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F.R.I.E.N.D.S; Your Job’s a Joke, You’re Broke!

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I’m going to start this article with a controversial opinion; I don’t think Friends was actually that good. I much preferred the crossover storylines & humour of Seinfeld, and I didn’t think it was as ground-breaking as Sex And The City. However, I will say that Friends did explore very important topics, one of them being money.

This show really highlighted the relationship between friends, work, money and how each character dealt with these situations. So I thought, seen as I’ve done The Simpsons, Sex And The City, and Seinfeld, it would be cool to analyse each character and how they behave with money. Of course, we are going to explore topics about rent (like how the hell did Monica and Rachel have that huge apartment in NYC!), careers, and if I think each character was good at saving and investing.

Chandler Bing

Chandler is a great character to analyse financially. Although his career is a big vague (something in IT management?), we see his career grow significantly, to where he is considered a higher income earner. Some articles say his salary would have been roughly USD 100,000 per annum, with others saying up to USD 180,000. I can imagine that this corporate role of his gave great benefits; probably health insurance, bonuses and maybe even contributions into a 401K. This would mean that Chandler would have a good capacity to save- a high income with less fixed expenses. And we can see that throughout the show, mainly when he does a mid-career switch and becomes an intern. This would mean that he would have taken a massive pay cut, but that doesn’t seem to phase him. This tells me that he had enough saved up in his emergency fund to be able to still cope, even on a lower salary. The only red flag Chandler has when it comes to money is his willingness to loan a friend cash without expecting it to be repaid. He lends Joey a lot of money, and covers a lot of his expenses, and I don’t think Joey pays it all back. To me, this shows that Chandler has a blurred line between logic and emotion, particularly with money. He could have learnt to either say no to Joey, or set some expectations as to when and how he would like to be repaid.

Rachel Green

Rachel’s career development throughout the show is very interesting. She starts off as a runaway bride from a rich husband, and we know her family is well-off, but she gives all that up and becomes a barista and waitress at Central Perk. It’s difficult to estimate her salary at this point, because wait staff do not qualify for minimum wage in the US; their base salary is very low and the rest is tips. Whilst tipping culture in the US is huge, one could argue that Rachel may not have been getting a lot of tips. She isn’t great at her job and often messes up orders. Moreover, Central Perk is a cafe, not a fine-dining restaurant, so the tips in general wouldn’t been as high as other establishments.

By the end of the show, she works in fashion, pulling a salary of roughly USD 55,000. I’ll explain later that her fixed expenses in terms of rent would have been very low. However, something tells me that Rachel’s expenses would have increased with her income; she doesn’t duplicate an outfit, and we see her with some designer pieces too. Although her job at Ralph Lauren would have given decent benefits (similar to Chandler), I think her lifestyle expenses would be more.

I’m unsure whether Rachel would be investing, as well as saving. She is hard-working, but she can also be spontaneous, which leads me to believe there’s not a tonne of forward-planning going on. She comes from a well off background, so there is a chance that her parents may have taught her the importance of investing, or she may have been completely sheltered from it.

Ross Geller

Maybe another controversial take- I cannot stand Ross. He has that toxic ‘nice guy’ trope, he doesn’t treat Rachel well and my biggest gripe is his job as a Palaeontologist. As someone who has a BSc (Hons) in Palaeobiology & Evolution, and an MA in Palaeolithic Archaeology & Human Origins, I can tell you right now that Ross’ job doesn’t make any sense. His lectures often cover non-palaeontological topics such as geology and sedimentology, and he often talks about his research in anthropology. These are all different things, and a lecturer would not be trained in all of these areas, or be hired to give lectures on all of them! Another point that always confused me is that Ross is portrayed as a higher income earner, with his salary being estimated at USD 75,000 a year. I know it’s very different to the US than in the UK, but I know for a fact that in England no palaeontologist would earn that amount.

But it’s not all peachy for Ross- he has a LOT of expenses; he’s the only one out of the six that lives alone, which means that he’s covering the rent by himself. He also has two kids and is three times divorced, which means that he would have a lot of outgoings in terms of child support and alimony.

Monica Geller

Monica has very good financial standing in the show. A head chef would have been pulling a salary of approximately USD 80,000 a year. Chefs have to work long hours, which would mean less time to spend money on going out. Not only that, if you work in a restaurant, it’s very common for your food to be covered, meaning that Monica wouldn’t have a tonne of expenses going out each month. Now let’s talk about the apartment. That place was huge, and we all know that New York is super expensive, even back in the 90s. So how did Monica (and Rachel) keep up with rent every month? It’s mentioned in the show that the apartment originally belonged to her grandmother, and when she moved away, Monica began living there and started subletting it out (illegally). This apartment was rent-controlled, so the rent would have only been USD 200! This would have been so cheap when spilt between her and Rachel, meaning that Monica’s living cost would have been very low indeed.

Moreover, Monica has quite an organised, cautious and responsible personality. This tells me that she was provably a prudent saver and investor, and she probably would have been investing in cautious portfolios. This would mean that sh’e likely be seeing moderate returns of 4-5%, meaning that her money would have been out-performing inflation. Therefore, Monica would be well set up for future kids’ expenses, and retirement.

Phoebe Buffay

Arguably the lowest earner out of the bunch, Phoebe’s salary is very difficult to estimate. Like Joey at times, we see her doing lots of various odd jobs, such as free lance caterer, busker, or a masseuse. A masseuse in the 90s could have drawn a salary of roughly USD 50,000. So at times when Phoebe’s salary was consistent, she could have been managing ok. Moreover, she lives with her grandma, meaning low fixed expenses, and she even inherits this property when her grandma passes. Whilst this would mean additional costs, such as maintenance and various taxes, that would be a huge boost for Phoebe’s assets. Other than this, I get the feeling that Phoebe often lives paycheque to paycheque, and therefore not a lot of space for savings and investing.

Joey Tribbiani

Joey’s character I think is the most interesting to explore. Throughout the show, we see Joey’s professional career as an actor- a job which is not always consistent or full time. And because of this, we often see Joey going through bouts of unemployment, or doing odd-jobs. However, by the end of the show, he is arguable earning the most out of the six, with his annual salary estimated at around USD 130,000. One thing I like about Joey is that, although his salary massively increases, his lifestyle doesn’t seem to change a tonne; he stays living in that apartment for the most part, he still enjoys home cooked Italian food or take-out, and we don’t see him spending too much on frivolous luxury items.

Another positive portrayal in the show is the bond between him and his family. They seem incredibly supportive of him, and value quality time together. Coming from a Mediterranean family myself, I can imagine that Joey’s culture and family dynamics contributed a lot to his money habits. From personal experience, immigrant families tend to have very strong work ethics, understand the importance of saving and realise that there are non-material ways that you can feel rich. I’m sure a lot of these mindsets rubbed off on Joey, but one thing about him that isn’t so good is the fact that whilst he is out of work or doing odd-jobs, he often relies on Chandler for financial support. Chandler not only covers his rent and food on several occasions, but he also pays out of pocket for Joey’s hernia surgery, which if you know anything about the US healthcare system, you know that it’s really quite costly! A fan estimated the amount that Joey owes Chandler, at a whopping USD 101,760!

All in all, Friends is a great portrayal of a group from various income brackets, with characters with many different money mindsets. We can learn a lot from them, such as the importance of setting aside for a rainy day, minimising our fixed expenses, and how to deal with friends in different money situations to us. I’ve really enjoyed doing this financial deepdive into the show, but I’d like to move away from US (particularly NYC) based shows! So please give me some suggestions for the next ones!

References:

https://www.bustle.com/entertainment/friends-characters-salaries-earned-throughout-series-estimated

https://entertainment.ie/tv/tv-news/a-friends-fan-has-worked-out-how-much-joey-actually-owes-chandler-216057/#:~:text=So%20the%20final%20answer%20is,career%20of%20a%20Transponster

https://www.cbr.com/friends-how-monica-afford-apartment/

What Type of Advisor Should Expats in Singapore Work With?

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Living in Singapore as an expat can come with its own set of financial challenges that are not applicable to locals. From various tax considerations, to dealing with foreign exchange rates, it’s often quite challenging for expats to ‘DIY’ their financial planning. Therefore, it’s important to find a financial planner, or advisor, that has experience with clients that also have these niche issues. Here’s a few things to look out for when you choose a financial advisor:

  1. Their qualifications & regulations

This is not just applicable for expats, but for anyone seeking financial advice in Singapore. Financial advisors need to be licensed and regulated by the Monetary Authority of Singapore (MAS) to legally give advice, and the investments & products they are selling should be regulated by MAS, too. Even offshore investments in Singapore must follow these regulations; if they are not, you run the risk of not being legally protected should anything go wrong.

2. Their independence & ties

There are two types of advisors in Singapore- independant & tied. If someone is independent, it means that, even though they probably work for a specific firm or financial institution, they are able to recommend various investments, insurance etc. from many companies. A tied advisor can only recommend products from the financial institution or insurance company they work for. I started off my journey as a Private Wealth Manager being tied to a local firm, and I found that this limited my ability to help my clients, particularly expats. Now that I work as an IFA (independent financial advisor), I find that I am able to help expat clients a lot more, as various investments will have different tax considerations, and certain insurance products may be better for expats from certain countries, whilst others are not. It’s totally up to you whether you work with a tied or independent advisor, but I do think that planning can be limited if you are only able to have investments from one company.

3. Their experience with working with expats

Look for a financial advisor who has experience working with expats in Singapore, and who understands the unique financial considerations that come with living abroad. Many local advisors or those who solely work with locals, will not be aware of capital gains tax considerations when an expat repatriates, and a surprise tax bill can be detrimental to investment planning. Retirement planning for expats can be complicated due to factors such as differing retirement ages, pension eligibility, and social security contributions. Advisors that have little experience working with expats may not be familiar with these specific considerations and how they can impact an expat client’s retirement goals. For example, I am able to assist my clients who are British or have worked in the UK, with their retirement planning and pensions. The same goes with Australians, as we have investments that are tax-efficient in these countries, and have tax experts on-hand to advise on this portion of their financial planning. Generally, if you are an expat, it’s good to work with an advisor who will be able to understand your unique situation & goals. You can always ask the advisor what kind of clients they work with, or if they have any case studies to share on clients in similar situations as you.

4. Discuss fees and charges upfront

Generally, in Singapore, fee-based advice is not very common. Whilst this is usual in western countries, in Singapore most advisors are paid either a commission, or an on-going fee, let’s discuss the slight differences between the two:

  • Commissions are paid to the advisor usually upfront, either when you buy an insurance product or an investment. This cost is factored into the premiums that you are paying, along with the company the advisor works for paying a chunk, too. Because these commissions are generally upfront, you may see that the charges are very large in the first couple of years. Due to this, if you are buying a product, be it investment or insurance, that does not require a lot of transactions, you may not always get the same level of service as you did at the start.
  • On-going fees are usually a percentage of the advisors funds under management. They will get a % on whatever monies their clients have entrusted with them. Because these fees are on-going, there is an obligation by the advisor to give you on-going advice and service. This generally tends to lead to a synergy in yours & advisors interest, because as your money grows, so does their pay!

A couple more fees to look out for are transaction and trailer fees; these fees are normally triggered when you buy or sell out of a fund or investment, or switch your portfolio, and a % is paid to the advisor. It is key to be aware of all fees and charges and that your advisor is transparent.

This means that you could have many meetings with your advisor before they actually receive their pay, so do consider if this is the route you would like to go down.

5. Their personality

To me, this may be one of the most important points; you are going to be working with this person for a very long time, therefore it’s best to choose someone that you feel understands and listens to you. As an expat, you may have specific financial goals or concerns that you need help addressing. Make sure the financial advisor you choose communicates clearly and is responsive to your needs. If you are someone who is a novice in investing, you may not like talking about all the ‘buzz words’ of investing, and would appreciate someone communicating to you in an easy-to-understand way. On the flip-side, if you are a bit more knowledgeable and would like investments in specific areas, it’s good to find an advisor that can discuss and educate you on these topics, along with giving their professional opinion.

To conclude, many may think that there isn’t a need for talking to an advisor; they’d rather watch YouTube videos, or talk to their friends and family about finances. But a financial planner should be giving their professional, unbiased opinion. They will be able to objectively look at your goals and financial situation objectively, and construct a clear plan bespoke to you. Always remember that being an expat comes with its own unique situations, and you should look for an advisor that understands that.

Normalise Talking About These Four Money Topics!

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I recently went away with a friend, and then my family joined me later on, and finances (money in general) came up a lot in general conversation. I was really pleased with how open the discussions were, and I realised that not many people actually have open conversations in their day-to-day lives about money. Whilst money is seen as somewhat of a taboo to talk about, and I do agree that sometimes it is inappropriate, I do think there are some conversation topics we should normalise talking about, here are the top four money topics we should normalise!

One: Saving for a rainy day.

Actually came up quite a lot on my trip, mainly because the friend I was travelling with quit her job to take a year (or more) out to travel the world. She mentioned that quite a lot of people that she met whilst travelling were shocked and confused as to how she could afford to do that. I also commented that I experience quite a lot of the time, especially in Singapore, that if somebody loses a job, they quite quickly mention that they are unable to afford living in Singapore anymore, pack their things, and leave.

I am aware that visa situations can stop people from staying in Singapore more than a month after their visa is cancelled, but a lot of these people are on a One Pass, and if you have read my previous article, you’ll know that this pass doesn’t have so many immigration issues, and basically allows people to stay in the country even without work. So why aren’t people able to stay in the country longer than one month was they look for another job? I think it’s because many people do not save and sometimes spend beyond their means, meaning that if an emergency happens, they are not able to pay for the upfront costs.

Similarly, I think a lot of people are shocked that my friend was able to go travelling for a year, because they realised that they do not set aside enough to cover a years worth of expenses. With conscious & rigid savings of your surplus each month, and planning properly ahead, you are able to set aside for a rainy day, an emergency, or even if you want to take a break from work. Remember, you should have at least 3 to 6 months of your spending as liquid cash available.

Two: Future proofing and passing on your money.

This one might sound quite morbid, and unfortunately, it is really. But my family and I recently have experienced quite a lot of deaths, and as horrible as it is to talk about, it’s better to start talking about future planning and what happens to your finances before it’s too late. For example, my dad shared with us that one of his clients recently passed away, and being UK residents, their family were hit with a huge inheritance tax bill of 40% of the entire wealth. I commented and asked why more people don’t just take out life insurance; in the UK, we can put this into a trust, which protects it from inheritance tax, and that way, even if you have 40% of your wealth in an insurance policy, that will cover the inheritance tax bill at the end of the day. This is a lot more cost-effective than trying to put your housing into a trust, which can often mean paying a lawyer annually to maintain.

He told me that he thought that was a brilliant idea, and a really good way to inheritance tax plan, but not enough people think about it or talk about it with their family, and then unfortunately it is too late. Although in Singapore, we do not have inheritance tax, any overseas assets may be liable to whatever inheritance law is applicable in that country. Moreover, even if your assets are all in Singapore, probate can take a very long time for all the assets to be distributed correctly. Planning ahead for the worst outcome means that you can ensure that your wealth is passed quickly, so the next generation, or whoever you want it to be passed down to, and also means that your family enjoy your hard work, more than a large portion, going to the tax man!

Three: The importance of investing

My friend commented that while she was on a world cruise, she had paid for the internet package on the ship, and whilst it is expensive, I do agree that access to internet in this day and age is a must. However, I was shocked to find out that many of the people on board were not paying for internet, and we are struggling day-to-day, and even asking her to use her internet package! She had commented that it’s obvious that these people aren’t managing their finances correctly, because in a four-month cruise, during that period, you would need access to your online banking, and your investments. She also said that a few of the people on board scoffed at the idea of investments. Unfortunately, I find this very common, even today.

Investing is the only way that you can beat inflation, because most savings accounts do not beat inflation, and endowment policies and savings plans, whilst they do have a guaranteed amount, these often have incredibly high charges, and also do not beat inflation. Thinking that you are going to have a comfortable retirement without doing any savings and investing planning, is quite frankly, not a reality!

What’s more, whilst I have mentioned in the past, and I still think that you should not be checking your investments every single day, it’s important to be having regular reviews with your wealth manager, at least annually, to ensure that your financial and investment goals are still on track, and you can make any adjustments to your investments if necessary. If you are at a retirement or financial freedom stage of your life, it’s also incredibly important to plan how you are going to draw down from your investments, effectively and tax efficiently.

Four: Property

I feel like property is often shrouded in mystery, what can you buy, what can’t you buy? What kind of mortgage? What taxes are applicable and what rent should you charge? My friend has recently sold a property, and I recently closed on an apartment, so the topic of property came up quite a lot on our trip, and even more so with my family afterwards. I think it’s really important that we normalise talking about property purchase more frequently, because there seems to be a lot of misinformation out there. For example, my friend was hit with a large tax bill when she sold her property and nobody, not even her accountants, informed her about this! Many people don’t think that they can apply for a mortgage if they are an expat, which is definitely not the case. Many people don’t understand the process of buying, and how to go about finding a solicitor and so on, and I think if we open up this conversation more, there will be less chance of confusion.

To be honest, I think I have many more things in terms of finances that we should normalise discussing, but seen as I’ve been talking about these four topics a lot recently, and I have been having very productive and positive conversations, I think it’s important that we all normalise certain money conversations in the right spaces. What kind of money conversations do you think we should normalise?

Let’s Talk About Finance Basics For Young Women

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I’ve just finished my new ebook: Let’s Talk About Finance Basics For Young Women!

In this ebook, I’ll be delving into the socio and psychological consequences of financial literacy, along with how our upbringing could have affected our money mind. Not only that, I have a few strategies on how to discuss money without shame or judgement, along with some basic budgeting tips and what we should be saving for.

Feel free to read, share and let me know what you think!

lets-talk-about-finance-basics-for-young-women-2Download

Time For A Financial Self-Reflection

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For someone whose job revolves around finances, it’s very easy for me to think about money on a daily basis. But for those who have other areas of expertise; are in the creative field; have a tonne of other priorities to think about; or are just not knowledgeable in this subject, planning finances can seem like an incredibly difficult feat.

How do we know that we are planning correctly? How do we check that we are on track? Do we need to change our financial planning? I’m going to give you a couple of tips on how to self-reflect when it comes to money and, if needs be, do a financial reset.

  1. Think to yourself, ‘Do I have a plan in place?’

This is one of the building blocks of financial planning; you must know what goals you hope to achieve and plan accordingly. Aim for mid- to long-term goals, as this will be easier to plan out using savings & investment instruments. Not only that, you should ensure than whatever planning you do takes into account which country you will be moving to or retiring. Different countries have different tax laws and jurisdictions, so you need to be aware of these if you want to plan your money successfully.

2. ‘Am I prepared for the unexpected?’

While this may be very bleak to think of, it is very important; life doesn’t always go as smoothly as we have planned. Any number of events can happen that can negatively effect your finances, such as a death in the family, a divorce, unexpected illness or even something as small as the fridge breaking. That’s why it’s crucial to have several safety nets in place to cushion the blow of these things impacting you and your family. You should make sure that you have an emergency fund of at least 3-6 months of spending. Not only that, you should ensure that your assets are protected with sufficient insurance, and you and your family should have a will in place for every country that you have assets.

3. ‘Do I know what I spend daily? Am I in control?’

We cannot deny, life is getting more expensive. Inflation is high, the cost of living has increased, you may feel it is more difficult to save each month. Take this time to reflect and be conscious about your spending. If this means putting all your cashflow into a spreadsheet, do so. If you need to use an app to track this, there are plenty of free ones you can use. Remember that what you are spending now will only increase over time (inflation, again!) so ask yourself, ‘Could I live like this comfortably in my retirement? Is this monthly income going to be enough?’. If the answer is no, start making tweaks to your retirement planning.

4. ‘Have I taken steps to plan for later life?’

This final point leads on from my previous one- no one wants to think about getting old but unfortunately, it is a fact of life. With old age comes extra challenges, like will your savings be enough to allow you to retire? Where and when will you retire, and is that even achievable? Not only that, who will you pass your estate on to when you leave, and have you sorted out inheritance tax? As mentioned, no one wants to think about these things, but it is good to ask yourself these tough questions every once in a while.

If you feel like all of this is too much, or you have reflected and now don’t know what to do, reach out to an advisor or a professional to help you mitigate these challenges.

What Makes A Corporate Insurance Good?

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Many expats in Singapore have the privilege of being covered under their company’s insurance policy. This is a great perk to have; I’ve already written posts in the past on the benefits corporate insurance brings, such as covering pre-existing and outpatient costs. But there are some aspects that people seldom think about. In this article, I will explore these here.

Clear Limits & T&Cs

This point may seem very obvious but a lot of people simply think, I have company insurance, I’m covered. This is not always the case; company policies will always have limits. Sometimes, a company may not provide certain outpatient coverage (especially dental, as this tends to be more expensive). Sometimes, the claim limit for surgery may be insufficient. For example, the most common limit I see for company hospitalisation is $15,000. I went for a very minor surgery back in 2018 that cost close to $18,000. Medical costs have definitely risen since then, and my surgery was only a 30-minute procedure. So, you can see that $15,000 is clearly not enough to be covered for hospitalisation. Not only that, some policies may include a co-payment that you need to pay and cannot be claimed. Make sure that you are made fully aware of your company’s insurance limits and terms & conditions.

Fast Response

It’s all well and good having amazing claim limits, but if you don’t hear back from the agent or company for months on end, it renders worthless. Ideally, you as an employee should be able to talk to the company’s agent directly, instead of constantly having to use your HR as the middle man, and the agent should respond to you quickly in regards to claims status or understanding your policy further.

No LOG Complications

A Letter of Guarantee is very common both for company and individual policies. This letter acts as a kind of pre-approval so that the hospital can directly bill to the insurance company. However, I have seen some very strange clauses when it comes to LOGs, such as asking for notification weeks in advance, including if you are hospitalised due to an emergency. As you can imagine, it can be very difficult to get an LOG if you are being rushed to the hospital! And it would be unfortunate if this means you are unable to claim! Even if you have to pay for your emergency hospitalisation first, you should be able to claim later.

Personal Touch & Added Perks

This is something that many forget about- personal touch makes all the difference! Starting with the responsiveness of your agent in regards to claims, but also so much more. Did you know that many corporate policies offer free talks, classes and wellness perks for their clients? This could be anything from on-site health screenings, to doctor’s talks, to yoga sessions, and even financial empowerment seminars. If your company insurance is a faceless corporation, with none of these personal perks, you may be missing out.

Whilst sometimes your own company’s policy is out of your control, you can still take the initiative to find out more of what you are covered for. If you find that it is not enough or insufficient, then you can be proactive and have personal coverage, too. Moreover, if you are in the midst of applying for a new job, you know that there are certain employee benefits that you can ask for or look out for in your contract. Or you can share this article with new expats moving to Singapore!

What Should Expats Take Note of Before They Move To Singapore?

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When I first moved to Singapore, I didn’t really know much about the landscape here in terms of living and working. I had only visited the country via transit, so Changi airport was all I knew! Of course, the reason I chose to move to Singapore was because the pay was a lot higher than what I can get in the UK. However, I wish I did understand things before I moved here so I could make more of an informed decision. So, I’ve come up with this list, hopefully I can help some newbies who are considering to move here. 

  1. Flights

Of course, if a company is willing to relocate you over here, then they should try and cover some of the moving costs. When I first accepted my job offer, my company did in fact offer to reimburse my flight ticket. However, this was not enough to cover the full flight cost. If I remember correctly, I had to book with a budget airline direct from London; there are no direct flights from Birmingham, so that was an extra hassle for me to try and travel down there. We all know they’re a lot more expensive than they were pre-Covid, so look out and make sure that your company’s reimbursement is sufficient to cover these inflated flight costs!

2. Housing Costs

I’ve written a few articles now regarding how expensive housing has gotten in Singapore. In fact, a couple of days after I broke my last article, the government raised the additional stamp duty for foreigners from 30% to 60%! Not only that, rental has skyrocketed over the past year or so; so even though your salary might be higher here than your home country, your outgoings might be a lot more too. If you are offered a package that covers some or all of your rental costs, then I think that is ideal! Rental costs are the bulk of my outgoing expenditures each month.

3. Insurance 

I know I always go on about this, but it’s very important! I spend a lot of my personal insurance each month. When I first arrived in Singapore, my previous company gave me an allowance of $200 annually to cover insurance…let me tell you now, this is not enough. This only covered a fraction of the very basic hospital & accident insurance I purchased, let alone the additional life & critical illness insurance I later purchased. If a company offers an allowance to purchase insurance, make sure it’s at least in the thousand dollar range. But ideally, a company should provide you with a corporate insurance plan, that way you may have an opportunity to be covered for GP, specialist and dental, coverage that is normally not claimable on a personal insurance plan. Also, it’s good to know that it is mandatory for companies to provide foreigners on work permits and S passes with insurance coverage.

4. Annual Leave

I didn’t factor in how important this was when I accepted a job offer. In my previous company, when I was an English teacher, I enjoyed a lot of days off, because of school holidays et cetera. The tuition centre simply refused to open, meaning that we were unable to work. However, these days off went over our 14 days annual leave, meaning that we actually had to pay back the company the days that we did not work! This basically ate away into our bonuses. I wish I’d have found a better offer that didn’t absorb our days off in lieu this way!

5. Shares & Taxes

A lot of companies offer shares as part of their incentive. I think this is a great idea, as you basically have access to stocks (maybe even blue chips) that you wouldn’t normally have access to. However, a word of caution- and this has happened a few times with my clients; IRAS will tax you on these shares even if you haven’t cashed them out. Quite often, you are taxed when the shares are doing well and price high, then, the shares may plummet, especially during this economic uncertainty. So, you may be taxed on assets that are actually a lot higher than their current value! This could push you into different tax brackets altogether, meaning that your tax for that year will be quite costly!

6. Education Costs

As a foreigner, it is often incredibly difficult to get your child into a local school, they have to take several exams on a syllabus that they probably are not familiar with. So, for most expats in Singapore, their kids have to go to international schools. The fees for these schools can be very pricey, easily $50,000 or even more a year for some! So, factor this in before you make the move. Ideally, you can find a package that will cover some of these educational costs for you.

7. Dependent’s Pass

A lot of foreigners here are in fact trailing spouses, following their husband or wife for work. In the past, this was not so much of an issue, but over Covid, the government made it a rule that those on a dependent pass could not get a letter of consent to work. This means that if you are on a dependent pass, you may have to work remotely for your previous company overseas, or simply not at all. I do know some who have set up their own company to bypass this, but then another problem arises in having to hire a local and pay their CPF, regardless of how well your business is doing.

Some argue that Singapore is becoming less attractive for foreigners to live and work. I don’t necessarily agree with this statement, however, I think it’s key that you know all of these things to look out for and make an informed decision.

What challenges are coming to Singapore in 2023?

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I didn’t want to start of the year with a depressing post, and I assure you it isn’t going to be one, but I thought it would be useful to people to be informed on the changes that are coming to Singapore that will directly affect us this year.

  1. GST Increase

As everyone knows, GST has now increased from 7% to 8%, meaning that things are generally more expensive. Not only does this apply for small things like going out for drinks or doing the grocery shopping, but I think people, particularly expats, will feel the pinch when it comes to paying for their child’s education. International school is already incredibly expensive, and with it being very difficult to get into the state schools, it is pretty much the only option for most people with families over here.That one percent extra makes all the difference, actually. I have Heard of a few international schools allowing the parents to pay for their 2023 bills in December, meaning that they are still paying at the 7% rate, but of course of December is over and moving forward it will be 8% across-the-board.

2. Rental

I’ve been talking about this topic a lot because it directly affects me and is most expats in Singapore, because most of us do not own a property here. Unlike the UK, which I’m used to very good laws that protect the tenants, Singapore does not seem to have this. There seems to be no glass ceiling when it comes to rental prices over here, and actually, a lot of expats when considering relocating to Singapore, should take into consideration how much of their salary is going to go on paying for rent! I do wonder when the rental prices will stop increasing, and I’m hoping that in 2023 it will stop, but there is no way to be sure.

3. Means Testing For Medical

From the end of 2022, the Ministry of health have decided to implement a subsidy framework across healthcare. This of course is to help those from lower income households, who may find medical bills too expensive. This method calculates the subsidies that people will receive based on their household income, so that the government can give assistance to those that need it most. While this is great for those who really need it, there are some factors to consider that will affect all of us. The first is opting for government hospitals instead of private.

Generally, going to a government hospital means that it is a lot cheaper than going private, but of course, this is more appropriate and best saved for people who really need it, on lower income households who qualify for the mains testing. Expats in particular are rarely included in these kind of schemes, which means that generally our healthcare will still stay as expensive. And don’t forget, the Ministry of health have also implemented a drug list, which means that if you are on medication that is not on this list, you may not be able to claim it on your insurance!

4. Inflation

This seems like a really scary word now, last year Singapore reached an all-time high with its inflation rate. While the Monetary Authority of Singapore has tried to curb this, by appreciating the currency and tightening policies to try and curb the upward prices, I still think that inflation will affect us in 2023. We can already see that things such as groceries and Energy bills have increased, what will this be like in 2023? I do think that the government has done a very good job at plateauing the inflation rate, but it has plateaued at a very high point. I am looking forward to seeing it decrease in the future.

5. Recession

While the unemployment rate was very low last year in Singapore, there is something that us as expats must think about; retrenchment. Due to the recent recession, we’ve seen a lot of companies cutting people on Employment passes and S passes, and employing more locals who they don’t have to fork out large levees or salaries for. Of course, this is great for the locals, and I do think that it’s wonderful to see a country put so much effort into supporting its local citizens, but this could greatly affect expatriates living and working in Singapore. Reshuffling of large organisations could mean relocation or retrenchment.

Not only that, I have seen a real competition for S passes due to the quota system. An S pass has changed a lot over the years, with its salary for some even being comparable to those on an Employment pass, but there is strict criteria and quota that each company needs to be able to employ someone on an S pass. Leading to shortages in some companies. Not only that, as we get older and we gain more work experience, our work passes become more and more expensive to renew for the employer. This could spike the increase in unemployment rates in the expat community.

Despite all of this, of course, I still love living in Singapore and consider it my home.

I’m sure that these things are just challenges that we will have to overcome, and will not continue forever. There have been worse economic periods in the past, this is not the worst that could happen! I’m still incredibly grateful to live in such a wonderful country. Here’s to a wonderful 2023 ahead!

How Will Inflation Affect Your Long-Term Planning?

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We’re all been hearing about how bad inflation is and that it’s increasing etc. But what does this actually mean and how does it have a lasting affect on our money planning?

What Is Inflation?

Simply put, inflation is when the cost of goods and living increases. Whilst some see this as a bad thing, slight inflation is good as it is a sign of a growing economy; meaning more employment, higher profits and an increase in production. But, right now, we are seeing a significant rise in inflation. In December of 2021, Singapore saw inflation hit a 9 year high of 4%.

How It Affects Us Now

This increase directly affects us, and you may have even felt a bit of a pinch. Food is a bit more expenses and energy prices seem to have gone through the roof. All of this means that your cold hard-earned cash has less spending power, essentially meaning that you cannot buy as many things with the same amount of money as you used to. What further exacerbates this problem is bank interest rates; most current accounts in Singapore have an annual interest rate of 0.05%, meaning the bank gives you that much extra each year (not a lot at all). If current inflation rate is at 4%, you are losing 3.95% of your money every year by just leaving it in your bank account! This means that whilst you are earning money, not only are things getting more expensive but you’re losing money in your bank account too!

How It Affects Our Future

As you can imagine, this situation has a massive knock-on effect for our futures. If inflation increases, or even plateaus at say about 2%, you are still losing money in your bank account. Food, housing, medicine and energy will continue to go up in price, meaning each year you will either be able to afford less, or have to spend more to keep up. Not only that, your savings will not be as powerful as it once was…so you can see how this is a problem two-fold!

How Can We Stop This?

But fear not! If we prepare now ahead of time, we can manage inflation so that it doesn’t eat away at our savings. There are a few things you can do in preparation: first, include inflation in any planning you do. Want to save up for a holiday in 5 years’ time? Inflate your ticket and hotel prices by at least 2% per annum (3% if you want to be safe). Secondly, consider using vehicles and instruments that will offer you higher returns than your current bank account- any % higher than current inflation rate will give you a positive yield, and will ensure that your savings don’t run dry. I also think it’s best to create multiple avenues for growing your money, so that if one option is not doing well, at least you have money in different areas that you can withdraw from. Lastly, do not underestimate how much different sectors will increase. Food, healthcare, housing etc. do not always follow the same trend or inflation rate. Ensure you have medical expenses covered and calculated into your long-term planning, as well as remembering that your income will not go as far in future unless you ensure there are increases.

Essentially, it is best to start planning now instead of panicking later on in life, realising that you could have prepared for inflation but didn’t. As always, it’s best to stay in-the-know, and consult a professional when it comes to your financial planning.

Hospital & Cancer Insurance; Updates YOU Need To Know About

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  There have been some new updates to Integrated Shield Plans (hospital insurance) in Singapore you need to know about. The MediShield Life Council reported that spending on cancer drugs has been increasing by 20% a year; a stark contrast to the 6% spending increase for other drugs. To curb these rising costs, MOH has come up with a Cancer Drug List.

The Cancer Drug List contains drugs that are effective and cost-efficient drugs and treatments that insurance companies will cover. If the drug is effective but not cost-effective, insurance will not cover it. Not only this, even if the drug is very cheap, but does not improve the cancer treatment, insurers won’t cover.

Those with Integrated Shield Plans, will not allowed to be covered for treatment not on the list, even if they are still on treatment. Although this sounds very daunting, MOH has stated that close to 90% of current cancer drugs and treatment in Singapore are on this list.

While this isn’t ideal, and of course may affect many people, it does mean that your insurance premiums won’t skyrocket up and up each year. Medical inflation is already very high in Singapore; this is one way the government are stepping in to stop it from going out of hand.

But what does this mean for insurance moving forward? I would strongly suggest adding a cancer coverage to your portfolio, to cover the shortfall of possibly having to pay for a drug not on the Cancer Drug List. Receiving a lump-sum payment can help pay for monthly cancer drug expenses, which can be approximately $2,300 a month.

How do you think this affects you in Singapore?