Wednesday, February 25, 2009

Business idea : Landlord agency

On the way home today, I talked with a Scottish friend who takes the same bus as me. We were talking a little about investing and financial stuff and he mentioned that he is currently renting out his home in Scotland.

And when i asked him if his tenant was troublesome.. i.e the kind that complains about every single thing from a blown bulb to a dirty wall, he mentions that all of them are taken care of by his agent.

This got me thinking.. Does Singapore has a service that is similar to this?

The rough idea is that the agent takes a commission of say 10% a month from the monthly rental,and in return he takes care of any requests the tenant might have ( blown bulb, burst pipe etc). In addition, if the tenant defaults, the agent will have to pay up.

Also,the commission rates varies according to the house condition. A brand new house would require lower commission rate, as things are less likely to spoil, and hence the agent would not need to work much. On the other hand, a higher commission is required for an older house, because it is likely that the agent would have to fork out money to change bulbs, repair a leaking pipe etc.

In all, basically the landlord is purely an investor. Sitting back to collect rental income without worrying about implications that come from renting out their homes.

I find that this business opportunity is feasible because
  • Usually if a person has a house to rent out, he would be rich enough to be busy with his own work and hence would be willing to pay a little for someone to settle the nitty gritty details of renting out an apartment. ( I mean would you want to wake up in the middle of the night to repair your tenant's busted pipe, when you have a meeting the next day?)
  • If Singaporeans who are relocated overseas for say a year or so, they could engage such an agent 'to take care' of the house. This could range from answering all the complains from the tenant and even to sourcing for new tenants should the lease expire

Comments from anyone? Or if you interested to develop the idea further..feel free to drop me an email at

Sunday, February 22, 2009

Credit crisis explained in a video

This video was brought to my attention by one of our readers. I find it REALLY good in explaining how the credit crisis occurs and the problems that arises.

It might take a while to load, but the wait is while worth if you would like to understand what is going on. Also,the animation is quite good too!

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

Thursday, February 19, 2009

With the present economic crisis, I urge all of you people out there to be careful with your credit. Credit cards are a double edge swords. Using it effectively will allow you to spend less and get interest free deferred payment. However once you start to default, the problem starts.

Here is a simple check list that everyone should watch out when getting a credit card. ( taken from the website)


Stop charging additional purchases. Use only in emergencies.
If you can eat, drink, or wear it - don't charge it!
Pay balance in full monthly. If this is not possible, try to pay more than the minimum payment due in order to reduce your balance and stop using the credit card until the balance is paid in full. It is a loan which must be repaid.
Don't ignore a credit card bill; it won't go away!
If your payments begin to fall behind, talk to a school counselor or friend and contact the credit card institution.
Don't panic! Go to someone for help!
Ask lots of questions (fees, grace days, etc.) and shop around for the best interest rates.
Don't fall for gimmicks and don't take the first card offered.
Limit the number of cards.
Don't get more cards to pay off debts!
Watch for limit increases.
Don't spend the maximum offered - it all adds up!
Ask for low credit limits.
Don't accept a card if they will not lower the credit limit.
Pay on time. Allow enough mailing time for the payment to reach the financial institution by the due date.
Don't pay late - some late fees are as high as $25.

To avoid identity fraud, review your monthly statement for accuracy.
Don't throw away your receipts until you compare them to your statement. Then shred them.

Sometimes we get so caught up with our temporary purchasing power that we forget to think about the long term. Look far,plan ahead!
You will not regret it! =)

Tuesday, February 17, 2009

Interesting salary/pay/income website

It is human nature to be interested to know how much other people earn. However most of the times, it is a sensitive issue. This website show's roughly the pay in the respective industries. You can even look at how high your pay is ranked in Singapore!

Click the separate links here to find out more about how you ranked in your

For the link to the 100 best paying jobs in Singapore, click here

credit goes to the author of the blog

Sunday, February 15, 2009

Did you know that the STI and Dow Jones are calculated differently?

STI is calculated base on the weightage of the market capitalization of the individual stocks that constitutes the index. This means that a company that is bigger ( in market capitalization), would have more influence on the index. For example, for example a fall of 10% in the price of DBS would cause the STI index to drop more than a 10% drop in a smaller company, say start hub.

However in the case of the Dow Jones. It is price weighted. This means that stocks that have a higher absoulte price carry a heavier weightage in the index. This has raised an issue on whether the Dow Jones is artificially supported. This is because bank stocks used to be very expensive.
After the large drop over the last few months, where the absolute stock price could have dropped from USD70 to the present USD3 causing a large drop in the Dow Jones index.But because the price is presently very low, even with extreme bad news in the financial sector, a drop from USD3 to USD 1, is not going to impact the index very much.

Hence, due to the fact that quite a lot of traders look the Dow Jones index while trading in the Singapore market, they might come under the false impression that the US economy has reach a support. And this might influence their decision on the present state of Singapore's stock market.

Therefore, if you do really want to trade/invest/time the Singapore stock market. It is also important to the look at the individual US stock components, as the Dow Jones might not be a very accurate way to judge the US economy.

Wednesday, February 11, 2009

Which sectors in Singapore are truely hit the hardest?

After reading a report by JP Morgan. I found that shipping, health care and real estates are under performing the STI index.
Ironically, most banks are not.
However they are certain sectors where some companies are outperforming the STI index while some are under performing it.

Considering the fact that financial institutions like banks carry a heavy weightage in the STI, it is ironic that banks should perform better than the STI. If this is really true, it would imply that even though the US is in a financial crisis due to the banks failing, in Singapore it is the non-banks that being affected more than the banks. I.e our financial institutions are still healthy but the companies are not.

here is the list of companies and their absolute/relative performance to the STI index. ( taken from JP Morgan):

Tuesday, February 10, 2009

Toxic derivatives sold by American investment banks

Got this from an email from a friend..Mr T

Young Chuck moved to Texas and bought a Donkey from a farmer for $100.
The farmer agreed to deliver the Donkey the next day.
The next day he drove up and said,
'Sorry son, but I have some bad news, the donkey died.'

Chuck replied, 'Well, then just give me my money back.'

The farmer said, 'Can't do that. I went and spent it already.'

Chuck said, 'Ok, then, just bring me the dead donkey.'

The farmer asked, 'What ya gonna do with him?'

Chuck said, 'I'm going to raffle him off.'

The farmer said, 'You can't raffle off a dead donkey!'

Chuck said, 'Sure I can Watch me. I just won't tell anybody he's dead.'
A month later, the farmer met up with Chuck and asked,
'What happened with that dead donkey?'

Chuck said,
'I raffled him off. I sold 500 tickets at two dollars a piece and made a
profit of $998.'

The farmer said, 'Didn't anyone complain?'

Chuck said,
'Just the guy who won. So I gave him his two dollars back.'

Chuck worked at Lehman Brothers and when it went belly up he moved to Goldman Sachs.

This is the legacy of free markets promoted vigorously by Milton Friedman and Alan Greenspan

Just for laughs!

Because of the ongoing market turmoil, several companies are merging in order to survive. Some results of these mergers:

Hale Business Systems, Mary Kay Cosmetics, Fuller Brush, and W. R. Grace Co. will merge and become – Hale, Mary, Fuller, Grace

3M and Goodyear will merge and become – MMMGood

FedEx is expected to join its competitor UPS to become – FedUP

Honeywell and Dewey Electronics – Honey Dew

Wonder who are the people who actually thought of this..

Sunday, February 8, 2009

Sunshine empire

I was first exposed to this company shortly after I ORD. It was introduced to me by one of my army friends. It started with my friend roughly explaining to me how the company works. It is basically just putting in cash into the company, and getting your returns monthly. The returns that are promised per year is like 50%? I can't remember the exact details, but it is REALLY good. ( Essentially, only the money part was explained. How the money generated is not.)

Following the brief introduction, I went with my friend to Toa Payoh hub. It is where the head office is located. The place is well decorated, however it looks a little too simple for be an 'investment' place, when comparing to banks and such. His mentor, a person who is just a few years older than us met me. Same as MLM companies, my friend gave me a rough introduction of this mentor by telling me his academic qualification, of being presently in the 1st class honors region(still schooling). However, I wasn't impressed by his qualifications, because I don't think he's well versed in economic knowledge.

The first thing when i saw him, was him holding a VERY thick stack of $50. He told me that he is going to buy in another gold package ( $10,000) . I had a feeling that he took the stack of notes to 'show' me. After that, he went through a simple power point presentation with me on the company. It essentially explains more into detail on how the company functions, and the benefits of buying into the plan.

The company is actually an marketing arm of the whole group, called the empire alliance. It is raising funds for the investment work that they are doing in Taiwan, a mobile broadband investment. The money raised from the public will be pumped into doing the infrastructure. And when it completes and the revenue comes in, there will be another bonus payment given out to the 'shareholders'. They also talk about other perks that 'members can enjoy.
Here is a quick summary
  • More than 50% returns in a year
  • VERY big bonus payout after the wireless network is completed in taiwan
  • 'EBay' like system where people can buy and sell their goods
  • Free call times. This is because their wireless network company does deal in phone networks too
  • Others that I can't remember.

Just by looking at all this, I think most people will be really tempted to buy into the system. I do not deny that I was really really interested in buying into the plan.

HOWEVER, there were quite a few tell tail signs that the company is not as legitimate as it sounds. Here is why, ( all this findings that I did was before the company had an publicity in the news.)

  1. I did a ACRA search online on the company. Basically you can pay $5 to find out that the paid up capital of the company, the owners and where they stay. I found out that the owners are really young and they only had a paid up capital of less than $500,000. If i am not wrong, it is around $200,000. This is really little for an 'investment' company. Also, the directors are a little too young, and they stay in HDB flats. The give away was the fact that the company used to be a company selling health care products. And more prying into the previous company, I found out that it was an MLM company.
  2. The people at the company were selling to me the idea that you can get returns on the money you put in. But did not explain how the company is going about doing it. I.e they could not explain in detail the wireless network that is happening in Taiwan. Basically almost everything that the sales people know is form their own PowerPoint slides. When I request for a financial sheet, they cannot produce it too.
  3. The freebies of their 'Ebay' system was flawed. When i request for them to show me the website and how to use it, they could not. Even the upline who was there for quite some time could not show it to me. They did not know how to log in and search for products. Moreover, when I went home to try out the website, I found the website quite unprofessional, and the stuffs were above market price. Worst still, the company intends to develop this aspect of their products, and are thinking of fighting the real Ebay, head on.
  4. There were too many young people selling products in the company. And too many teenagers/ old people buying products. What sort of investment company will target this kind of people?
  5. There was once, even an upline, together with my friend came to my hall in NTU. The upline showed me his really expensive phone and was holding his BMW keys. He was around my age and has quit school to do this full time. I am quite wary when people flaunt their wealth. Most of the time, they are not really rich. Really rich people that I have met do not flaunt their wealth. Or rather they do not see the need to make an effort to falut their wealth. However after 2 hrs of trying to convince me, he left. I was already determine not to take the risk.
  6. Their promise of around 50% return per year for long period does not seem logical at all. I have been looking for companies financial sheets for a few years already. It is known that a legitimate company with a 20% growth for a consistent few years is already very very hard to come by. So how is it possible to sustain 50% growth a year for a LONG period of time. I tried explaining that to this particular upline who came to my hall, but he did not seem to understand me. I already seems to me that he might have been blinded by the greed.
Nonetheless, the good deal that was portrayed was really effective in wavering the logical side of me. However I was lucky to not succumb to it. It helps that my parents who are financially savvy do not believe it too.

So now, finally after 2 years, the police has uncovered the scam. However I pity all the people who's money has been swindled away. And the students who have quit school to purse this ambition.

To end, off I now believe that most things that are too good to be true will most likely scams. However, not everything are scams. Like in the case of sunshine empire, if they could show me their financial sheet, and explain to me their business plan convincingly, even if it was a start up company, they will be a highly likely chance that I will invest in them.

Tuesday, February 3, 2009

Things to consider when writing a will

Though I would think most of you out there are still healthy and fit, but i guess it is still useful to know a little more about wills. I came across the information from this from a book that I borrowed recently from the library, titled 'Personal Wealth Management' by Peter Tan.

I did not think the book was good though. It was too general and not much specific details were given,but at least the 'Will' part was interesting.

Summary ( according to the book, and its published in April 2007) :

  • Even after death, before the assets can be passed to those in the will, the assets will be subject to tax.( NO more true from 15 Feb 2008)
  • If you nominated a 'spouse' in the will, even if you remarry, the spouse will be the person who was originally your spouse, when you wrote the will. ( A reader emailed me to clarify this. According to the book that I read, it states that under Section 73 of the Conveyancing and Law of Property Act, ''Spouse'' refers to the spouse during the period when the spouse was nominated as the beneficiary.)
  • Letters of administration will be given to spouses,children above 21 or close relatives when the person passes away.
  • For a default family of a spouse and children with grandparents. The spouse will get half of the assets, and the rest if shared among ONLY the children.
  • Will must be in writing to be valid
  • Will must be signed on the last page by the person writing it, or by someone in his presence or at his request.
  • Will must be signed in the presence of 2 or more witness, not named as beneficiaries, who will also sigh the document.
  • Muslims may bequeath only 1/3 of their estate under Islamic or Syariah Law
  • A typical paragraph opens with ' This is the last will and testament of me, ABC of 1 Bedok Ave,Singapore'.
  • A will cannot be used for joint property. As the property will automatically go to the other person.
  • The Will has no jurisdiction over CPF funds. And you will need to make a nomination. However you will need to renominate when you marry/remarry. If there is no nomination, the $$ will be paid to the public trustee which will distribute the $$ as though there is no will.
  • USING THE STATE TRUST, your $$ is protected from creditors and you will have a $600,000 exemption from estate duty.

Yup, i know its rather wordy, but I feel that this is the most simplified 'need to know'. You will never know when it will come in handy..