Singapore Savings Bonds Vs WholeLife Policy -- My Case

I have two "long time" whole life policies.  The first one (simple whole life) bought on my first week of my army recruit days.  The second one (whole life plus critical illnesses) bought from my army buddy just after my National Service.  I had no financial and insurance knowledge at that time.  On hind sight, probably I would not buy such policies.

my-first-insurance-policy 

After these many years, it's good to know that the money in the policies is not so important to my family now and I do not really need them anymore.  After the launch of the SSB, I want to know whether it is beneficial to terminate the policies and re-invest the money into SSB.

I made a trip to the Insurance service centre and found out the followings:

1. After so many years, the surrender values of the policies are now much higher than my total premium paid. 

2. The policies are now growing at a fast rate after so many years. In fact, for every dollar of premium paid into the policies now, the policies more than double my premium paid. [Unfortunately I cannot increase my premium now!]

3. The returns of SSB cannot match the returns of my insurance policies now.   


My whole life policy may be my mini money making machine after 20+ years in making.  But with years of experience, on hind sight it is not really a good deal as an investment.  Because part of the premium paid goes into the death benefit of the policy, part goes into the investment portion of the policy and part goes to the insurance agent/company.  Hence, it has very low efficiency or returns as an investment tool.

As I did not know about these details then, I think it can be counted as one of my costly mistakes from my younger days.  Probably I could do much much better investing the money myself into the stock market.  The next mistake is that I did not invest when young and lost the years of compounding opportunity. 

But what is done cannot be undone, I would be happier by thinking positively or maybe negatively:

1. The policies do act as forced savings in my earlier days.  Considering that I was "Moonlight tribe" (月光族) once (another mistake), probably I would spend all my money if otherwise.  I am glad that I do have these policies now and they do accumulate a cash value that can be withdrawn.

2. I could have invested more money into the CLOB shares (one more mistake) and suffered a bigger loss.

the-clob-shares-saga

3. I could have gotten burnt badly during those few market crashes.

4. By buying the policies young, I have logged in a low premium value and the premium stays the same for the whole time the policy is in force. 


In conclusion, I will not invest into SSB.  I am just too far down the road to switch to SSB.  I will treat these policies as the bond portion in my investment for now. 

However, SSB may still have a place in another person's investment portfolio, under different circumstances.  

2015 November Fixed Deposit Rates Update - 1.80% P.A.

First some clarifications: Fixed Deposit is not for real investment.  My review on Singapore's FD is limited to S$50,ooo and below; and tenure term not exceeding 12 months.  Fixed Deposit is for parking the emergency fund and allowing immediate access to the fund when needed.  These are also based on the following considerations:

1. Singapore's Deposit Insurance Scheme maximum coverage up to S$50,ooo only.

2. Long tenure term will potentially affect your cash-out value for your emergency fund, as you may suffer a penalty fee for early withdrawal.

Back to the update:    

The highest interest rate in the market now is 1.80% p.a., offered by 2 banks:

1. CIMB Bank

CIMB Bank's 12-months FD rates of 1.80% p.a. is currently the highest in Singapore, with the lowest Minimum Placement Sum of $10,000.

This promotion is for fresh fund only and excludes any renewal of CIMB fixed deposit.  

There are only two branches of CIMB Bank in Singapore:
1. Orchard Road (270 Orchard Road #03-02, Knightsbridge),
2. Raffles Place (50 Raffles Place #01-02, Singapore Land Tower).

[I am considering converting part of my CIMB starsaver money into this FD.  Of course, I need to transfer the money to another bank account to "freshen up" the money first.]

2. Maybank

The promotional interest rate is 1.80% p.a. for 12 months tenure.  Minimum placement sum is $25,000.

This promotion is for fresh fund and for a limited period. What’s more, the interest will be given to you on the next day. However, you will need to open a Maybank saving account for that interest to be credited in. 


The fixed deposit rates in Singapore do appear to be creeping up.  Please let me know if there is better offer in the market.

My Stock Portfolio @ end Oct 2015

No.	STOCK NAME	No.of SHARES	PORTFOLIO%	MARKET $
1	SGX	4,000	16.11	7.38
2	Starhub	6,700	13.16	3.60
3	SPH	5,000	10.89	3.99
4	SATS	3,000	6.21	3.79
5	SingTel	2,190	4.76	3.98
6	AIMS AMPI Reit	5,900	4.51	1.40
7	Suntec Reit	4,900	4.41	1.65
8	CapitaMall Trust	4,000	4.32	1.98
9	OCBC Bank	815	4.02	9.03
10	Keppel Corp	1,000	3.86	7.08
11	Starhill Global	8,000	3.54	0.81
12	CapitaLand	2,000	3.38	3.10
13	SPH Reit	5,800	2.98	0.94
14	ParkwayLife Reit	1,800	2.27	2.31
15	CDL HTrust	3,000	2.22	1.355
16	SIA Engg	1,000	2.18	3.99
17	FCT	2,000	2.13	1.955
18	Sembcorp Ind	1,000	1.95	3.58
19	Keppel InfraTr	6,000	1.70	0.52
20	HPH Trust	3,000	1.28	0.555
21	Keppel DC Reit	1,800	1.03	1.045
22	FCOT	1,000	0.75	1.37
23	FE HTrust	1,900	0.69	0.67
24	MapletreeCom	900	0.67	1.37
25	Boustead	1,000	0.52	0.955
26	Saizen Reit	900	0.45	0.925

Movement in my portfolio in October:-
Sold:- Nil.
Bought:- ParkwayLife Reit, AIMS AMPI Reit, FE HTrust, Saizen Reit.

Dividends collected in October: $649.11
2015 avg dividends/month: $697.06 [43.65% up at this stage cf. 2014]

Boring process of building up my passive income portfolio brick-by-brick (bit-by-bit).


Comments:
1. I am too slow in adding Saizen Reit.  Too bad that I did not buy more by trying to save on transaction cost.

2. 4Q is a good quarter for me, as Nov and Dec are both better-than-average dividend months.  Nov and Dec are the 3rd and 4th best months of the year for me.  I can relax, sit back and collect dividends, for a  good winding down to end of the year.

3. I do not think it is too much of a concern even if US does raise interest rate in Dec. It is better to just get over this inevitable thing.