Thursday, August 07, 2014
Wednesday, August 06, 2014
Shifting priorities
Plans to do another 70.3 has been shelved, so my remaining races for the year will be TriFactor OD next month and StanChart 42k in Dec.
I had never worried excessively about my finances until Ryan was born.
Becoming a dad and husband means the extra responsibility of making sure that I provide enough for my family, which will become increasingly challenging as the kids grow up.
Though I have started to invest a bit in the last 2 years, but it has been more of simple buying for dividend payouts rather than fully understanding what I invested it. To put it in simple terms, it is almost equivalent to gambling but on a much lesser level.
Attended a short free class a couple of weeks ago, and decided to invest in getting myself educated and signed up for a short course to learn how to trade and invest better. It may save me lots of headache and heartache that may result from bad investments in the future.
Learning to better manage my finances will be important.
Apart from trying to increase my income, the other aspect of controlling expenses and money outflow will be critical.
After exhausting the child tax relief within 2 years and racking up high income tax again, I have started to take tax reduction planning more seriously.
Been reading up a bit on voluntary contributions to CPF and depositing into SRS, which are good means to reduce/defer taxation.
Despite the fact that I may not fully support or agree with some of the CPF policies, there is no escaping from the fact that everyone has to meet the Minimum Sum. So instead of grousing against the policy, it will be better to make it work for me.
CPF SA cash contribution
Benefits:
Coming to think of it, this is a really good scheme for retirement planning.
Now I kick myself for not looking into this years ago when I broke the higher income tax bracket and paid so much tax to the gov for a "Thank you for your contribution towards Nation building"
I'll make sure that I won't make the same mistake again this year come Dec when it is time to make the final changes towards my income tax relief.
CPF SRS
Benefits:
A combination of these 2 will be able to help to substantially reduce the tax that I have to pay every year.
At least the money is still mine even though I can't touch it for the next 30 years.
Better than letting the government squander it away on Brompton bikes (that is more expensive than my racing bike!)
Instead of hoarding lots of cash through worrying about not having enough capital on hand when I eventually start my own business, it will be better to put these cash to good use instead of just wasting them away in cash savings accounts with extremely poor returns.
My 2014 To Do list included 2 sets of 70.3 races.
Since I'm not going to do another 70.3 this year, learning to better manage my finances will be a good replacement.
Anyway it is best to start proper finance management and investments early, so that compounding over time will works it's magic.
I had been procrastinating for years on better managing my finances. It is high time I look seriously into this.
Another good case of facing up to my fears (or rather short-comings in this case) rather than just running away or pretending not to see them :)
I had never worried excessively about my finances until Ryan was born.
Becoming a dad and husband means the extra responsibility of making sure that I provide enough for my family, which will become increasingly challenging as the kids grow up.
Though I have started to invest a bit in the last 2 years, but it has been more of simple buying for dividend payouts rather than fully understanding what I invested it. To put it in simple terms, it is almost equivalent to gambling but on a much lesser level.
Attended a short free class a couple of weeks ago, and decided to invest in getting myself educated and signed up for a short course to learn how to trade and invest better. It may save me lots of headache and heartache that may result from bad investments in the future.
Learning to better manage my finances will be important.
Apart from trying to increase my income, the other aspect of controlling expenses and money outflow will be critical.
After exhausting the child tax relief within 2 years and racking up high income tax again, I have started to take tax reduction planning more seriously.
Been reading up a bit on voluntary contributions to CPF and depositing into SRS, which are good means to reduce/defer taxation.
Despite the fact that I may not fully support or agree with some of the CPF policies, there is no escaping from the fact that everyone has to meet the Minimum Sum. So instead of grousing against the policy, it will be better to make it work for me.
CPF SA cash contribution
Benefits:
- Up to $7000 tax relief can be derived from cash contribution
- Good 5% interest rate on the first $40,000 in SA, and 4% for sums above $40,000
- Counts towards Minimum Sum
Disadvantages:
Locked up till retirement and become annuity (uncontrollable factor so no point fighting against this)
Coming to think of it, this is a really good scheme for retirement planning.
Now I kick myself for not looking into this years ago when I broke the higher income tax bracket and paid so much tax to the gov for a "Thank you for your contribution towards Nation building"
I'll make sure that I won't make the same mistake again this year come Dec when it is time to make the final changes towards my income tax relief.
CPF SRS
Benefits:
- Tax deferment up to $12750 per year
- Can be used for investment purposes (except for property)
- Only 50% is taxable on withdrawal
- Enforced savings in a sense since I won't be able to spend this pool of money
- Flexible contribution compared to an endowment fund where I have to contribute at a fixed rate
Disadvantages:
- Early withdrawal penalty of 5% (except Death, Medical or bankruptcy issues)
- Locked in till retirement
- Possibly of higher taxation rates if my income falls in a higher tax bracket (not a big issue since I don't expect to work forever so my active income at 62 is probably much lower than compared to my prime)
- Possibility of higher tax rates than current levels when I'm 62 (uncontrollable factor and there is no certainty that this will happen so no point worrying about this)
- Investing is necessary. Cash deposit interest rate at 0.05% PA is horrendous and one will just be losing money to inflation this way.
A combination of these 2 will be able to help to substantially reduce the tax that I have to pay every year.
At least the money is still mine even though I can't touch it for the next 30 years.
Better than letting the government squander it away on Brompton bikes (that is more expensive than my racing bike!)
Instead of hoarding lots of cash through worrying about not having enough capital on hand when I eventually start my own business, it will be better to put these cash to good use instead of just wasting them away in cash savings accounts with extremely poor returns.
My 2014 To Do list included 2 sets of 70.3 races.
Since I'm not going to do another 70.3 this year, learning to better manage my finances will be a good replacement.
Anyway it is best to start proper finance management and investments early, so that compounding over time will works it's magic.
I had been procrastinating for years on better managing my finances. It is high time I look seriously into this.
Another good case of facing up to my fears (or rather short-comings in this case) rather than just running away or pretending not to see them :)
Tuesday, August 05, 2014
Happy weekend and Ryan is 2 years old!
Celebrated Ryan's 2th birthday with a simple home buffet party at MIL's place during the previous Sunday.
Kept it relatively simple and low key this time with just relatives.
Ryan was still recovering from his fever so he probably didn't enjoy it as much as he should.
Celebrations in his child care center was done on Tuesday afternoon.
Pretty nice to see Ryan do the handing out of the goodie bags to his classmates, even though he didn't really look too excited when doing so.
Guess his behaviour takes after me when I was at his age; not that excited or super sociable when with huge crowds.
Ryan subsequently recovered and we managed to bring him out for some quality family time after a month-long disruption with him, dear and me taking turns to fall sick.
He was significantly happier when we brought him out to visit Marina Sq, Suntec, Marina barrage. It was a long time since he was smiling throughout the day and being super cooperative.
Sunday was a simple cycling affair at ECP but guess he didn't enjoy it as much as dear could not cycle with us. Ryan prefers to have daddy and mummy spending time together with him!
More happy weekends for Ryan ahead!
And, I still miss my Ah Di.
He will have turned 17 years old last Friday.
I know he will be watching over the family spiritually.
Kept it relatively simple and low key this time with just relatives.
Ryan was still recovering from his fever so he probably didn't enjoy it as much as he should.
Celebrations in his child care center was done on Tuesday afternoon.
Pretty nice to see Ryan do the handing out of the goodie bags to his classmates, even though he didn't really look too excited when doing so.
Guess his behaviour takes after me when I was at his age; not that excited or super sociable when with huge crowds.
Ryan subsequently recovered and we managed to bring him out for some quality family time after a month-long disruption with him, dear and me taking turns to fall sick.
He was significantly happier when we brought him out to visit Marina Sq, Suntec, Marina barrage. It was a long time since he was smiling throughout the day and being super cooperative.
Sunday was a simple cycling affair at ECP but guess he didn't enjoy it as much as dear could not cycle with us. Ryan prefers to have daddy and mummy spending time together with him!
More happy weekends for Ryan ahead!
And, I still miss my Ah Di.
He will have turned 17 years old last Friday.
I know he will be watching over the family spiritually.
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