Hey everyone,
This week’s newsletter is all about being practical. The kind of insurance most people don't think to question, what I'd actually do with an $80K salary in Singapore today, why I'm still with the same broker eight years on, and a 46-year-old finance manager's portfolio that's two-thirds parked in T-bills.
Let's get into it.
🎯 Personal Finance Quick Action
Here's something worth doing this week: pull up your life insurance policy and check what type it actually is.
If you don't know offhand, that's the first sign it's worth five minutes. Singapore has two types. Term life covers you for a set period, five years, 15, 25, whatever you choose, and costs significantly less in premiums.
You can also cancel it at any point without penalty, which matters because your coverage needs at 25 look nothing like your coverage needs at 45 or 55. Flexibility is priceless.
Whole life covers you forever. It comes in two forms: participating policies, which bundle in “bonuses” and an investment component, and non-participating, which don't.
Premiums are meaningfully higher than term life for the same coverage (for both participating and non-participating), and inflexible. Cancel early and you'll typically eat a real (i.e. meaningful) penalty.
If you're holding whole life and you're not sure why, ask yourself one question: did you choose this policy, or did an agent recommend it during a meeting that started about something else?
Now, that's not a dig at agents but it’s just the incentive system that is present here in Singapore. We need to recognise that.
And it’s worth knowing whether the policy fits your actual needs or someone else's incentives.
If you've got term life with solid coverage and you understand why you chose it, you're done. There’s really no action needed.
If you're not sure what you're holding, that's this week's task: find out, and decide if it still makes sense for where you are now.
My take: term life is nearly always the better option for most people, in Singapore or anywhere else in the world.
It's cheaper, it's more flexible, and you can buy a policy with solid coverage limits directly online without ever talking to an agent. Your life circumstances inevitably change over time and your insurance coverage should adapt to that.
📷 YouTube Deep Dive
Most personal finance advice treats every income level the same. I wanted to go properly deep on one specific number this time: $80,000 a year in Singapore.
Here's the part that surprises most people. If you're earning $80K, you think you're taking home $6,660 a month. You're not.
Your actual take-home is closer to $5,333. The other $1,330 goes straight into your CPF before you ever see it.
That single number changes everything about how you should be structuring your money. In this video, I walk through the 5-bucket framework for what to do with that $5,333, and why your CPF Special Account is already doing the job of your bond allocation.
Plus, I take a look at the honest maths on voluntary CPF SA top-ups (the tax saving is smaller than most people think at this income level), and the one habit that's worth roughly $600,000 over a career.
💡 Tim’s Pick of the Week
I get asked which broker I use more than almost anything else. It's Interactive Brokers. Also known as “IBKR” for short.
I've been with them since 2018. The reason is pretty simple. Most brokers here make you choose between proper UCITS ETF access and low fees.
IBKR's one of the few that gives you both.
The recurring investment feature is the part I actually rate most. It’s just the platform isn’t the easiest to navigate.
You can set up automatic purchases into US and European-listed ETFs at the same basic commission rate every time, with no extra layers stacked on top.
Added to that is the fact that it’s one of the cheapest places to exchange currencies (useful for SGD to USD conversions for our UCITS ETF investing).
My take: if you're still deciding where to actually buy your global ETFs, this is where I'd start. It's the platform I’ve built my own portfolio on.
📩 From the Inbox
I'm rating a 46-year-old finance manager's portfolio this week.
Quick breakdown: Singapore T-bills at 65%. VWRA at 18%. UOB at 7%. OCBC at 3.8%. SPDR Gold at 0.8%. DBS at 2%. Nvidia at 2%. Broadcom at 0.3%. Lion-Global Fund at 1.5%. IBKR stock at basically zero.
Time horizon: 10 to 20 years.
Four changes I'd make:
Cut the T-bill allocation. Two-thirds in T-bills is too much. If you've got CPF, that's already your bond allocation, and T-bills don't beat 2.5% on your OA or 4% on your SA. Keep enough liquid for an emergency fund (in SSBs or money market funds), then put the rest of that allocation to work.
Grow the equities core. The VWRA position is a good start but with a 19-year runway, there's room to take on more risk and grow it.
Build out the gold tilt. Under 1% is negligible. If you want a real allocation, 5–10% is more meaningful. Lion-Global's Physical Gold ETF is a basis point cheaper than the SPDR equivalent on SGX, or IGLN on the LSE (which trades in USD) costs 0.12% p.a. if you want gold exposure that’s even cheaper.
Collapse the single stocks into VWRA. Nvidia, Broadcom, and IBKR stock already overlap with what you hold. Nvidia and Broadcom alone make up over 6% of VWRA, so you're doubling up on tech exposure you already have. On the banks, holding all three is fine, but I'd balance it out (if you’re insistent on owning all three). UOB's been the long-term laggard of the trio, so I'd trim there and top up DBS.
4/10 from me, but with these fixes it easily gets to a 7 or 8/10.
They've got the right instinct with an equities core, it's just too small, and the T-bill allocation needs to come down. The good news: 19 years is a long runway to fix it.
If there's a topic you'd like me to break down in a future edition, hit reply and let me know. The best ideas in this newsletter come from your replies.
Until next week,
— Tim
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