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For time-pressed investors who are looking for stock ideas, with sufficient capital to take action.


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A common question I often get is how and where I get my investment ideas from. If you count just SGX, NYSE, NASDAQ and HKSE (the stock markets I'm most interested in), there are a gazillion listed stocks alone...all of which could provide an opportunity. So where does one get started?

For me, I get my stock ideas from anywhere and everywhere. It could be from reading the news, an analyst report, a (non-fiction) book, seeing a brand when I'm overseas, or hearing about a "stock tip" from my friends. 

As long as you cultivate an open eye and mindset, there really are opportunities to be found everywhere. For instance, my investment into Disney (almost a 50% gain now) was sparked off when I noticed plenty of children carrying Frozen and Marvel-themed backpacks while I was out on a casual stroll through a neighbourhood mall. That piqued my curiosity enough to wonder and decide to study the parent stock (Disney), and the rest is history.

I'm always on the lookout for opportunities, even in casual conversations with friends or colleagues who aren't stock investors, because sometimes even the latest consumer trend could be the next multi-bagger. After all, that was my experience with Apple when I was younger; I would certainly also invest into Dyson now if only they were listed!

But if you struggle to spot opportunities like these, there's another solution that has recently popped up on my radar: subscriptions to stock mailing lists.

Similar to analyst reports from brokerages, these stock mailing lists are run by often seasoned investors who dedicate their full time to researching and writing about stock opportunities. While most aren't as technical as the ones you get from your local brokerage, they're usually easier to read and also provide insights into stocks you've probably never heard of before.

Free resources online

If you know how to discern the good picks from the bad eggs when you're reading for investment ideas online, then frankly speaking, you don't need to pay for stock mailing lists because you're fully capable of finding your own stock ideas! 

Save the money and use your own time to generate your own picks instead.

But if you're not a fan of the resources online, then perhaps following an investor whose opinion you value could be a good starting point. Some of such investors I respect write for free online, while others charge for their time and effort spent. Some offer both free and paid resources (including yours truly. IPO resources from me will always remain free on this blog.)

Bear in mind that not every investor goes in deep into research either. By the way, some of the best resources I read for investment ideas include articles by The Fifth PersonInvestment Moats, and Dr WealthCheck them out if you haven't already.

Almost everyone has an opinion on a stock. What's undervalued to one investor could be overpriced to another. At the end of the day, you need to be able to judge for yourself. So if you're concerned that you don't know how to differentiate between the many differing opinions on the web when it comes to stocks, then a good tip would be to follow the writers whom you respect and know they do not compromise on their research process.

If you find there aren't enough of such free resources for you, then perhaps a paid subscription to a stock mailing list might be another place to look.

Are such stock mailing lists worth it?

It really depends on what you wish to get from such a subscription. Generally, if you're looking for viable investment ideas, such a service could be useful because they curate what they believe to be quality stocks and narrow down the entire universe for you to focus on a few opportunities.

While some of the reports go into pretty extensive detail and financial figures / ratios as well, they're definitely not as detailed all the time, so you'll have to manage your expectations there.

Two important factors to consider before you subscribe are:
  1. Profile of the research analyst(s)
  2. Cost
You'd want to make sure their investment profile is one that resonates with you. For instance, it could be pretty useless subscribing to a newsletter that looks solely at growth stocks if you're a purist in value investing.

To determine cost vs value, an easy way to calculate it would be to divide the number of stock ideas or reports that you'll be getting by the subscription fee. Everyone's threshold would be different when it comes to assigning a dollar amount to such a value, but personally, I'm willing to pay up to S$50 for a really good stock idea. Hence, if I'm paying S$200 a year to a subscription that doesn't give me at least 4 good stock ideas to look into in any given year, then I tend to terminate my membership thereafter.

Folks who aren't suitable for such mailing lists

Of course, not everyone might be suitable to start with such mailing lists. If you've a small capital base, then you might be better off doing your own research instead. If you've plenty of time on your hands, then perhaps you could save the monies as well and DIY.

Based on the mailing lists where I'm subscribed to, I've also realised that the following profiles of investors may not be entirely suitable:

Dividend investors - many of the mailing lists available focus on overseas stocks, and for Singaporean investors, you'll be subjected to withholding tax which make it a lousy strategy to build your dividend portfolio based on overseas counters. You'll be better off looking at REITs instead, or check out Dividend Machines by The Fifth Person to learn how to do your own research.

Investors who buy purely on "stock tips" - if you're expecting to be spoon-fed such that you can immediately put your money into a stock just by reading a report, then these mailing lists would be a recipe for your own disaster. 

The strategy should be to use these stock ideas as a base to go forth and conduct your own research and judgement. If you don't take ownership and effort with your own money, then that is almost akin to speculating, and you're just setting yourself up for a higher failure rate.


Reviews:

I'm currently subscribed to several mailing lists where I receive periodic updates on stocks that they reckon are worthwhile investments to go into. From there, I sieve out the ones that sound appealing enough to me, and proceed to do my own research and analysis before I decide whether to buy or skip. 

Here's my review of 4 resources, and I hope this helps you decide if it'll be suitable for you as well before you sign up:

1. Alpha Lab by The Fifth Person

Their proposition:


Discover market-beating stocks and learn how to identify the best value-growth and deep value stocks from around the world. As a member of Alpha Lab, you receive new stock ideas and our complete video analysis on the companies’ four core areas: business model, management, financials, and valuation.
Watch us break down our analysis of a company for you. We currently cover companies listed on the Singapore Exchange, Bursa Malaysia, the Stock Exchange of Thailand, the Hong Kong Stock Exchange, the New York Stock Exchange, and Nasdaq.
I concur with many of their stock picks, many of which they've bought at an even lower price than me, lol. However, due to the subscription price, it'll be best only for time-pressed investors who already have a substantial capital base (eg. min. $20,000) to start.

2. Stansberry Pacific Research

Looks at global stocks across several stock markets, and particularly delves into undervalued gems in Asia. From their newsletter, I came to know of several companies that are benefiting from the growth of China, that I didn't previously know of. Here's some data extracted from one of their recent stock picks:



"It also has one of the highest profit margins in the industry, with operating margins of 13 percent, and a return on equity of 37 percent. In contrast, Ford is at 4.2% operating margins, and half of company X's ROE. 
While Ford produces 2.6 million vehicles a year from 29 different factories, this Chinese carmaker manufactures 1.25 million cars a year from just 11 car plants in China."
An interesting option for value and growth investors who are looking to capitalise on the growth of Asia and Asian stocks.

Patreon

Disclosure: My own stock subscription list.

I also run a Patreon with such reviews, but be forewarned that my reports are generally very long, given the depth of financial analysis and qualitative evaluation. I would say this is only for readers who like my style of investing, and who have ready capital (but no time) to spare to do your own research.

Each report generally takes me about a week to research, and another 2-3 days to write, so I take immense pride in the articles I write here as I go in-depth and even look at the next buy / sell levels that I'll take action on. My Patreon is basically a place where I park my own investment thesis before I buy / sell a stock, except that paid readers can access them as well.

Nonetheless, my investment profile is definitely not as prolific as many other investors, and I wouldn't recommend for most people to subscribe to me unless you (i) wish to support my blog and (ii) look at stocks in a similar approach like me i.e. qualitative > quantitative, although both aspects must and are always analysed.

VIA Club

Disclosure: Affiliate links included for VIA Club.

Stanley is a respected investor within the Singapore and Malaysia scene, as he sloughed through 8 years before he started seeing massive gains in his portfolio. Today, he is a full-time investor and spends his hours researching and sharing about companies, including SGX-listed ones. If you're keen on following someone with a $1.5 million investment portfolio and potentially mirror his trades, then VIA Club might just be for you.

In fact, if you've followed his call in December on Facebook, you would be sitting on 50% of profits by now...within just 7 months. Back then, he released a report on Facebook, deeming it as his "favourite company for 2019". (Psst, it was my favourite stock in 2018 too.)
Stanley's portfolio, available on VIA Club

You'll also get access to:

  • Live updates on a cool S$1.5 million portfolio
  • Weekly market reports and stock analysis
  • Premium podcasts with senior management of listed companies
  • Community discussions

I have a similar investment approach to Stanley's and his picks are usually stuff already on my watchlist as well, which is why I generally appreciate reading through his reports and thoughts on the company before I start my own research.

Here are some of his other investment picks:



For those of you who are keen on US, HK and SG stocks, then Stanley's picks may be right up your alley. And if you're interested to try it out, you can use the promo code "SGBB" to get 25% off (valid till end July 2019) so it brings the price down to just USD 126 a year. 

That's less than $15 a month for one good stock idea.

If you're not willing to fork out that amount, don't worry - there's always free resources as well. Just scroll back up and you'll find the links to those :)


With love,
Budget Babe
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Insights into the milk powder industry and why I switched Nate to a wallet-friendly brand with higher quality and value.


Readers who have been following my parenthood journey from Nate’s birth late last year will probably recall that we were first feeding him a different brand of formula milk, which cost us almost $60 each time.

Coupled with the cost of numerous diapers, baby clothing, feeding needs and more, the amount we were spending on Nate each month was no small sum, and it was going to hurt our wallet if we continued to pay $60 every 10 days for a tin of milk powder to meet his demand.

Thus I embarked on numerous trips to the supermarket and took it upon myself to research all the different milk powder brands available, by comparing them on both price and nutritional levels. The findings were unsurprising (you can view my excel sheet here), and proved what I had always suspected: price does not necessarily equate to quality when it comes to milk powder.

Shortly after that, I switched Nate to Nature One Dairy. This post explains why.



The milk powder industry

There are various milk brands being sold in Singapore, all touting different benefits for your child, and when it comes to country of origin, a quick Google search will show you that milk from Australia is said to be among the best for your child.

However, not all milk formula brands in Australia have their own manufacturing facility. Some brands outsource their production to various factories – some owned by them, others owned by a third party manufacturer. I had the privilege of meeting the CEO of Nature One Dairy recently to chat about how the industry works, how milk is produced and sold, among other relevant topics. That was when I found out that Nature One Dairy manufactures all its infant milk formula in their own pharmaceutical grade manufacturing facility in Australia.


We’ve all heard of the infant milk formula contamination saga last year, so I asked about the controls that Nature One Dairy has in place to prevent incidents like these from happening. By having a cleanroom with controlled environmental parameters such as temperature, humidity and pressure, as well as filtered air and the highest cleanliness standards, this is how they (and the best manufacturers in the industry) reduce the risks of contamination to almost zero.


And of course, by being a manufacturer and selling their own products, they’re able to maintain their high stringent standards and quality. This also reduces third party risks, as well as middlemen costs – which translates into…


Lower prices

My child’s nutrition and health is non-negotiable, and I absolutely do not believe in giving a cheaper brand of milk powder just because I’m trying to save money.

However, as my research has proven, contrary to popular beliefs, the most expensive milk brand is NOT the best nor the most nutritious. But don’t take my word for it – go to the supermarket and compare the nutrition levels for yourself, or you can ride off my excel sheet here.

The funny thing? Most milk formula brands cost more than double in Singapore as compared to Australia. Yes, the same brands!

Nature One Dairy formula prices are similar to the average median pricing in Australia (between $20 to $30) regardless of whether it is sold in Australia or Singapore and this is something I really appreciate. The slight price difference is mainly due to currency exchange rate, costs for export, transport and import costs.

Since switching to Nature One Dairy, I’ve reduced my monthly expenses on infant milk powder by 50%.

That’s the equivalent of more than $1000 saved in a year.

But is the quality guaranteed?

Price is not always indicative of quality, as the stock market will tell you. The same goes for the infant milk powder industry, because all Australian manufacturers cannot release goods for sale or export unless the products have passed stringent testing requirements first, and obtained health certificates for export.

For Nature One Dairy, their manufacturing facility undergoes regular and strict onsite auditing and inspections by the Australian government, Dairy Food Safety Victoria, the country’s Department of Agriculture and Water Resources, and more.

Okay, but then why do some brands charge such high prices?

Perhaps the best people to answer this question would be the spokespeople of the brands themselves, but from what I’ve observed, many of the more expensive brands also seem to spend a lot more on marketing and freebies – all of which cost money, and surely that money has to come from somewhere.

For instance, I frequently see many of those brands as sponsors at many pregnancy conferences, and paying prominent lifestyle influencers who charge considerable fees for sponsored posts. One example would be a popular lifestyle influencer in Singapore, who was initially feeding her daughter Enfamil, then later did a sponsored post promoting Abbott, and then recently promoted Bellamys. Personally speaking, while I’ve nothing against her, I’m unable to figure out which she thinks is the best milk brand for her child anymore, because I’ve seen her change her tune each time a new brand sponsors her for a post.

Singapore: the crackdown on the milk powder industry’s marketing

As a consumer, I’m not a fan of what I feel are misleading product names in the milk powder industry. For instance, names like Gain IQ and Intelli-Pro gave me the impression that if my child drinks those, they’ll make him smarter, but when I compared the nutritional levels, I found no evidence that this will indeed be the case.

Some other examples include Enfamil's marketing message, which is that they're "scientifically formulated to support overall mental and physical development, with ingredients DHA, ARA, choline, prebiotics, zinc and iron", while Wyeth S-26 claims that they "contain 26 specialized ingredients to complement the learning environment for nuturing your child's mind". Well, guess what? The same ingredients can be found in other brands as well, which are retailing for almost half the price.

I’ll willingly pay more for higher quality, but my research has shown that it isn’t the case.

Are higher nutritional levels better?

Some mothers believe that milk powder with higher nutritional levels are better for their child, but I personally don’t believe in that because only nutrients that are within legal limits are clinically proven to be safe, and those that exceed legal limits might have side effects on babies. Moreover, in the milk powder industry, higher nutrients may not necessarily be better; it is all about balance.

Our babies’ digestive system and organs are not yet fully developed, so I’m also concerned of the potential issues that could arise later if we consistently feed them nutritional levels that their system (eg. kidneys) may not be mature enough to process. However, there aren’t enough studies (yet) to show the impact of this on babies, so as parents, we will need to determine what we feel is best for our children, and then live with the consequences of our own choices.

Is more prebiotics better?

Manufacturers often add prebiotics (often found as FOS, GOS and/or inulin within the ingredients list) to milk powder to mimic the effects of oligosaccharides that occur naturally in breastmilk. However, these substances are not absorbed in the small intestine, and reach the large intestine as essentially intact. Breastfed infants generally have softer stools compared with formula-fed babies, and this difference may be due in part to the presence of oligo- and polysaccharides in breastmilk.

Moreover, GOS and inulin-derived substances are hardly digested in the small intestine. As there is virtually no systemic exposure to these intact oligosaccharides, the only possible adverse effect identified has been an increased osmotic potential within the colon, which can potentially lead to increased water loss and dehydration. It has thus been concluded that these substances, either alone or in any combination, at concentrations up to 8 g/L will contribute to increased osmotic potential in the colon of formula-fed infants.

If that’s confusing, here’s an easier and potentially more useful guide: the legal limits under the governing food standards in Australia and New Zealand.



Is more DHA better?

Not necessarily. I’ve written on this before, so do read my findings here.

TLDR summary: There’s no conclusive evidence to prove that more DHA makes your baby smarter.

For me, I care a lot about the source of the ingredients as well. Given that DHA can be obtained from fish oil or algae (keep a lookout for crypthecodinium cohnii oil in the ingredient list), I prefer the former.

And that’s another reason why I picked Nature One Dairy, which uses DHA from fish oil, over some other brands such as Enfamil, Similac and S-26 which use DHA from algae instead.

Here’s the legal requirements governing the use of such acids in milk powder produced in Australia and New Zealand:





*** Sponsored message below ***



Benefits of Nature One Dairy

You know you can be assured of the highest-quality milk when it is sourced from grass-fed cows in Australia, where the cows are free to graze on the pristine pastures of Gippsland, thus producing consistently high-quality milk. In addition, their milk formula is gluten-free and does not contain sucrose, maltodextrin or any sweeteners. Lactose (the natural sugar present in human breast milk) is the only source of carbohydrate.

All products are manufactured in an ISO-8 pharmaceutical-graded facility that has been specifically designed for infant formula production. All infant formula brands have been formulated by food science technologists to mirror (as close as humanly possible) a mother's breast milk.

All ingredients used in the manufacturing of Nature One Dairy infant milk formula also have to go through strict microbiological and chemical testing and analysis by nationally accredited laboratories in Singapore and Australia. Their formulas are also halal-certifiedby the Islamic Coordinating Council of Victoria (which is responsible for halal food exports from Australia) and the Australian Halal Authority & Advisers. It is also recognised by the Islamic Religious Council of Singapore (Muis).

As a manufacturer, they also manufacture for other brands, such as NTUC's FairPrice Gold Infant Formula.

For those uncertain whether to choose between their Standard or Premium formula, the difference is that the Premium range has higher levels of nutrients and GOS (a prebiotic), which some babies may not take well to. Hence, if your baby frequently experiences diarrhoea and bloatedness, then the Standard range may be better suited for them instead. And for parents who want to feed organic milk instead, there’s the Organic range as well.

What’s more, as Nature One Dairy produces pregnancy milk and infant formula for between 0 – 6 years, there is no brand switch needed in between. After 6 years, growing children can progress to the Student Formula if desired.

Pick an affordable milk formula brand without compromising on quality for your child. Choose Nature One Dairy today.

Nature One Dairy milk products can be found online at RedMart, or bought directly off retail shelves at Sheng Siong, Cold Storage, Giant or FairPrice (organic, student & adult range only).

I’m really glad we switched to Nature One Dairy, and I hope that this post will be useful to those of you looking for a more affordable milk option too.

This post was written in collaboration with Nature One Dairy.

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Join us tomorrow (online) as we discuss the implications of the US-China trade war and its implications on the stock market.



In this webinar, we will look into what happened historically when trade tariffs were imposed on such a global scale, and discuss what could happen for the markets if history ends up repeating itself.

Even if it doesn't, we'll discuss what the trade war may mean for your portfolio, and the strategies you might want to adopt to "weatherproof" your investments.

For the opportunistic, we'll also cover how to capitalise on this, as well as 2 stocks that we think you may want to keep an eye out for buying opportunities.

The webinar is completely FREE to attend, but you'll need to RSVP and reserve your slot here.

Note: This is NOT a current affairs programme (lol) so if you're completely clueless, please try to read up a little about the ongoing trade war prior to the webinar! You can reference Wikipedia here or check out this really cool summary I like from the Financial Times.

Agenda Summary:

- Implications of the US-China trade war
- What might happen if history repeats itself
- What this means for your portfolio
- Strategies to adopt to "weatherproof" your investments
- How to capitalise on this
- Case studies
- 2 stocks to keep an eye on for buying opportunities


Join the Facebook event for latest updates on this webinar here.
See you tomorrow evening online!
With love,
Budget Babe
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Resale endowment policies as an investment option - higher returns in a shorter duration. 

Thanks to several financial advisors on Seedly, I recently found out that a secondary market for insurance policies actually exists in Singapore, with the most reputable being REPs Holdings Pte Ltd. In the event where you're thinking of surrendering your policies, you could in fact sell it to a company like REPs Holdings, and get more money back than the surrender value offered by the insurer.

So when their team from RepsInvest (REPs Holdings Pte Ltd) reached out to me to say that one can buy resale endowment policies as well, I was intrigued and met them several times to find out more. This article shares my findings.




What are resale endowment policies? (REPs®)

These are basically traded/secondhand endowment policies which provide opportunities for new investors to take over and continue the remaining term to maturity.

The process of taking over the ownership will be done through absolute assignment. And yes, it is perfectly legal. If you look closer into your insurance policy documents, you'll find this same clause allowing for you to transfer the policy to a third party in this manner.

I also requested to interview several clients who have gone down this (non-traditional) path of securing their investments, and learnt more about how REPs® can be tailored to different types of investor profiles. Here are a few examples:


Investor Profile: PARENTS with babies/toddlers

Since endowment policies are usually bought by parents as a form of educational fund for their children, I looked at how a brand new endowment policy would stack up against a resale option. Here's the math:



(Brand new)
Endowment Policy from Company X
Resale Endowment Policy
Policy duration
15 years
15 years
Capital outlay
$43,980
$43,750
Payment mode
$2,932 x 15 years
1 lump sum $17,395 +
$1,757 x 15 years
Maturity value
$54,918
$72,960
Compounded returns (yearly)
2.73%
4.5%
Absolute gains
$10,939
$29,210


For the same duration (15 years), I can in fact get much higher returns on my policy if I opt for a resale endowment policy! 


Investor Profile: PARENTS who didn't plan earlier for their child's university fees


However, while it is common knowledge that if you want to be able to afford your child's university fees you will need to start planning and saving much earlier on, but not every family has the luxury to do so. Some forget to save right from the beginning or do not realise the importance of saving until it is almost too late, while others do not have the capital for it (for us, my pregnancy clashed with our first home purchase, and our finances only allowed us to choose between paying for delivery fees vs. the downpayment of a house, so we obviously chose the former…).

For instance, one of RepsInvest clients include a father of a 11-year-old girl who did not buy any education policies previously, and is unable to start a new endowment policy as it will not mature in time for his daughter's university studies. He could look at shorter-term structured deposits or fixed deposits, but the returns wouldn't be high enough. In contrast, RepsInvest was able to get him a 8-year endowment policy instead, which had been surrendered and sold to them by another customer.


If that describes your situation too, then you might want to consider if resale endowment policies can similarly be a solution for you.


Andrew* is another such customer of theirs, who works as an engineer and was looking for an endowment policy with a shorter duration. With two children, he told me (during our interview) that ideally, he wanted a plan with a lump-sum payment that also offers a higher rate of return than the banks. He initially considered getting a new endowment policy for this purpose, but in the end decided to go with REPs® instead as he could get better returns in a shorter time. 

Investor Profile: RETIREES looking for shorter term policies

There's also another group who would benefit most from this strategy - those who are looking to build an annuity REPs® ladder to ensure a continuous stream of income during your retirement.

I spoke with Mr. Tan*, who's 65 years old with 4 grandchildren. Two years ago, his daughter introduced him to REPs®, which she felt was better for him in contrast to the rates offered by fixed deposits (~1.75% or less). RepsInvest offered him higher returns for short-term plans, and Mr. Tan was able to get several plans which are due to mature in 2 - 6 years time.
"They give me a much higher yield than fixed deposits and structured deposits. I prefer REPs as it suits my risk profile and I do not have to monitor. I like the flexibility of being able to choose the duration and premium amount, and it gives me a higher return in a shorter term. 
At 65, I have no intention to start a brand new policy, as I do not need the insurance coverage now." - Mr. Tan*

If not for REPs®, he would have put his savings into fixed deposits instead, which would give him a lower rate of return and also more hassle as he'll need to keep renewing them.

Investor Profile: RETIREES building an “annuity” using REPs®

Another RepsInvest’s client, Mr Ong* invested a total of $400,000 into 30 policies which were staggered to mature between 2021to 2033, thus providing him with a stable source of retirement income. His total premiums due is $9,000yearly, which he finds a manageable sum of expenses. For every year from 2021 to 2033, there will be policies maturing and Mr Ong* can enjoy continuous stream of income during his golden years.

Retirees / if you have parents who would benefit from this mode of planning, REPs® might be the way to go, especially if they're not keen to take on any risks with their money at this life stage.

Investor Profile: Retail Investors 

A key part of portfolio management includes hedging your risks by having a mix of safe, risk-free investments and other more volatile instruments. In my case, I personally use my CPF as the "bond" element of my portfolio (read more here), however, I have friends who are not keen on this approach because they don't like the idea of locking up their funds in an account whereby withdrawals are determined by the government.

If that describes you too, then other close substitutes would be to use the Singapore Savings Bonds, government or (reliable) corporate bonds, fixed deposits or endowment plans to form the low-risk portion of your financial portfolio. REPs® are a compelling option as well, as they don't require you to lock up your funds until age 55 and yet can give you similar returns.



TLDR:

Are resale endowment policies REPs® a good investment?

Key benefits offered by REPs® include:
  • Low risk and lesser volatility as compared to bonds and stocks
  • Higher returns vs starting a new endowment plan and/or fixed deposits
  • No need to monitor the markets
  • Income earned is not taxable
  • No background checks needed - you do not need to undergo any health checks or profiling for the insurer to approve your policy
In essence, if you're looking to reap higher returns in a shorter duration than a traditional endowment plan, then taking over REPs® could be more beneficial.

However, this should not serve as a substitute to your other investments, and should only be used to construct the risk-free / low risk portion of your portfolio.

*Names have been changed to protect the interviewees' privacy, as some of the interviews contained information of their financial circumstances and net worth

*** Sponsored Message ***


RepsInvest is the leader in resale endowment policies REPs®, and we have transacted over millions worth of policies. Whether you're looking to plan for your retirement, your child's education, or more, we can help you out.

Find out why more Singaporeans are turning to resale endowment policies to jumpstart their savings and plan for retirement. Contact us to find out more today!



Disclosure: This article is sponsored by REPs Holdings Pte Ltd, who provided their resources and linked me up with their clients for interviews. All opinions are that of my own.
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If you've ever wondered how the banking/credit cards system works, here's an overview so you can learn how to game it to your benefit!

How exactly do the credit card companies / banks know whether you've fulfilled the transaction criteria, and how do they know how much to give you back? 

6% cashback on dining, 5% for retail shopping, and 3% for groceries! Credit your salary and make 3 bill transactions to get bonus 2% interest!

Here's how:
  • Credit card transactions, and the corresponding rewards, are determined by MCC codes
  • The transactions on your bank account would be judged by its relevant transaction codes.
Hacking Credit Cards: MCC Codes

A Merchant Category Code (MCC) is a four-digit number used to classify businesses - those accepting retail financial transactions via credit cards - by the type of goods or services it provides.

In Singapore, for instance, here are some common MCC codes:


Online
Taxis, Limos
4121
Online groceries
eg. Honestbee, Redmart, Fairprice Online
5411
eCommerce
eg. Lazada, Qoo10, Shopee
5699
Online hotel / travel bookings
eg. Agoda, Expedia
5699
Groceries
Convenience Stores
5499
Supermarkets
5411
Shopping
Women’s fashion stores
5621
Shoe stores
5661
Departmental stores
5311
Babies & children wear stores
5641
F&B
Caterers
5811
Dining places and restaurants
5812
Bars, Disco, Nightclubs (alcoholic beverages sold) eg. Zouk
5813
Fast food restaurants
eg. McDonalds, KFC, Subway
5814
Bakeries
5462
Beauty & Personal Care
Drugstores and pharmacies
eg. Watsons, Guardian
5912
Petrol
Service stations
5541
Utilities
Singapore Power
4900
Town councils
9399
Hospitals
Hospital and medical fees
8062


Of course, most of us have difficulties trying to remember which credit card/bank gives us how many % for what type of transaction as it is, much less attempt to memorise the MCC codes for each. Which was why I created the SGBB Cashback App, so it could serve as a nifty tool in your phone to help you see which card you should use for your transactions.

But there's one limitation with that app: I can't tag specific merchants to each card. To do that, I would need to slowly research and accumulate all the data of which merchant = what code, read all the different credit cards for the codes assigned to each bonus interest, and then do the back-end programming to store and tag the data to each card.

Too much work for a one-man show, considering how reviewing all the different cards T&Cs each quarter is already taking up so much time, which is why I was really glad when WhatCard approached me with their project : because their team of 3 has basically undertaken the heavy lifting that I was unable to do by myself to create a solution.

And now, we can tap on their work!

Do note that this is NOT a sponsored post, nor do I receive any renumeration or in-kind benefits for writing this. It is simply something that I think every Singaporean credit card user should know about.


What is WhatCard?

Simply put, WhatCard is essentially a search engine to help you do a quick search on a merchant (before you make payment at the cashier) to see which of your existing credit cards in your wallet you should be using for maximum rewards.

All you need to do is to simply key in the merchant name in their search bar (or filter by the merchant spend categories to pull up your desired merchant), and the site will instantly tell you which cards give you the best rewards for that spending.

This is all based on a comprehensive database operating in the back-end which tracks and tags the MCC codes, thus giving you this nifty online search engine and comparison site. The database has been put together using:
  • Existing (known) transactions sourced from public forums and chat groups
  • Their own existing transactions
  • Terms and conditions of the respective credit cards

If your aim is to really optimize your spending to get the maximum possible cashback or miles, you'll definitely find this tool useful.

Of course, this is still very much in beta phase so you can expect more data to be added as they go along, but I also highly encourage you to contribute by either (i) reporting an error if you spot one or (ii) sending in feedback about known transactions that you've personally tried out as well. For instance, you can see here that there are still several merchants the WhatCard team has not been able to figure out the MCC codes for eg. Typo, ClassPass and Coursera. If you know of the answer, please let them know.


Banks: Transaction Codes



If you've a habit of tracking your bank statements on a quarterly basis, you would probably have noticed several odd line items with codes that cause you to stop and wonder what exactly that transaction was for. I know, because I struggle with that sometimes too. Until I pulled up the "legend" document one day and realised the letters actually stand for something:


ACR
Accounting & Corporate Regulatory Authority
ADP
Deposit
AS
Purchase / Sale of Shares
BB
Baby Bonus Scheme
BILL
Bill Payment
AINT
Account Interest
BINT
Bonus Interest
CDP
Dividends / Cash Distribution
EPS
Shares Payment
ICT
FAST Payment
OTRF
Funds Transfer
PAY
Salary
SAL
Salary
QCDM
Quick Cheque Deposit
TFL
Tuition Fee Loan

The above codes are taken from DBS as an example. 


Now that you know how the banks and credit cards issuers operate, you should be able to make more informed decisions with your spending from here to get maximum rewards on each transaction that you make.

For more information on hacking cashback credit cards, you can also head over here to find out what I think are 2019's best cards to own and use!

With love,
Budget Babe
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I've previously written on why I cancelled my investment-linked policy (ILP), and provided another reason based on the way allocations are seemingly done in ILPs.


Since then, I've only been getting much flak (mostly from insurance agents) about my stance on ILPs, and I've been pressured to write a post showing the flip side of it, since there are no bad products, but only bad advice, correct?

So here's the other side, but before you read the details, you ought to first know a few things:
  • My stance on ILPs still hasn't changed, and I'm still not keen on ILPs and won't get one for myself. However, over the past few years, I've come to realise that there are some (a very, very small group of) people who might be suitable for them.
  • I'm not a financial advisor so this should not be taken as financial advice. If you have any questions regarding your own policies, please speak to a licensed advisor whom you can trust to operate in your best interests.
  • This is NOT a sponsored article.
An Investment-Linked Policy is often marketed to potential clients as a "Savings Plan" or a "Wealth Accumulation Plan". Many traditional ILPs sold today consist of two components which integrate both insurance and investments together into a single plan, which means your premiums paid are being used to achieve two concurrent goals - protection and growth.

Here are some selling points that agents usually use to justify your purchase of an ILP, and my rebuttal towards them:
  • "Your premiums remain the same even though your cost of insurance goes up"
    This is true, but only because of the assumption that your invested capital will be generating good returns that are more than sufficient to cover the cost of your insurance. Should your investments do poorly and your premiums are no longer sufficient to pay the mortality charge, then your policy might just lapse.
  • "Your money is achieving not one, but TWO goals for you! Insurance plus investment, all in one product"
    They just don't tell you about the higher costs involved, which can go as high as 18% in the case of my friend here. And you guys already know about the costs involved in mine...
  • "It can give you higher potential returns than simply getting a term or whole life insurance plan"
    Those returns aren't guaranteed, my dear. I terminated mine early so I certainly didn't get these higher returns that were promised to me, but my friend here held onto hers for a total of 9 years and 3 months. Guess what was her annualized return? 0.92%!
Since ILPs are often compared to Whole Life Insurance, so I'll use that as a basis of my comparison here as well.
I met an insurance advisor who's pretty active in the Seedly community to understand
his take on this, and this was the argument he presented to me.
Do note though, that I'm an advocate of term over whole life insurance as it is a more cost efficient method of getting the same level of protection, and you can read my take on whole life vs. term insurance here. However, a case can be made for whole life if you're looking to combine with critical illness protection, as I recently outlined in the linked post.

So are ILPs pure evil? Not exactly.

Two benefits in ILPs that I can think of would be:
  1. Discipline - for someone who is totally not disciplined in their finances (don't we all know some folks like that?), an ILP helps to address this gap by taking a sum of their money each month to cover for both insurance and investment.

    Of course, I'd argue that you should always keep your investments and insurance separate, but I've met people who are too busy / lazy to pick up investments even if I simplify it down to an ETF or even a Regular Shares Savings Plan. For these folks, perhaps a combination of term insurance and a pure investment ILP might just work, although they'll essentially be paying someone else a fee to manage their investments for them.
  2. Access to investment funds - some ILPs offer access to exclusive funds that you'll be hard-pressed to find anywhere else (unless you have a sizeable investment amount to give to the fund managers) and at a lower upfront capital, too. Others offer free fund-switching, which isn't something you can always get in the real world when you're doing your own direct investments. 
But here are the types of folks whom I don't think will be suitable for ILPs:
  • Active traders / investors - if you're already doing direct investments, why pay someone else to do it, unless you're absolutely sure that they "confirm guarantee chop" can generate higher returns for you?
  • Folks who aren't interested in the ILP's underlying funds - you can check out the whole list of funds that your ILP offers, but be forewarned that that's a pretty long list. If none of them appeal to you, then you're better off without.
  • Naive fresh graduates who buy ILPs from their friends who are fresh insurance agents - one benefit of ILPs lies in how well you and your agent work together to manage them. The best agents constantly monitor the various funds, provide you with updates, and sometimes even reach out to the respective fund managers to understand their performance or strategy in order to evaluate if it'll match yours. And while age and experience is certainly not a good gauge of how financially savvy your advisor is, you ought to question what advantage your friend can offer you in contrast to you doing your own investments.

    For folks under this profile, you might just be better off investing in ETFs/RSS plans while learning how to do your own investments. And you might eventually just find that you enjoy investing better than leaving someone else to manage your investments, too.

TLDR: So are ILPs good or bad?

ILPs aren't bad financial instruments per se, but they're not suitable for everyone or anyone. A lot of the online literature points to ILPs as a bad idea, and I sought out to hear from the other side without bias.

If you lack discipline in your savings and investments, and can't even be bothered to invest into a low-cost ETF or RSS plan, then an ILP might just be the vehicle for you, at a price. You'll be paying the impact of these fees for having someone manage your investments for you, but it'll be better than if you didn't do any investments at all.

However, the main reason why ILPs aren't fantastic is largely due to their high costs involved in paying your agent, the insurer, and the fund manager, to manage your money for you. These are fixed expenses, which means that no matter whether your policy makes money or not, these people still get paid. You, on the other hand, might get less of your capital back if your ILP funds do not perform well, although many of them will tell you otherwise when selling you a plan. 

In investing, costs are always real, whereas returns are never guaranteed.

If you're already stuck with an ILP and you're contemplating whether to terminate it, speak first to your financial advisor, or find another agent you trust who can advise you (without selling you a new ILP or any other policies). As for myself, I cancelled mine (as you can see from my story here).

There are cheaper and more cost-efficient ways to get insurance and investments. For me, I do it through term insurance + investments in ETFs, bonds and stocks. I don't see a need for an ILP in my own life, and prefer to do my own investments instead.

What about you?

With love,
Budget Babe
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Get 1.8% - 2.13% p.a. realistically on the first S$100,000.

Salary crediting is a precious commodity. Many of the banks reward you if you do credit your salary into your high-yield savings account with them, but with so many options and only one salary credit choice, which one should you choose?

For those of you who earn more than $3,000 and spend at least $500 each month on a credit card, you have two options to choose from: OCBC 360 or Standard Chartered Bonus$aver.

Notes:
  • UOB One is another fantastic option, but you could still qualify for the bonus interest by spending $500 on their credit card (the UOB One Card is a pretty good cashback card) + 3 GIRO transactions. This frees up your salary credit for another account.
  • Bank of China SmartSaver offers a generous headline rate as well, but it works better for high income-earners (more than $6,000 a month) and high spenders (>$1,500 credit card spend each month). One of their biggest downsides, though, is that their online banking interface is extremely cumbersome, and they've much fewer bank branches across Singapore. If you don't mind the hassle of navigating a poor user-friendly site in exchange for higher interest, then this account might just be best for you.
For the reasons above, I've zoomed into OCBC vs. SCB for someone who can do a salary credit + credit card spend + bill payment, and in this comparison, the Standard Chartered Bonus$aver wins hands down.

Since several of you have asked me about this account recently, I'll zoom into the SCB offering today.

Here's the criteria fulfilment:
  • Salary credit of min. $3,000
  • Spend at least $500 monthly on any SCB credit card
  • 3 bill payment of min. $50 each
  • Insure or invest with SCB  I won't do this, and you might want to think twice too

If you've $75,000 of funds to park aside, you could be getting more than $1,600 every year through this account. Here's how the interest breaks down (feel free to play with your own variations here):



I personally would not even consider the other bonus tiers for SCB Bonus$aver for the following reasons:
What's more, SCB only rewards you bonus interest for this tier for the first 12 months after purchase, which means if you wish to continue enjoying that 0.75% of bonus interest, you'll have to buy another (expensive) insurance policy / unit trust again. Thanks but no thanks.

Never commit to something long-term for the sake of your short-term (bonus) interest. You're only more likely to regret that later on.

So this would equate to salary credit + credit card spend + 3 bill payments on the SCB account to enjoy higher and sustainable interest. In contrast, performing the same actions on the OCBC 360 account would give you about $140 less every year. However, if you earn less than $3,000 of salary then OCBC would be a better choice between the two, due to its lower ($2,000) salary credit requirement.


However, if you're a disciplined saver and you're confident of increasing your monthly savings by at least $500 every month, then OCBC 360 would serve you better.



Remember to play around with the calculators on both banks websites before you commit to opening an account with them. 

Sign up gifts:

From what I can see, Standard Chartered is currently offering three different gifts - free wireless headphones or a travel luggage - depending on how much funds ($10k - $50k min.) and whether you open an account with them online or at one of their branches.

Personally, I'd always pick cold, hard cash over physical gifts anytime, and if you feel the same, then SingSaver's promotion looks more attractive as you can get S$100 when you open a SCB Bonus$aver savings account through them. 

You can apply here, and read the terms and conditions here. I can't really find any catch except that you need to remember to submit the rewards form to SingSaver, but that's about it.

As for the relevant credit card(s) to pair with the account, you might want to take a look at the Standard Chartered Unlimited Cashback Card, which is my top pick among the bank's 5 credit card offerings and gives you 1.5% unlimited cashback. 

Otherwise, if you find that OCBC's 360 account gives you more interest in your circumstances, then a good credit card from them would be their OCBC 365 Card - just note the (higher) minimum spending of $800 monthly for the bonus cashback.

Between the two accounts, which do you prefer? 

With love,
Budget Babe

Disclosure: Affiliate links have been included in the above article. If you choose to sign up via my affiliate link, I'll earn a small referral sum at no additional cost to you.
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Which is better when you need life and critical illness insurance - BTIR or a whole life plan?

A part of being financially savvy involves outsourcing your biggest (financial) risks to a third party (an insurer), but you'd want to make sure you get the best coverage that you need for the least amount of premiums.

But when should you review your life insurance plans? Here are the different life stages where it'll be good to review your protection coverage and what you need:
  • When you get married (increase protection)
  • When you have kids (increase)
  • When your parents are no longer around (decrease)
  • When your kid gets their first job (decrease)
Now the question is, should you buy term or whole life (WL) plans?

When it comes to pure life protection, the answer is simple: if you want the most cost-efficient method, then Buy Term and Invest the Rest (BTIR) is best.

However, it no longer becomes so simple when you add in coverage for critical illness (CI). I compare the difference here.



If we presume that the couple wants to purchase life and critical illness insurance for their kid(s), then the couple would potentially be looking at the below instead.


*I looked at WL + CI + ECI for our kid.
The above table shows how much a family needs to set aside each month for insurance premiums, depending on their preferred plans and number of children.

Scenario 1: BTIR vs. Whole Life + CI

My preferred strategy, and one that I think most folks who do their own investments would also lean towards (BTIR).

The assumption here with the BTIR approach is that you invest the remainder of premiums you would have otherwise paid on a whole life plan, and create your own cash pile to tide you over should critical illness strike.

If you can generally achieve 5 - 6% and above on your investments, BTIR works better than if you had locked down the money in your whole life plan. It'll also give you better returns and a bigger sum for emergencies. Frankly speaking, these returns are not difficult to get, but it involves a certain level of risk appetite.

The problem is, most people I've spoken to do a half-hearted approach when they use BTIR, and that is, they buy term but don't invest the rest. They either don't invest at all, or even for the ones who do, they invest in risk-free instruments (eg. government bonds) which typically offer less than 3% p.a.

The next question to ask yourself is, even if you invest the rest and do moderately well, will you have the discipline to set aside the sum for your retirement + critical illness coverage instead of spending it on holidays (or anything else!) now?

Another question to think about - don't forget the withdrawals. At the point when you need money the most, you may or may not be able to sell your investments at their peak. Hence, if you're going down the BTIR method, it'll be wise to diversify your portfolio and plan out your withdrawals (you can keep them in short-term instruments and stagger their expiry) so you know you'll always have a pile of emergency cash to fall back on, while still using it to generate compounded returns for you.

If you have discipline, this would frankly be the best and most cost-effective method. You can lower your cost of premiums down to just several hundred a year in this manner, but the catch is that you need to set aside and invest your own pool of money to cover up the gaps.


Scenario 2: (Temporary) Term + CI vs Whole Life + CI

But what if you don't, or if you're worried you won't have the cash on hand when CI strikes?

In this case, a term + CI plan could do the trick. I'm using term plans till age 74 because it gives a margin of safety for our son in case he wants to pursue a field that requires a longer duration of study, or if he wishes to pursue his Masters first. Also, term plans from age 75 onwards generally start to have a huge spike in premiums, which is what I prefer to avoid.

In our case, for the same coverage of $300k, the cost comes up to:


*Coverage for VivoAssure (WL) becomes $100k guaranteed sum assured plus bonuses after age 70, as I opted for a 300% multiplier till then.
*We opted for a limited pay (20 years) on WL which translates into annual premiums being higher in the short term i.e. during our prime working years. Paying till our 60s would equate to a lower annual premium ($2k+) but the total premium paid is then so much higher, which doesn't make sense to us.

The upfront monthly premiums are more than double if we opt for the WL+CI route, but the total premiums are only about $7k - $8k in difference, which is not much in the grand scheme of things. Between opportunity cost and ease of mind, which would you prefer?


Does it even make sense to get a term plan till 100?

With a better quality of life and advanced medical care and diagnostics today, our lifespans are likely to increase. Some readers have previously asked me if there were term plans covering till end of life, and there are, although these are usually used more for legacy planning rather than protection per se.

So a term plan till 100 would address this, while still benefitting parents who are looking to leave a legacy for their child, but cannot afford the higher upfront costs of whole life plans.



Using TermLife Solitaire + CI riders from NTUC Income as an example, you pay $270 (wife) - $406 (husband) every month, which is lower than if you had gone for a similar coverage ($500k per policy) but on a whole life plan. But how do you fund these premiums after you're retired and no longer drawing an income? Well, I suppose one strategy you could adopt is to ask your children if they wish to take over your payments once they've progressed in their careers, since the sum assured will "benefit the family" as either a lump sum payout of $500k (for CI diagnosed, or assuming no claims on CI is made, then the full sum goes to them once you're no longer around).

Presuming they pay for 10 years, they'll be "investing" $30k (mom) - $45k (dad) in total, but will get $500k by the end of the term (or even $1 million if they pay for both parents' policies!). That's even better than any endowment plan they can buy.

I know I wouldn't have minded paying in this way if my parents had adopted this strategy back then when they were younger. Unfortunately, because they barely had surplus cash, this was not possible back then, and it'll be too expensive to get one for them now that they're quite old.
  
Of course, if you go down this route, I'm not responsible if a Taken 3 outcome plays out k?! (the movie where murder was committed to get an insurance payout)

I suppose this is one way you could use insurance as a decent legacy plan if you wish to leave behind a pot of money for your children. 


What about insurance for my kid? 
Should I get whole life or a term policy for them?

If you're just looking to cover your child's life, then my stance is that I would get neither, because the point of a life plan is to provide a payout to the dependents in the event of tragedy. Your child has no dependents at this point in time.

But critical illness is different. In the event that you need to quit your job to care for your child while he/she recovers, the insurance payout could serve to replace your own income during this season, while paying for any outpatient medical costs as well. 

If your child is unfortunate enough to get diagnosed with any chronic disease (and you didn't buy any life plans for them yet), there's one thing for sure: they will face problems with getting insurance for the rest of their life, or be subjected to unfavourable underwriting.

So if guaranteeing your child's insurability is important to you, then getting a plan makes sense. In this regard, a whole life plan could be more beneficial because the premiums are low due to their young age, but they get coverage for life. In other words, the total premiums paid by someone who purchases a whole life policy at age 1 vs. age 30 would be very different (eg. $43k lesser using my son and husband as an example, according to our quote from NTUC Income).

But what if you can't afford the premiums now? Having a baby is already so expensive, and there's so much to pay for even when they go to school! In this case, I would opt not to even get any life coverage - instead, focus on getting a hospital shield plan and a personal accident plan, and then perhaps a disability income plan if you can afford it.

A disability income replacement plan for yourself to serve the same purpose should usually cost less than your child's whole life + CI plan premiums. In our case, it would be 70% cheaper. The catch is that your child won't be guaranteed insurability for life if you choose this method.

-----------------------------------

TLDR / Summarised Thoughts


There's certainly an argument to be made for getting whole life + CI plans for the whole family of 3, but only if both parents have financial leeway to pay about $750 in premiums each month.

Otherwise, getting term+CI on the parents and WL+CI for the child would cost lesser at $420 a month - almost 45% cheaper.

To sum it up, here are some general observations from reviewing the family's insurance coverage recently:

1. If I want life and critical illness coverage, the difference in total premiums between a term and whole life plan is hardly much (less than $8,000).
  • That's much lesser than I expected, and in this regard, it seems like a whole life plan offers more value and peace of mind, for the trade-off of more expensive premiums upfront for a shorter payment duration.
2. A whole life plan for one's child is a great gift to ensure guaranteed insurability and cash, provided the parents can afford it. 
  • In the event of critical illness, the sum paid out can also allow one parent to potentially quit work and stay home to care for one's child.
What should you decide? As always, evaluate first your needs and budget. 

While it sounds great to have as much protection as possible, affordability should your primary consideration because there's hardly any point to run into debt just to get insurance. While stuff like leaving behind a legacy sum for your child and guaranteeing your child's insurability is no doubt important, these are secondary if you don’t have enough cash on hand to maintain the premiums.

Differentiate between your needs and wants for insurance based on how much you can afford, and then choose the best plans for you.


Disclosure: This article was sponsored by NTUC Income, so the examples used are their plans, which are also among Singapore's most competitive. However, for a detailed quote and financial planning, you're encouraged to seek out a trusted advisor instead of making your decisions regarding insurance purely based on this article, or any other articles you read online. Premiums used in this article are for myself, my husband and my son respectively, so they may or may not be reflective of the premiums you will need to pay for your case as your age, smoking status, medical history, preferred sum assured, riders, and more will likely vary.


*** Sponsored Message by NTUC Income ***

Whether you prefer term or whole life insurance, we've got you covered. Want a term plan? TermLife Solitaire covers you for $500,000 coverage (or higher) with competitive premiums. 

Want peace of mind with a whole life plan? Check out VivoAssure (with Advanced Assure Accelerator rider), which not only covers you for life, but also guarantees you protection against unknown diseases as long as you undergo surgery or suffer from infection, and require a stay of 5 days or more in ICU. Not all diseases are known, and we'll cover you against even the unknown so you can sleep peacefully at night. 

Show your family how much you truly care. Protect them with a NTUC Income life plan today.


This advertisement has not been reviewed by the Monetary Authority of Singapore.
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One of the most underrated cards in the market with 5% cashback.

It's an open secret that I'm always on the lookout for the best cashback cards, so when a reader who has recently switched to the DBS Multiplier account recently messaged me to ask which credit card I would recommend for her to pair with the account, and when she told me she preferred cashback over miles, I immediately suggested that she look into the DBS Live Fresh Card.

"DBS Live Fresh? Is that a new card?" was her response.

I'm actually surprised more people aren't talking about this card, and if you don't already know of this card, then you might want to take notice.

The DBS Live Fresh Card : Yay or Nay?

Short answer: Yay!
Source
I'm not much of a fan of cashback cards that require you to spend at least $800 every month, and I recently found myself needing to switch to another more suitable credit card based on my monthly expenses of $700. After all, I can't win at the cashback game if I'm not even spending enough to qualify for the bonus cashback.

That's when the DBS Live Fresh Card caught my eye, and it'll work together perfectly with our DBS Multiplier account as well - that's cashback AND bonus interest i.e. a double win in my books!

One of the biggest merits of the DBS Live Fresh Card is that I find it to be a super convenient and fuss-free way to earn 5% cashback easily. Unlike many other cashback cards which have pretty strict spending requirements (e.g. X% on dining, entertainment, travel, petrol), the two categories are broad enough to cover almost everything in our lives today.

Key features:
  • 5% cashback for online shopping / Visa contactless spend
    • Visa contactless i.e. transactions through a contactless terminal via the Card or mobile wallets on Apple Pay, Samsung Pay, Google Pay
    • FavePay counts as an online transaction if used at retail outlets
  • Minimum monthly spend of $600
It can be quite easy to hit the minimum monthly spend, given how the qualifying categories are fairly broad - almost everything in our life today can be done via online or contactless payments these days! Groceries? Retail? Fashion? Dining? Travel? All checked!

And if you're a parent, you'll probably benefit from this card as well, especially if you spend often on online platforms such as Fave, Shopee, Lazada or Qoo10 like I do a.k.a. shopping havens for baby essentials, diaper sales and wet wipes!

The card also comes with several notable merchant privileges, and the ones that I use more frequently would be Chope, Expedia and Zalora.

Here's an example of how DBS Live Fresh Card fits into my own regular spending:



Category
Monthly Expenses
Cashback Earned
Grab rides
Online
$100


$20
Milk powder and (heavy) groceries via RedMart
Online
$200
Diapers via Qoo10
Online
$60
Baby essentials or clothes via Shopee
Online
$40
Dining
Visa contactless
$100

$18
Movies
Visa contactless
$40
Groceries at NTUC Fairprice
Visa contactless
$220
Some months we dine out less frequently, or don't even get the chance to watch a movie in cinemas, depending on our baby's schedule!
*($20 + $18 = $38/month, or $450 per year)

That's easily more than $450 cash that I get back to offset my spending each year, which are pretty much mostly essentials (yes, I can't live without watching movies in the cinemas!). Do note though that the since the cashback is capped at $20 per category, this means anything above $400 on each wouldn't earn you the maximum cashback rate. This isn't an issue for me, as I seldom exceed that.

Anything else would be counted as a "third" category i.e. "all other spend", which gives you 0.3% cashback. 

If you're also trying to earn maximum interest on your DBS Multiplier account (read more here) and you're looking for a great cashback credit card to pair it with, the DBS Live Fresh Card makes perfect sense. 

It is, after all, DBS' best cashback card.

Conclusion

Given that the DBS Multiplier is one of the easiest high-yield savings account in the market to use right now, your next question will probably be on which credit card to pair it with. The DBS Live Fresh Card might just be your answer if you spend at least $600 a month on online shopping and Visa contactless spend (which is essentially almost everything today, except smaller merchants or hawker centres).

This will give you at least $30 back every month (or $360 in a year) assuming you're savvy in getting the 5% cashback on the two broad categories and hit the minimum spend. 

What should you do with that money? Treat yourself to something nice, or even better, put it into your DBS Multiplier account and earn that extra bonus on it so your money keeps growing!

Disclosure: This post contains a sponsored message by DBS below. All opinions above are that of my own.


*** Sponsored Message by DBS ***

From now till 30 June 2019, register and stand to win a limited edition Leica Sofort with every S$50 spent on your DBS Live Fresh Card. We're giving out 50 of these, so register here to enjoy the offer!
Plus, get 5% cashback on overseas spend* when you travel and charge a min. of S$700 in a calendar month during your next vacation! The cashback will be awarded for all payments made in person abroad, and excludes contactless and online transactions made overseas in foreign currencies. If you're booking a trip to Europe, Greece or New Zealand, DBS Live Fresh Cardmembers get 10% off and more on Contiki. Don't forget to activate your card for overseas usage before you fly! 
    What's more, get access to various perks at our merchant partners including

    • 15% off at Zalora for existing users (use promo code "DBS2019"),
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      I spent my Saturday at an investment conference jointly organised by DollarsAndSense and InvestingNote, and this is what I learnt.

      The event had several notable speakers, particularly Terence Wong of Azure Capital (recently featured in The Sunday Times "My Money & Me") and David Kuo of The Motley Fool (who appeared looking exactly like the Motley Fool's logo with their special hat), and was aptly titled:

      IN THE FOOTSTEPS OF MASTERS: Going Beyond #myfirsttrade

      I attended the conference with my son (financial education starts young!) and these were my key takeaways:

      The youngest investor in the room. Nate has his own investment portfolio also
      okay (managed by his mama), so don't play play!

      Timothy Ho of DollarsAndSense started the session by talking about the differences between investing and trading, for the benefit of attendees in the room who weren't sure which approach would be better suited for them. The litmus test? How much time you have.

      • If you trade, you need to make sure you're able to react to market changes in time. If you can't be "always on" in the stock market, then perhaps investing would be better suited for you.

      Next up was David Kuo from The Motley Fool SG, who shared about his portfolio which he called the "Personal Income Portfolio". If you wish to build a portfolio that lasts forever, look to the pyramid. This approach consists of

      • A base of 40 - 60% income stocks (dividends)
      • A layer of 30 - 50% growth stocks
      • An apex of 10% max. speculative stocks
      For income stocks, he uses mostly REITs to provide a strong base of dividend payers which generates his passive income. For growth stocks, Kuo holds only U.S. stocks, and interestingly, he defines "speculative" as value shares. If you talk to more value investors though, they'll tell you that good undervalued shares are the exact opposite of "speculative".

      For those wondering about portfolio management and sizing, his portfolio consists of 12 REITs, 3 property developers, 2 telecom towers, 1 railway, 1 hotel and 1 estate management agent.

      Very geared towards property (more so than I would like), but then he talked about how you can create your own "themed" portfolios based on your circle of competency. So if you're a doctor, perhaps a healthcare portfolio would work for you, whereas a portfolio with mostly technology stocks could serve an IT person more.

      His screening criteria consists of companies with:
      • Good cash flow
      • High returns on equity
      • Retained profits for growth
      • Low debt
      • Dividend payers
      The framework is simple enough for most beginners to follow, just in case you suffer from analysis paralysis when you look at fair too many ratios and numbers. Of course, those who do their homework more thoroughly will tend to reap more generous returns as well.

      Next was Collin Seow, who runs a systemic trading course. I'm not a fan of trading so the biggest takeaway I got from his talk was where he challenged the traditional notion of "buy low, sell high". Instead, one should look to "buy strong (companies) and sell weak (ones)"

      How do you know whether they're strong or weak? Simple, look out for the signs, says Collin. As an example, he talked about how weak companies typically carry out constant rights issues, pay management an overly high salary, etc.

      My favourite and most relatable speaker was Terence Wong from Azure Capital, who focused on two themes: analysts reports and management quality.

      His two messages were clear:
      1. Don't trust analyst reports. Use them as a basis for information and insights into management quality, but never trust their buy/sell signals.

        The reasons he gave were because most analysts tend to be young and inexperienced, and face pressure from corporate finance and sales which often affects the signal given on a report.
      2. Buy companies with strong, capable and committed management. He used the example of one locally-grown company whose senior management is actually flying to China for their growth plans during her son's PSLE season, as a testament to how committed she was to the business.
      What made his session extremely relatable was the giving of concrete examples, something which The Fifth Person also often does in their workshops. To be fair to the attendees who paid for the event tickets and took time off to attend the event early on a Saturday morning, I won't name the stocks he featured here :P

      Remember, great management is crucial to a stock's success. I cannot agree more.

      Unfortunately I was only able to sit in for these 4 sessions as my baby fussed during the rest, and I had to carry him out for milk / diaper change / soothe to sleep. But other than that, he was an angel and was even extremely attentive during Terence's talk!

      May all these lessons from the "masters" sink into his subconscious :P

      With love,
      Budget Babe

      Disclosure: I attended the event on a media pass as the organisers are my personal friends and I've great respect for the work they're dedicated to doing in the personal finance space. It was a Saturday well spent learning from the "masters" indeed!

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