Take Risk & Manage Risk

 Are you courageous enough to face challenges? Daring to take risk? Dare to fail?

I just read of a 26-year old man who lost about $400,000 in the stock market. He had saved up to US$300,000 with his frugal living. He started well, with US$5,000 on a US stock called AMC and made it to $15,000. Then he bet on silver and increased his capital to $50,000 within a short time. Next, he wanted to move to a safer stock and chance upon Ali Baba, a very well-known and profitable Chinese e-commerce stock listed on the New York Stock Exchange (NYSE). Ali Baba stock price was falling due to the Chinese government clamping down on all tech-stock and the price looked attractive. That’s when he put his money (US$300,000) into Ali Baba. As the price kept dropping, he put in another US$100,000. (All he had up to that time). Painful as it was to see the price kept dropping and taking a mental toil on him, he finally exited the stock after 9 month in October 2021 with about US$20,000 left. You can read it HERE.

https://www.vice.com/en/article/bvnn3a/i-lost-dollar400000-almost-everything-i-had-on-a-single-robinhood-bet

AliBaba price chart (keep falling)

I respect this young man. Time is on his side to recover from any failure. That is the beauty of youth. He work hard, frugal and save every dollar that he earns. He is hard-working, read a lot about investing and learn how to trade and make progress initially. He dare to take risk. That is what I also like about him. People who dare to take risk and challenges are usually courageous. They dare to fail, learn from it and come out stronger. To be fair to him, he traded on a very good stock – Ali Baba. So, what is the mistake that he made in his investment? Let us learn from King Solomon, the wise man from of old (Ecclesiastes 11:1-6 NLT):

#1. Don’t be afraid of risk (Ecc 11:5-6)

Life is full of uncertainty. Be humble enough to admit that we do not understand every activity of God, who does all things (Ecc 11:5). Because of our limited capabilities, we need to work hard – “plant in the morning, busy all afternoon” (Eccl 11:6) – that is: do everything you can to improve and grow. Our hardworking will pay off with profit even with risk and uncertainty. That is what King Solomon told us.

Then he explained how to mitigate this risk in Ecclesiastes 11:1-4.

 

#2. Diversify your portfolio (Ecc 11:1-2)

Divide your investments among many places, even across the seas (into other countries). In the stock market where there is a high risk, don’t put your money only in 1 place or only 1 or 2 stocks. If that stock get hit and price falls (like Ali Baba), all your money will wipe off. That is what happen to this young man who lost almost all his $400,000. Practically, I think it is good to spread your money across different kind of stocks – equities, Exchange Traded Fund (ETF), Real Estate Investment Trust (REIT), and Bonds; all of which have different level of risks. But do not spread it too much until you lose focus. Keep it to 10 -15 stocks, with each stocks not more than 10% of your capital. I personally invest only in Singapore (home ground is always familiar and safer) and good stocks with strong fundamental and profitable business. Time is not on my side and so, there is no point to venture across the seas now. If you are younger, yes, try “across the seas”.

#3. Prepare for rainy days (Ecc 11:3)

Warren Buffet, the richest investor of our time said: “"Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble."

Here, we know that rainy day, or bad times will always come like a dark cloud or a rotten tree that is going to fall. We may not know when it will happen, but it WILL SURELY happen to a stock market crash whereby every stock prices fall by more than 20% - 50%. And when that happen, it is the opportunity to buy good stocks at a very cheap price. It is important to have sufficient cash on hand to serve as a bucket for you the catch the falling price and buy at undervalue price. The mistake this young man made is that he did not keep his US$100,000 as his bucket and not buy in Ali Baba when it is the only stock that is dropping while the stock market is still not crashing. I personally hold about 40% of my money in cash and wait for the rainy day. This cash can form 2 buckets to collect the rain twice.

 

#4. Don’t wait for perfect timing (Ecc 11:4)

On the other hand, rainy day don’t come often. It happens only once in a decade or so. So, he who wait for the perfect timing will never start planting or investing. Always start small and learn as we grow. This is what the young man who lost his US$400,000 do it right. He started small and learn along the way.

 

 Life is about managing risk and continue to plant and grow. What kind of risk are you most afraid of? Be strong to face it.  But don’t take too much risk until you can’t sleep. If that happens, cut it off, take the loss and let go. Stock market investing is no different.

Agape

Building Passive Incomes for financial freedom

 

Actually, I didn’t really think about making money during my years of employment. I just give whatever spare money I have to those in need – Charitable organizations (NKF; Salvation Army; St. Luke’s Hospital) and Christian Ministries (GMB, Gospel Mission to the Blind; Singapore Bible College; ODB and churches).

Now that I have stopped working, I realize … (and a bit late)

Nothing is free in this world. To live in this world, we need money. Although money will never drop from the sky, ideally we can still receive money by doing nothing after the initial work or effort. It is like planting a fruit tree. After the initial work of planting and nurturing, when the tree matures, it will bear fruits in its season – some yearly, some regularly depending of the type of fruit trees you plant.

Passive income is like planting “money-trees”. Once the money-trees mature, they start giving you money seasonally – yearly, semi-annually, or even quarterly depending on the type of money-trees you plant.

Passive income, which is opposite of active income, is money generated without you doing anything ACTIVELY.  [Active income is your employment. You are paid for your time, energy and skill by your employer]. Just like planting a fruit tree, which requires seeds, soil and nutrient, passive income or planting money-trees need seed-money; time and planning. And so, let me share some of my Passive Incomes:

 

Type of Passive Incomes

1        CPF Interest (Central Providence Fund)

CPF is only applicable to Singapore Citizens / PR.  For those who are 55 years old and above, after setting aside the amount for Full Retirement Account, the amount of money in the Ordinary Account (giving an interest of 2.5% p.a.) and Special Account (giving an interest of 4% p.a.) can be withdrawn. So, if I have $1million in the OA + SA, I will have at least $25,000 of yearly interest! This interest can be withdrawn if needed and become my passive income. We can also do a top-up to our CPF account up to $37,740 per year. With compounding interest at work, the money can grow faster.

 

If you are a young working adult, planning to buy a house, you will likely use your CPF OA to fund your housing loan. I have also used my CPF OA to buy a HDB flat and use it for 15 years. It is best to avoid buying private property as the first house if we do not have the means and use up all the CPF money, leaving nothing for retirement. By keeping the HDB flat loan from CPF to 15 years (which ended in 2007) and not longer, I have now more than $1million in the CPF OA + SA even without voluntary top-up. My plan is to grow this CPF OA +SA to $1.5 million, so I started doing yearly CPF top-up in 2020. (Should have started earlier if I have known about this). As I am no longer in employment, where will I have the money to do voluntary top-up to my CPF?

 

If you want to achieve $1million by age 55 years old, you can also transfer your CPF OA to CPF SA to earn higher interest and also do voluntary yearly top-up. You need to do your own calculation. Once you achieve this, you will have a money-tree or passive income of $2k per month. If you start earlier, you will reach it earlier.

 

2. Insurance Policies

When I first started work, I bought a lot of Insurance Policies because my brother and sister-in-law are insurance agents and they approached me. I actually bought these policies out of obligations. So now, after more than 20 years, these insurance policies are maturing and I can cash them out. I am now using these cash to top up my CPF account and also for my expenses! As the years go by, I will continue to redeem these policies. As a young working adult, buying insurance is a long term saving. It becomes your passive income only after >20 years. But, you do not need to over commit and buy too many insurance policies, unlike me.

 

Or you can buy an Endowment Policy with a fix number of years (3, 5 or 10 years). Once the policy mature, you will get a monthly payout. I have also one such policy that will mature in 2 years’ time.

 

3. Singapore Saving Bond

SSB is another passive income that I invested in 2020. With $30,000 and giving about 1.5% p.a., I received about $250 semi-annually. The interest changed yearly and now has decreased drastically. This is a risk free investment and will last for 10 years.

 

4. Corporate Bond

In March 2021, I manage to purchase ASTREA VI bond for $15,000 for 3% dividend semi-annually. It was over-subscribed and I was offered only 15,000 instead of my subscription of 30,000. I received the coupon of $226.85 in 20 September and will be also in March. This Bond will last for 10 years.

 

5. Fixed Deposit

Bank Fixed Deposit is another passive income but give very low interest. I do have some Fixed Deposit but was lazy to terminate it. I will do so early next year when it mature. Initially, when I started this FD, the interest was 1.5% p.a. for 9 months, then the interest dwindled to peanut and I forgot about this FD.

 

6. DBS Multiplier Account

This Multiplier Account give you higher interest if you are a working adult and credit your monthly salary in DBS account. The higher your salary, the higher the interest. Also, with more transactions done monthly like DBS credit card, Paylah transaction, DBS housing loan and DBS Vickers Security stocks dividend, you can get higher interest. For me, when I was working, I would get about $150 of interest per month. Now, I can only get about $99 per month as I don’t have any salary credit into my DBS saving account.

 

Semi-Passive Income

Semi-passive income has higher risk, but give higher interest or money to you. You also have to do some monitoring of the progress to make sure that the risk does not kick in and eat up your investment. So I will classify them as Semi-passive because of some monitoring needed.

 

1.      Stocks Dividend

Your need to have some stock investment knowledge and skill before you start. I started to do some stock investment in 2015 after reading a book by Adam Khoo – Winning the Game of stocks.

 

There are 3 type of stocks that I invested:

·         Equities - Stocks of individual companies.

·         Exchanged Traded Fund (ETF) – this is an index fund that makes up of a group of stocks of companies

·         Real Estate Investment Trust (REIT) – These are properties that collect rental and dividend to investors who buy their shares. There are various types of REITs – healthcare; logistic; industrial; commercial; hospitality; and others.

 

To reduce risk and get higher dividend, invest only the best companies that keep making more and more profits and so give increasing dividends. Also, by investing in ETF, any companies that does not perform well will be removed from the ETF and replace with another better performing companies. This will mitigate any risk but the yield is usually low (3 to 4%). REITs usually can give >4 % and only invest in the best REITs.

 

If you are new, start with:

è REIT ETF like NikkoAm-straits Asia Ex-Japan REIT ETF. The REIT ETF give >4% and pay quarterly dividend, It holds a basket of REIT all over Asia.

è Equities – DBS (Development Bank of Singapore), this is the number one company in Singapore and the must have stock. It pays >4% dividend and pay 4 times a year.

è ETF – either Straits Times Index ETF or Nikko AM Singapore STI ETF. These stocks give 3 to 4% dividend semi-annually.

These are very low risk stocks and yet giving very good interest you can imagine them as fixed deposit. However, I consider them as semi-passive income because it will better to do regular monitoring of the stock prices so as to buy them at the lowest possible prices to increase the dividend yield.

 

Other semi-passive income which I do not engage in are:

-          Room rental

-          Limited partnership in a business

-          Write blog, book, songs to earn royalty

-          Write articles for magazines like Reader Digest, Kris (SIA) magazine.

 

And so, start by saving up a regular portion of your salary and use them to diversify your investment. Start planting your money trees and let time mature them. You can starting learning all about passive income or stock investment before you start.

 

Blessings

________________________________________________________________________________

Disclaimer:

The information provided is for educational and general information purposes only and is not intended to be personalized investment or financial advice. I make no promises as to the accuracy or usefulness of the information present.

Money, in the name of religion

Many years ago, my big boss sneered when the topic on religion was being discussed : “All religions are just out to get people's money!” Unfortunately, he is always right

In Singapore, we have seen Catholic priest, Buddhist monk, Muslim cleric, and now church all involving in money tussles with the Law.

Yesterday, another church in Singapore is being probed by the Commercial Affair Department (CAD) about the church money matters.

http://sg.yfittopostblog.com/2010/05/31/city-harvest-church-members-under-investigation/

More significantly is the testimony of one comment:

Atheist on May 31, 2010 at 7:20 pm
I am glad this is happening. Its high time, the authorities checked all these churches, temples and mosques, so many ppl give with the intention that the $$ goes for good causes like to the poor, less fortunate and etc. In particulr, so many of these churches practice the old testament of giving 10% of ur salary to the church and on top of that weekly donations.
Many years back, i joined City Harvest and after gg thru 3 month orientation with them, I was a “member” of the church. Then they started asking for 10% of our pay and the church actually have ” cell group leaders” or “debt collectors” to harrasses us for that $$. I wasnt too happy but I gave them my 10% which was a 3 figure sum. Things went out of hand when they requested for my payslip to check if I was really giving 10% of my pay in which I immediately stopped gg to the church as I felt something was not right.
And of significance, it is notably that since the birth of this church, the pastor has apparently upgraded his cars, to condominiums and etc.
This checking of financial records should be an annual thing. Just the other day, I saw a monk driving a BMW 7 series at my block to attend a funeral to chant prayers. When he stepped out, you shld have seen the faces of the family and relatives at the wake. I too was surprised.


Well, my fellow BSG leaders, hope we can all reflect and learn from this comment (whether his comment is true or not).

God's Money or Mine?

The most often used item in our daily life is MONEY!

Last Sunday, we had a Church class conducted by the Pastor after worship service, talking about money. The big question of the class is: “God’s money or mine?”

As we broke into groups, I thought everyone wanted to play it safe and since the class was conducted by the pastor, we all unanimously agreed that it’s God’s money and we are his stewards to what He has given us.

Sure enough, the Pastor gave the following verses to support his view that the money we have is God’s money:

Psa 24:1
The earth is the LORD's, and everything in it,
the world, and all who live in it;

1Chron 29:11,12
Yours, O LORD, is the greatness and the power
and the glory and the majesty and the splendor,
for everything in heaven and earth is yours.
Yours, O LORD, is the kingdom;
you are exalted as head over all.
12 Wealth and honor come from you;
you are the ruler of all things.
In your hands are strength and power
to exalt and give strength to all.

One brother also quoted Deut 8:17,18
You may say to yourself, "My power and the strength of my hands have produced this wealth for me." 18 But remember the LORD your God, for it is he who gives you the ability to produce wealth, and so confirms his covenant, which he swore to your forefathers, as it is today.

Interestingly though, near the end, one sister, Mrs. Catherine Goh, spoke up: “After I give 10% to God, the money is mine. And I can use the money for shopping!”

Is she wrong?

Did the Bible specifically says that money belong to God even though you have it in your hand?

If you look at the verses – Psa 24:1&2 and 1 Chron 29:11&12 - the psalmist (who is David) is thinking in general terms that everything ultimately comes from God. I don’t think that when they said this, they are thinking about money belongs to God, but that you and I belong to God so He gave us strength to get it.

But there is a clearer verse that talk about God's money:

"The silver is mine, and the gold is mine," says the LORD of hosts (Haggai 2:8)

Jesus Christ has more to say about money (from the earthly perspective):

There’s a story about the Pharisees coming to ask Jesus a question:

Tell us then, what is your opinion? Is it right to pay taxes to Caesar or not?"
But Jesus, knowing their evil intent, said, "You hypocrites, why are you trying to trap me? Show me the coin used for paying the tax." They brought him a denarius, and he asked them, "Whose portrait is this? And whose inscription?"
"Caesar's," they replied.
Then he said to them, "Give to Caesar what is Caesar's, and to God what is God's."
(Mat 22:17-21)

What do you think Jesus is saying?

Is money belongs to God?
Is money belongs to you and I?
Money belongs to Caesar!! --- the government of the country.

I take out my $50 dollar bill and I see the face of my former president. On it is the signature of the chairman of the monetary authority of Singapore. The dollar bills also stated: “This note is legal tender FIFTY DOLLARS”

So, the money I have belongs to the country of Singapore but given to me for transaction of anything that is legally worth fifty dollars.

Such is the power of money, the more I have, the more I can do anything of that’s worth.

And money has power that can be a god. Jesus Christ goes on to say:

"No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money. (Mat 6:24)

Here we see that Money is a rival to God for our servanthood. Either you serve God or serve Money. No other option is given to us. Matthew 6:24 makes it very clear that Money does not belong to God. In fact, it is evil (as stated in Richard Foster's book on Money, Sex and Power)and challenges God for our services.

“Fools serve money and leave it all behind. Shrewd believers serve God and invest in eternity.”

Want to know how to invest in eternity?

What is your view about money?

PTL

Envious over how others spend their Money ?

Imagine getting a lot of criticism about how you spend your own money for a holiday?

Recently a civil servant got a lot of bombardment after writing about his family holiday in Paris. The holiday was estimated to be about $45,000 which was spent mostly on attending a cuisine cooking course.

Read this:

'A senior Singaporean civil servant has been reprimanded for publicising his family’s vacation at a top French cooking school when his country is suffering from a recession, a minister said Monday.
"It struck a discordant note during the current difficult economic circumstances when it is especially important to show solidarity and empathy for Singaporeans who are facing uncertainties and hardship," Defence Minister Teo Chee Hean said in parliament.'

Do you have a right to spend your own money and tell the world about it? Also, do you have a right to judge others on how they spend their money?

I did read this civil servant's article in the Life page of the Straits Times. Yet it did not occur to me at that time to criticize him of the huge money spent on such a cooking course. It was only after reading all the criticism in the blog that made me realized that what we do and say about money does make people envious or jealous.

Pastor David has always asked me to preach on his behalf when it comes to passages that talk about money, like 2 Cor. 9; 1 Tim 6. I have now come to realize that I should stop preaching about money. It is a sensitive issue and really nobody likes to hear such a message. Full Stop.

Be an Agent of God’s Blessing

Some of us are familiar with what Hudson Taylor used to say: “God’s work done in God’s ways never lack God’s Supply”

Ever wonder how God really provide for those in need?

I learnt this from my previous church. We worshipped in a very old wooden hut rented from an old couple along Balestier Road. We were poor and few in number, about 20 odd of us. Before I came to this church in 1976, there were some problems and many left. According to the pastor, someone came and “steal the sheep”.

In 1982, I was in my first year in the university (as a sophomore, Polytechnic students were exempted from first year engineering) and by God’s grace had received a scholarship. I knew in my heart (a very strong feeling) that God sent the money ahead for HIS future use. How did I know? When I received the scholarship, I needed to sign a bond. The two guarantors a\were my eldest brother, who is the church treasurer and Brother Tan, a businessman and a very godly brother whom everyone respected. He has since gone to be a pastor of another church. When you are dealing with money and with godly people (who gave everything they had to God) around you, you instantly know that the money belong to God. That was how the feeling came to me but I wasn’t quite sure what God was doing then.

In 1983, the church roof leaked quite seriously after many days of continuous raining. The church was in need of money for the roof repair. I then contributed whatever was leftover from the scholarship. No one knew where the money came except Brother Tan and my brother.

The following year, my pastor was on a mission trip to Canada and required a substantial sum of money (slightly more than $2700). The pastor pleaded relentlessly through his sermon. He asked for a collection. Very few responded. I knew that God again wanted to take back what HE had entrusted to me. One non-Christian visitor announced publicly that he would give an interest free loan to the pastor. The whole congregation felt very embarrassed. After the worship service, I told my brother to use the scholarship and whatever saving I had in his bank for pastor’s mission trip. After this second incident, I knew quite clearly that I was to be God’s agent of blessing to this poor church.

In 1985, one church brother enrolled in the Philippines theological seminary. This was my last year in the university and after offering my financial support for his dedication to serve God, I actually graduated from university studies with nothing in my bank account but learning everything about God’s riches.

Shortly, thereafter, I went to USA for job training and on returning from the States left the church in 1986 due to personal reasons.

People use to think that becoming a Christian is just to gain a passport to heaven. For me, becoming a Christian is to be God’s Agent of blessing.

And my God will meet all your needs according to his glorious riches in Christ Jesus (Phil 4:19 NIV)

Mark Lim

How to get Money for church work?

Most people go to church to worship God and make friends.

Whether the church building is beautiful or full of facilities like cafeteria, internet or game rooms actually does not matter much to most of us. We go there only once or at most twice a week and only for a few hours.

Perhaps if you work in the church, 8 hours a day for 5 days a week, then that is a different thing altogether. Bigger offices, better copier, broadband internet are all useful for those working there. But then, where do you get the money to beautify or build facilities in a non-profit organization like the church?

That is one of the topic is our every BPCES committee meeting. We had a meeting last Sunday and well, it is still about money. Money is needed for upgrading and renovation for year 2009. I believe it is even more discussed in the Elders and Deacons court. Money, Money, money and where to get money? In such a meeting, we need lawyer, accountant, financial controller and businessman. What has a blur engineer like me who play with machine and silicon (soil and mud) got to do with such a discussion? Just like someone in the congregation once told me direct in my face, “there are better people in the BPCES who can do a better job than those in the committee now” (A hint for me to step down actually, as committee discussions are always on money)

Hence, we need deacon who likes to talk about money. If not, the deacon attending such meetings will be stressed up. Deacon Casey, after attending many of such meetings has already told me that he is being stressed by all these sub-committee and has relinquished his BSG leadership. As for me, with hindsight and wisdom, I rejected the job of deacon in Bethany.

How then should a church deal with money?

Biblically speaking, tithing is not a command in the New Testament. Let’s turn to 2Cor 9:7

Each man should give what he has decided in his heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.

Giving should always be done without compulsion. There is no such thing as each members should contribute $XXX a month. Each of us has to decided in his heart how much to give.
So if, we can’t get enough money, the simplest way is - don’t renovate or upgrade. It is just a building that we come once or twice a week. Of course, not many would think like me. I don’t think you do. This is where godly wisdom and faith is needed. The church leadership has to make a decision (going to the bank, going to the congregation, or going to God) to get money.

Going to the bank to get money need no faith and everybody can do that without much wisdom needed. The end result would always be more painful as we need to pay interest and still repay the money borrowed. How our church leaders make that decision is clearly seen in the past and the repercussion continue till this day.

Going to the congregation to get money, the leaders need faith in the people. People who support your vision for the church will be moved by that vision and are more willing to give.

Going to God for money, the leaders need faith in God. Do you believe God can provide money for the church needs? Yes, I have seen how God works. I will share with you in my next blog.

If we truly believe that God want us to upgrade HIS church facilities, church renovation, have more rooms for church workers, then ask God for the money! Let’s not harp at why some people are not giving enough. That is lacking in faith. And people don’t respect pastors and church leaders who lack in faith. Not sure about you. I don’t respect pastor who has no faith that God will provide for his work.

Learn from Hudson Taylor and George Mueller

Mark Lim

Spending money in the Church

One of the role of the deacon in the BPC is to attend the Elders & Deacons Court. At this meeting, members discuss over many issues concerning the church affairs and in particular how money is being used. If you look at the statment of income and expenditure for year ending 2007, it would be shocking to find that the Chinese/Hokkien Service had a deficit of $11,539.83. This is about 2-3% of their collection. To some, this may not be a big amount. But for a church that is dependent on worshippers' contribution, this is down right poor mismanagement of the good-will offering that people give to the church. Yet for this year 2008, we hear of renovation, buying of new electronics gadgets, and many things to make the church more conducive for worshippers. With this thoughtless spending, it will be another year of deficit.

There are at least 3 ordain ministers & preacher in this Elders & Deacons Court. I wonder whether they are mindful of how money given to the church is to be used? Most likely, they feel that money used for beautifying the church is well spent. Granted, but why do it till the account ends in deficit, going into the red?

Quite scary, isn't it? I wouldn't want to join them in this Elders and Deacons court and be held accountable for it one day, on earth or in heaven. We have just completed the study of 1 Timothy. I wonder how many is heeding the warning:
"... and do not participate in the sins of others; keep yourself pure." (1Tim 5:22)

When money is concern, every members want a say...

Mark Lim