Sunday, May 19, 2019

First World Problems

Image result for First World Problems

Sometimes I stir a lot of shit on weekends.

The topics that blog readers get anxious about include topics on dating Singapore women, dissing Financial Advisors or delivering a nasty brutal lesson to Polytechnic students. Regardless of the negativity of the engagement, I get 2000+ views in one day.

But sometimes, the world stirs throws some shit at me. In such a case, I should also share on this blog because we can learn something from the experience and I get to dissipate some Bad Kharma I accumulated from previous blog posts.

My dad has currently been hospitalised for a few weeks and it's been quite rough for him. The doctors found three problems with him and are systematically resolving it one by one.  At the home front, we've been trying to hire a domestic help to support my mum when my dad comes home.

Apparently to sponsor my domestic help, I need one of the following :

  • Notice of Assessment for my Income Tax
  • Evidence that I have a Fixed Deposit account containing $50,000
Unfortunately for me, I only started reporting my income tax for year 2018 so I will only get my notice of assessment maybe end of this year. Prior to that, I was a student. So I spent the yesterday contemplating the stocks I need to sell to build that $50,000 fixed deposit account. 

This is a rare case of something financially independent folks face. 

While I can easily liquidate my stocks to build the fixed deposit account, the opportunity cost assuming 7% dividends is almost $3,500 every year. Considering that I am likely to take this from my leveraged account, the penalty is much worse.

This is not the first time I was inconvenienced by my lack of conventional employment in this society. Years ago, I was abused at at ICA by part time counter-staff and had to document my dividends payments for ICA to initiate my wife's SG citizenship application.

I think insisting on a fixed deposit is cruel, and alternatives should be offered to citizens who really need a domestic helper to assist at home :
  • Instead of $50,000 fixed deposit, it is much better to also allow $50,000 in SSBs to also qualify.
  • Perhaps the sponsor can also show that his CDP has $250,000 in his account.
I am pretty used to government officers explaining that my case is very special and have experience getting concessions from them. 

But right now, if life throws lemons at you, make lemonade :
  • Looks like I now have an emergency fund. 
  • As the trade war gets worse, I now have a war-chest.
  • I am likely be getting rid of my equities first to reduce the beta of my overall portfolio. 
  • For my leveraged portfolio, the securities with the lowest yields will be culled first
Let me know if you have experienced a similar problem I did and whether you have a workaround.

All my administrative requirements have been explained to me by the maid agency. 

( If you are a private banking client, do share with me whether these banks have some sort of way to help their HNW clients out. )









3 comments:

Ben said...

Hi Chris,

I will suggest against using your leveraged portfolio as the solution to the Fixed Deposit of $50,000. It will be a bad decision as per my view. Of course, I believe that you know what's best for you based on the available resource.

Take my view as a pinch of salt if you decide to opt for the leverage portfolio.

Ben

Christopher Ng Wai Chung said...

No worries, I intend to deleverage to get my $50,000.

What you thought I was going to do was suicide.

Unknown said...

Ok, a crazy idea ... how about putting some of your REITs under a $2 paid up company, and reporting those dividends as your income? Sure, you may need to pay some personal income tax but you can size the amount of REITs to generate less than $20,000 in distributions. Or declare not more than that amount as your salary.

For new start-up companies, SG govt is giving 75% discount for corporate income tax for the 1st $100K, and 50% discount for the next $100K. i.e. Of the initial $200K of corporate income, $125K won't be subjected to corporate tax. You can read more at IRAS website.

You can also charge expenses like trading commissions to the company. By managing your chargeable expenses and sizing of salary to declare for yourself, you can end up with zero or even negative corporate income.

Use your lawyering skills man!! LOL!!