Looking forward to 2015?

Well I think you should. Staying positive is best. Have fun & celebrate !

Time passes so fast.

The year is ending & 2015 is almost upon us. Time to review what I've done through this year. Nothing much.

I did go for a long long break & that was fun. Hope to go for another one next year. That's refreshing.

What's the best investment? You'll never regret if you invest in yourself !

What if you have no money for any major investment?

A house in a good location cost at least somewhere around $2million or more. You need at least $250,00- to buy a single bond. Blue chips the safest shares are all pretty expensive. Infact for most "good" investments, you need a sizeable capital.

Well for those of us who do not have a very healthy bank account , or rich families, I suggest we "invest in ourselves"

Yes, update the wardrobe- throw away all the old outdated clothes & shoes. Go for a course to upgrade. Get a second degree, a masters. Have a new look, cut or dye your hair. Ditch any friend who are leeches- you know what I mean...lol... at the same time stay away from negative ones. Do it for yourself! I'm taking a day off & Going to my hair-dresser, getting a pedicure than shopping. How about you ?

Have you thought of investing in wines?

Wine merchants such as Bibendum, Farr Vintners, Justerini & Brooks and Berry Bros & Rudd have connoisseurs touring vineyards to seek out potential future winners. They often buy the wine before it is even bottled – known as ‘En Primeur’ – at least a couple of years before it hits shop shelves.   After buying wine on your behalf they typically take a 10 per cent commission when you sell. Investment wine is usually ‘bonded’ and stored in a special warehouse where there is no VAT or duty to be paid (in UK).

A wine index has been launched to help customers enjoy a wider range of great tasting investments - including champagne. The Liv-ex Fine Wine 1000 Index – following a thousand top tipples from around the world – was launched last month. It calculates that over the past five years total returns have been 37 per cent. More traditional wines have risen 24 per cent.  The snob appeal of luxury brands means someone will always want to impress with a bottle of Lafite. But prices of Premier Crus have been pushed up to such a high level by international demand, including new Chinese consumers, that investors are now looking at other markets.

These are some of the wines that have achieved record prices:

- 1978 Romanee-Conti. Case of 12 bottles of this pinot noir Burgundy,  sold for £286,000 at a Christie’s auction in Hong Kong in November 2013. 

- 1869 Château Lafite-Rothschild. Three bottles of 1869 Lafite sold at Sotheby’s for £146,232 each in 2010. Rothschild bought the château in 1868.

- 1787 Château Lafite. A bottle of Bordeaux sold for £105,000 in 1985. Reportedly belonged to third president of the United States Thomas Jefferson. 

- 1945 Château Mouton-Rothschild. Claret given 100 marks by critic Robert Parker. Six-magnum case sold for £182,700 at Christie’s in 2006.

 

In the UK, It typically costs £15 a year to have 12 bottles bonded in a temperature-controlled warehouse, which includes insurance. Most wines are stored for at least ten years. Wine is seen as a ‘wasting asset’ by Revenue & Customs and escapes capital gains tax.

It’s best to leave it to the experts when investing. One investor says: ‘I am no connoisseur, but I enjoy a good wine, and this makes it more interesting as an investment. What also appeals is that it is a finite commodity – as once drunk a bottle cannot be replaced. It makes a great wine even more rare and therefore attractive as a valuable investment.’

Minimum investment for The Wine Investment Fund ( an unregulated collective investment scheme where investors pool their money to buy Bordeaux wines.) is £10,000. There is an initial charge of 5 per cent plus a 1.5 per cent annual management fee. Since its launch in early 2004 the fund has turned £10,000 into £23,300 – more than doubling returns over a decade – with annualised returns of 8.9 per cent to the end of last year.

Wine investments need to be treated with caution. As it’s an unregulated market.

Herd instinct can be a detriment to investing success

On the one hand, one's own 'personal' approach to making an investment decision may suggest one course of action; on the other, the lure of the 'herd instinct' may be pulling entirely in the opposite direction. Even professionals can be swayed by popular opinion at times when ignoring the crowd would ultimately be more profitable.

Today, the instinct to listen to the group and follow the crowd is often useful. For example, you may choose a restaurant based on reviews , book a room at an inn after referencing feedback on TripAdvisor, or choose a plumber by following recommendations from Facebook friends.

This instinct to favor what is popular and well-liked among family, friends, and neighbors was crucial in the human race's early days. Common group knowledge supported survival. For example, if everyone drank from a certain body of water or ate a strange food and lived happily afterward, then the water or food was deemed safe to consume. Following the crowd simplified decision making, offering an easy and secure way to live.

Today, however, we may suffer harm when we apply such thought processes to investing decisions. That is, favoring what is popular or following the crowd may not be the best way to invest our money. Specifically, we often wrongly chase performance, buying shares of stocks, mutual funds, or other assets based on recent past performance and unloading them from our portfolio when everyone else is selling.

We need to retrain our instincts not to ignore the crowd altogether but to place a much greater weight to a disciplined investment approach.

Are Singapore residential rents really going downhill ?

The prime reason?

Huge unit supply gives tenants bargaining power. In its latest analysis of the Singapore residential rental market, Knight Frank Singapore said that there are over 16,000 private residential units launching island-wide in 2013. 

Rents are anticipated to see downward pressure this year as prospective tenants are presented with ample housing options. 

Leasing demand for residential units in prime districts has been moderating for the past 2 quarters, as accommodation budgets for many Singapore expatriates are constrained amid a challenging global business environment. Budget-conscious expatriates are also seen to be opting for units in the city fringe and suburban locations

Do you know how to invest wisely?

There’s a fine line between optimism and ignorance. We love investment of any kind.... but are we over-investing ? that means putting more money into an asset (whether it’s a house, courses, etc.) than the asset is actually worth.

1.  Properties

It's our favourite national past time. People talk about properties being the best means to hedge against inflation. Yes it probably is, but it’s not for the rookies. But now even rookies are at it, the reason? Home loans are at its record low.

But what they don’t understand is, even though it’s low now, you are taking a 25 to 35 yrs. loan & along the way it’s going up. Especially after your 2nd or 3rd year lock in period. And did you factor in the interest increasing in a few years time when you buy your dream home? Then there's the agent fee, stamp duty these are money that could be substantial. If you think of flipping your apt, these are costs that will set you back quite a bit.

As for rental, it is not predictable at all. Expats come& go, economy rises & fall- all these would affect you if you are looking to this rental income to help in paying for the mortgage. What if no one wants to rent your apartment & you have to leave it empty for months? You  hear there's an over supply now right?
 2. Renovations

I don’t understand why someone would blow a cool 100k into a brand new apt. If it's old & need work ok... but a brand new place???? In the past only the rich living in condos or landed properties hires an interior decorator or designer. Today the bulk of their business comes from HDB dwellers.

The most popular renovations involve walk-in wardrobes, “open concept” layouts, and kitchen islands. Truth is a HDB room is already so small what’s the point having a walk-in wardrobe? The cost involved in creating something so impractical is mind boggling!! And in the future any appreciation in property value is diminished by that extra cost. Worst is if you have to take up a renovation loan to do all that!

3. Get Rich Seminars

Just open the papers & you see  a ton of these.  Someone wants to impart their secret to you on how to make a million. It's really getting very popular these days. We all desperately wanted to buy some get rich secrets from the experts.

I’ve been to a few. They are essentially the same. A charismatic motivational speaker talks to you- it’s all very positive & feel good.  They don’t have any real information to give you. They just remind you that if “they” can do it ( they & other very rich people lah…) so can you! You pay $2500- for someone to tell you that!!!!  Truth is,  they make the money from just telling you : you can do it- you have it in you- dont let obsticales stand in your way & a bunch of crap like that!!! I can do that for free!!! Or just buy a book any book from some financial guru, it's just as good- can buy second some more...lol....

Oh....If you think you can do some networking there, well you’ll be disappointed, everyone there, is just like you……

Still you'll excited make plans and phone calls, and give it up a few days later. All that’s left is that big heavy file & $2500- poorer!