Central Provident Fund (CPF) monies bequeathed to a bankrupt by a deceased member stands to be seized by the Official Assignee (OA). This is the verdict by the Court of Appeal in the case ofLim Lye Hiang v Official Assignee (Singapore Law Watch). The Straits Times carried the same story available from CPF’s IM$avvy link: HERE. Last year, I wrote a blog on this sad story (available from this … [Read more...]
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CPF Enhanced Nomination System (ENS)
The CPF Enhanced Nomination System takes effect from 1 January 2011. Under this system, it is possible for the CPF Member to bequest his CPF monies to the nominee’s CPF accounts. The FAQs are now up at CPF website: http://ask-us.cpf.gov.sg/explorefaq.asp and search under “General Information on Enhanced Nomination System (ENS)” When in doubt, consult your estate planner. … [Read more...]
CPF Nomination made to a bankrupt
Central Provident Fund (CPF) monies bequeathed to a bankrupt by a deceased member stands to be seized by the Official Assignee (OA) and distributed to creditors. Ironically, it takes a couple of miscommunication between two government departments to clarify this. See HERE (link broken). The details can be found Re Lim Lye Hiang, ex parte the Official Assignee [2010] SGHC 299 It is … [Read more...]
What is the difference between savings and investments?
Very often I come across cases in which the client is unable to distinguish between savings and investments. The confusion is usually related to the unfamiliarity with the different asset classes. For savings, it is usually refer to putting money in asset class which (1) Will not have any chance of capital lost; (2) Whose value can be determine easily; (3) No contractual commitment; and (4) … [Read more...]
What you need to know about CPF Life Questions & Answers
I just came back from a public seminar organized by CPF Board on CPF Life held in DBS Auditorium. I attended it because I need to be familiar with the scheme in order to advice my clients. Ideally CPF Board should organize a specialized training for financial planners but I figured that they cannot be bothered because financial advisers and planners wouldn’t be interested to attend since there is … [Read more...]
When is the best time to invest, when is the worst time?
The best time to invest is when there is fear; the worst time to invest is when there is greed in the market. That is to say that the best time is when market is down and that the economy is in despair, when job losses are high with massive retrenchments. However, avoid individual stocks because companies can close down if economy becomes very bad. The worst time to invest is when … [Read more...]
How does a structured product work?
Structured product usually provide some form of capital protection with the potential of upside. It is usually require the client to hold on to the investment for certain number of years. At maturity, the principle is returned. An additional bonus is provided if the underlying investments meet certain target. A structured product in reality invests in derivatives. Here is an illustration of how … [Read more...]
What is the purpose of investments?
If you make an investment, it must be because of a reason. Since investment entails risk, you must be satisfied that your reason is sound and reasonable. The "good" reasons why people invest is either to (1) Save up for retirement and/or (2) Ensure their assets are protected against inflation. Other reasons why people invest are: they want to get rich and/or because of peer pressure. These two … [Read more...]
What is equity?
In accounting term, equity refers to the portion which a shareholder is entitled to in a company. The equity of a company is Assets less liabilities. Equity is also equal to Retained Earnings at the beginning of the period + Income + Other comprehensive Income - Dividends paid in that period. In investment terminology, equity refers to investing in stocks. Because stocks are traded on the stock … [Read more...]
What is fixed-income?
Fixed-income or bonds refer to the debt issue by a company. When a company wants to borrow money from the public, it will issue bonds. Lenders or investors buy these bonds. These bonds will pay a regular fixed interest through the tenure of the bond. When the bond matures, the company returns the "par" or face value of the bond. The risks of fixed-income are default risk (i.e. the company … [Read more...]