Pathetic Bank Interest Rate

Hi Fellow Automated Millionaires,

Today I received a very important email from Standard Chartered. They are reducing the e$aver's Interest Rates from 1.5% to 1.2%. This is really Pathetic.

I am a very strong believer of High Interest Saving Account and ever since Standard Chartered came out with e$aver, I am a Champion for it. But, they reduced the interest rate from 1.98% to 1.5% and now from 1.5% to 1.2%. Though it is higher than conventional savings account of 0.25%, but it is NO longer the highest interest saving account in Singapore.

So what is the highest? Citibank Step-Up Account at 2% (terms and conditions apply). And this is where my Emergency Fund lies. Although, Fundsupermart.com's Cash Funds Interest rate is higher at 2.119% as of 28th Oct 2007 (nett of the expense), but it is still not as liquid as Citibank Step-Up Account. Hence, not justifiable for that small amount of difference in Interest Rates.

This is a breakdown of my Automated Funds dated 30th Oct 2007:

1. Citibank Step Up Account - Emergency Funds (10%)
2. StanChart Own xSaver - Education (5%)
3. StanChart Joint e$aver - Bills (Mobile, Cable TV, Internet, Insurance)
4. StanChart Own e$aver - Basic Necessity
5. StanChart Joint xSaver - Play (10%)
6. Financial Freedom Fund - Direct Debit from Citibank Account (10 ~ 15%)
7. Charity Fund - Direct Debit from Citibank Account (1%)

I am comptemplating to put my Financial Freedom Funds into Cash Funds to achieve a slighty higher Interest rates, but since I don't have S$20,000 in my CPF (updated singapore law) by April 2008, I will have to use my Financial Freedom Funds either cash or through SRS (for tax relief) for my 25 years Retirement Fund Plan.

But most importantly, all these have been automated. Hence, freeing me from having discipline to put my money into this and that accounts and for investment :) That is really wonderful! Hence, that is why we are Automated Millionaires!

Disclaimer
The above information is wholy author's personal opinion. It does not intend to replace any professional advice. If legal advice or other professional advice, including financial, is required, the services of a competent professional person should be sought.

Level Term vs Limited Premium Whole Life

Hi Fellow Automated Millionaires,

I am totally divided now. :) David Bach is preaching most of us to take up Level Term Plan but yet my trusted financial coach has asked me to take up a Limited Premium Whole Life insurance.

Well below is the difference between the 2 Plan.

Level Term Plan (35 years)

1. Have Death / TPD / Critical Illnesses coverage
2. Same premium for 35years, which means I am paying S$76,440 in total
3. With $182 per month, I am covered S$430,000 for 35years, which means there is NO coverage after 35 years, but Income is offer a guaranteed renewable after that 35 years until I am age of 80 (i am still finding out the premium for that renewable)
4. No Cash Value after 35 years

Limited Premium Whole Life (Pay for 25 years and Protected for life)

1. Have Death / TPD / Critical Illnesses coverage
2. I pay S$187.65 for only 25 years to be covered for life, which means I am paying S$56,110 in total
3. High Premium for only S$100K to a maximum of S$175K (age of 65) coverage
4. If projected 5.25% returns, the policy would have about S$100,477.00 cash value in 36 years time (age: 65)

As everybody can see, if I am going for Protection, Level Term Plan is the one to go for, as my dependents (although strictly speaking I don't any dependents now) gets more if anything were to happen to me. Because if taking inflation of 3% of 25years, I need at least S$209,377.79 to cover myself, which is NOT achievable in Limited Premium Plan.

But if I am going for Cash Value or FREE Protection after I retire, I will be going for Limited Premium Whole Life. However, if I am going for Cash Value, why not take some of the premium to go investment, which gives more % back... which leaves the only attractive advantage of free protection after I retire at the age of 40 :) Oh god, I am so confuse

I need your help, what is your opinion on this issue? Please feel free to comments.

Disclaimer
The above information is wholy author's personal opinion. It does not intend to replace any professional advice. If legal advice or other professional advice, including financial, is required, the services of a competent professional person should be sought.

Money Market Funds

Hi Fellow Automated Millionaires,

I met up with my trusted Financial Planner last night from 10 to 1130pm. After discussing with Anthony and Kae Tyan, I made several decision:

1. NOT to put my FFA into a Money Market Funds but also invest into Mutual Funds for better growth
2. Not to work on Bi-weekly Payment for Real Estate (as there is no such payment mode in Singapore)

Money Market Funds
I have researched Money Market Funds in Singapore are generally making a profit of 2-3% returns. Hence, minusing the initial sales charge of 2%, the nett profit is only 1% (taking the maximum returns of 3%) which is lesser than the e$aver of 1.5%. Hence, for all the trouble of setting up the Money Market Fund, it just doesn't add up. Hence, I decide NOT to put my FFA into Money Market Funds but invest into Mutual Funds until end of 2008 to buy Real Estates in 2009

Bi-weekly Payment
Sad to say that Bi-weekly payment according to Anthony Boon doesn't exist in Singapore. Hence, enough talk about it :( So it makes more sense to grow money in elsewhere rather than paying off the interest other than required.

Retirement Calculator
I have found out that CPF website has an incredible array of Calculators at http://mycpf.cpf.gov.sg/Members/Calculators/mbr-Calculators.htm. I am using it to determine what i need to do to achieve my Automated Millionaire Plan!

Disclaimer
The above information is wholy author's personal opinion. It does not intend to replace any professional advice. If legal advice or other professional advice, including financial, is required, the services of a competent professional person should be sought.

My 1st Step

Hi Fellow Automated Millionaires,

"A journey of a thousand miles begins with a single step" - Confucius.

That single step involves in talking to my Financial Planner, researching on Money Market Funds, talking to several Insurance companies, etc to find out the finalised the Plan to become an Automatic Millionaire. *phew* Tough work to localise the concepts from David Bach, but I have learnt a lot during this process.

At the current moment, I aim to achieve a Net Worth of S$3 million by age of 40 and this is what i have done as of 24th October 2007:

Wealth Protection

1. Death, Total Permanent Disability & Critical Illnesses covered at about S$100k (Asialife)
2. Personal Accident covered at about S$100k (Tenet)
3. Hospitalisation Plan (NTUC Income)

Wealth Accumulation

1. Increased Income Level by S$500 ~ S$1,000 per month through Melaleuca
2. Pay Myself First (10% to FFA, 10% LTS, 10% Play, 5% Edu, 1% Charity)
3. Build my Emergency Funds with 2% interest rate (Citibank)
4. 25 years Retirement Fund by reinvest my CPF in Mutual Funds aiming to achieve a 10% ROI up to a maximum of S$834/mth (Thank you my Financial Planner!)
5. Automate most of my bills payment (e.g. Starhub, Insurance, Transport)
6. Direct Debit payment to Charity (currently to Singapore Children Society)
7. Working on Melaleuca business aiming to achieve S$84,000/mth by age of 40
8. Future plans to go into Real Estates and Stocks

As this is the 1st time I am setting up the system, hence, there is some hardwork involved. However, once the system is setup, there is absolute no discipline needed, as it is automatic! This is why it is so fun! ;)

Max Tay's Life Vision: To help at least 1,000 people to become Automated Millionaire

Max Tay's Life Mission: Enhancing the lives of those we touched by helping people reach their goals

I have a dream today!

Hi all,

After reading The Automatic Millionaire by David Bach, I feel so much inspired! Even though I still am in debt now, unsure of my future, but my friends, I still have a dream. A dream deeply rooted in me...

I have a dream that one day I would be a Millionaire. I would be the true owner of my life. Spending quality time with my wife and children. Have the freedom to travel round the World. Have the chance to taste exquisite food *slurp*

I have a dream that one day not just me can be a Millionaire. All of my friends will be able to sit down together at the table of Millionaires. They would one day possess the knowledge of how to become an Automated Millionaire.

I have a dream that one day we will be enhancing the lives of those we touched by helping people reach their goals. It will no longer be restricted just in Singapore but also in Malaysia, Indonesia, Thailand... the sky is the limit.

I have a dream today!

And NOW is the time to take action. Now is the time to raise up to the challenge. Now is the time to make this dream a reality! I sincerely invite you to come along with me to make this dream a reality!