10 Ways to increase your wealth TODAY!

Looking to increase your wealth? 

There are ways to enrich oneself without the need to pay fees to a third party. Most of the time, it is a matter of utilising free tools that are already available in the market. So before you purchase the product that the banker is marketing to you, read what this ex-banker does to make the additional cash.

1) Refinance your property loan

The headlines on the papers are screaming about a possible interest rate increase in the coming months. To safeguard against the increase, consider refinancing your property loan.

Refinancing simply means asking the bank to reprice the interest rates. You could ask your banker to do or get competitive rates from other banks. Usually, when your housing loan promotional period (usually 2 years) is over, the bank will revert to much higher interest rates if you do not request refinancing. The difference could be as high as 2 % or more. For every 1 million loans, that means a difference of 20K a year!

Savings: $20,000 per 1 million Loan

2) Interest rate guaranteed products are not always the best option

Fixed Deposits and Bonds are 2 of the favourite 'risk-free' or low-risk assets that most will put their funds in.  However, Fixed deposits are only paying 0.5% while Singapore Savers Bonds ( considered to be the safest bonds) are only paying 1.78% annual.

If you have funds that you would not be using and saving for retirement, there is a better way to save. One of the ways is to top up your CPF and earn 2.5% interest.

With the power of compounding, this is what you will get for a $100,000 investment

• Fix Deposit at 0.5% over 10 years : $105,114
• Singapore Saver's Bonds at 1.78% : $119,295.61
• CPF at 2.5 % : $128,008.45

Compared to FD, that's a whopping $22894.45. The money earned is sufficiently for a trip to US AND Europe for the family!

The only downside to this is that there is a yearly CAP on CPF Voluntary Contributions (VC).

There is a yearly VC cap of up to CPF annual limit  ($37,740 per employee) less the mandatory contributions received by the employee for the calendar year. Moreover, VC will be divided into your CPF ordinary account, special account and Medisave. The latter 2 accounts cannot be used for housing or education needs.

Savings:  Potentially over $20K for every $100K over 10 years.

3) Pay off your CPF used for housing 

If you had used CPF to purchase your property, you can opt to refund the CPF used as well as the accrued interest to your CPF accounts. The refunds are directly credited to the ordinary account so you can use it to service the existing loans or to purchase new properties.

The benefit is that you would get 2.5% interest. Additionally, if you reach your minimum retirement sum by age 55, you can opt to draw out the balance on top of the retirement sum. Last but not least, if you do sell your property, you can get additional cashback for your next property as you would refund a lesser amount to CPF. 

This will work best for people who are in the age group of 45-55 and have excess funds that are placed long term in CPF. 

Savings:  Potentially over $20K for every $100K over 10 years.

4) Buy a 'used' new car 

Do you know the moment you drive your new car out of the showroom, you will start losing at least 10 grand?  

Instead of getting a new car from the dealers, there are several ways you can save on an almost new car

-Get showroom or demo cars

Some of these cars are barely driven (less than 1000km) and you can get a good discount on it

-Event Cars

 New cars used for events such as Singapore Airshow are sold as much as 10-40k off the listed price (depending on the model). Speak to your dealer about it

-Management Cars

These cars are easy to spot, they are often listed on the pre-owned section of the authorised dealers. They are usually around a few months old with very low mileage. 

If you really insist on getting it new, consider a parallel importer. Some of the more reputable importers provide decent warranty terms and services. You could easily save a couple of thousand of dollars and in some cases, get a better specs car.

Savings: A few thousand to tens of thousands

5) Buy the display unit

A similar strategy can be adapted for electronic devices. Sometimes, you can find display units on sale at the bigger electronic shops. 

Savings: A few bucks to hundreds

6) Feast on weekdays

Want to eat at a fancy restaurant but on a budget? Head there during weekdays and you could find deals such as set meals or discounted rates. Save the weekend to do other things such as a hike which is free!

Savings: A few bucks and an expanding waistline

7) Go for SIM card only plans instead of a bundle with a phone

If you are one of those that keep upgrading your phone with a SIM bundled plan, you might be surprised to learn that you end up paying more. You may be paying lesser upfront, but you pay more monthly. The final price is often much higher than getting a SIM card only plan and buying the phone separately.

Savings: A few bucks to hundreds

8) Shop online during sales

Those 11.11, 12.12, Black Friday, Boxing Day sales online are damn worth it. I had used these opportunities to stock up on apparel and other items. In most instances, I can save as much as 50% 

Savings: A few bucks to hundreds

9) Ask for discount

In Singapore, it is not always easy to bargain, but there might be chances for you to ask for a discount especially if you are buying things that are not easily quantified. No harm in asking for a discount if this is the case.

Savings: You never know until you try

10) Learn to change a lightbulb

There was a stage where I would ask an electrician to change a lightbulb and it will cost at least $50 just for transport. Nowadays, I change my own lightbulbs instead. Other than light blub, invest in a little time to DIY around the house. Not everything requires a handyman to get the job done.

Savings: It adds up!

Bonus: Health is wealth!

This is a cliche but it's the truth. In Singapore, other than housing, the next most expensive item on the list is hospital bills. I had seen in the past how a hospital stay can wipe out one's savings. Keep yourself healthy to prevent this scenario. More importantly, get insurance coverage for health too.

As you can see, most of the tips here do not require you to pay a 3rd party for advice. Sometimes the best advice is FREE. In most cases, it is not money earned but the money saved that will make a difference. 

Like they say, a penny saved is a penny earned!