My Money Foundation
💵

My Money Foundation

Written by
Demi Zhuang
Date published
January 20, 2024

Hello 👋🏼 , just some opening thoughts before we dive into the details. I’m writing this as someone who wished I had something like this when I first embarked on this journey. Money — a means to an end, a tool. Think of personal finance as many layers of protection for what life throws at you as you journey through it. Life is uncertain but we as humans, crave for some certainty and having this ‘Solution Fund’ can provide you with that. Hear me out. This fund is more than your Emergency Fund, it’s inclusive. This is the first layer, the outermost shell in your overall personal finance set up. It protects you from / equips you to - 👨🏻‍💻 Loss of Job Income You’ve been laid off or you simply want a break for your mental health. 🏥 Unfortunate Events Life is uncertain and you just never know… Even if you have Health Insurance. 💭 Chase that Dream Having this amount somewhere that can be drawn upon if one day you had a ‘woke’ moment and you want to pursue that dream you’ve always had deep inside of you. 📈 Ride through Stock Market Volatility Despite knowing that the market in the short term can fall 50% and only in the long term provide us with gains and 'you just need to hold it out’, is easier said than done.

Savings without a spending goal gives you options and flexibility, the ability to wait and the opportunity to pounce. It gives you time to think. It lets you change course on your own terms. The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness Morgan Housel

What a ‘Solution Fund’ means to me right now?

🏥 Unfortunate Events
💭 Chase that Dream
📈 Ride through Stock Market Volatility

A fund that lets me go through my day to day activities without having to worry about making ends meet. It lets me go to sleep at night regardless of how my investment portfolio is doing.

It lets me make any impending purchases. For example (maybe not the best example lol…), if I need to fly back home urgently, like now or tomorrow, I can just buy that ticket despite the cost. You get what I mean.

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How much is considered enough?

The most basic is having what others term as an ‘Emergency Fund’ any amounts above and beyond that depends on you and what stage of life are you at right now.

➡️ If you’re comfortable at your day job, it’s stable, you don’t have any upcoming obligations then you probably might not need as much in this fund. Go ahead and invest more.

➡️ If you’re at a point where you’re unhappy at your job but it’s still bearable. It’s time to build this fund up just for some form of security and options.

➡️ If you are planning to / are already invested in risky asset s, it’s time to build this fund so you can ride through volatility and stay invested.

Ignore what others consider as ‘enough’ for a fund like this. Personal finance is as the name says its PERSONAL. If it gives you a peace of mind to keep $50,000 in Cash then so be it BUT you can be SMART about how you’re allocating this amount (more on this in a bit).

The funds should be LIQUID / SEMI-LIQUID (i.e. quick access to it when required) and relatively low risk…

The common rule of thumb for an Emergency Fund

3-6 Months of Income

e.g: Income $2,700 * 6 = $16,200

3-6 Months of Expenses

e.g: Expenses are at $1,500 a month (Fixed & Variable) = $1,500 * 6 = $9,000

🚨
I’ll be sharing my own fund details below but keep in mind, this is not financial advice… I’m comfortable with having this amount based on my current circumstances, risk appetite and no one can tell me otherwise.

How I Manage the $?

SHORT TERM:

Bank Savings Account

  • Emergency use
  • I can access it immediately

MEDIUM TERM:

Guaranteed Returns, No Fluctuations

  • I lock in rates that might change down the road
  • Relatively quick access to funds

LONG TERM:

Low Risk, Decent Returns

  • Can be invested in Bonds, Money Market Funds
  • Very little risk and volatility

💭 The thought process behind my current strategy → With the 5 figure amount that I have kept for any rainy days ahead, it is highly unlikely that I will need them all at one go.

Unless I had to suddenly fork out for a medical emergency. Even though the 2nd layer to this, we have insurance for that 😆. I hope you have gotten your insurance sorted, if not, WHAT ARE YOU WATING FOR?! 😒

Even in a scenario that I had just gotten laid off and I had to find a job. I wouldn’t need $15,000 upfront… Which comes to my point that some of it could go into a semi-liquid, low risk instruments.

BUT

If you’re someone who can mange your money well i.e. you won’t squander it all if you kept it all in one place, and have not maxed out the Bank Savings Accounts then keep it in the Bank.

Another reason why I’d do #2 is also to lock in the rates for the long term, read below.

Bank Savings Account

Credit your Salary + Save $500 monthly

OCBC 360 @ 3.25% on your first $75K

🔗  OCBC360 Savings Account

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Credit Salary + Spend $500 / Spend + Save $500

#1: UOB One

Condition - credit your salary via GIRO, min $1,600 + spend min $500 on eligible UOB Card

FYI - PayNow and indicating as ‘Salary Payment’ from DBS will also qualify as Crediting of Salary

🔗  UOB One Savings Account Details

Annual Interest
3.85% on your first $30,000 EIR of 5% on $100,000 (super high for now~)

#2: OCBC Bank

Condition - Credit your salary + Increase your average daily balance by at least S$500 monthly + spend

🔗  OCBC360 Savings Account

Saving + Credit Salary
3.25% on first $75,000 EIR of 4.05% on $100,000
if you can spend with OCBC
3.85% on first $75,000 EIR of 4.65% on $100,000

Singapore Savings Bond / T-Bills

🔗  Extract from the SSB Website

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There really isn’t much to say about this… It is safe and fully backed by the Singapore Government so why not?

What about liquidity? It is SEMI-LIQUID, withdrawal can be done in any given month with no penalties. Just pay the $2 service fee. There is a little waiting time depending on which day of the month do you choose to ‘withdraw’.

January 2024

Interest - average 2.81%

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Rates for SSB’s were really good in 2022 and 2023 when Interest rates were climbing. Now that interest rates are easing, likewise SSB rates have fallen.

It would have made sense to place into SSB’s to lock in the high rate back then, now I’d say, if you don’t have at least 1 SSB in your assets, get 1 before the rates fall even more.

I’m not asking you to put 100% of your emergency funds into the Singapore savings bond. (💭 Why not all?) The same concept as the saying goes ‘Don’t put all your eggs in one basket’. Think about what if you need the money NOW, instantly. The Singapore Savings Bond redemption isn’t going to give you back your money today. A regular bank savings account is still necessary for instantaneous use.

Here’s my example so you can see how much potential earnings you could receive when you decide to start on this:

My November 2022 Investment into the SSB (i still hold this):

November SSB @3.21% Capital $4,000
Yearly Interest
Interest paid out every 6 months
Year 1 @ 3.08%
$123.20
$61.60
Year 2 @ 3.15%
$126
$63.00
Year 3 @ 3.18%
$127.20
$63.60
Year 4 @ 3.19%
$127.60
$63.80
Year 5 @ 3.21%
$128.40
$64.20
Year 6 @ 3.23%
$129.20
$64.60
Year 7 @ 3.25%
$130
$65.00
Year 8 @ 3.26%
$130.40
$65.20
Year 9 @ 3.28%
$131.20
$65.60
Year 10 @ 3.30%
$132
$66.00
Total in 10 years
$1285.20
Interest I get if I kept it in the bank @ 2%
$886
I lose out on
$399.20

You might think 10 years is really long but it really isn’t. Getting into SSB locks in the interest rate for 10 years. Think long term because bank’s interest rates can and will fall back to the usual 1-2% before Covid.

Get started here:

🔗  Relevant link to help you get started with investing into the Singapore Savings Bond

Singapore T-Bills

As I’m writing this, the latest 6 months T-Bill rates was just announced - 3.74% which is great but make sure you understand that it’s LOCKED! You will not be able to get access to the funds locked in a T-Bill.

🔗 Find out more here

Placing 10-20% here make sense despite being locked in for 6 months, which still is a relatively short amount of time.

Money Market Funds

SGD Fullerton Cash Fund

(my choice of broker; Moomoo Singapore)

If you’ve followed along on the channel you’d know that in my own personal investments the platform of choice is Syfe Trade for S&P500, Moomoo Singapore for SG Stocks.

Hence, instead of adding another platform, Moomoo is the platform I can get access to the SGD Fullerton Cash Fund a money market fund.

☘️
What is a Money Market Fund?

A mutual fund that invests in cash, cash equivalents, good quality short-term debt instruments (i.e. bonds).

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Who is this for?

  • You have a lot of spare cash lying around not earning you good interest rates
  • You want to let it grow but don’t want to invest into stocks (you’re already maxed out at banks)

How I personally use this fund now?

When I can’t hit bank’s requirements like spending $500 in a month because compared to other digital banks like GXS, Maribank offering 2.68% and 2.88% respectively, Money Market Fund is higher at 3.5-3.8%.

Moomoo’s Money Market Fund is offering 5.8% p.a. on the first 30 Days in this fund for New Users. I’ve used mine in November and collected $208.32 on a deposit of a little over $30,000.

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Get up to S$900 as a New User from now till ⏳ 01 April 2024, 9:59PM SGT.

Note: This includes a S$20 with my exclusive link 🙂

Sign up here

🎥 FAQ on the Fund I covered in a video - https://youtu.be/8fWRuVJC5b8 🎥 My Experience keeping funds in the SGD Fullerton Cash Fund on Moomoo & What the Fund is - https://youtu.be/7Z8lNHZf-Bk

Steps
Reward Value
Holding Period
Register and Open an Account →
My Link Exclusive
Deposit $100 1 Buy Trade
$20 (S$2 daily for 10 days)
-
🎁 Reward 1 Moomoo Cash Plus 🇸🇬 SGD Fullerton Cash Fund 🇺🇸 USD Money Market Fund
6.8% p.a. Guaranteed Returns max deposit of S$60K
$340
31 Days (not locked in)
🎁 Reward 2
Deposit S$3,000 3 Buy Trade
1x Stock Bundle S$70 (Apple, Nvidia, Tesla, NIO, Sea shares)
30 Days
🎁 Reward 3
Deposit $10,000 8 Buy Trade
3 x Stock Bundle S$210 (Apple, Nvidia, Tesla, NIO, Sea shares)
90 Days
🎁 Reward 4
Deposit $100,000
1 Apple Stock $260
90 Days
$900

My current set up as of January 2024

$40,000
UOB One
Singapore Savings Bond
Moomoo Money Market Fund (5.8%)
Percentage Allocated (approx)
I can’t hit for Jan, no spending on the card
45%
50%
Interest Rate
- My liquid cash is in UOB and HSBC to maintain the Min Monthly Balance so I don’t get slapped with the fall below fee 😅
Nov 2022 - 3.21% Dec 2022 - 3.47% Dec 2023 - 3.4%
5.8% p.a. for 30 days existing users promo just came back for 30/60 days promo until 01 Feb 2024
Paid out
Bi-annual
Daily
Returns
-
$583.60 / Year
5.8% p.a. * my capital

Even though I don’t get a salary from an employer now, UOB still allows salary crediting via Bank Transfer and indicating as ‘salary’ hence I’m able to enjoy an EIR of 5% on amounts up to $100,000 provided I spend $500 on a Credit Card of which I can’t for now so…

For when I can’t hit the monthly spending requirement I then shift the funds over to Maribank / GXS Bank offering 2.88 / 2.68% p.a. A fuss free savings account.

For now, I shifted to low cost brokers as they’re offering 5.8% p.a. interest for 30 days when you keep your funds in a money market fund the SGD Fullerton Cash Fund. Channeled some funds here to enjoy the returns before placing them back in a bank savings account.

This depends on your risk appetite because it is at the end of the day an ‘investment’. A money market fund aims to provide you returns similar to that of a bank however fluctuations should be expected and capital losses are not 100% impossible even though it’s highly unlikely.

if you want to find out more - here

I hope this has been helpful for you! If you have any questions, as always, email me or direct message me on Instagram @demiizhuangg.

Information accurate as of 20 January 2024.