Practical Ways To Increase Our Income

The road to financial independence is sometimes not an easy one. Many people in the past such as my parents' generation born in 1950s-1960s were savers. They work hard, they save money and never really had much luxuries. Life was simple back then. However, you would have realised that the baby boomers generation still did not have much savings. This is after working hard and saving money all their lives. Why is this so?

The reason is simple, most of them could not increase their income due to circumstances back then. Some of them had to quit school early to work in order to supplement income for the household. Singapore was also transforming fast during the 1980s and 1990s which means jobs were changing fast too. Some were left stranded with their skills and experience being made redundant and this caused them to suffer wage cuts or stay stagnant in their career.

Income is an important factor on the road to financial independence. You can be saving 50% of your income but if you earn only $2000, that is just $1000 savings which is not a lot. Furthermore, if you want to start a family or have kids, it is quite hard to save if you have a low salary. I have been focusing on increasing my income which I see it necessary if I want to achieve financial independence earlier. It may take years and a lot of hard work to increase income but it will all be worth it in the end.

If you're looking at a career switch or to upgrade your skills for more income, this is the post for you.

Ways to increase your income

Find A Job You Really Like - Mid career switch is possible too

If you hate your job, most likely you're not going to do well in it. Passion has created success for many people as they no longer feel a burden to work. People with passion tend to excel in their work and create more income for themselves be it in their career or business.

The problem with finding a job you like is when we were younger, we may not have chosen the right course to study and thus not able to enter the industry we want. We may have spent $25,000 on a university education which we realise we didn't like at all. When we enter the industry we don't like, we may want to change.

With the most recent statistics by Ministry of Manpower that the unemployment rate has risen and more workers have been retrenched, it is all the more vital to know how and where to acquire the right skills. Some sectors are still lacking in manpower and in this competitive environment, without the relevant qualification, it may be hard to change industry. However, we can actually get some help in this. I too may want to change industry so I've been looking at some relevant courses to gain better competitive advantage. To my surprise, I found various schemes which are really quite useful. In this blog post, I'll list down some schemes which I found that will help us progress better in our career:

U Future Leaders Programme 

(U Future Leaders Summit 2015 speaker line up) 

This is a programme where there are a series of seminars, conferences and mentorship sessions to help us up-skill and even gain access to useful networks.

It comprises of:

1) Future Leaders Summit - The  flagship conference featuring speakers such as the CEO of DBS, Managing director of LinkedIn, vice president of amazon etc.

2) Future Leaders Mentorship - Where industry leaders conduct mentoring sessions in a small group setting behind closed doors to help PMEs in their personal and career development.

3) Future Leaders Sectorial Programmes and Series – These are sector specific such as young engineers leadership programme, aspiring HR leaders programme, finance operations development programme and many more.

Funding for courses

This to me is the best funding for courses I've ever seen. On top of the $500 SkillsFuture which we know of, there are actually a lot of courses which are heavily subsidised for Singaporeans and PR.

Let's take for example you're seeking a career in project management, you would most probably need to be PMP certified which a lot of project management job position requires. PMP stands for project management professional. The PMP® designation is recognised worldwide as the standard of the profession.

The normal course fees for a PMP certification course would cost $2675. I did a search and found the course on NTUC learning hub website with the breakdown of the course fees. Here is a snapshot for your reference:

As you can see above, if you're a Singaporean or PR, the course fees reduces to $1129.75 as compared to the original course fees of $2675. If you're age 35 and above, you get even more subsidies that the course fees comes down to just $100-$200+ dollars. Don't forget we still can use our $500 skillsfutures credit to offset the course fees so in the end we don't really have to pay much for the whole certification course.

To remain relevant in the workplace, Singaporeans have always been encouraged to upskill. Labour chief Chan Chun Sing even said “As our economy transforms, more and more of our people will be in the PME sectors, and it is also NTUC's job to make sure that we help our PMEs remain competitive and stay ahead of the competition."

Aside from the $500 SkillsFuture credit given to all Singaporeans which can be used on a range of 10,000 courses, there are actually so many schemes to subsidise course fees for us. Some of the schemes are workfare training support scheme and SkillsFuture Mid-Career Enhanced Subsidy. If you're an NTUC member, you can also get further funding under the Union Training Assistance Programme (UTAP).

If you're interested in short courses such as communication skills or WSQ certified courses, I saw some by NTU which are quite interesting. Courses such as negotiation skills, or even WSQ Apply Statistics for Lean Six Sigma. More information on the short courses by NTU can be found here. There are also subsidies and SkillsFuture credit can be used.


Place and Train Programme

Lastly, I also noticed that there is this place and train programme under WDA where it enables companies to hire workers first, then to provide them with structured training to equip them with relevant skills and knowledge.Under the programme, the trainees do not pay any fees as their training will be supported and co-funded by their employers and WDA. These trainees will also receive their salaries as usual, as they are already employed once they join the programme.

There is a whole list of conversion programme where we can switch our career to. We get employed and we get the training without any cost.

Since 2008, NTUC’s e2i has also worked with various industry partners to create over 50 Place-And-Train programmes.

Getting relevant certification will help us to increase our income. The courses will also help us if we want to make a career switch into something we feel more passionate about. With the heavily subsidised courses, I think all of us can look to upgrade our skills and increase our income. Also, with programmes such as the place and train programme, switching career is no longer just a dream. There are many ways to increase our income. By just knowing more about the schemes available, we can see a better light for our career and also able to seek a passion which we yearn for.

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Having A More Secure Financial Future Not Only By Saving And Investing

I started working 5 years ago as a fresh young polytechnic graduate after serving my NS. To be honest, my starting pay was not very high, it was below $2000. Today, fresh young polytechnic graduates are getting higher pay than 5 years ago. It was reported that the graduating class of 2015 who landed full-time jobs were hired on a median monthly salary of $2,100.

In my short 5 years of working full time, I've seen my fair share of complaints from my colleagues and friends that their pay is low, career progression is slow etc. I have seen more foreigners coming in, taking up management positions. There will always be feelings of unfairness among Singaporeans when it comes to the rights of us as citizens.

Then, there is also chatter about unions in Singapore. That the unions do not do much and they support the government. The National Trades Union Congress (NTUC) is our union in Singapore and has over 60 unions affiliated under its umbrella.

The 1st of May, which is also known as May Day or Labour Day is celebrated in many countries as a traditional springtime festival or as an international day honoring workers. This day seeks to honor the hard work which workers put in. Many workers in various countries stage protests because they feel that they are being treated unfairly. But how is it like in Singapore?

I have mentioned in my previous blog posts that increasing our income is important. Planning for our financial future is also important as we really do not know what will happen in the future. We can be retrenched and lose our jobs the next day. Besides focusing on growing our money, setting aside emergency funds etc, there are other factors which I think is very important to have a more secure financial future.

I always think that I am very fortunate to live in Singapore. Besides having a safe and peaceful environment, we also have many opportunities to learn and grow and fulfill our dreams. Let’s see the opportunities we can grab hold of to have a more secure financial future for ourselves.

A Cautious Outlook Ahead

On May day this year, Prime Minister Lee Hsien Loong made his speech at the May day Rally. You can read more about it as reported on Straits Times and other news portal here and here. A big part of PM Lee's speech was to address the concerns in this current economic outlook and how the government is working together with the labour movement to cope with the issues ahead.

Credit: https://www.flickr.com/photos/teegardin/6093699369

As we all know, many countries are still experiencing slowdown including China while Europe and the US are still struggling to recover. Unemployment is high in many countries and youth unemployment is worrying as well.

PM Lee said that a person from the Singapore Port Workers Union told him that there was one day when for two shifts out of three, PSA's Tanjong Pagar Terminal did not receive a single ship. There is certainly a slowdown in the marine, oil and gas industries which will cause many workers to lose their jobs.

With the cautious outlook and headwinds ahead, the government will deal with changes in three areas namely:

1. In our industries
2. In our jobs
3. In our workforce

You may have heard many of your friends are buying things online now such as on Taobao. Taobao is an online retailer website owned by Alibaba and is the world's most valuable retailer. However, it does not have any physical shops or own any stocks.

Airbnb is now the world's largest accommodation provider but it does not own a single property!
Uber is the world's largest taxi firm but it hardly owns cars.

The industries around the world are definitely changing and if we don’t change the way we do business, we will definitely fail. Look at past big companies such as Kodak or even Nokia. They get taken over by companies who embrace change and technological advancements.

Jobs are changing

Jobs will change as industry transforms. With current technological advancements going at even faster pace, we need to be prepared that our jobs may be replaced and the skills we have now will become obsolete. For those who are at risk of losing their old jobs, they can get help to make the transition by reskilling and upskilling. NTUC provides training courses which you can find out more below. This is unique as very few countries actually have trade unions providing courses for the workers.

For example, the ICT sector is growing currently and will need a lot of workers in this industry. The government set up the Tech Skills Accelerator to train Singaporeans so they can be matched to these jobs. It is estimated that there would be as many as 30,000 new jobs in the ICT sector by 2020.

I was in a seminar 2 weeks ago listening to the technological advancements which will happen from now to 2020. It is a big WOW as I listen to the speakers. Our current mobile internet connectivity is amazing with 4G speeds of up to 450 Mbps. We will have 1 Gbps speed very soon and even 20 Gbps speed with 5G coming in 2020. 5G is a key technological advancement which will make automation and smart cities a reality. This is also a project which the Singapore government is embarking on. With automation, many jobs will be replaced. For example, I heard they can even automate hospitality and construction sectors. A worker can control a machine in a construction site located in another country using real time robotic hands with haptic feedback to sense the pressure and force of the digging work. A cleaner can control several robotic cleaning machines in a control room without having to do the manual work. All these will certainly replace manual labour and it is timely to retrain these workers so they can continue to be employed and even get a higher pay in the future.

It was announced that NTUC will partner with NTU to support mid career workers, including PMETs, to learn new skills. Currently, NTUC has been partnering with the Polys and ITEs for trainings. NTUC intends to raise $50 Million to work with Universities and the government has decided to support by matching $3 to every $1 which NTUC raises. This means $200 Million more in the NTUC Education and Training fund. This is how our trade union is different from other countries where we focus on the bigger picture instead of the now.

The partnership with NTU will focus on short courses to help working people keep up with technology and industry development. NTUC will expand the programme to more universities in time to come. Courses will include digital electronics, molecular genetics and enterprise and innovation which are key growth sectors to come. SkillsFuture credits can be used to offset course fees, and NTUC members will enjoy an additional subsidy of up to $250 a year under the Union Training Assistance Programme.

With jobs changing, I think it is necessary for us to have more skills on hand so that not only we will stay employable but our income will also increase. This is important in having a more secure financial future. Imagine if we lose our jobs and can't find another job because our skills become obsolete, how much impact will it have on our life and finances?

Workforce is Changing

Lastly, the workforce is also changing with times. In Singapore, more than half of the workforce are PMEs (54%). By 2030, it will be two-thirds. The labour movement needs to adapt to meet new needs and stay relevant. The needs of workers are changing. Therefore, for unions to stay relevant to workers, they need to expand their services. This also includes growing their networking because this is something that workers are interested in, networking for better opportunities.

Not only will unions provide collective bargaining, they will also provide other services such as career counselling, networking, skills upgrading etc. As more of us progress better in our careers, it is important to network and explore more opportunities. I think this is a very good move and a platform for us to develop further. Furthermore, the labour movement will be exploring a pay-per-use model with PMEs instead of their usual pay-per-month model. This is also disruption as the traditional operating model of unions is broken down to meet evolving needs of the working people.

To me, Singapore has a unique model where businesses, unions and the government can work closely together to ensure a more sustainable economic environment for its people. Taking care of workers' rights and balancing it with the long term view of the economic structure has always been tricky. I think that there are certainly opportunities in Singapore as long as we work hard for it. If we want to increase our income, we have many opportunities to upgrade our skills. We also have opportunities to learn new skills so as to boost our employability and make us more relevant to the industry needs. No longer is the working environment the same as 20 years ago. We have to embrace change and be prepared. Having another skill on hand will help when we realise our current skills become obsolete. Losing our jobs can be a very painful experience. Are you prepared for a more secure financial future ahead?


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My First Investment Into Crowdfunding For SMEs

Just a few days ago, I made my first investment into something which I have been looking closely at for quite some time now. I decided to get into it because I believe it is safe enough and the returns are relatively good at 13.5%.

In just 26 hours, $1 million was actually raised by this particular company. They are going to raise another $1 Million so investors still have a chance to invest in it. What exactly is this investment on?

Here are the details:

Issuer Summary

Date of Listing: March 17, 2016
Amount: S$500,000
Tenor: 12 months
Repayment Type: Callable
Repayment Term: Quarterly
Target Interest Rate: 13.50% p.a.
Purpose: Asset Purchase

About the company: 

The Company is a well-known brand started in early 2002 by a very experienced entrepreneur with over 25 years of experience in the IT industry. It was established with the objective to be a one-stop digital lifestyle store by offering a comprehensive suite of digital lifestyle products and high quality pre- and post-sale services.

Revenue Source: 

The Company generates revenue through a multi-channel point-of-sales strategy using both offline (retail) and online (e-commerce) channels to transact physical merchandise. Their products consist of a wide range of exclusive computing and mobile equipment (such as laptops, tablets, smartphones, accessories, cases, headphones, and stylus) from top IT brands and the Company's private label.

Purpose:

The purpose of this funding is to finance the purchase of inventory as well as for general working capital.

Corporate Guarantor: 

Her parent company (an SGX-listed company) will provide a corporate guarantee for the notes.


This investment is brought to you by Moolahsense. They got the company on board their platform where the company started this funding campaign to raise cash. When we invest in this company, we are actually lending money to the company to expand their business in return for interest.


Risks of this investment:

Many of you might be worried about the risk involved when investing through crowdfunding platforms. While risks are always present in every investment, we can reduce it by doing our homework. The risk of notes/bonds investment is when the company defaults on its payment. Looking at its financials, the company has a operating profit of $330K and cashflow from operations of $5.1 Million in the current financial year. It also has an average cash balance of $1.4 Million. This particular investment is also guaranteed by the parent company which is a SGX listed company.

I am sure the company name is familiar to most people here in Singapore but due to some confidentiality, I will not be able to mention the name of this company in this post. If you are interested to find out about the investment, you will need to sign up for an account with Moolahsense and view the opportunity in their platform. If you already have an account with Moolahsense, you can login to view this opportunity straight away.


WHAT IS A CALLABLE NOTE? 

This particular investment is a callable note. In a Callable note, an issuer has an option to early redeem the note on a quarterly basis. If the note is not early redeemed, the issuer pays a quarterly interest. The principal will be fully repaid on the quarter that the redemption is early called or at the maturity date.

SAMPLE Scenario (only intended for illustration). 

Assume that you invested $10k in a campaign at a final note rate of 13.5% p.a. in a Callable note.

This is a short term investment which I have also participated in. I believe it is a good opportunity with decent returns for the short term.

To invest in this short term note, check out the investment opportunity on their website here.

P.S: There have been comments on concerns regarding the investments. I have gathered the facts as below:

1. For a company which is 100% owned by a Holding company, no Director will provide the Guarantee

2. Investors need to understand, this is Credit Line to the borrower and not an Equity investment where repayments happen base on cash flows generated by operations in the borrower company

3. Corporate Guarantee of a listed company certainly has some meaning. Even today the company has a market capitalization of 16 mil

Some further facts:
1) Grp Equity is 5 mil as per latest SGX filing

2)  Company is making operating profit in FY15

3) For Parent company, majority revenues comes from borrower. As the borrower financial profile has certainly shown improvement over the last FY, dividends shall accrue back to parent company.

4) about RTO being a red flag >>> not so relevant for a 12 month credit investment (vs an equity investment)

Hope this clarifies. While i understand there are still risks involved, I calculated and invested base on the risk i would be willing to take. Readers are advised not to invest more than what they can lose in any investments.

Disclaimer: This article is not to endorse any products or investments or to give any advise on any investment matters. I have written base on my experience and what I have done. Readers are strongly 
advised to do their own due dillengence before investing. 

This article is written in collaboration with Moolahsense. All ideas portrayed are independent by SG Young Investment.

The Opportunity To Invest In SMEs in Singapore

Did you know that we can actually invest in SMEs (small-to-medium enterprises) in Singapore? This allows individual investors to earn attractive returns while supporting the growth of local businesses. We can invest in SMEs through debt-based crowdfunding platforms. This is where SMEs can issue bonds and everyday investors can buy the bonds and get returns on their investments.

Here's an example of a campaign that local crowdfunding platform, MoolahSense, had previously:

This was the first campaign listed under MoolahSense platform. It has paid out successfully to all investors at a rate of 9.9%. The target amount of the company was initially only $100,000 but due to popular demand, offers went up as high as $207,000.

Company: SMATHS

Smaths Consulting Pte Ltd is a boutique education centre that tailors solutions and learning needs in Mathematics, Physics, Chemistry, Biology and Economics, with additional activity streams in adult and continuing education.

They have four upmarket, mixed use education centres by end of 2014, targeting affluent customers who are quality sensitive, staffed by the best qualified, most motivated tutors in the business.

Programmes are free to try, backed up by money-back and results guarantees.

History:

• Founded 2010, first learning centre opened 2011
• Second centre opened 2011
• Third centre 2013
• Fourth centre (and our second in Bukit Timah) by end of 2014
• Projected ten centres by end of 2015

Issuer Summary:

• Date of Listing: November 5, 2014
• Amount:S$100,000
• Tenor:12 months
• Repayment Type:Equal Instalment
• Repayment Term:Monthly
• Target Interest Rate:18.00% p.a.
• Purpose:Business Expansion / Growth Capital

Use of funds:

• Development of additional education hubs during first quarter of 2015
• This will increase the usable space for learners and expand the number of educators available
• Will allow us to continue to grow the range of subjects on offer
• Expected to form a base to increase Smaths revenues substantially and free cash flows by over 100% within one year

Before investing, it is prudent to do our own due diligence to know the financial health of the company. For investment like this, which is similar to bond investing, there is always risk where the company goes bankrupt and default on their payments. In the case of SME investment, the bonds will have guarantors. For SMATHS's case, the guarantor of the bond is the Group Chief Executive of the company itself. 

Under Moolahsense platform, it has a section called MoolahCore, which shows the financial strength of the company. Here's a screenshot of it:

Click to enlarge

Under this section, you will see the turnover of the company, profitability, current ratio, debt/equity ratio, interest coverage ratio, cash flow from operations and the average cash balance of the company.

You can also ask any questions before investing, through an internal forum – MoolahPost. Moolahsense also organises info sessions for investors to meet the business owners personally for you to understand more before investing.

Investing in SMEs have its risk and thus the returns are higher than the average retail bonds out there. Investing in SMEs through Moolahsense allows you to reap an average of 11-12% p.a. on your investment. Most notes are only for 1 year period with some less than a year.

I have an account with Moolahsense and am looking out to invest part of my money into SMEs which I think is worth investing. You can check out their website and sign up for a free account to try out their crowdlending platform. Who knows you may just find a good company to invest in and at the same time get good returns on your money.

For local SMEs owners, this could be an interesting alternative financing option as well.

Click here to visit MoolahSense Website.

This article is written in collaboration with Moolahsense. All ideas portrayed are independent by SG Young Investment.