtually nonexistent when you do? How do they warp time so they’re changing shift exactly when you start looking for them? What mysterious allergy to water makes them burrow underground and vanish when it rains? I blew $45 on cab rides to ask five taxi drivers:

The Main Issues of Taxi Availability

Before we get into this, I need to explain the relationship between taxi drivers and taxi companies. I’ve covered it in earlier articles, but here’s a quick rehash:

A taxi company does not make its revenue directly from passengers. When you pay the fare in a Comfort cab, the money doesn’t go to Comfort. It goes to the taxi driver. How much the taxi driver earns is his own business – the more people he wants to pick up, the more he’ll earn.

The taxi companies – Comfort, SMRT, CitiCab and so on – make their money by charging the taxi drivers, not the passengers.

This is done through a daily rental fee, which is paid by the drivers. Depending on the car model, the price will vary. So the old beat up Toyota Crowns can be as cheap as $80 a day, whereas the more luxurious models can reach around $130 a day.

In theory, this should motivate taxi drivers to pick up as many passengers as they can. Based on conversations with five taxi drivers though, there are some flaws in the system:

• Accident Risks in Rain
• Picking Up the Sloshed
• Choosing to Earn Less
• Problems with Heavy Baggage

1. Accident Risks in Rain

I spoke to a driver named Cheok, who agreed it was harder to get taxis in the rain.

“A lot of drivers don’t like to drive during heavy rain,” he says, “because it’s very dangerous. When you drive a taxi, you may not know the place the passenger is going, so the road is not familiar. If you already don’t know the way very well, you still want to drive in the heavy rain some more?”

Cheok added that risks outweighed the income:

“I get into an accident two times, I can lose my job. Also I will bear the cost of the damages, liable up to $2,000. If you were me, will you risk losing your job or $2,000 to earn the taxi fare? It’s not worth it.”

Cheok added that, when there are heavy rains, taxi drivers want to avoid flood prone areas:

“Farrer Park, Alexandra Road, Nee Soon…all these places a lot of us don’t like to go during heavy rain. If there is a flood, and you drive your taxi into it, you are responsible. Any maintenance issues, you are the one who has to pay.”

2. Picking Up the Sloshed

“Drive him home, take him up to the 22nd floor, put him in bed, and clean the puke off the seats. Here’s $12″.

Say you’re utterly smashed, and can’t stand without two of your buddies propping you up. You need a taxi to get home, more than ever. But the next cab you flag down just zooms past. Why?

“It’s the same with a drunk friend and your own car,” says long time taxi driver George (not his real name), “You know he is going to vomit, or be rowdy, and you also will not want to take him.

I have plastic bags, but you think that helps? When they are drunk they will just vomit without warning. And after that I spend more than one hour cleaning. For the sake of one passenger, I give up two or three more.”

3. Choosing to Earn Less

Ever get the sense that half or just two-thirds of all the taxis are on the road? You may be right. George explains that some taxi drivers aren’t as driven (see what I did there?) for the money:

“You have some taxi drivers who really need the money, and you have some who are retirees who are just doing it to stay active. The retirees don’t need to push themselves too hard. Once they hit a certain quota for the day, they go home and sleep. Even if they can earn more, they are not so eager.“

Wait, just retirees?

“No, some young ones are also like that. They are more interested in their family time, or they want to go out and KTV or whatever. Some of them are not willing to give up an hour just to earn another $50.”

4. Problems with Heavy Baggage

On the upside, Uncle, it’s not fragile.

Lugging heavy bags? Look like a pack mule going over the high Sierras? Don’t expect all taxi drivers to slow down and help. According to taxi Pang, who’s been driving for two years:

“As part of our service, we need to get out and help to load the things in the car. If the passenger helps a bit it’s okay. But some of them will just stand there and watch you. For people like me, I am already almost 60. I have ever gotten back injuries before.

At least they should help a bit. But most of them will not; when I see someone with so many bags, I also hesitate to pick them up.”

What Can We Do?

The issue is with the nature of taxi companies’ business models. We can’t expect taxi drivers to take certain risks – e.g. road accidents in the rain – for the fares they’re getting. There’s also no way to force taxi drivers to pick up more passengers; it’s about their own motivation. We will explore more regarding COE allocation for taxis and how this impacts drivers and taxi companies so stay tuned with us on Facebook!

Image Credits:
tallkev, Simon_sees, Oneras, cobalt123,

Source: http://www.moneysmart.sg/money-talks/why-you-can-never-get-a-cab-when-you-need-one/