4 Tips To Help You Achieve Your Sweet Retirement

Below are some of the tips I have been practicing and I hope it helps you to achieve your sweet retirement. Please feel free to share more tips with me in the comments below.

#1 Invest For Passive Income

If you have followed my blog, you know that I am a dividend investor. As a dividend investor, I collect dividends from stocks that I bought, accumulate cash and re-invest them. Occasionally, I will do a stock take of how much cash I have on hand versus the amount I invested (Seventy Four Percent Invested, Twenty Six Percent Cash). I try to maintain at least 30 percent cash versus 70 percent investment. Anything above 30 percent, I will invest them if opportunity arises. If there is no current opportunity, I will park the cash in Singapore Savings Bonds which I think is an excellent place to keep your war chest as you can redeem the bonds anytime.

I have not been investing for a few months now as I am building my cash position towards the 30 percent mark.

#2 Transfer Your Monies From CPF Ordinary Account to Special Account

As a monthly routine, I have been transferring my monies from my ordinary account to my special account. Monies in the special account earns you a higher interest p.a. For more details of the interest rates, you can refer to the CPF website.

#3 Buy What You Need Not What You Want

I learnt to buy what I need and not what I want. There are endless things that I desire and wanted. My “Wants” are never enough. Nowadays, when I wanted to buy something, I will always ask myself whether do I need that thing that I wanted to buy and after I bought it, will I use it often? This allows me to be more conscious in my spending. For these few months, most of my monthly spending is on basic necessities such as food and toiletries. This also helps to make my home less cluttered as I avoided buying things that I do not need such as a new pair of shoes (P.S. I already have 3 pairs of shoes).

#4 Contribute to Supplementary Retirement Scheme

I contribute to the Supplementary Retirement Scheme (SRS) account. Although the interest rate is pathetic, it helps to reduce your income taxes.

May 2018 Singapore Savings Bonds is 2.39%

I was caught by surprise when April 2018 Singapore Savings Bonds was over subscribed. One thing I concluded that it is not the Singapore Savings Bonds scheme that is not attractive, it was the low interest rates that were not attractive!

The effective interest rate for May 2018 Singapore Savings Bonds gives you an effective interest of 2.39% if you hold it for 10 years. That will be a total of S$2,416 of interests collected if you purchase S$10,000 of Singapore Savings Bonds now. This is higher than the effective interest rate of April 2018 Singapore Savings Bonds. If you see from the chart I plotted above, this is in fact the highest effective interest rate over the past 12 months.

If you decided to apply for May 2018 Singapore Savings Bonds, there is some good news. The Monetary Authority of Singapore (MAS) announced that the monthly issuance size of the Singapore Savings Bond (SSB) programme will be increased from S$150 million to S$200 million from this month. According to MAS, this is in response to the increasing demand for Singapore Savings Bonds.

Teach Your Kids to Spend, Save and Share

Recently, I attended a parenting course organized by my neighborhood community center. One of the topic is to teach your children about financial literacy. Just like me, I believe many parents out there does not know where to start when it comes to teaching your children about money management. Did you ever experience your child spending all their allowances at school and ask you for more money to buy additional stuff such as Pokemon cards?

You can try this simple technique that I have learnt from the course, summarized in three words: Spend, Save and Share. These are three broad techniques which you can use to remind your child to make choices with their money. You can make the above money jars using recycled containers (PS: I used the empty containers after finishing up the Chinese New Year goodies).

With the money jars, you can show your child how to allocate the given allowance into different containers and also help them understand what the purpose of each container is. Here are the three categories:

#1 Spend

Buy things that you need and want now.

#2 Save

Set money aside to buy things in the future.

#3 Share

Donate money to help people or buy something to share with your siblings or friends.