The Central Provident Fund (CPF) is a mandatory social security savings scheme here in Singapore. It is funded by both yourself and the employer, with the aim of helping you achieve financial security and meet your retirement, housing, and healthcare needs. If you're wondering where the small monthly deduction in your paycheck goes to, this is it!

Now, there are actually four types of CPF accounts that each individual will have, and that is the:

• Ordinary Account (OA): for housing, insurance, and investment;
• Special Account (SA): for retirement funding and retirement-related financial products;
• MediSave Account (MA): for hospitalisation expenses and approved medical insurance; and
• Retirement Account (RA): formed after the age of 55 solely for the CPF LIFE annuity scheme, and funds are sourced from your SA and OA accounts.

Of course, these accounts do accumulate interest over time, although it should be noted that the interest rates are not entirely fixed, but rather, reviewed by the CPF Board every quarter. The rates for each are as follows:

• Ordinary Account: 2.5%
• Special Account: 4%
• MediSave Account: 4%
• Retirement Account: 4%

It's safe to say that with this scheme set in place, that most, if not all, Singaporeans will be set for their future in general. However, the Government introduced the CPF Investment Scheme (CPFIS) that provides members with the option to invest their savings! What's better than having your money work for you?

What is the CPF Investment Scheme?

With the CPFIS, you'll be given the option to invest the savings in your Ordinary Account or Special Account in a variety of instruments, from insurance products and unit trusts, to fixed deposits and bonds and shares, to enhance your retirement savings.

Am I eligible for CPFIS?

Investing under CPFIS is fairly simple, as anyone above the age of 18 can invest so as long as they meet the criteria below:

• Are at least 18 years old;
• Are not an undischarged bankrupt;
• Have more than $20,000 in your Ordinary Account; and/or
• Have more than $40,000 in your special account; and
• Have completed the CPFIS Self-Awareness Questionnaire (SAQ).

How do I build my CPF portfolio?

First things first, you must first evaluate your current situation before you decide to invest. A few key factors that you should take into consideration are:

• What is your investment goal? Why are you investing and do you have an objective that you wish to achieve?
• What is your risk appetite? How much risk can you afford and tolerate?
• Are you sure that through investing that you'll be earning more than the CPF interest itself?

Once you've identified those key aspects, you can then begin to invest! Building your CPF portfolio will not only take time, but effort. You'll need to do your due diligence and research and understand that while investing is risky, it can also be rewarding.

Now, when you're investing, know that the best course of action you can take is to diversify. Diversification is key! You do so to spread out the risk, as investing in a mixture of assets might bring you higher returns all while reducing risk at the same time. You can spread out your investments across different products like stocks, bonds, or Exchange-Traded Funds. Here, you can view all of the different products that you can invest in under the CPFIS.

Looking to get started with CPFIS? First, check your eligibility with the SAQ! If you're still unsure of where and when to start, I'd love to walk you through the process. Just reach out to me and I'd be more than glad to help you out on your first investment journey.

The markets are constantly changing all the time, even as we speak. So, how can you tell when to jump in on the right opportunities so you don't miss out on any of them?

There are plenty of promising stocks out there in the market that are always available, but the challenge lies in your ability to find them. It's entirely up to you, or whoever is managing your investments, to locate and identify the best opportunities for you to trade and invest to maximise your returns.

While you may be wondering how that's possible considering the volatility of markets and how any stock can dip just as fast as they rise, research will really go a long way here.

To make it simple for you, here are a few handy pointers on how you can actively seek for excellent opportunities in the market!

1. Observe growth statistics
   In every case, you'll definitely want to keep an eye out for future growth potential. A high percentage on stock growth indicates a great buy, especially if the stock is in a young and thriving industry!
   
   With that said though, you must learn to look beyond the company that you're investing in and consider its environment as well. Take a look at the industry as a whole. Is it predicted to grow in the future, or decline? If your industry is future-proof, that's all the more reason to invest in it.
   
   On top of that, take into consideration the standing of the global market when you're looking to invest. Events from all around the world could very well affect the investments that you make because your company's operations could be impacted by it.
   
   As a whole, learn to consider all perspectives when you're investing. Don't just narrow down your view to the company's potential itself, but in its industry and the international markets as well. It's good to look at the bigger picture so that you can see how your investment will pan out in the long run, and most importantly, to identify any opportunities before you miss out on it.
   
   
2. Dividend payout
   To calculate a stock's investment potential, take a look at its dividend payout. Compare the price that you'll be paying in order to secure the stock, against the dividend payout that you'll be receiving in return. Keep in mind though that dividends are generally paid out on a quarterly basis, which means that whatever payout you're looking at, that figure will be quadrupled in your account every year.
   
   It's known as the P/E Ratio, otherwise known as Price-to-Earnings Ratio that'll give you insight into the payout potential of the stock that you're buying based on how much you pay for it. When you're able to make these comparisons, you'll be more well-informed on the best investment opportunities that you should make.
   
   
3. Monitor your investments
   For all of the instruments that you've invested in, you should always monitor their progress and look for opportunities actively! Other than that, as you're managing your investments on the regular, you'll be able to make much smarter choices in terms of whether to buy, trade, or sell, which will ultimately strengthen your portfolio for higher returns.
   
   When you're on the ground and handling your investments on your own, you'll be able to gain more experience as well, which will help you manoeuvre the investment scene much easier too.

All in all, in order to not miss out on any opportunities that will surface in the market, you must be proactive! Stay informed on all of the latest updates, keep track of your investments, and learn how to judge the potential revenue you can capture from your instruments. Do your research and expand your knowledge as much as possible and you'll be good to go. If you ever need help with finding opportunities for your investments, come and look for me as I'd be more than glad to help you out! Get started on your journey today and leverage the opportunities that are now present in the market to build your wealth to be much more than what it is today.

Investing is all about making smart, calculated moves. The key to letting your money grow is to go in not with your emotions, but rather, with a full game plan in mind.

That's where diversification comes into play.

What is diversification?

In short, think of diversification as the saying of "don't put all of your eggs in one basket"—it's about diversifying your portfolio to include a variety of investments for two main reasons, and that is:

1. To manage and minimise your risk. As you can't predict the future nor the rise or fall of stock markets, diversifying your portfolio means that you'll be spreading out the risks across multiple instruments and not placing all of your bets on one gamble.
2. To allow for a variety within your portfolio which, in turn, will yield a higher return. With a blend of different instruments within your portfolio from low to high risk, you're opening yourself up to opportunities to earn more if select markets are thriving.

Diversifying is akin to setting up a front line of offense for your portfolio. Without it, many resort to the late defence of reacting only when the market dips, when most of the damage has already been done. With a well-diversified portfolio, combined with an investment horizon over the next five years, it builds a good offense, which serves as your best defence, which will be able to weather through most of the storms in the volatile market.

By diversifying your portfolio and maintaining a smart, disciplined, and regular manner of investment from an early age, you can sit back and watch as your money matures on its own.

How can you diversify your portfolio?

Diversifying your portfolio means exploring other investment instruments, and you can do so by:

1. Spread your investments out, but not too much
   Rather than investing in just stocks or funds, open your options to include other instruments such as commodities, exchange-traded funds (ETFs), and real estate investment trusts (REITs). Don't bound yourself down to only investing in stocks and bonds, because there are many more alternatives out there which you can consider!
   
   While you're at it, learn to not invest it all in one place either, but rather, look outwards and see the world of opportunities that will unfold before you. Go beyond the confines of your own country—think beyond, go global! The key here is that the more your risks are spread evenly, the more hefty the reward that you'll reap in the end.
   
   You could even consider creating your very own virtual mutual fund and invest in a handful of companies across a variety of sectors that you are loyal customers of. If you know, trust, or use their products or services in your everyday life, you could very well consider them as a good investment opportunity!
   
   However, always know your boundaries and set limits. Don't build an over-diversified portfolio that simply isn't feasible where you're off investing in over 100 different instruments or sectors, because you won't have the time, effort, or resources to keep up. A good figure is to keep it within 30 different investments so that it's all manageable and profitable.

2. Look into index or bond funds
   Other options that you can consider are index or fixed-income funds that you can add to your diversified portfolio. Securities that track various indexes, on top of the fixed-income funds that will only hedge your portfolio against market volatility both make for an excellent long-term diversification investment. Plus, these options are often low in fees, which is yet another bonus that constitutes a win-win situation for you.
   
   With low management and operation costs, it'll only mean more money earned in your pocket!
   
   Do take note though, that both, in general, are passively managed. When it comes to inefficient markets or when the economy is undergoing challenging times, it's best to engage in active management instead.

3. Dollar cost-averaging, buy-hold, and know when to get out
   Be consistent with your investments and keep them on a regular schedule. With a certain amount that you're looking to invest, employ dollar-cost averaging so that you're able to work through the volatility of the market. With the dollar-cost averaging strategy, rather than investing all of your money in one go, you reduce risks by investing a set amount over a period of time. It's all about consistency here!
   
   On the other hand, keep your portfolio relatively stable over time, in spite of market fluctuations by buying and holding. Rather than constantly trading, you're taking a more passive approach which will allow your investments to grow.
   
   With that said though, be sure to always stay updated on your investments and changes in the market so that you'll know when you should cut your losses and move on to the next investment opportunity.

Well, that's a gist of what you'll need to know when you're looking to diversify your portfolio, minimise your risks, and increase your profit! Remember, the best and most successful investors are those who walk in ready, with a strategy in mind. Know what you'll invest in, and what goals you're planning to achieve through those investments. Markets will fluctuate with every passing moment, but with the right mindset and plan, you'll be able to protect yourself against its volatility and come out on top. If you'd like to get started but don't know where, I'm always a message away and would love to help you find your footing in the investment scene.

Your golden years may be far into the future, but your retirement planning should begin as early as possible. As inflation brings up the cost of everything—from healthcare to even your daily necessities—there's no saying as to how much things will cost in maybe ten to twenty years from now. Depending on the lifestyle you'd like to live once you sign off from your career, do you think you'll actually have enough in place to retire comfortably?

Here's where the CPF Lifelong Income For the Elderly, otherwise known as CPF LIFE, comes in. In short, it is a national longevity insurance annuity scheme that'll provide you with regular monthly payouts for as long as you live.

Why choose CPF LIFE?

Of course, there are other options out there such as the private annuity plans, but CPF LIFE isn't another investment product, but rather, it's an insurance product. You'll find that most private retirement income plans often have a limit on payouts, but with CPF Life, it'll carry on for the rest of your days.

As CPF LIFE is guaranteed by the Singapore Government and administered by the CPF Board, you'll bet set to earn high and risk-free interest that's up to 6% per year and there will be no costs incurred as well. It's all win, no losses here.

All you'll need to do is consider your desired retirement lifestyle, and from there, you'll have three options of CPF LIFE plans to choose from: Escalating, Standard, and Basic. From there, you can figure out how much you'll need as your monthly payout and the premium you'll need to pay, which you can also make manual cash top-ups or CPF transfers if it isn't enough. Lastly, get ready to receive your payouts! However, if you decide you'd like to defer your payouts, you'll gain a 7% increase for each year you defer.

CPF LIFE plans will secure you a monthly payout, however, in the event of your death, if there is any premium balance left (along with any savings), it will be distributed back to your loved ones. You'll be protecting not only yourself, but your loved ones in the long run.

Are you eligible for CPF LIFE?

If you meet these criteria, you'll automatically be included in CPF LIFE:

1. A Singapore Citizen of Permanent Resident;
2. Born in 1958 or after; and
3. Have at least $60,000 in your retirement savings when you start your monthly payouts.

Of course, if you're not automatically included, you can opt to join CPF LIFE whenever you're ready to start receiving payouts. On the other hand, you can also choose to be exempted from the scheme if you meet the criteria set as well.

It's high time for you to start your retirement planning, because the earlier you start, the more time you'll have and the more you'll be able to save to live a more comfortable life after you retire. Look out for your future self by doing the hard work today.

If you're ever in need of any help with retirement planning, reach out to me and I'd be more than glad to assist you!

According to a survey done by estate planning firm Rockwills Trustee, it was found that only 33% of 751 Singaporean respondents have drawn up their wills. Many Singaporeans delayed writing their wills, so much that at a national level, it was estimated that only 15 to 20 per cent of Singaporeans have prepared their wills.

The survey also found that only 49% of respondents showed interest in trusts for estate planning, and 10% of those people were already in the midst of trust planning. While some people didn’t proceed with trust planning because they don’t have enough assets or they feel that their beneficiaries can fund themselves in the future, the majority of the respondents didn’t come through because they were unsure of how to proceed.

Understanding will and trusts

Both will and trust are estate planning tools, but they each serve different purposes. A will is a legal document in writing that is signed by you, the testator, and the executor to allocate your assets after your passing. A trust, on the other hand, is a legal arrangement between a settlor and a trustee. This legal arrangement shows assets that will be managed by the trustee for the benefit of the beneficiaries.

If you’re wondering what differentiates between a will and a trust, the most obvious difference is that a trust takes effect immediately after creation while a will can only take effect after the will writer has passed away. But do know that both a will and a trust can be revised or amended until your passing, or for as long as you are mentally capable.

A trust can remain private. What this means is that it can be carried out outside of probate, so the court doesn’t have to supervise the process. A trust can hold properties for beneficiaries who are still minors and even those who might misuse their inheritances—ensuring protection for all parties involved. A will, however, cannot remain private and must go through probate. The court will have to oversee the process to ensure its validity and that the asset distribution is as the will writer’s stipulation.

Lastly, a trust only includes properties that are transferred to the trust account. Therefore, to include the properties, it must be appointed to the trust. A will only cover properties that are under your name as of the time of your passing. To make it clearer for you, here’s a summary of the differences between a will and a trust:

Will	Trust
A legal document in writing that is signed by you, the testator, and the executor to allocate your assets after your passing.	A legal arrangement between a settlor and a trustee that shows assets that will be managed by the trustee for the benefit of the beneficiaries.
Takes effect only after the death of the owner.	Takes effect immediately.
Covers only properties that are in your name as of the time of your passing.	Includes only properties transferred to the trust account.
Passes through probate.	Can be executed outside of probate.
Public record	Private record

Do you need to have both?

You can have both a will and a trust because they’re both different legal documents. To have the most comprehensive estate plan, you must understand the type of will that you’ll need to go along with your trust. You must also ask yourself questions such as “Do you have children to name guardians for?”, or “How will you declare your final wishes?”. Almost everyone should have a will, but not everyone should get a living trust. Depending on your situation, it’s best to consult with a professional and let them assist you in this process.

Luckily for you, we have financial advisers who specialise in trust and will planning. For more information, contact us here. If you seek a promising career as a financial adviser and would love to join our team and learn more financial tips and tricks from our seasoned advisers, join us today!