BEARDYMAN : One Mouth, Two Hands.
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A simple lesson on economics, capitalism, taxes, the government, and you!
Apr 14, 11
Not sure who’s the real author of this, but it’s quite a layman way of explaining tax and it’s effects. Let’s put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for dinner. The bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this: The first four men (the poorest) would pay nothing. The fifth would pay $1. The sixth would pay $3. The seventh $7. The eighth $12. The ninth $18. The tenth man (the richest) would pay $59. So, that’s what they decided to do. The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily meal by $20.” So, now dinner for the ten only cost $80. The group still wanted to pay their bill the way we pay our taxes. So, the first four men were unaffected. They would still eat for free. But what about the other six, the paying customers? How could they divvy up the $20 windfall so that everyone would get his ‘fair share’? The six men realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being ‘PAID’ to eat their meal. So, the restaurant owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so: The fifth man, like the first four, now paid nothing (100% savings). The sixth now paid $2 instead of $3 (33% savings). The seventh now paid $5 instead of $7 (28% savings). The eighth now paid $9 instead of $12 (25% savings). The ninth now paid $14 instead...
read moreFiling your income tax in Singapore
Apr 11, 11
April is the month where we pay our dues. That’s right! It’s time to file our income tax! For Singapore this year, the deadline is 15th April 2011 for paper filing, and 18th April 2011 for e-filing. Besides people who are not very savvy with computers, everybody should be doing electronic filing via the IRAS website! As always, there is the tax calculator provided by IRAS. Main thing to note is the 20% one off personal tax rebate this year. Yay! There’s going to be a change of tax bracket for next year’s income tax. From the table of changes, it benefits all tax payers, but the biggest benefit goes to the middle income earner. (ie, the $40k to 160k per annum chargeable income range). Another new feature this year is the estimated tax payable after you finished your e-filing. Previously, when you filed your taxes, you won’t know how much you gotta pay, until you get the tax bill. Now, they have it displayed so that you won’t get a shock later. My company is in the auto-inclusion scheme. So basically all the details are already electronically submitted to IRAS. On top of that, I was actually in the no-filing service. This means, I don’t even have to e-file. However, I had to include some new reliefs. I believe we should not evade taxes. But on the other hand, we should always try to minimise our tax bill legitimately using legal methods provided for in the system. The most common ways is through incorporation of a business, and claiming of reliefs. Incorporation is probably only for the self-employed with high cash flow, else it wouldn’t make sense anyway. For individuals, we should always know what we can claim in reliefs. Aside from parents/child/sibling/NS relief, the most common 3 for the working employee is course fee relief, donations, and SRS contribution. I can’t remember for sure, but I think the government just increased course fee relief to $5500 per annum! That means if you attended a...
read moreRefresh Day Spa – A quick review
Mar 28, 11
Okay I admit. I got scammed by a spa package before. None other than the infamous True Spa. Fortunately, I only bought a $1500 package then, and already used a substantial amount of it. Phew. However, massages and foot reflexology are some of the few simple luxuries available for the stressed out Singaporean. And of course, being a stressed out Singaporean, I need to find alternatives ASAP! Fortunately, I hold a couple of credit cards. Credit cards typically have massage promotions available in the monthly brochures. But because I had a package previously, I did not really pay attention to the promotions available. Most of the time, the promotions are only for first time customer. However, there are quite a number of them which state that if you have not visited them in the last 6 months, you’re eligible for the promotion too. Times must be bad! The promotions are typically $20-40 for a 60 minute massage. Besides the hassle of the sales pitch that you have to sit through, why should a person sign up for a package that charges $50-80 for a massage if there are limitless first time trials that a person can go to? You have to note, this was before the days when the deal websites like groupon got popular. Prior to discovering Refresh Day Spa, I was actually going to the Refresh Bodyworks near my house for their foot reflexology. One of the things I liked about it is the consistency of service at a fairly decent price. Even for non-members, it’s ~$30 for 40 minutes of foot reflexology. If I’m not wrong, this is cheaper than some of the other foot reflexology places around Singapore. So then, I found out they are expanding into the day spa concept. And just so nicely too, since their day spa at Far East Plaza is very very near my workplace! I dropped them a visit, did a $28 for 60 minute massage trial, and then I decided to sign up a...
read moreOpen letter to Singapore Exchange regarding Continuous all-day trading
Nov 10, 10
With regards to Singapore Exchange’s public consultation on continuous all-day trading, I have a few personal reservations about it. Below is my open letter. I believe continuous all-day trading is not necessary in the Singapore market, or most other Asian stock markets in general as the benefits are not necessarily more than the disadvantages that come with it. Unlike in US, brokerage firms play a key role in the eco-system here. In US, unless you pay top money for a full service broker, you would probably end up using a discount broker, which do not have a trading representative tied to the account. The reason why this can happen is because risk management can be calculated and computerised. This is largely due to the difference in evolution of equities trading and trading account management. In Singapore, contra trading is common. Deposits by clients, if any, tend to be around 20% to 50% of the trading limit, as opposed to 100% in most US brokers. Thus, trading representatives play a very important role as risk managers as they are usually the ones who underwrite the credit risk of the clients. Business in general tends to be conducted very differently in Asia as compared to the Western countries. In Asia, people tend to cultivate a more informal relationship while pursuing a business relationship. It is because of that you hear the common phrase ‘guan xi’. This is no different in Singapore. While trading and execution is a significant part of the job, trading representatives spend a large amount of time meeting up with clients over meals and having casual chats. Besides meeting clients, trading representatives also have to juggle with attending analyst briefings, luncheon presentations, or simply just catching up with the latest news. For a trading representative who is committed to providing quality service, one would be reluctant to leave his trading desk during market hours. As such, most of such activities happen when the market is closed, such as before market, during lunch hour, or after market. For established brokers, some of them would hire trading assistants, so that they can devote more time...
read moreThe attack of the DBS atm queues
Aug 27, 10
Being Singaporeans, most people started out having a POSB bank account as their first ever bank account. From then, they move on to DBS, and then having DBS credit cards etc.. Not me. My first ever bank account was a UOB Funsavers account. This was one of those fun savings accounts for young kids that come with a bank book and all those stuff. Then, I graduated to the TX account, which is basically a low minimum balance account for teens, with a cool looking ATM card to flash around your friends. When we all got older, I moved up to the Campus account, which comes with a nice debit card that allows you to act cool in front of your peers by doing the ‘grown up swiping card for payment’. It also comes with nice cheque books that make you SO business-man like! One of the sights that always amazes me is the queue in front of a DBS/POSB atm. In a typical shopping center, whenever you see a hub of atms, there will usually be 2-3 DBS/POSB atms, 1 UOB atm, 1 OCBC atm, 1 Citibank atm (because citibank is almost like the 4th local bank of Singapore. *heh heh*), and occasionally a ANZ/Maybank/StanChart/etc atm. What I would typically do, is walk to the UOB atm, which has no queue at all, withdraw my money in 1 minute flat (with the quick customised menu thing), and do a quiet snigger at the bunch of DBS/POSB customers queuing 10-20 minutes to withdraw their money. Hur Hur! For some reason, there will usually be around 10-15 people queuing 2-3 dbs atms, but there will be at most 1 person, or usually nobody waiting for the uob/ocbc atms. Why, I would never understand. There hasn’t been any inherent benefit in having a dbs/posb savings account ever since they instated the $500 minimum deposit for a normal savings account, which brings in on par with the other local banks. So why not just open a UOB or OCBC...
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