Friday, August 18, 2017

Is Game Of Throne's 'Iron Bank' A Veiled Criticism Of The IMF?

The Iron Bank of Braavos is the most powerful financial institution in the Game of Thrones. It controls the fate of nations, just like the real-world International Monetary Fund (IMF). In the Game of Thrones series, the Iron Bank of Braavos is the world’s most powerful financial institution. As the only “multinational” bank in its fictional setting, the Iron Bank controls the fate of powerful individuals and nations alike. This will all sound familiar to some people. These criticisms echo real world fears of the International Monetary Fund (IMF).

What is the Iron Bank of Braavos?
In the Game of Thrones (GOT) series, the Iron Bank is an ancient financial institution. It’s founded by a group of traders, who used to hide their wealth in an abandoned iron mine (hence the name). As the bank grew in power, it gained the ability to finance entire kingdoms. In particular, the kingdom of Westeros is deeply in debt to them. As far back as the first season, Eddard Stark is shocked to hear the kingdom of Westeros owes three million gold dragons to the Iron Bank (and the same amount to House Lannister). In season three, Tyrion Lannister points out that the Iron Bank likes to finance a kingdom’s enemies, when said kingdom doesn’t repay its debts. True enough, the Iron Bank secretly backs Stannis Baratheon, who attempts to claim the throne for himself. A common saying of the Iron Bank is that “the Iron Bank will have its due”. Many rulers are both dependent on it, and afraid of it at the same time.

What is the International Monetary Fund (IMF)?
The IMF is a financial organisation dedicated to economic stability around the world. Founded in 1944, the IMF currently has 189 member countries, and its roles include fostering free trade, fueling economic growth, and reducing poverty around the world. One of the central roles of the IMF is loaning money to countries in distress. During the Greek Financial Crisis, for example, the IMF played a role just as vital as the European Union (EU). Unfortunately, the IMF has just as many critics as it has supporters. It’s often accused of interfering in local politics and having an inordinate degree of influence in how countries are run.

The Iron Bank Seems to Be a Veiled Reference to the Ugliest Sides of the IMF
The “Iron Bank” metaphor isn’t restricted to the IMF. It’s also partly inspired by the Italian city states in the later Renaissance, where banking was born. But it does seem to be a caricature of all the accusations often hurled at the IMF. These accusations, in the real world, pivot around how the IMF can influence the development of local politics, and hijack a country’s sovereignty. In a recent bailout to Egypt in 2016, for example, the IMF attached austerity measures – conditions such as slashing certain forms of social support – in order to bring the national budget back in line. These measures can significantly alter the lives of citizens. Cost cutting can mean that citizens suffer slashed pensions, see their housing subsidies dry up, receive fewer education grants, and so forth. But these are conditions the IMF can indeed impose, as the price of its loan. The behaviour of the Iron Bank in the GOT series embodies everything critics fear about the IMF. When the Iron Throne of Westeros seems unable to repay its debt, the Iron Bank goes on a programme of what – in our real world – would be called “regime change”: they fund Stannis Baratheon, a challenger to the throne. Despite being a complete outsider, the Iron Bank is able to influence Westeros better than even the kingdom’s own people (and many of its lords). The Iron Bank also has a tendency to maximise its leverage, by calling in due loans at the worst times. After Tywin Lannister’s death, the Iron Bank calls in a tenth of the amount they’re owed, which is twice the amount of money that the kingdom actually has. However, the Iron Bank should have realised the kingdom would be in no position to pay, precisely because of the chaos following Tywin’s death. This is another criticism commonly levelled at the IMF. Their loans are virtually impossible to repay (by design or bad management), because of the nature of countries that borrow heavily. Countries that tend to be mired in debt – such as during the rebuilding from a war, or from a collapsing economy – are the ones that need big loans from the IMF. Countries that are well-developed seldom need the IMF, and are often the ones contributing to it. Yet this perpetuates a system where vulnerable or developing countries are perpetually stuck in debt; and they have to live in fear of the debt being called in, if don’t listen to the IMF, or its major contributors. Notice that once Cersei repays the debt, the Iron Bank immediately offers another loan. But why would they? Westeros is ravaged by war, winter is coming, and there’s a big risk they wouldn’t be able to repay it. There’s only two possible reasons the Iron Bank would extend such an offer: short-sightedness on their part, a desire to hold Westeros in control with their wealth, or even a combination of the two. This mirrors the dual accusations often hurled at the IMF, which either paints them as incompetent, or as political manipulators.

The Real World IMF is Not So Simplistic
Volumes can, and have, been written about whether the IMF is a boon to societies. For all its faults, the IMF has done a lot to help developing and disaster-struck nations. The Iron Bank seems to be based on only the darkest and most negative stereotypes affixed to the IMF, along with snide references to the nature of banking (the Iron Bank was founded by slaves, and now in turn enslaves others through money). Perhaps Cersei should follow up on that idea of Westeros having its own bank.'s #1 personal finance comparison platform by transaction volume, provides consumers with timely money insights and aggregates the latest credit card offers and up-to-date personal loan deals.

Monday, August 7, 2017

Your Attitude Towards Money Needs To Change When You're 35 Years Old

As you move to the later stages of life, you need to react differently towards windfalls and financial crises. Here’s how your money attitudes will change by age 35. Age plays a significant role in personal finance. It’s not just a matter of how many dollars you have. There’s a deep emotional and psychological change in the way you react to receiving windfalls, encountering financial crises, and managing debt. In order to cope with it, your mentality toward money – from saving to investing – will have to change when you reach age 35.

You Need a Different Attitude Toward Debt
When you’re in your 20s, a lot of the debt you encounter is small enough to be paid off at one go. A typical example is credit card debt. If you tighten your belt and budget for four to six months, it’s usually possible to pay off even a maxed out a credit card. Most credit cards are capped at two to four times your monthly income. When you are 35 and older however, you will start to gain debts that can’t be paid off this way. An example would be your home loan, which typically takes 25 years to pay. A car loan has a tenure of five to seven years, and university fees (perhaps for your children) can run up to five years. These loan amounts are in the hundreds of thousands, possibly over a million in the case of private property. You can no longer rely on the old method of “budget for a few months and get rid of it”. Your financial planning has to change. As you can’t “go on a saving spree” to settle these debts, you need to treat them as fixed expenses. One method is to save enough to service these debts for six months. For example, if your home loan costs S$4,000 a month, you might go on a tight budget until you’ve saved up six months of the mortgage (S$24,000). After that, the money could go into investing for your retirement instead. But you must accept that the debt is a fact of life, and adapt your long term spending to its presence.
You Need Stronger Internal Controls Over Your Money
Consider that, among the jackpot addicts in Singapore, nine out of 10 are in their 40s. You might assume that, at the age of 35 or above, we would be more financially mature; but that’s where a new issue crops up. At the peak of adulthood, society assumes you’re mature enough to handle money. Also, as you’re nearing the peak of your earning power, it becomes easier to get larger loans. Banks hesitate to give a S$10,000 loan to a 20-year-old with a part-time job. However, the average 35 year old can get a personal loan approved in 15 minutes. This access to credit is accompanied by another dangerous factor: as society assumes you’re mature, fewer people will stick their nose into your spending. In your 20s, your parents or close relatives probably still keep one eye open: if they notice you’re getting addicted to gambling, or see the repeated letters from the banks, they may stage an intervention. When you’re 35 or older however, they may just leave you to your own devices. Overall, there’s less external control on your money – no one is managing your allowance, nagging you to save, or refusing you five digit loans. But this means you need to evolve strong internal controls to deal with it. Financial prudence has to become a fully ingrained habit, as all the controls are in your own head.
Your Attitude Towards Windfalls Have to Change
In your 20s, you have more opportunity to have fun with windfalls. If you unexpectedly come into money, you can treat yourself to a shopping spree or holiday. But from 35 onward, that will probably have to change. Remember what we said in point 1, about long term debts? You’d be better off using your windfall to ensure you have emergency savings, in order to keep servicing these debts during emergencies. Besides long term debt, having dependents will require you to change priorities. You can expect most windfalls to go into what the children want, rather than what you prefer. This does take getting used to: unlike your younger days, you won’t feel the significant (temporary) jump in your lifestyle from unexpected money. Instead, you’ll have to learn to take comfort in a sense of greater security.
Unexpected Costs Tend to Be Larger
As you move to the later stages of life, unexpected costs tend to be larger. In your 20s, and unexpected cost might be a broken laptop that costs you S$1,600. At 35, an unexpected cost could be your elderly parent developing a health condition, which will cost S$2,000 a month for the rest of their life. In the event that you lose your job, you can’t simply go home to mope until you find a new one. Mum and dad probably don’t run the house anymore, so your home will have (1) an empty fridge, and (2) no one to pay the mortgage or utility bills. Everything is now on your shoulders, and the world won’t give you a break to recover. You’re either prepared for unexpected costs, or you’re sunk. From 35 onward, there is no safety net but what you can build for yourself. This means the measures you took before – such as having a few hundred dollars stuck in a drawer for “emergencies” – are not going to cut it. You need to have a proper savings plan, money in different places (from savings bonds to fixed deposits), and comprehensive insurance plans.
Don’t Wait Til You’re 35 to Get Started
Most Singaporeans learn all this the hard way, but you don’t have to. You can start cultivating good money habits before age 30 so that practices like saving your windfalls are ingrained in you as a 20-something. The sooner you start adapting to it, the less painful the shift will be when the time comes.'s #1 personal finance comparison platform by transaction volume, provides consumers with timely money insights and aggregates the latest credit card offers and up-to-date personal loan deals.

Friday, July 28, 2017

Can You Afford To Retire At Age 50 In Singapore?

Some Singaporeans want to retire at age 50 instead of the usual 65. Here’s how to make a realistic estimate of how much you need to earn and save. Most Singaporeans expect to retire at 62 or 65. However, some Singaporeans are ambitious or have other goals. It’s hard to climb mountains at age 65! This means there are a few Singaporeans who aim to retire by 50 at the latest. But can you actually do that, and how much would you need? We take a realistic guesstimate.

First, Work Out the Income Replacement Rate (IRR) After Retirement
The IRR is, quite simply, the percentage of the income you have right now. The “correct” IRR is not the same for everybody, as we all have different goals. If you want a particularly lavish lifestyle at retirement, the IRR can be well over 100 per cent (that is, you want to have a higher income than you have now, when you retire). If you are content to live a simple life, with no travel and only home cooked meals, your IRR can be as low as 35 per cent (it is inadvisable to aim any lower, due to the hardship it would inflict). Most people would be comfortable at an IRR of 70 per cent (because even before retirement, most of us only have 70 per cent disposable income). This would more or less allow you to live at the same quality of life you have now. The median income in Singapore is around S$4,000 a month, or S$48,000 a year. Therefore, an IRR of 70 per cent for most of us would mean S$33,600 a year after retirement.
Work Out the Sum Total We’d Need to Last Till 90
It’s predicted that Singaporeans could live to the age of 90. It’s better to overestimate your lifespan than underestimate it. To be blunt, dying with excess money is not as difficult as living without it. Now assuming you retire at age 50, this means you have another 40 years to live. Your money has to last throughout that entire time. Earlier, we deduced that you need S$33,600 a year in order to maintain your lifestyle. Over 40 years, this would seem to mean you need around S$1.34 million. However, this isn’t enough because you also need to factor inflation. In developed countries like Singapore, the cost of goods tends to increase by around three per cent per annum. $1.34 million in the year, say, 2037 will buy you a lot less than it will today. So let’s say you are 30 years old today, and have 20 years to build up sufficient funds to retire at 50. The total you would need to accumulate over the next two decades is: S$1.344 million x (1+3) ^ 20 = $2.42 million
Now That’s Still Not Entirely Accurate
Remember, inflation still keeps going, even after you reach 50. This means your retirement fund of $2.42 million must – even as you spend it – keep pace with the three per cent rate of inflation. To do that, you’d need a balanced portfolio of different assets, which provides a regular income stream. You’ll have to talk to a qualified financial adviser for details on how to do that. But at least now, we have a ballpark figure as to how much we need to have by 50; and S$2.42 million sure seems like a lot.
The Bad News is, at S$4,000 a Month You Just Aren’t Earning Enough to Retire at 50
We’re going to exclude windfalls, like winning the lottery or inheriting a load of money. Let’s assume you have to do it the hard way. You have a target of $2.42 million, and you can reliably obtain a return of about four per cent per annum on your investments. Mind you, there are many products out there – such as Investment Linked Policies (ILPs) or stock trading algorithms – that will claim you can get much higher returns. However, these are risky, and we’re going with an amount that most people can safely manage. (It’s not our place to endorse financial products that give higher rates of return; you’ll have to decide which qualified wealth manager or financial planner to trust for that). At returns of around four per cent per annum, over 20 years, you would need to be investing somewhere around S$78,500 per annum, in order to reach S$2.42 million on time. This means that, at the very least, you would need to set aside S$6,541 a month to reach your target. Given that most people can afford to set aside 30 per cent of their paycheque for investment, this means you’d need a monthly income of about S$22,000 to retire at age 50.
That Sounds Really Hard
That’s because it is. Trying to retire 12 or 14 years before the usual retirement age is no mean feat. After all, there’s a reason most people don’t manage to do it. However, difficult is not the same as impossible, and there are ways some people have managed this. For example, you can lower some of the amount you need, by working less instead of not working at all, once you retire. You could also consider moves such as downgrading to a smaller house – given the appreciation of your property, this could cover a large portion of the retirement fund you need. Perhaps the most important consideration, however, is to stay insured and keep healthy. A chronic medical condition, or severe illness, is a common factor that could change this goal from being just difficult, to being impossible.'s #1 personal finance comparison platform by transaction volume, provides consumers with timely money insights and aggregates the latest credit card offers and up-to-date personal loan deals.

Monday, July 17, 2017

Is Investing Better Than Saving Money?

It’s important to know the difference between investing and saving. Each serves different functions, and one isn’t always better than the other. Investing and saving can seem like two different worlds sometimes. However, it’s important for Singaporeans – even if they aren’t in the finance industry – to know the difference between the two. The key thing to note is that they serve different functions.

What’s the Difference Between Investing and Saving?
Savings are monies that you set aside for emergencies. These need to be liquid – that is, you must be able to get the cash from savings on short notice. An example would be some extra cash stored in a current account, which you could grab whenever you want. Savings ensure that you have money to cope with immediate financial difficulties, such as medical costs or getting retrenched. When you have savings, you don’t need to borrow money or use personal loans to deal with these situations. Investments serve a totally different purpose. Investments help you to hedge against inflation (i.e. grow your money to match the rising cost of living), and to increase your wealth to last throughout retirement. This means investments are not meant to be fiddled with, except for tasks like portfolio rebalancing. If you get into an emergency, one of the worst things that can happen is having to cash out your investments. If you have a lot of units in a unit trust fund, for example, you don’t know how much they will be worth if you cash them out during an emergency. If you happen to be in a market downturn, you may lose money by having to sell the units at a lower price than you paid for them.

Is Investing Better Than Saving?
No, but this is a common misconception. The reason some people believe investing is better than saving is that savings don’t grow your money. In fact, savings can cost you money. For example, a typical savings fund is capped at six months of your income. This is considered financially prudent for most people. So if you make S$4,000 a month, you should aim to save S$24,000. However, this S$24,000, because it’s not invested, will not grow. Inflation will eat into it every year. We can calculate the real value of S$24,000 with the following formula: Future value = amount /(1+inflation rate)^number years. Assume an inflation rate of three per cent, which is common in developed countries like Singapore, and a period of 15 years. By the end of that time, your S$24,000 in savings would only have real purchasing power of around S$15,404.

Does This Mean You Can’t Rely on Savings Alone to Retire?
Well, yes and no. You can rely on savings alone to retire, but you’d need a lot of money to be able to do that. You need to stash aside enough money that, even with inflation, rising medical costs, diminishing income as you age, etc. can be overcome. For example, let’s say you want at least S$500,000 in real purchasing power, by the time you retire in 30 years (that’s not a lot at all; remember this retirement sum may have to last you around 25 years or more, assuming retirement at 65). You don’t want to invest, and you intend to do this by just literally hoarding money until you reach this amount. Now reversing the above formula*, we find that real purchasing power of S$250,000 in 30 years means you’d need to accumulate about S$1,213,630 in today’s dollars. You’d be setting aside almost S$3,371 per month, every month for the next 30 years. Remember you’d have to set aside this amount on top of paying all your bills, such as your home loan, and using the same money to deal with emergencies. It’s not impossible if your income is to the tune of S$15,000 a month or more. But it’s hardly an easy or comfortable way to live, even if you have an income that high. *amount x (1 + inflation rate)^number years

Investing is Better Than Saving for Retirement Planning
As you can see, using savings alone to build a retirement fund is possible, but not probable for most people. The average Singaporean will need something like an endowment plan, CPF Special Account, or unit trust funds in order grow wealth. However, if savings are not the best tool for retirement, remember that investing is not the best tool for emergencies. Investments are seldom easy to convert to cash, as they tend to be committed for the long term. For example, if you invest heavily in a house, you are hoping it will appreciate in value. You may want to sell it at retirement and live off the returns. But if a loved one gets sick next today and urgently needs cash, how will you get it out of your house? Property is not something you can sell on the spot, and you’re not guaranteed to get a good price selling in such a hurry.

Use the Right Tool For the Right Job
It’s important to both save and invest. If you feel it’s a struggle to do both at once, then focus on saving alone until you have a fund of at least three months of your income. After that, split the money you set aside between your savings and your investments. Once your savings have built up to six months of your income, you can safely shift the money you set aside to more investment related products. Speak to a financial adviser for more help on this, as everyone’s situation is a little different. You may be able to invest a little more or less, based on your own needs.'s #1 personal finance comparison platform by transaction volume, provides consumers with timely money insights and aggregates the latest credit card offers and up-to-date personal loan deals.

Wednesday, June 28, 2017

Why Giving Up Avocado Toast Won't Bring You Financial Freedom

Nitpicking your expenses doesn’t lead to financial freedom; it’s growing your income and investing your money that will. Last month, Australian millionaire Tim Gurner suggested that young people couldn’t afford their houses because of…get this…avocado toast. This is the same kind of advice that’s in line with “don’t buy expensive coffee”, and “never go on vacation”. Now we’re not against saving money (we’re called for a reason), but this mindset is all wrong:

Crunching The Numbers
Mr. Gurner says: “When I was trying to buy my first home, I wasn’t buying smashed avocado for $19 and four coffees at $4 each”. Now we get it, he’s not literally saying saving on coffee and toast will buy you a house. But he’s suggesting (we’re pretty sure) that not saving on the small things is what costs you a house. The problem is, Mr. Gurner isn’t exactly right. Here’s why. Let’s say you want to go on a small budgeting spree, and cut the following luxuries out of your life:

    No Netflix subscription: save $15 a month
    No Starbucks once a week: save $60 a month
    No using Uber or Grab: Most people save $40 a month this way
    No once-a-month shopping spree: Let’s say you save $150 this way

Total saved every month: $265
Typical price of a four-room flat: $350,000
Amount of time in which your monthly savings will pay off your flat: Approx. 110 years

Now, we’re not saying savings are useless or unimportant; they are. What we’re saying is that trying to save via the small stuff is an ineffective way to buy a house, pay for your education, or find financial freedom.
Let’s put it into perspective:
    Nitpicking is the wrong mindset for saving
    You have to be proactive if you want more than just security
    Small savings have a role, and that’s small luxuries

Nitpicking Is The Wrong Mindset For Saving
Look at the above example of a flat. Considering it’s so expensive, how are over 80 per cent of Singaporeans home owners? The answer is that we don’t try to afford a flat by nitpicking, and buying cheaper socks, single ply toilet paper, etc. Most of us can afford to buy a flat because we set aside a whopping 20 per cent of our monthly income (the CPF makes that mandatory), right when we get paid. So if you want to see a real difference in your life, here’s what we suggest: set aside a sizeable portion (at least 20 per cent) of your income every month, even after CPF contributions. Make sure you do this before you spend a single cent, and put those savings in a separate account. After that, use whatever money remains, however you like. Go ahead and gorge yourself on avocado toast if you want. You’ll find you still have enough for emergencies or financial goals, without getting a daily sense of deprivation.

You Need To Grow And Invest Your Money As Well
Simply stashing your money aside won’t bring financial freedom. If you have big aspirations, like a beach house in California or sending your children to Harvard, then skipping toast is never going to do the job. There’s a limit to how much you can budget. Unless you’re already rich, you’ll never be able to budget enough to retire at 40, own a helicopter, have five houses, etc. If that’s what you want, then your attention shouldn’t be on pinching pennies. You should be focused on starting-up side businesses, investing wisely, and stretching your income. Your response to needing S$100,000 cannot be “what can I cut out from my budget to afford this?” Instead, your response should be “What can I do to try and make an extra S$100,000?” Financial freedom takes a whole different mindset from basic financial security. It requires a proactive, income-seeking mindset, and not just thrift.

Small Savings Are For Small Luxuries
So what’s the role of small time budgeting? Why, small luxuries of course. Hoarding your cashback from credit cards, shaving S$10 off shipping, skipping Starbucks for a week…that all does have a role. It’s role is to afford you the occasional extra trip to Bali, a nicer laptop, or other small (read: non life-changing) luxuries. That has its place in personal finance, as we want to maximise the enjoyment of life. But please don’t fall into the trap of thinking lots of small deprivations (which can snowball into massive misery) is some sort of magic key to your financial woes.

Do What Matters Instead
Save based on a substantial percentage of your income, and work on growing said income. That’s where your attention and willpower should be. Forget about walking two blocks to shave 50 cents off your chicken rice, or feeling guilty that your salad cost S$5 extra for seared tuna; that’s not the stuff that matters.'s #1 personal finance comparison platform by transaction volume, provides consumers with timely money insights and aggregates the latest credit card offers and up-to-date personal loan deals.

Tuesday, June 6, 2017

Why Cooking At Home Won't Save You Money (At The Start)

Many personal finance articles talk about how cooking at home in Singapore saves money. While it does in the long run, the initial costs can be high.
By now, you’ve read about a thousand personal finance articles that explain how cooking saves you money. And you’re probably wondering why so many Singaporeans – especially those short on cash – still eat at hawker centres so often. What a lot of these articles don’t talk about is that cooking involves a lot of initial costs, and may not save you money at first.

How Much Does It Cost to Cook at Home in Singapore?
When most people first work out the cost of a meal, the budget plan goes something like this:
    Mixed vegetables S$5
    Fish (two fillets) S$9
    Chicken (whole) S$8
    Cooking oil (2 litres) S$5
    Rice (5kg) S$12
All in, you can have enough food for three or four days for S$39, and the rice and oil will last much longer than that. But here’s the thing: that’s the way it works after you’ve been cooking for a while. If you have never cooked before, here’s what the budget really looks like at the start:
    Mixed vegetables, which your children refuse eat so you have to toss the previous batch, and buy new vegetables that they will eat – S$10
    Fish, of which you need three fillets, because you burned the previous one – S$27
    Roasted chicken from the coffee shop, because you gave the previous whole chicken to a neighbour, after realising you have no idea how to use that chopper, and would have just end up with badly shredded chicken due to your cutting skills – S$12
    Cooking oil price remains the same, but you’ll probably be using more of it due to errors. Also, you never knew a decent non-stick wok really can cost upward of S$30.
    Rice prices remain the same, but then you realise you’ll need a rice cooker, so you need to fork out an added S$50.
And right when you check the recipe book, you realise you also need six or seven different herbs, a blender, a convection cooker, a toaster-oven, flour, eggs, milk, cut chillies, etc., etc. Now over time, if you keep cooking, this will be less of a shock. You will gradually accumulate the equipment and spice cabinet that every decent cook has. But at the very beginning, the initial setup cost can be much higher than you imagine. It’s not as simple as the cooking shows or recipe books would suggest, especially if you’re cooking for a whole family. Some of the key factors to consider are:

Mistakes Cost Money
If you put sugar instead of salt in the soup, or leave a whole salmon on the pan for too long, you need to start from scratch. That’s an expensive mistake.

Your Family Might Not Like Your Cooking (Especially the Children)
It hurts when you bought and roasted a whole chicken, but your family finds your beginner-level cooking to be, well, inedible. Many people often give up because they get tired of trying to force their cooking on the family, especially the children.

Equipment Can Be Expensive, and Discount Versions are Worse
When it comes to cooking equipment, discounts are for those in the know. A cheap knife or wok can end up costing more money, when you throw them out and replace them. It’s more than likely, however, that an amateur chef will overspend on branded equipment.

The Biggest Cost is Time
Cooking is a skill that takes time to learn. It is not like riding a bicycle, which can be managed in a day or two. This is the number one cost that’s often overlooked. Every dish is different and represents a new learning curve. On top of that, consider that even experienced home cooks can take an hour to prepare a meal. If it’s your first time, you can expect to spend two to three hours on something as simple as lemon chicken and rice. Yes, you can prepare something quicker like sandwiches, but you can’t be having that for dinner all day, every day. And microwaved food doesn’t count as cooking! If you’re working, it may not be an option rush home from the office at 4 or 5 pm, in order to get dinner ready by 7:30 pm sharp. Don’t say you can pre-cook it in the morning, because it’s hard to do that also when you need to be at work by 9 am. Learning to cook also interrupts other opportunities, such as starting a side-business or doing a part-time job.
Those Who Need to Cook are Often the Least Inclined to Do So
If you’re financially stable and can afford the “start up costs”, it’s worth learning to cook. The savings will more than make up for the costs in the long run. However, families on a tight budget (e.g.S$1,200 a month) might not be able to afford the initial equipment; and they certainly can’t risk wasting food. When your budget for the day is S$3 a meal, a burned beef patty is something you’ll have to choke down, as you can’t afford to make another. This means that you should learn to cook while you have the time and money. Later on, if you ever get in a dire financial situation, you’ll have the means to save money via home cooked meals.
Cashback Credit Cards Can Help You Save on Home Cooking
If you want to save money on cooking, you can put your purchases on a cashback credit card. This way, you can earn back a small percentage of what you spend, especially if it gives rebates for supermarkets. The HSBC Advance Credit Card gives you 2.5% cashback on anything, capped at S$70 per month. Plus, you get a S$150 NTUC voucher when you apply for it through before 30 June 2017. This goes a long way into helping you offset the initial costs of learning to cook.'s #1 personal finance comparison platform by transaction volume, provides consumers with timely money insights and aggregates the latest credit card offers and up-to-date personal loan deals.

Monday, June 5, 2017

Why Do Some Companies Like Gong Cha Change Their Name?

It’s often discomforting when companies like Gong Cha change their name, but there are very good business reasons behind it.
You might think it’s a terrible idea for a company like Gong Cha to change their name. They’ve been in business for a few years and developed a cult following in Singapore. To change their name would be a waste of all the marketing and branding they’ve spent on. Sometimes however, there’s a good reason for businesses to change their name.

Companies Change Their Names More Often Than You Think
It’s an exercise called re-branding. It happens quite often, and sometimes it’s so subtle you don’t notice it. For example, not a lot of people noticed that, back in 2011, Starbucks changed its name. It’s no longer Starbucks Coffee, but Starbucks Corp. At present, the local Gong Cha (bubble tea makers) is planning to change its name to LiHO starting in June.

But Why?
Gong Cha is a franchise, and the Singaporean owner of the franchise is RTG Holdings. Recently however, the parent company of Gong Cha (called Royal Tea Taiwan) was bought by Gong Cha Korea. The new owners of the Gong Cha name are imposing new restrictions on franchise owners. We don’t know what these are, but we do know that some companies forbid franchise holders from operating other types of businesses. For example, if you buy the franchise for a famous chain of pizza restaurants. The parent company of said restaurant may not want you owning other fast food franchises. Regardless, RTG Holdings seems to be splitting from the Gong Cha franchise and going their own way. As such, they need a new name, and the Hokkien name “Li Ho” is meant to sound more Singaporean. Some other reasons companies change their names are:
    Name no longer represents the company
    Corporate mergers and acquisitions
    Copyright reasons, or overly generic names
    Negative publicity
    Tax reasons

Name No Longer Represents the Company
Starbucks dropped the “coffee” from its name because it’s no longer just a coffee company. Starbucks long ago started to sell pastries, tea, chocolate, and countless other non-coffee related products. Another example would be Sony, which up to 1958 was called the Tokyo Telecommunications Engineering Corporation. It wouldn’t have made sense for Sony to retain the name, as by that point it was no longer just operating in Tokyo, nor was it focused on telecommunications anymore. Sometimes, the company takes on the name of its most famous product. For example, recruitment firm TMP Worldwide changed its name to Monster Worldwide, as they are best known for running the jobs portal

Corporate Mergers and Acquisitions
Sometimes, companies merge or are bought over. This can result in a name change. When AXA became the majority shareholder in National Mutual (a major insurer) in 1999, National Mutual simply took the name of its parent company. McAfee Associates and Network General merged in 1997, and the new company was called Network Associates International. However, the name changed back to McAfee in around 2004, as the anti-virus software remains their best-known product.

Copyright Reasons or Overly Generic Names
Some names are so generic, they are impossible to copyright. For example, petrol giant Amoco Corp. used to be called Standard Oil Company. Sometimes, the name is so generic that customers can’t tell if it refers to a specific company, or to an entire industry. United Parcel Service (UPS) for example, used to be called American Messenger Company. It also causes problems with regard to online marketing. If you call your education company “Singapore Tuition Agency”, you can bet it’ll get lost in a sea of similar terms during a Google search.

Negative Publicity
Some companies change their name because they’ve acquired a bad reputation, and they don’t feel the name is salvageable. For example, Philip Morris (a tobacco company) caused controversy when it changed its name to Altria – many protested that it was trying to hide tobacco industry involvement in different areas, such as when it donated to political campaigns. Notably, the name change helped to protect companies like Kraft, of which Philip Mor…oops, Altria, is a major shareholder. (Yes, the same Kraft you find in supermarkets). Kentucky Fried Chicken changed its official name to KFC not just for convenience; they wanted to avoid mention of the word “fried”. In Sim Lim Square, many of the blacklisted scam stores repeatedly changed their name, to avoid being identified after their name popped up in the news.

Tax Reasons
We absolutely don’t condone any sort of tax evasion or avoidance. But that being said, some companies repeatedly close down and re-open under a slightly different name, to get tax benefits. It’s common, in most countries, for new companies to get lower taxes in the first few years of business. This is to give them time to get on their feet (most new businesses run at a loss for the first year). Some small companies decide to “extend” these tax breaks, by repeatedly closing and re-opening with a variant name. For example, a restaurant named River Valley might close down after two years, and then re-open as New River Valley. Two years later, they close down and re-open as River Valley Restaurant, and then later as River Valley Family Restaurant, and so on. Besides getting tax breaks, this might also qualify the business for repeated grants and lower interest loans. (Until the authorities notice, and decide to make an example of the owners). What do you think about Gong Cha rebranding to LiHO? Are you looking forward to it, or would you rather Gong Cha stay the same? Tell us in the comments!'s #1 personal finance comparison platform by transaction volume, provides consumers with timely money insights and aggregates the latest credit card offers and up-to-date personal loan deals.


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