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duckmite

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Hello, I've got a slightly cheeky question.

As a 41yo, self-employed lower-income risk-averse individual who has maxed out BHS and reached FRS in SA, would it be adequate (interpret as you will) to just shovel cash into CPF and SG bonds and go back to watching earwax removal videos and looking at all the horses one can get for $1000 in the U.S. or should I bestir myself and learn about ETFs and stuff?

I lean towards the former for obvious reasons but thought I might be making a huge mistake.

Thanks for any input!
 
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Yes, you can buy DII in Singapore that insures up to age 65 or, in one case (Aviva's MINDEF and MHA Group Insurance DII Rider) up to age 70.

TM Protect 1 offers a maximum payout period of 6 years, so it's certainly not going to work well for young adults, at least not on its own. Also, its definition of disability is a little different, probably more restrictive. I can imagine if you're getting close to retirement and/or you're getting close to being able to self-insure that TM Protect 1 might play a supporting role. Generally speaking it's not great.

Thanks for the reply ! I'll check out GE's and AIA's DII offerings :)
 

BBCWatcher

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As a 41yo, self-employed lower-income risk-averse individual who has maxed out BHS and reached FRS in SA, would it be adequate (interpret as you will) to just shovel cash into CPF and SG bonds and go back to watching earwax removal videos and looking at all the horses one can get for $1000 in the U.S. or should I bestir myself and learn about ETFs and stuff?
The horses part doesn’t seem to be “risk-averse.”

The conventional “rule of thumb” is that you’d have either 80% of your long-term investments in stocks (low cost, well diversified index funds) until 7 to 10 years before retirement (when you’d start a gradual adjustment), or “110 minus your age,” which would be 69%. Risk aversion could be something like 50% or 40% in stocks/stock-likes, so how about that?
 

DOINK1

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Hi BBC,

Assuming that I'm a 37yr old typical Singaporean and retiring here. Let's say I have only 7K a year to invest in stocks. Should I contribute it to my CPF SA for tax relief as well as compounded interest for retirement or buy IWDA ETF in one lump sum / DCA quarterly.

Buying IWDA is more liquid though.
 

duckmite

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The horses part doesn’t seem to be “risk-averse.”
Imaginary horse shopping is easy on the budget and the body.

The conventional “rule of thumb” is that you’d have either 80% of your long-term investments in stocks (low cost, well diversified index funds) until 7 to 10 years before retirement (when you’d start a gradual adjustment), or “110 minus your age,” which would be 69%. Risk aversion could be something like 50% or 40% in stocks/stock-likes, so how about that?
I think I might be asking about the opportunity cost of not investing in stocks. Capital protected, interest guaranteed, low returns, may not keep up with inflation vs potentially higher returns?

Maybe I'll just split my dollars three-ways. Can't get out of learning about investment then!

Adulting sucks.
 

BBCWatcher

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Assuming that I'm a 37yr old typical Singaporean and retiring here. Let's say I have only 7K a year to invest in stocks. Should I contribute it to my CPF SA for tax relief as well as compounded interest for retirement or buy IWDA ETF in one lump sum / DCA quarterly.

Buying IWDA is more liquid though.
If you’re still eligible for bonus interest, I think I’d favor CPF since that’d be 5% interest. Otherwise I’d probably either go with IWDA or split the $7K and do a little of both.

However, if you’re eligible for tax relief it means your earnings are at least decent. One would think more than $7,000/year of savings should be possible.

I think I might be asking about the opportunity cost of not investing in stocks. Capital protected, interest guaranteed, low returns, may not keep up with inflation vs potentially higher returns?
CPF MA/SA/RA are going to stay ahead of inflation in all likelihood. They’re certainly designed to do that.

Maybe I'll just split my dollars three-ways. Can't get out of learning about investment then!
Adulting sucks.
You can be more conservative, more risk averse than other savers/investors if you wish. Just allocate a lower percentage of your total wealth than the “textbook” advises to a couple low cost stock index funds, and save monthly/bimonthly/quarterly (depending on the cost) accordingly. You’ll then likely end up with an “in between” result: something between the “textbook” forecast and barely ahead of inflation.

Depending on which “textbook” you pick the generic advice is 80% or 69%. You’re currently at zero. So pick a lower percentage if you want to be more conservative. Right now you’re really, really, really, even more conservative.

For long-term investing into low cost stock index funds you don’t even look at it for years and decades, except very occasionally to make sure your regular, dogged savings are being credited properly. It’s all very mechanical and as automated as you can make it.
 

BBCWatcher

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About the U.S. Diversity Visa Lottery

If you’re interested in emigrating to the United States for a spell (or more), read on.

Singaporeans are among the most privileged citizens in terms of their ability to enter the United States. The most popular way is via the H-1B1 visa program, also available to Chilean nationals. This program is virtually identical to the general H-1B program, but there’s a separate annual quota allocation. In practice (and unlike H-1B) the quota has never been fully consumed, so Singaporeans have never had trouble getting H-1B1 visas. These visas require employer sponsorship, and they are “non-immigrant” visas, meaning they do not confer the right to stay in the United States. They are analogous to Singapore’s Employment Passes for foreign workers. There are possible routes to permanent residence (a U.S. “green card”), but it’s perilous and certainly not guaranteed.

However, there’s another possible way into the United States, and it’s an immigrant visa: the annual Diversity Lottery. Singaporeans are welcome to enter the U.S. Diversity Lottery, although the definition of “Singaporean” is a little different. (The Diversity Lottery generally uses a birthplace standard.) There are 50,000 green cards awarded every year through this program and yes, that’s right, it’s a straight path to a green card (U.S. permanent residence). And Singaporeans have a pretty good chance of winning the lottery, statistically speaking. Maybe even a very good chance. The lottery formula tends to favor atypical immigration patterns, and countries that already send large numbers of immigrants to the U.S. are already barred from the Diversity Lottery. Congress set up the Diversity Lottery to make sure that there’s at least some broad, global opportunity for individuals from diverse backgrounds, countries, and cultures to come to the United States.

There’s no fee to enter the lottery and no obligation if you win a ticket. If you do win, and if you want to emigrate to the U.S., you should complete the process at least reasonably expeditiously and carefully. There will be standard visa fees and requirements, and yes, you can bring your spouse and minor dependents as long as they’re also eligible for visas (also with clean criminal records and properly vaccinated, as examples). The U.S. State Department knows that a certain number of winners won’t complete the process and won’t qualify, and the State Department tries to fill all 50,000 slots. In other words, there are more than 50,000 lottery “tickets” passed out. Once the 50,000th visa slot is filled, that’s that — it’s a strict quota. Anyway, you should enter if you have a serious intention to emigrate to the United States if you were to win, even if it is free to enter.

The next lottery (“DV-2021”) should open in early October, 2019. The only way to enter will be through the U.S. Department of State’s official Web site: https://dvlottery.state.gov. If it’s anything else, it’s a scam. Nobody has any “inside access” or otherwise can cheat or circumvent the rules. It’s called “DV-2021” because that’s the general, broad timeline when 2019 winners who complete their visa applications would enter the United States (in 2021).

If you’re married (same or opposite sex), both of you should enter the Diversity Visa to double your chances, assuming you’re both eligible to enter based on national origin. (Some countries of national origin are barred, the ones that are already well represented in U.S. immigration.) If you have a same sex partner but are not yet married, how about you get legally married? You can get legally married in many countries, including in the United States as foreign tourists. Yes, you can get married in Las Vegas with an Elvis impersonator as your officiating “minister,” if you wish. ;)

Good luck, everyone. ;)

Please note that I’m not necessarily recommending that you emigrate to the United States. I live in Singapore, and I like living in Singapore, as it happens. However, preferences and goals vary, and the U.S. Diversity Lottery is interesting and special.
 

klarklar

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Hi BBCWatcher,

I discovered Interactive Brokers just launched a new programme that is a great relief to investors with substantial funds in the brokerage account. Cash in IB account will be swept into U.S banks. Up to $2.5m of cash is insured by FDIC. With Uncle Sam's protection, no fear anymore. I'm not sure if this wonderful programme includes non-USD currencies.

Is this too good to be true? Do you see any downside to this programme?

https://www.interactivebrokers.com/en/software/am3/am/settings/insuredbankdepositsweepprogram.htm

The Insured Bank Deposit Sweep Program allows eligible IB clients to obtain up to $2,500,000 ($5,000,000 for joint accounts) of FDIC insurance in addition to existing $250,000 SIPC coverage for total coverage of $2,750,000 ($5,250,000 for joint accounts).

One more question which is the far more important question. It seems that money in U.S bank accounts is not subjected to estate tax. Does it mean if I die of heart attack now, my USD cash deposited in the banks allocated by IBKR is safe for my children to inherit?

Thanks for your time.

https://www.taxesforexpats.com/arti...oreigners-investing-in-the-united-states.html

Certain assets that are exempt from U.S. estate tax include securities that generate portfolio interest, bank accounts not used in connection with a trade or business in the U.S., and insurance proceeds.
 
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BBCWatcher

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I don’t think IB’s Deposit Sweep program has any bearing on U.S. estate taxability, but that’s just a guess.
 

duckmite

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CPF MA/SA/RA are going to stay ahead of inflation in all likelihood. They’re certainly designed to do that.
I notice you've omitted OA. Slightly concerning and something to keep in mind.

Regarding the Diversity Visa Lottery, it's not gonna be around much longer if Messieurs Trump and Miller have their way!

You can be more conservative, more risk averse than other savers/investors if you wish. Just allocate a lower percentage of your total wealth than the “textbook” advises to a couple low cost stock index funds, and save monthly/bimonthly/quarterly (depending on the cost) accordingly. You’ll then likely end up with an “in between” result: something between the “textbook” forecast and barely ahead of inflation.

Depending on which “textbook” you pick the generic advice is 80% or 69%. You’re currently at zero. So pick a lower percentage if you want to be more conservative. Right now you’re really, really, really, even more conservative.

For long-term investing into low cost stock index funds you don’t even look at it for years and decades, except very occasionally to make sure your regular, dogged savings are being credited properly. It’s all very mechanical and as automated as you can make it.
I'll do my homework and try to figure out an investment strategy I can live with. Thanks!
 

BBCWatcher

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I notice you've omitted OA. Slightly concerning and something to keep in mind.
OA is currently yielding 2.5% (floor rate), and it's pegged to a bank deposit interest rate formula. When inflation is running below the floor rate, as now, OA runs ahead of inflation. But it's not designed to do that. I expect OA will approximately pace inflation.

Regarding the Diversity Visa Lottery, it's not gonna be around much longer if Messieurs Trump and Miller have their way!
Well, even when the Republican Party recently controlled the House, the Senate, and the White House -- through 2018, actually -- the Diversity Visa Lottery survived. DV-2021 is quite safe, I'd say.

There's an awful lot of fodder for the rubes involved in U.S. immigration politics. Follow the money, and that pretty quickly becomes clear. For example, if the current White House would really, genuinely like to reduce further the already low levels of unauthorized immigration, that's easy: (a) boost the funding for E-Verify, including for appeals and correction processes; (b) require all employers -- even somebody hiring a gardener for two hours -- to use E-Verify before paying anybody for work; (c) aim almost all enforcement firepower directly at employers who violate (b), with stiff penalties.

But no, too many employers like the current arrangement just fine. Desperate, poorly paid, compliant workers (often well deserving of asylum) -- including at the Trump Organization's hotels, resorts, and buildings -- are great. The more desperate and compliant -- the more terror they feel -- the better. :(

Unfortunately we live in a world where too often too many believe in and practice exploiting the most vulnerable and desperate among us. And sometimes that's even popular, or at least popular enough.
 

duckmite

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Many places don't seem especially welcoming to immigrants at the moment, dependent on melanin levels. Newer iteration of an old problem?

Plus ça change

Going back to investment, ES3 or skip that bit and go right to IWDA?
 

ahthere

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There's an awful lot of fodder for the rubes involved in U.S. immigration politics. Follow the money, and that pretty quickly becomes clear. For example, if the current White House would really, genuinely like to reduce further the already low levels of unauthorized immigration, that's easy: (a) boost the funding for E-Verify, including for appeals and correction processes; (b) require all employers -- even somebody hiring a gardener for two hours -- to use E-Verify before paying anybody for work; (c) aim almost all enforcement firepower directly at employers who violate (b), with stiff penalties.

But no, too many employers like the current arrangement just fine. Desperate, poorly paid, compliant workers (often well deserving of asylum) -- including at the Trump Organization's hotels, resorts, and buildings -- are great. The more desperate and compliant -- the more terror they feel -- the better. :(

Unfortunately we live in a world where too often too many believe in and practice exploiting the most vulnerable and desperate among us. And sometimes that's even popular, or at least popular enough.

E-verify will only solve one half of the problem and i agree mandatory E-verify is necessary. Strong enforcement of immigration laws (which is happening now at least) is another.

"Unauthorized", actually illegal immigration is not at low levels, unless you are referring to rate of illegal crossings. The number of illegals is far from a trivial number. As for asylum, i think you can read the statistics of asylum approval rates (irrespective of administration) to decide for yourself how many are well deserving of asylum. Most are, face it, simply economic immigrants.

Also, don't forget the millions of non-citizens who are also technically illegal but action on them has simply been "deferred" under a program which has been judged unconstitutional and will likely be cancelled by the Supreme Court.
 

BBCWatcher

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E-verify will only solve one half of the problem.... Most are, face it, simply economic immigrants.
There’s much to disagree with, but I’d just like to highlight how this combination doesn’t make sense. There are no economic migrants when there’s no employment. Nobody is going to move to a country for economic reasons when the income opportunity is zero.
 

duckmite

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Then a little ES3 is OK with me.
:s13: Ok, not a ringing endorsement then. Just ploughing my way through the POSB Invest-saver thread which, I just realised, buys G3B, not ES3.

There’s much to disagree with, but I’d just like to highlight how this combination doesn’t make sense. There are no economic migrants when there’s no employment. Nobody is going to move to a country for economic reasons when the income opportunity is zero.
I don't understand. Are you saying all migrants are economic migrants? Retirees?
 
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BBCWatcher

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:s13: Ok, not a ringing endorsement then. Just ploughing my way through the POSB Invest-saver thread which, I just realised, buys G3B, not ES3.
G3B is the very slightly higher expense ratio alternative to ES3.

Are you saying all migrants are economic migrants? Retirees?
No, quite the opposite, but if you’re concerned about unauthorized economic migration then all you need to do is to shut down the easier-to-police half of the equation: the employer side. Singapore takes this approach, as an example.

I might favor essentially unlimited, non-immigrant, non-employment, renewable elective residence for those who pass a criminal background check and post a bond — buy a 30 year U.S. Treasury bond, for example, that’s held in escrow including accrued coupons. Probably also with a requirement to avoid any rental or purchase housing in particular “hot” housing areas — Silicon Valley, for example — because it wouldn’t be in the public interest to spike housing costs in low supply areas.
 
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duckmite

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G3B is the very slightly higher expense ratio alternative to ES3.
Also better performing, it seems.

No, quite the opposite, but if you’re concerned about unauthorized economic migration then all you need to do is to shut down the easier-to-police half of the equation: the employer side. Singapore takes this approach, as an example.
Got it! Take their HDB flats! Or the equivalent.
 
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