Tag Archives: money

How Safe Is Your Cyber?

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The need for cyber security has become paramount in today’s modern age, particularly in the fintech and financial space. Being in this industry myself, I handle sensitive client data daily, and have access to their online wealth accounts; it is therefore vital that their information stays safe and inaccessible to fraudsters. Robust security measures must be in place, and I am constantly having to upgrade and refresh my skills to keep my clients safe.

Whilst fintech has allowed for financial services to become more streamlined, convenient, and efficient, it has somewhat opened the floodgates for cyber-attacks and threats. Harvard Business Review reported a 20% increase in data breaches from 2022 to 2023, and this is set to increase further as the years progress. Not only does this mean we have to constantly upgrade our software and infrastructure, but human area can become a massive opportunity for cyber criminals. I truly believe that a two-pronged approach of new regulatory processes, along with using AI in cybersecurity is a dynamic tactic to tackle this ever-evolving problem.

Cyber security is now seeing the same level of regulation as every other type of security, which means that fintech companies in particular must adhere to stringent rules and procedures. Regulations such as the General Data Protection Regulation (GDPR) and the Payment Card Industry Data Security Standard (PCI DSS) must be followed. Whilst of course this is best practice to ensure that clients’ data is safe, it therefore adds an extra strain onto the company and its employees; this may lead to delayed admin processes, longer lead time for new business submission and therefore, a time delay in profit for the company. Time is money, and the longer it takes for profit to be made, it essentially means smaller margins for the company.

One way this can be tackled is with Artificial Intelligence. Whilst using manpower takes time and money (not to mention the risk of human error), AI systems can scan masses of data sets, analyse data, spot anomalies, and therefore detect possible cyber risks before they have even happened. This preventative method ensures that risks are managed efficiently, and before they become breaches, which means a safer system for the clients, and mitigates possible reputation risk for the company.

However, AI is not a final solution; with cybercriminals’ techniques ever evolving, it means that AI will have to do the same. Not only that, employees must keep re-training when new systems are introduced, to ensure that human error is kept to a minimum. Moreover, one must ensure that the third-party companies engaged to deliver this AI system, is also compliant, safe, and follows the stringent regulations set in place for fintech companies to adhere to.

But the buck doesn’t just stop with the company- clients and customers must also stay vigilant so that they don’t fall victim to cyber-crime. For example, being able to spot a phishing email, not clicking on unknown links, and not giving out all your banking details to someone over the phone. In order for an individual to be savvy, particularly when it comes to fintech and online financial transactions, they must be aware of risks and know when and where it is appropriate to give out their financial information. If you engage a professional for your financial planning, of course you will have to make them aware of your personal details and possibly even bank details. But do take note that they should be encrypting or password-protecting any sensitive documents that are being sent to you.

Even if you are planning your finances alone, and are using platforms for your investing, be sure to do your own due diligence; ensure that the apps you are using are regulated and have secure payment systems. Do take note that most will require you to upload some form of identification, as well as declaring your tax residency. Whilst to a layman, this may seem intrusive, this is actually a sign that the platform is doing its part to adhere to compliance and regulations. If they don’t ask of these from you, it could be a sign that the platform is not regulated.

For those that plan their investing and finances alone, cybersecurity becomes an even bigger risk, as this is normally something that a large corporation would have to ensure the safety of first, but now it is being left to the individual investor. If you are considering planning your finances yourself, having basic understanding and knowledge is incredibly important. Therefore, I often suggest that people understand four main areas before they start investing, which I will explore further in this article.

Finance 101

I have many clients and connections that I come across asking me for advice on how to get their finances in order. ‘How can we maximise what we have now, so that we can make the most of our money later?’. Of course, one of the best passive things we can do, is to invest.

  Investing is the concept of allocating assets, usually money, into different financial vehicles to create a profit. The bare minimum investment should be doing is beating inflation, because over time our hard-earned money is worth less, due to the rising cost of products. Before one starts investing, it is best to have a clear strategy, and get the basics covered first. Here are a few key financial areas you should have planned for:

  1. Build an Emergency Fund

At a glance investing may seem like an obvious choice when it comes to saving money. Why not just throw all your savings into investment if it means high returns? The answer is that investment returns are NOT guaranteed- even the safest investments come with some risk, and sometimes the lock in periods are high, or the penalty for withdrawing early is expensive. To ensure that you are not over-investing, make sure that you have an emergency savings fund that is easily accessible. That way should an emergency arise (like a large hospital bill or having to pay for car repairs), you can use your emergency money instead of jeopardising your investments.

  The recommended amount you should have in your emergency fund is 3-6 months of your monthly salary. This should be a healthy buffer should the worst happen. If you already have more than that, then that’s a great time to consider investing.

2. Know How to Budget

Of course, setting aside for investment would be impossible if you didn’t know how much to set aside. That’s why organising your budget is a crucial step in your financial planning. There are many ways and methods for planning, but a good starting point would be the 50/20/30 rule:

  • 50% of your monthly salary maximum should go on things you need to pay for: housing, bills, groceries & insurance.
  • 30% can go on doing the things you enjoy: hobbies, drinks and travel.
  • 20% should go into your savings: think about your long term savings and investment goals.

If you have surplus each month, you can even consider increasing this 20% to a higher proportion, and allocate more into your investment goals.

3. Be Debt-Free

Before you do any investing, you should really consider paying off your debt. Having a credit card bill is fine, but having any large or bad debt will hinder you in your long-term goals. It seems counter-productive attempting to make lots of money with investments, whilst paying off lots of debt. It may be difficult paying off student debt or large loans, but you will reap the benefits in the long run when your debt isn’t eating into your assets.

4. Set Your Investment Goals

This is arguably the most important step, defining your goals. What is the reason for investing? If you are doing it out of pure greed, then your judgment will become clouded when it comes to riskier investments and you risk losing it all. So have a long and hard think about why you want to invest. You are putting your money, that you worked hard for, somewhere that could give you high returns, or give you nothing. Therefore, it’s best to have a long think and define some clear goals for your future. Do you want to plan for your retirement? Save for a house? Pass something on to your children? Whatever it is, decide how much you would need and by when. Most investments give better returns if you have a longer-term commitment, so it’s OK to think big. If you have no clue and are just investing for the sake of it, you will quickly lose your drive and passion for making money.

These steps may seem simple, but they really are the key to an effective investment strategy. I work with clients every day to ensure that they have budgeted correctly, serviced their debt and built an emergency fund, and together we work together to work towards their financial goals. Many find that this is more complex than they first thought and will include tax planning and ensuring that their assets are protected. This is of course one of the added benefits of hiring a professional. If you feel that these services are something you would require, feel free to reach out at via my contact page!

Updates On The UK Spring Budget 2024

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For Brits, the most recent Spring Budget announcement was incredibly important, as it gave us some very key and drastic updates for tax and spending. Essentially, Chancellor Jeremy Hunt aimed to deliver lower taxes, encourage investment and improve public services. Although the elections may affect this announcement, it’s still very important for Brits, particularly those abroad, to be aware of. Martin at Spice Taxation (Company Registration No. 202133724G), has written a very in depth piece on the Spring Budget. It’s incredibly useful to hear the views of a professional tax expert, and Martin has been kind enough for me to share his thoughts here. Of course, I myself am not a UK Tax expert, so I often seek the help of professionals, such as Martin, to help me and my clients with their tax planning when necessary.

Below is Spice Taxation’s write up on the matter.

Our Thoughts on the Spring Budget – 6th March 2024
The Most Important Budget for Expatriates since 2010


“Over the years I have discovered that I am just not very good at predicting Budgets. Speculation is always rife about what a Chancellor might do in face of this and that economic and political situation, but mostly the actual announcements just tend to underwhelm and disappoint. Maybe I just crave excitement!


However, all that changed with Jeremy Hunt’s Budget on 6th March. It is likely to be the last Conservative Party Budget before the next General Election – an election which the Labour Party is widely expected to win. So, it remains to be seen how many of the announcements will find their way onto the Statute books if Labour does win. That aside, it really was an exciting Budget which promises a lot of change, much of it positive.


For much of the speech, it felt like a ‘normal budget’ with a plethora of announcements about regional incentives, funding initiatives, levelling up grants, subsidies and tax breaks for the arts etc. However, there was also a number of genuinely eye-catching and important announcements which are also relevant to expatriates.


First of all, Jeremy Hunt announced a further reduction in National Insurance paid by employees and the self-employed of 2%, from 6th April 2024. For employees, this will reduce from 10% to 8% and for the Self-Employed from 8% to 6%. For those returning to the UK, this will be welcome news.


Secondly, he announced the intention to introduce a new Individual Savings Account – the UK ISA, with an annual subscription allowance of GBP 5,000, in addition to the existing threshold of GBP 20,000. This new ISA would hold British-only assets – equities listed on the four recognised UK stock exchanges, UK corporate bonds and gilts and collectives. This will be good for UK resident savers.


Third, there were a few property tax announcements which came as a surprise:


o The marginal rate of Capital Gains Tax on the sale of residential property will reduce from 28% to 24% from 6th April 2024. This is intended to help stimulate the property market. The basic rate will remain at 18%. This is good for anyone selling, gifting or assigning an interest in UK residential property from that date.


o Multiple Dwellings Relief for Stamp Duty Land Tax is being abolished from 1st June 2024 – this was a relief that allowed you to take the average purchase price for SDLT purposes where at least two properties were being purchased in a single transaction.

o Furnished Holiday Letting status is to be abolished from 6th April 2025, with some anti-forestalling provisions which came into effect on 6th March 2024.


o The geographical scope of Agricultural Property Relief and Woodlands Relief (two Inheritance Tax incentives) will be limited to assets situated in the UK only from 6th April 2024 – those situated in the Crown Dependencies and the EEA will lose their IHT protected status.


Fourth, the VAT registration threshold will rise to GBP 90,000 from 6th April 2024, an increase of GBP 5,000, which will be welcome news for small businesses.


However, perhaps the biggest and most barnstorming announcement was the abolition of ‘non-dom’ status from 6th April 2025. The Conservative Party has been a staunch defender of the ‘non-domiciled regime’ over many years, so it was something of a surprise to see them adopt an avowed Labour Party policy. Stealing their thunder no doubt. It is a very major announcement that will impact many people.

In a nutshell, the Government plans to delink a person’s ‘domicile status’ from their UK tax outcomes, and move to a residence-based set of incentives. Consultation documents are yet to be published, but the main features of the new system will be to:

– Abolish the ‘remittance basis of taxation’ for UK resident ‘non-doms’.

– Replace it with an opt-in system that will allow, seemingly anyone – including, presumably, British nationals – to exempt their non-UK incomes and gains from UK tax for the first four years of UK residence, provided that they have been continuously non-resident for at least the 10 previous years.

– Exempt from tax the remittance of these non-UK income and gains to the UK, which will be hugely simplifying in the long run.

– Retain Overseas Workday Relief for qualifying individuals for the first 3 tax years of residence.

– Apply world-wide taxation for all individuals from the 5th year of residence in the UK.

– Introduce a thoughtful set of transitional reliefs for certain ‘non-doms’ who are already resident in the UK

– Switch away from a ‘domicile based’ system of Inheritance Tax to a residence-based system, whereby qualifying individuals switch to IHT on world-wide assets only after 10 years of residence.

Keep anyone who leaves the UK within IHT for 10 further years, which presumably also will apply to British Expatriates too. UK assets remain within Inheritance Tax at all times, regardless of residence.

We are missing a lot of technical detail here which should be answered by the Consultation Documents that the Government will be publishing shortly. So watch this space! However, whilst I have many more questions than answers at the moment, at first sight the main impacts appear to be the following:


a) Tax planning for relocation to the UK is likely to change quite a bit and these proposals could amount to a generous tax break for returning British expatriates.


b) They will also make Inheritance Tax planning potentially a lot simpler and not so reliant on subjective judgments about where a person is domiciled.


c) It might possibly result in an exemption from Inheritance Tax for a swathe of non-resident British expatriates who have already been non-resident for at least 10 years, which would be quite a result!


I am going out on a limb a little by saying that it appears the proposals will also apply to those we currently regard as ‘domiciled’ in the UK. However, surely that is the point – it is switch away from a tax system where a person’s domicile was the deciding factor, to a tax system where the deciding factor is driven by residence. This potentially bodes extremely well for British expatriates.
If this Budget does turn out to be the Conservative Party’s fiscal swansong, it is perhaps fitting that its period of Government will be bookended by a commitment to enshrine in law a statutory test for residence in 2010 at the start, and a set of announcements that displace domicile with a new regime based on that very residence test at the end. Mastering the Statutory Residence Test is clearly going to be more and more important.
Beyond this, all tax rates, thresholds and allowances for Personal Tax remain frozen, as do the rates for Corporation Tax. The dividend allowance will fall to GBP 500 from 6th April 2024 and the Capital Gains Tax Annual Exemption will fall to GBP 3,000 from the same date. Class 2 and Class 3 voluntary National Insurance Contribution rates will remain unchanged at GBP 3.45 per week and GBP 17.45 per week respectively, and the New State Pension will rise to GBP 221.20 per week (of GBP 11,502.40 per year) from 6th April 2024.”


If you would like to discuss your own circumstances in confidence or would like to be on the subscriber list for Spice Taxation’s new dedicated coverage of these breaking developments, please contact Martin at martin@spicetaxation.com or by sending a Whatsapp to +65 96650019.

I’d like to thank Martin at Spice Taxation for allowing me to share this information with my readers. I am sure that this will help many of you plan your finances in relation to UK tax.

How Did One Of History’s Smartest Men Get Scammed?!

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Even though we’ve all heard the phrase, ‘if it’s too good to be true, it probably is’, there are many that will choose to ignore red flags in the hope that this is not the case. This is true even in investment- if fact, I have written many articles on risk tolerance vs reward, and investment scams (I’ll link below). But it seems that investment scams are not a new thing, and even the smartest person could still fall for them! Did you know that even Sir Isaac Newton, the man who discovered gravity, fell for an investment scam!

Why Financial Advice is Better than DIY
Read up on how a professional can help you avoid investment scams!
Is Volatility A Good Thing?
Why fluctuations are normal in the market, and how not one investment can perpetually go up, without any downs.
How To Spot An Investment Scam
How you can do your own due diligence in spotting an investment scam!
The Pros and Cons of Crypto!
An example of a bubble many investors bought into…

In the early 1700’s, Sir Isaac Newton lost £20,000 in the South Sea Bubble- this amount would now be worth approximately £4,000,000 today! The ironic thing is that he had actually sold his shares in 1713 at a profit, but then was lured back in and lost it all when it bankrupted Georgian London in 1720.

The South Sea Bubble was a pyramid-scheme backed by the government, at the dawn of fiat currency. The Bank of Scotland had issued the first ever paper bank notes back in 1695, which Newton was a great advocate for. He had previously ran the Royal Mint, and he felt that the Mint could never keep up with the demand for producing coins to keep up with the growing economy.

Naturally, many during this period were suspicious of paper money, because it could be easily forged and had no intrinsic value, and Newton fell privy to many con artists and forged notes, in which he made it one of his missions to seek justice for.

But what was the South Sea Bubble and how did Sir Isaac Newton, one of the world’s most intelligent thinkers, fall for it? At the start of the 18th Century, the British Government’s debt was huge. To ease this burden, the government created the South Sea Company, by requiring investors to exchange their government debt holdings for South Sea stock. Much like ‘pump and dump schemes’ that we know of today, the company’s directors grossly inflated stories and hyped up the company so much that new investors saw impressive returns, such as Newton, whose first investment grew by 100%. It was at this point that he sold his stock, happy with his profit.

However, as the stock continued to rise, Newton became envious of those who were still invested. He became so envious, in fact, that he bought into the stock again, and put a larger amount of his wealth towards it. The South Sea Company achieved very little in terms of growth and in September 1720, the bubble finally burst, rendering many of its investors bankrupt.

What Can We Learn From This?

Although Sir Isaac Newton was more intelligent than most, he still made many common human errors. The first is FOMO (fear of missing out), which isn’t just applicable for not going out to the party; he saw everyone else enjoying the continued profits and felt that he shouldn’t have cashed out early. Herd mentality was another human error- quite often people will want to follow the crowd, and invest in an asset class because ‘everyone is talking about it’ or ‘everyone else is doing it’ (NFTs & Crypto ring a bell anyone?). He quite obviously ignored the red flags and practised ‘selective hearing’- remember this man co-created calculus; he should have known that the numbers weren’t adding up and this was a bubble soon to burst, but he ignored the warning signs.

The most fatal flaw arguably, was greed. People become excited at the thought of making money quickly, and unfortunately this is a driving factor in people making poor investment decisions. He did not take the emotion out of investing, and succumbed to greed. If you can put your emotions aside, you can actually become a better investor than Sir Isaac Newton.

How To Take Emotion Out Of Investing
Why emotions can hinder investment planning.
How To Be A Successful Investor!
How can you not make the same mistakes as Newton!

One Pass

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For expats that have been Singapore for a while, like myself, I’m sure that you have noticed that there has been a change in how easy it is to obtain employment, passes or visas to work here in Singapore. Particularly, a couple of years ago, the rules around Dependants Passes were changed, meaning that dependants of those on Employment Passes could no longer get a Letter of Consent to work. This was devastating for many, meaning that, as soon as their spouses contract ended, or Employment pass was due for renewal, they too had to quit their jobs, rendering them a stay at home spouse. The only way around this, which I know many have taken up, was to set up their own business and either get themselves an Employment Pass, or a Letter of Consent to work. 

However, this comes with many challenges, such as business costs, and the need to hire a local above a certain salary. I can understand why many chose to leave Singapore during this time, because a dual-income household is obviously going to be better than one in most circumstances. 

But now there is a new pass that allows for flexibility and means that dependants can work, just like Dependants Passes used to be! This is the One Pass, or the Overseas Networks and Expertise Pass. I thought it would be a great opportunity to write about this pass, some of the requirements, and the application process, because most people I know are not even aware about this pass. 

What Is A One Pass?

This pass is very similar to a PEP, or Personalised Employment Pass, with some extra added benefits. You can either apply for yourself, or get your company to apply for you, and has a longer duration than a PEP, of five years. The good thing about the One Pass though, is that it has subsequent renewals, also for five years. Of course, there is certain criteria that needs to be followed, such as a fixed monthly salary of at least $30,000 for the last 12 months or have been offered a job in Singapore by their future employer for at least $30,000 a month. There are special considerations, which I will come onto later, but this is the main route to be eligible for this pass.

Those on a One Pass are not restrained by the Compass and Fair Consideration Framework Advertising requirements, meaning that you don’t have to wait for the job to be posted for a certain amount of time and do not have to fill out the self assessment tool based on your age, experience, et cetera like you do for Employment passes. Flexibility is a massive bonus for this pass, meaning that you can work for multiple companies at any one time, and your pass or visa is not tied down to your employment in Singapore. This also means that if you change jobs, you don’t need to reapply for this pass.

Special Considerations 

 As I previously mentioned, there are ways that you can qualify to outstanding achievements, meaning that you don’t necessarily have to earn a minimum of $30,000 a month. If you have made outstanding achievements in either sports, arts and culture, or academia and research, the salary criteria will be waived. Of course, this is subject to individual review by MOM and other necessary agencies.

What if I Set Up a Company?

Of course, if you want to set up a company, and under the One Pass, you can do so, but many will say that it is very unlikely that you will be receiving $30,000 a month salary from a new business! That’s okay, because the renewal criteria for this pass allows leeway for this. If you’ve started and are running a company in Singapore, you need to employ at least five locals, and they need to be earning at least $5000 a month, your One Pass will be renewed under this criteria instead of the $30,000 a month.

Family

Family members independence were one of the main reasons I decided to write this article because this will allow you to continue to have a dual-income household, without your spouse having to search for their own Employment Pass or S Pass. Your spouse may have a Dependants Pass with a Letter of Consent to work in Singapore under the One Pass. This is great for not only the spouse, but also employers because those on a Letter of Consent do not have to meet S pass or E pass quotas and their salary can be a bit more flexible. It also means that you can get a Long-Term Visit Pass for parents, step children, and even common-law spouses. Of course, if you have children of your own, it’s no issue putting them on a Dependants Pass.

Thing to Take Note 

There are some key differences between this pass and Employment passes, Personalised Employment passes, Entre or Tech passes. For example, Entre, Tech and Employment passes may only be valid for one to 2 years, with Personal Employment passes normally being valid for three years. Of course, the One Pass is mainly targeted at high-income earners, such as executives who have a long track record in that industry, or outstanding individuals in arts and culture, sports, science and technology, or academic research.

Personalised Employment passes require a minimum salary of $22,500; this isn’t too much of a large gap between the One Pass at $30,000, but of course it can be seen as a very large jump if you are on an Employment pass. This path offers many flexibility options that regular Employment passes don’t, meaning that you are not tied to one employer, you can work freelance or work for multiple companies at one time, including starting your own business. This is very similar to a Personalised Employment Pass, but you cannot renew a Personalised Employment Pass.

Why is it Good?

The best thing about the One Pass in my opinion is definitely the Dependants passes for spouses.

In my opinion, this will encourage high-income earners to move to Singapore because they do not have to think about their spouse having to be a stay at home partner if that’s not what they want. I have known many people to leave Singapore because their husband or wife cannot find a job here that will give them an SPass or EPass . This completely takes away that stress and means that those on a one pass can make a smooth transition to Singapore and have a dual income whilst residing here!

I hope you found this useful, by no means am I a recruitment or visa specialist, but I know many people that have gone through this route. If you’re interested in finding out more have any specific questions, feel free to reach out!

How NRIs Can Make The Most Of Their Time In Singapore

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A recent study by the Ministry of External Affairs Consular Services showed that NRIs (non-resident Indians) make up 24% of Singapore’s ‘non-resident’ population, which is currently at 1.4 million. Even though this group is referred to as ‘non-resident’, they are living and working as professionals in Singapore. This means that they are not considered as tax residents in India. Many of my clients come from this demographic, and as such, I felt it would be best to share some of the topics we discuss, namely, what they can do whilst they are living and working in Singapore to make the most of their time here.

  1. Saving

I will admit that Indian bank accounts have great interest rates- general public interest rates can be as good as 7.85% per year, and this often puts many NRIs off saving or even investing in Singapore, because they feel that the rate of return is low in comparison. However, there are many factors that have to be considered, which I believe makes Singapore a good place to build wealth. The first is that the Singapore Dollar is a stable currency. INR continues to depreciate against SGD by 3-4% per annum, with an inflation rate of 5.69%, meaning that rupees purchasing power will become less and less as the years go on, meaning that saving in INR and Indian bank accounts may not be as beneficial in the long run. The SGD is among one of the few stable and most traded currencies globally. It is regarded as a safe haven asset that also hedges against currency risk.

Not only that, the Singapore banking system is not only safe but simple; the Monetary Authority of Singapore esures tight regulations, but it doesn’t mean more bureaucracy. It is quite simple to transfer money around or even overseas from Singapore. This is in contrast to India, where there are still a lot of tedious processes in place, especially when it comes to selling a property as an NRI, or moving money out of the country.

2. Tax Relief Opportunities

This may be one of the most attractive reasons for NRIs to plan their finances in Singapore. There are many different kinds of taxes in India, whether that be direct or indirect. Direct taxes include things like income tax, capital gains tax or gift tax, with indirect tax including customs duty, value-added tax and service tax. This tax-heavy system can eat into your bank interest rate or your investment rate of return. In Singapore we have no capital gains tax, low income tax in comparison to other countries, and lots of tax reliefs, such as the SRS scheme (check out my articles on this topic here https://danielleteboul.com/2023/08/10/why-should-expats-open-an-srs-account/).

Source:

India Today Web Desk

New Delhi,UPDATED: Feb 1, 2023 14:14 IST

3. Investing

Speaking of capital gains tax and SRS accounts; there are many great investment opportunities here in Singapore. For example, in India, offshore funds are restricted. This means that many clients I encounter have excellent domestic portfolios (and don’t get me wrong, India is one of the champions of emerging markets, so it’s a must in someone’s portfolio!) but it is not diversified in terms of geographical location. Not only does that increase your investment risk, but it also means that you as an NRI are only having a small piece of the pie. In Singapore, so long as it is regulated and approved by MAS, you are not restricted to the funds you have. You can have access to regional, global, US, European, emerging market funds. And all of this is incredibly convenient, flexible and cost-effective. It’s pretty much the best of both worlds because you have the safety of Singapore, with the unlimited upside potential of global assets.

4. Being Of NRI Status

Being an NRI definitely has more perks than being a tax paying resident in India, such as all the previous things I have mentioned. Not only that, it means that whilst you are an NRI, you do not have to pay taxes on foreign investment or gifts received from relatives. This of course changes when you are back to being a tax paying Indian resident, with 20% tax on foreign capital gains. This is why it is crucial to make the most of your NRI status whilst you are earning in SGD. Ideally, you can build up a nice pool of assets and savings whilst overseas, and then once you retire or settle down in India, you can plan your finances accordingly following Indian tax ruling. The fact is that not every Indian will get the chance to become and NRI, and the Indian government has allowed many concessions for NRIs living and working overseas, to encourage globalisation. It is best to make the most of being an NRI, enjoying the stable and strong currency of SG, whilst enjoying offshore investment returns.

At the end of the day, we cannot avoid tax, and with many NRIs (60%) still preferring to retire in India, tax is inevitable. But, there is a window where this doesn’t have to be the case. Singapore is a capital gains haven! Why would you pass up on that opportunity!

Why Cash Is Not ACTUALLY King!

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Over the past year or so, we have seen a rise in interest rates and fixed deposits have offered quite attractive returns. Some may be inclined to put all their savings into these guaranteed bank deposits, but is this a smart decision?

I have spoken to many in the past year that are putting off investing because they find fixed deposits more favourable. They believe (which is true) that investments, such as equity and property, is uncertain. So they would rather pick the safer option of fixed deposits. Whilst I do agree it is always a good idea to have liquid cash and sufficient savings, I do believe that your excess money is better off growing elsewhere.

Cash Cannot Beat Inflation

When you put your money in a fixed deposit, you will only gain the guaranteed amount, never any more. Whilst some see this as a good thing, in periods of high inflation (like over the past couple of years), your cash is losing spending power. And inflation is a problem that will always be there; it is not something we can ignore, and historically bank deposits have not battled inflation in comparison to equities.

Lock Ups & Opportunity Costs

In order to receive the guaranteed rate of return of a fixed deposit, you quite often will have to fulfil a tenure. I will admit that these days you can find fixed deposits with quite short tenures, but this often means that inflation may have eroded your guaranteed returns, leaving you with net zero or even negative gains! This also means that you are exposed to reinvestment risks; you as an investor may not be able to reinvest the cash you receive from a matured fixed deposit at the same or better rate again. This shows that bank deposits are good for short-term situations, but have more cons over the long-term. In contrast, historically, investing in equities or bonds have proven to grow capital and protect yourself from inflation.

‘Safe’ May Not Really Be Safe

It has become more apparent recently that the chance of a bank defaulting may not be is minute as we once thought- just look at Credit Suisse, Signature Bank and SVB to name a few. This means that your ‘guaranteed return’ may not actually be guaranteed. Banks are covered by the Deposit Protection Scheme, but take note that generally these limits are not very high. This means that if you have anything more in a fixed deposit, or indeed in a bank account, and the bank folds, they are only obligated to pay you up to that limit, nothing more. To avoid this, it may be a sensible idea to spread your cash across different institutions, not leaving all your assets with one bank. Investing in portfolios can also help you diversify risk, whilst having access to possible high returns, and holding up against inflation long-term.

If anything, market volatility has proven to us that a few key financial principles, such as planning long-term and diversifying to mitigate risk, are very important guidelines to follow. Whilst fixed deposits seem attractive short-term, they expose you to reinvestment risk, and are therefore only beneficial for short-term savings. Focusing all your financial planning on one bank or indeed one savings account, means that you are not diversifying, and not only are you at risk if the bank defaults, but you are also missing out on possible higher returns you could be getting from investment. Cash may be key for every-day living, but it is definitely not king when it comes to successful, long-term planning.

2023 Reflection

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Whilst I am a big advocate for looking forward, I have learnt over the past year that reflection is just as important. So, I thought that it would be beneficial to look back over the past year and think about all the challenges and accomplishments I have experienced.

Personal Challenges

I’m not going to dwell too much on this topic but I feel that it’s important to highlight because I have not had a perfect year- whilst my professional life has been a success story, I have had my own crosses to bear in my personal life. I recently lost someone very close to me, only a few weeks before Christmas, and this has made me remember even more that family is most important and we should cherish these moments that we have.

Many people have commented that I seem fine on social media and that I’m still going to work, so I must be ok, but this is truly not the case. Grief hits people differently, and I’m choosing to try to continue with the day to day.

Business Challenges

Of course, like the market, work life also has its ups and downs. Not only have we all struggled with the cost of living and the markets not recovering like we had hoped, but here in Singapore the job market has become extremely volatile. I’ve had lots of clients, and indeed friends, leave Singapore due to losing their jobs or finding better opportunities elsewhere. Luckily, I am still in contact with many and some have even returned to Singapore, but it just shows that nothing is certain, not even our jobs, which is why it is so important to plan, have emergency savings etc.

On top of this, as many may know, during the first half of the year I was feeling quite deflated about my work situation; I felt that I was frequently made to choose between work and my personal time, and I felt that I was neglecting other parts of me. If you have read my reflection post when I turned 30, I think you will understand a bit more. I was starting to feel like there was a glass ceiling too; the holistic planning I was providing for my clients had gaps in, as I could only provide certain solutions. This made me feel like there must be something more, something better, so that I can be offering my clients the best service possible.

Business Successes

This actually led me onto many business successes. I truly believe that if there’s something wrong in your life that you can make an effort to change, you should do so. So that’s what I did. When I turned 30 I changed my mindset, sorted out my work-life balance, upgraded my skills and even changed jobs. Now I can provide my clients with even more support and advice that before, with solutions that are more suited to the expat transience we so frequently see in Singapore. Not only that, the level of support and resources that I am receiving now means that I can have a wider reach; I’ve recently had amazing opportunities such as speaking at conferences, hosting my own launch event, attending investment insight conferences and as of next year I will hopefully be joining an advisory board (more news to come)!

Of course I need to thank of all those that entrusted me with these opportunities to speak and share my knowledge, but this has also proven to myself that I can do it- that lul in the middle of the year was only temporary, and I am very excited for the upward trajectory I appear to be on for 2024. I’ve managed to empower and inspire others through my articles, videos and podcasts, and I can feel like I’m really making a difference.

Personal Successes

I feel like this positivity and new lease of life when changing jobs has created a domino effect, where things in my personal life have also been going well. I’m a lot happier and less stressed, which means that I am able to nurture and spend time working on my relationships. My friendships have grown stronger this year, I have travelled for some beautiful weddings, and I’m very blessed that my friends shared their special days with me, and I will be travelling home for Christmas to spend some quality time with my family.

Whilst this year has been far from perfect, I’m very lucky to have the life I have- I have wonderful friends, family and husband, my career is on the up, and whilst there has been a lot of sadness too, I’m ready to grieve and put the effort into healing.

I hope you took something away from this and it wasn’t just a self-indulgent exercise; I encourage everyone to reflect during this time of year and look forward to the year ahead!

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

My New Podcast! Expat Finances: The Go-To-Girl

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I’m really happy to announce that I have started a new podcast on Spotify! I noticed that talking about money, especially as a woman, is still seen as a bit of a taboo subject. I’m here to empower and impart my knowledge for other expats in Singapore, on how to successfully navigate personal finances.

Click on the link below to listen- I release new episodes every Monday so be sure to tune in!

Serenity Now! How Did Seinfeld Manage To Afford Living In New York?!

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“People don’t turn down money! It’s what separates us from the animals.” – Jerry

Seinfeld is one of my all-time-favourite TV shows. Most people were into F.R.I.E.N.D.S (not that there’s anything wrong with that), but I much preferred the self-deprecating jokes of Jerry, George (especially George), Elaine, Kramer, and even Newman (hello, Newman). If you’re unaware of the plot of the show, it’s a show about nothing- four friends living in New York, navigating their tragic love and work lives. But what I never understood is how Jerry, an a comedian working the club circuit, and Kramer, who is perpetually unemployed, could afford to live in Manhattan. Like my Sex & The City and Homer Simpson article, let’s explore that here.

“Who goes on vacation without a job? What do you need a break from getting up at eleven?” – Jerry

Let’s start by talking about Jerry. Whist Seinfeld in real life is a mega multi-millionaire, that’s not the case in the show. In the show, Jerry is a lesser known comedian- and in the 90s comedians couldn’t supplement their income as much as they do now with social media posts and advertising. The New York Times did a study and found that the income range for comedians varied from about $30,000 per year, up to $200,000 a year. Jerry would have been on the lower end of this spectrum, earning about $35,000 per year, Market Watch estimates. This is fairly low, considering that Jerry’s apartment, 129 West 81st Street, is very close to Central Park, and is thus a prime location. Right now, a one-bedroom apartment in that area costs $3,000 a month. If we work backwards inflation-wise, back in the 90s that would have been about $1,200 a month. This would mean that, after tax, deductions and rent, Jerry would have $14,271 surplus income annually.

“Jerry, just remember, it’s not a lie if you believe it.” – George

If you watch the show, Jerry’s lifestyle is not that frivolous, unlike Carrie Bradshaw. And we know that Jerry has the ability to save as in one episode he buys his dad a Cadillac, which back then would have been more than $30,000. Speaking of cars, Jerry also had his own car, which, considering he lived in central New York, is a big expense. He could have just used public transport like the Subway, as parking in NY is expensive. Jerry drove a BMW, which would have cost about $40,000 back then. So how did he manage to pay for two cars amounting to about $75,000 in total with only a $1,189.25 monthly budget?!

“I’m disturbed, I’m depressed, I’m inadequate. I’ve got it all!” – George

So, Jerry’s lifestyle is not too difficult to comprehend; most of his money goes on rent and his car and he doesn’t do too much else. He mostly eats at home or at that very cheap café and is generally a good saver. But what does baffle me is Kramer- Cosmo is either unemployed, is in the process of suing someone, or is running one of his various get-rich-quick schemes. He is Jerry’s neighbour, so how could he afford it?!

 “Do you have any idea how much time I waste in this apartment?” – Kramer

Kramer has almost had as many random jobs as Homer Simpson; Santa at a department store (which he got fired from for being a communist), a coffee table book author, a guy in police line-ups, the list goes on! All of these seem to not pay that much in terms of salary, and he turns down a lot of pay-outs from his lawsuits in exchange for things like free coffee or a billboard in Times Square. Why would Kramer pass up on so much cash if he has no stable income? This leads me to think…does he come from generational wealth?

“I’m speechless. I’m without speech.” – Elaine

I think the only valid conclusion I can come to is that Kramer’s father or his side of the family has left Kramer a lot of money. His mom works in a restaurant, so it’s probably not coming from her, but we don’t really hear anything about Kramer’s dad. Therefore, the only suitable answer I have is that Kramer’s dad is so rich that Kramer doesn’t care about money and can afford a decent apartment in central Manhattan and doesn’t need a job.

“You got a question? You ask the 8-ball.”- David Puddy

I will continue to review these shows that defy the laws of finance and budgeting, like Seinfeld, Sex and the City, and The Simpsons, but let’s not forget that the writers are very clever in smoothing out these questions by writing in things such as a rental cap, random relative’s inheritance or someone lending them money. But I do think it is funny how most of these shows are in the 90s and in New York, it almost makes me think, “Was it cheap to live in New York back then? Was the 90s just a wealthy time?” I guess until I invent a time machine, I will never know…