Hi Fellow Automated Millionaires,

Recently, the market went down and down. Acorns of Asia Balanced Fund went down by 5.82% in November. To tell you I am not affected by the whole situation is bullsh*t, my returns are affected of course. But then, I am not cashing out on the investment now anyway. The principle behind the whole Automated Millionaire System is time is on our side, hence history shows that if time is on our side, we are the ultimate winners :)

Both David Bach and Suze Orman recommends RSP so that we can dollar average our investment to diversify the risk and with time on our side, the percentage of getting a ROI of 8% or more (compounded) using Balanced Fund is greatly increase. (Side Note: Accumulative ROI of Acorns of Asia Balanced Fund from August to November 2007 is 3.31%)

This market fall makes me really consider what David Bach and Suze Orman recommendation on ETF. Because according to SGX, ETF has no sales charges, low management fees (less than 1%), diversified portfolio, price transparency, etc. Let me research more in this area before coming back here :)

Disclaimer
The above information is wholy author's personal opinion. It does not intend to replace any professional advice. If legal advice or other professional advice, including financial, is required, the services of a competent professional person should be sought.

Hi Fellow Automated Millionaires,

Confucius once said, "By three methods we may learn wisdom: First, by reflection, which is noblest; Second, by imitation, which is easiest; and third by experience, which is the bitterest."

Hence, let us learn by imitation and review what an Automated Millionaire should do by now:

1. Have Life Insurance to cover Death, Total Permanent Disability & Critical Illnesses, Personal Accident Plan and Hospitalisation Plan to protect one's wealth
2. Have a Citibank Step-Up Account and have your salary credited to this account
3. Have at least 2 e$aver and 2 xSaver accounts
4. Have the following accounts for Long Term Savings, Financial Freedom, Education, Play, Charity and Bills (Though some of them can share the same account).
5. Set a x% of your income for above accounts except Bills of course ;)
6. Invest a x% of your income to at least a Balanced Fund with a ROI of more than 8%p.a. (compounded) with the Goal of building a neat retirement fund in 25 or 30 years time
7. Automate the process of transferring the money *KEY factor to the whole process*

If a person wants to be an Automated Millionaire but have not done these 5 steps, then no way he/she can become one in the near future. Start Young, Just do it!

Disclaimer
The above information is wholy author's personal opinion. It does not intend to replace any professional advice. If legal advice or other professional advice, including financial, is required, the services of a competent professional person should be sought.

Hi Fellow Automated Millionaires,

I have calculated the differences of yearly investment through CPF versus Cash as below:

1. CPF
Amount Invested: S$10,000
Tax Incurred*: S$0
Employer CPF*: S$954 (subtracted S$3,396 for repayment of HDB loan of 4-room HDB flat)
Sub Total: S$10,954
ROI: 8%
Grand Total: S$11,831

2. Cash
Amount Invested: S$10,000
Tax Incurred*: S$350
Employer CPF*: S$0
Sub Total: S$9,650
ROI: 8%
Grand Total: S$10,422

*Taking an annual income of S$30,000.

DIFFERENCE: S$1,409

This difference for 1 year is already S$1,409.00. The difference in 10 years is S$22,044.49. What about 25 years later? The amount is S$111,246. The difference in 30 years is S$172,385.33. Are you willing to throw S$172K away? :) Definitely not me. Let us find a good solution to counter the CPF lock of the 1st S$20,000.

Disclaimer
The above information is wholy author's personal opinion. It does not intend to replace any professional advice. If legal advice or other professional advice, including financial, is required, the services of a competent professional person should be sought.

Hi Fellow Automated Millionaires,

I used to think that Estate Planning is only for old people or rich people and can be settled by just writing a will as shown on TV. Alas! But things are not true in that way in reality.

In reality, in simplified form, when a person die, the government will take all the assets of that person into a probate. According to Probate Enterprise, Probate is a process of application for the release of assets to the beneficiaries, which have been frozen upon the death of our loved ones. Probate might take at at least 1 year and even longer if a person die without a will or leave behind a complex estate! After all these hassles, the loved ones of the person has to pay estate duty (though there is exemption, click here to find out more).

Hence, to avoid the probate and reduce the estate duty (which potentially can run to tens of thousands of dollars, if not handle properly) legally, Estate Planning is one of the most important part of one's Financial Planning. As of how to do a proper Estate Planning, of course, seek professional help as I always recommend. But as usual, I will write down in this Blog on how I will do it :)

Disclaimer
The above information is wholy author's personal opinion. It does not intend to replace any professional advice. If legal advice or other professional advice, including financial, is required, the services of a competent professional person should be sought.