Official Shiny Things thread—Part III

[thisislife]

I didn't start off by buying shares either. my first 'investment' was an NTUC Living Policy that has been steadily returning 3%+ CAGR. It is better than a bond because every year, the surrender value increases more than the annual premium. Furthermore, instead of surrendering it, there are people who will buy it from me for more than the surrender value.

Even though I have a small CI rider ($50k), that is my regret - I do not think that you should get a CI rider for Whole Life because you are locked in to that plan and CI coverage is costly (and profitable for insurer and agent who will try to upsell you all sorts of rubbish). If I didn't have the CI rider, my insurance plan CAGR will be several basis points higher.

You should look at whole life + Term with CI. The reason is that its easier to switch your Term with CI plan if a different insurer announces a more competitive plan (eg: lower cost, wider CI coverage).

After getting the whole life policy, I had peace of mind and instead of wasting my office hours surfing HWZ to learn how to get rich and watching the stock market and CNBC, I could focus on my job and increase my salary. Now that my salary can't go much further, I can relax and surf the internet

mind sharing with us on your coverage and the premium paid per annum? no need share company though, i was thinking of adjusting my term plan as I feel that i am overpaying my term plan, almost 3k per year. which is why i am quite desperate to reduce my term premium by suitable means

 

[razoreigns]

Sorry if I overloooked something, but why can't a whole life policy (with the added benefits of any stage CI riders) providing returns be viewed as a sort of bond? I know it is not as liquid as bonds, but correct me if I can think of it as a "investment" that pays 200k for a 50k investment?

In my simplistic mindset, if I put away 50k by 2030, and even if this amount gets compounded by a nominal 2-3% interest per year, a whole life policy (with CI illness coverage of any stage) seems comparable to a bond and helps with a diversified portfolio?

Not correct to look at it as a 50k investment that pays 200k. However you may chose to consider the policy under 'bonds' in your portfolio allocation. Certainly not for 200k, and not even 50k, but the current surrender value. This is assuming that you have studied the policy and would still wish to continue with it.

 

[razoreigns]

Though I’m a low risk taker. Oddly, I get the most peace from just 100 percent into stocks while dca and easier to stick with it. Simply avoid watching the markets and just as simply and quickly buy that stock every month with almost a blank mind.

No rebalancing required, no need to think. Thinking about and watching the markets was bad for mental health and your portfolio.

I did way better back then mentally than I am now with 80 percent in fixed income.

Its not about bonds or equities then. Its about your current vs past behavior. You need to stopping tracking the markets closely - as a long term investor, you don't need to.

 

[swan02]

I’ve been trying to tell myself the same thing “you don’t need to worry about price movements as long term investor etc etc” yup I’ve been telling that myself since 1997. Never worked.

All these easy said in theory. Plus the greater the amount invested, the harder it gets.

What worked was cover the computer screen when I buy, sometimes I get someone else to buy. Then I psycho myself not to think, easier when i work and play computer games a lot.

Now all retired and nothing else better to do. Impossible.

I’m certain many are just like me. Just look at how the market moves.

Its not about bonds or equities then. Its about your current vs past behavior. You need to stopping tracking the markets closely - as a long term investor, you don't need to.

 

[chrisloh65]

I watch the market everyday, spend about 1-2 hours on it. That is the only way to have a good feel of where the market is going and horn the skill to be able to buy low sell high to get much higher returns than blindly DCA into ETFs.

This has helped me to achieve Financial independence at the age 45 years old.
The ability to control one's emotions is very important. People who are not able to do so when they watch the market everyday are just emotionally too weak to be able to use their mind to control their emotions.

Its not about bonds or equities then. Its about your current vs past behavior. You need to stopping tracking the markets closely - as a long term investor, you don't need to.

 

[Calibre2019]

Estate Duty for Singaporeans holding US Stocks

Suppose a Singaporean passes away abruptly.

If he has:

(a) US$200k in US Stocks and US-domiciled held in Interactive Brokers in a joint account with his wife

(b) US$200k in US stocks and US-domiciled held in Standard Chartered in a joint account with his wife

In the above 2 scenerios, is he liable for estate duty tax?

Thank you

 

[saltface73]

hi! been lurking for awhile and was wondering if anyone has any thoughts: i'm new to investing and have read the shiny things ebook + have run some numbers on the three-fund simulation spreadsheet i found here. my assets are <100k USD and will be at least until 8-10 years later i think. i'm hoping to get VWRA as my global portfolio, and have whittled the brokers down to SCB and IB.

i'm thinking of starting off with a few thousand SGD, then DCA-ing (about 1000 monthly at the moment) something like every 1-3 months, and i noticed (based on the spreadsheet) that SCB is only cheaper than IB if i do a lump sum payment or DCA every 6 months. do i have the right idea in saying that IB makes more sense in my situation, especially for a view to the long term, as it's only 10 USD / month in fees, whereas SCB has the downside of bad forex spread. i've also read that you can't transfer ETFs from SCB to IB, so it's not possible to built up 100k in SCB first before moving to IB.

i'm also debating whether or not to buy ES3 if anyone has any thoughts on that?

thank you!

 

[zoneguard]

i'm also debating whether or not to buy ES3 if anyone has any thoughts on that?

thank you!

Do you intend to retire here in Singapore and will need SGD in the future? Both Shiny and BBCW recommend ES3 but they disagree on the percentage and put forth their reasons.

There are also others here who argue on the basis of our market cap size one shouldn't invest in ES3.

Everybody's situations is different so please do your due diligence since it is your money.

 

[saltface73]

Do you intend to retire here in Singapore and will need SGD in the future? Both Shiny and BBCW recommend ES3 but they disagree on the percentage and put forth their reasons.

There are also others here who argue on the basis of our market cap size one shouldn't invest in ES3.

Everybody's situations is different so please do your due diligence since it is your money.

No I don't intend to retire in SG, and I'm leaning towards not investing in ES3 because of the market cap size, as you've mentioned.

 

[BBCWatcher]

Estate Duty for Singaporeans holding US Stocks

Suppose a Singaporean passes away abruptly.

If he has:

(a) US$200k in US Stocks and US-domiciled held in Interactive Brokers in a joint account with his wife

(b) US$200k in US stocks and US-domiciled held in Standard Chartered in a joint account with his wife

In the above 2 scenerios, is he liable for estate duty tax?

He isn’t liable because he’s dead, but his estate is liable in either scenario. The only estate tax-related difference between a U.S. broker and a non-U.S. broker is that cash, in any currencies, held at a U.S. broker is U.S. estate taxable. Cash at a non-U.S. broker is not (except if held by a U.S. person).

 

[kram62]

He isn&#146;t liable because he&#146;s dead, but his estate is liable in either scenario. The only estate tax-related difference between a U.S. broker and a non-U.S. broker is that cash, in any currencies, held at a U.S. broker is U.S. estate taxable. Cash at a non-U.S. broker is not (except if held by a U.S. person).

To put it more plainly and directly: if holding US stocks or US domiciled funds, it doesn't matter where in the world they are held, they are subject to the US estate tax laws.

If one want to avoid that, as you repeatedly said so here but somehow people never seem to get it, *it's very simple*:

Don't hold US stocks or US domiciled funds (in *any broker* *anywhere in the world*) above the limit (and also don't hold too much cash in any currency in a US broker).

 

[ezzo89]

Hi all, another lurker here. I'm looking for some ideas on transitioning from a roboadvisor (Stashaway) to a DIY portfolio - currently DCAing into VWRA. I've been with Stashaway for a couple of years and it got me started on investing when I hadn't a clue, and was also good for getting me to invest regularly. However now I'm beginning to question their asset allocation and of course the long term effect of fees.

Currently I have about 50k in SA, and I have fees waived until October thanks to some promos. Should I gradually shift some money into VWRA, or just pull the plug and transfer all my funds at once?

Thanks in advance!

 

[razoreigns]

I watch the market everyday, spend about 1-2 hours on it. That is the only way to have a good feel of where the market is going and horn the skill to be able to buy low sell high to get much higher returns than blindly DCA into ETFs.

This has helped me to achieve Financial independence at the age 45 years old.
The ability to control one's emotions is very important. People who are not able to do so when they watch the market everyday are just emotionally too weak to be able to use their mind to control their emotions.

Haha... pray tell.... in your own thread.

 

[beefjerky]

Hi all, another lurker here. I'm looking for some ideas on transitioning from a roboadvisor (Stashaway) to a DIY portfolio - currently DCAing into VWRA. I've been with Stashaway for a couple of years and it got me started on investing when I hadn't a clue, and was also good for getting me to invest regularly. However now I'm beginning to question their asset allocation and of course the long term effect of fees.

Currently I have about 50k in SA, and I have fees waived until October thanks to some promos. Should I gradually shift some money into VWRA, or just pull the plug and transfer all my funds at once?

Thanks in advance!

If I were you, I would do this: find the stock:bond breakdown for the portfolio in Stashaway, transfer everything out into VWRD and MBH in the same ratio. This way, if the market indeed collaspes, you wouldn't really be too far off if you had left the money in SA. On the other hand if the market moons, you would do better in the long run net of fees

 

[WC32890]

Does anybody know if a Nasdaq listed company but domiciled in Bermuda company declares a dividend, is that dividend subject to US witholding tax?

 

[Shiny Things]

i'm also debating whether or not to buy ES3 if anyone has any thoughts on that?

thank you!

The key thing you didn't mention in your post is that you're not planning to retire in Singapore. In that case, you don't need ES3 or MBH; and you might as well just go straight to Interactive Brokers. The extra monthly fee will be offset by the tighter FX spreads.

Indeed, the market seems too optimistic. Personally I think I will $ average in a span of 12 months.

Which market are you talking about? It's a mistake to say that "oh, markets are too optimistic" just because the S&P 500 is back within a few percent of its all-time highs and then apply that to Singaporean markets.

Read Shiny things book, which is nicely written BTW.... Wondering if the allocation to bonds 80% stocks 20% bonds for a beginner, 30 y old investor still holds true given bond yields have dwindled currently? Might it be better to go for complete stocks now and rebalance portfolio with addition of bonds when bond yields pick up? Appreciate any feedback. Thanks!

Yeah, I think it still holds. Bonds still have an important place in any portfolio—for older investors they're stability and income, for younger investors they're your war-chest to buy more stocks whenever there's a dip.

100% stocks is a pretty aggressive allocation. You need to be able to handle some fairly stomach-churning dips and peaks—and if you can't, the consequences can be rough, because you'll inevitably end up selling after dips and buying after rallies, which will eat up your returns.

Sorry if I overloooked something, but why can't a whole life policy (with the added benefits of any stage CI riders) providing returns be viewed as a sort of bond? I know it is not as liquid as bonds, but correct me if I can think of it as a "investment" that pays 200k for a 50k investment?

Nah. I strongly would not recommend using a whole-life policy as a pretend bond allocation for a couple of reasons:
1) The fees are gargantuan - and if you need to redeem it early for whatever reason, or if you just want to rebalance, the penalties are gigantic.
2) You don't really know what you're buying. The fund manager might invest in equities, un-hedged foreign currency bonds, all sorts of rubbish; and you wouldn't know until one year they have to cut the payout because the fund manager bought, I dunno, a truckload of value equities and then they all had to cut their dividends.

Also, these funds' portfolios tend to be at least partly in equities. You want something that you can redeem in downturns to buy things that are cheap—if a big chunk of the fund is invested in stocks, you'll be selling things at the lows, if you can redeem it at all.

So - no. Whole life policies are a terrible investment.

 

[Shiny Things]

Currently I have about 50k in SA, and I have fees waived until October thanks to some promos. Should I gradually shift some money into VWRA, or just pull the plug and transfer all my funds at once?

Thanks in advance!

I'd just pull the plug. Don't forget to buy some bonds, though, not just VWRA.

 

[CarlJung]

Which market are you talking about? It's a mistake to say that "oh, markets are too optimistic" just because the S&P 500 is back within a few percent of its all-time highs and then apply that to Singaporean markets.

True. I was referring to US and SG markets.
Also STI looks on its merry way up despite so many companies currently struggling.

 

[thisislife]

probably i going towarsd robo advisor path for a while

 

[yourplaceormine]

With banks lowering their interest rates for deposit accounts, where should I start putting my extra cash into?