It is said that there are definite signs of Recession or Great Depression. Man on the street will say that each Economic Cycle last 10 years and the next Recession can be anything from now to 2010. Where’s the facts and figures?
I would like to analyse some facts and figures and make my assumption and guess timing of the next potential Recession, or possibly, the Great Depression (which is scarier than recession).
Baby Boomer Generation
The Baby Boomer Generation refers to babies born from the period 1945 to 1965. During these period, there were more than 4 million babies born in America yearly. Huge childbirth were also experience in United Kingdom, Australia, Soviet Union, Canada.
There were 76 million American children born during the Baby Boomer period and that comprised of 28% of the adult US population while 80% of the wealth in UK are from Baby Boomers.
(extract from http://en.wikipedia.org/wiki/Baby_boomer#Size_and_economic_impact)
The Great Depression
The Great Depression is caused by the Worldwide economic decline, that started in 1929 and lasted till early 1940s. The Great Depression was a decade of unemployment, low profits, low prices, high poverty and stagnant trade that affected the entire world in the 1930s. The stock market crash of 1929 triggered the Great Depression in the United States, which then spread across the world's economies. (A depression cycle is said to be every 50 years).
The long term sufferings and memory made the American resolve that such a financial disaster would not be allowed to happen again, and that the nation would have "Freedom from Fear. Would you believe what they claim?
The stock market crash in 1929 didn’t last long. In the first half of 1930, the US stock market recovered to pre-market crash level. However, consumers cut back on spending and borrowings, and eventually brought down sales and prices began to decline across the board
The decline in the American economy was the motor that pulled down most other countries at first, then internal weaknesses or strengths in each country made conditions worse or better. By late in 1930, a steady decline set in which reached bottom by March 1933. This produced the greatest long-term market declines by any measure and erased billions in assets.
In the 1920s, widespread use of the home mortgage and credit purchases of automobiles and furniture in the U.S. boosted spending, but created consumer debt. People who were deeply in debt when a price deflation occurred were in serious trouble — even if they kept their jobs — and risked default. They drastically cut current spending to keep payments on time, thus lowering demand for new products. Furthermore, the debts grew when prices and incomes fell 20-50%, but the debts remained at the same dollar amount. With future profits looking poor, capital investment slowed drastically. In the face of bad loans and worsening future prospects, banks became more conservative in lending money.
The Singapore / South-east Asia Recession
In 1997, the Indonesia Rupiah devalued, follow by few other countries including Malaysia and Thailand. Singapore dollar had lost ground but comparing to our neighbours, the devaluation of Sing Dollars is mild. This can be explained by our strong reserves that the government had unlocked to prevent the fallout.
Few countries in SEA went into Recession during the periods of 1997 to 1999 and started to bottom out in 2000. However, 9/11 occurred in 11 Sept 2001. 9/11 was the incident whereby terrorist had attacked the United States. This caused another downward swing in many parts of the world, and tourism sector suffered badly (tourism is one key income and employment for Singapore).
As the economy started to recover in 2002, SEA were hard hit by SARS in 2003. The triple impact lasted till late 2004 and started to finally bottom out in early 2005, with banks starting to adjust interest rates upwards and economy started to show promising growth in 2006.
This period lasted almost 10 years, which I would relate to, a domestic Great Depression of Singapore. There is no economist value in my statement though. The happenings during this period is akin to the Great Depression in 1929 to 1939, where unemployment rates were high, spending were low, value of assets fell and lack demand, etc.
The Next Sign
The first batch of Baby Boomers will turn 65 in year 2010. From 2010 onwards, there will be more than 4 million people retiring from the workforce. With the biggest spending power and retiring, their lifestyle needs will diminish, they may start moving out of the cities into sub-urb areas. With retirement, they may even withdraw their investments in the stock market, and start selling away their properties to move out of city.
On the other hand, the current sub-prime issue may have bottom out currently, but it does not mean things will improve. Property loan default have increase from the current sub-prime. Seizure and lower property demand has caused a decline in property valuation and worrying ripple effects in the stock market has been experienced despite the downward Fed Rate adjustment (0.5%) on 18 Sept 07.
By year 2010, even if the property and stock market starts recovering, the retiring 4 million baby boomers per year may cause prolong lower demand.
Lastly, heard on CNN.com (Concerns over U.S economy) 25/10/07. Mark Konyn, CEO of RCM, had shared his knowledge. The concern is whether US economy slowdown may spill over to the world. Auto mobile sale (loan) has fallen, credit card debts had maintain (mount). There are signs of recession including tax coming down, sub-prime spill over, inflation, slow sales, etc.
This analysis may not hold much water since it has not taken into many economic consideration, but it has caused me to stop and wonder, if the signs are showing, shouldn’t I take a precautionary stand on my investment?
Friday, October 26, 2007
Monday, October 22, 2007
Life Expectancy and Retirement Funds
Heard on radio news this morning (22 Oct 07), some information on the government's plan on Annuity for Singaporeans. The annuity withdrawal age is proposed by SM Goh, to be 80 years old. Some facts and figures on Life Expectancy of Singaporeans:
- Male : 79.21 years
- Female : 84.59 years
- Average life expectancy being 81.8 years
- Median Age : 37.8 years
(info accurate as at Year 2007's statistics. Extract from https://www.cia.gov/library/publications/the-world-factbook/print/sn.html)
What gotten me wondering is, why does the government initially propose the withdrawal age at 85 years old, and now SM Goh counter-proposed it at 80 years old, when most males will be dead by then, and not many females will be living past 85 years old? This seems too funny, or rather, unfair to ordinary citizens like us. Is it really for the benefit of the general public, or will insurers benefit more from this? Shouldn't it be based on individual's preference, to opt-in if they like? Alternatively, the government could propose Endowment Funds provided by CPF where we get monthly payout from certain age for certain years, and remaining cash to be paid to next of kin should the member pass on prematurely.
Back to facts and figures. If the average life expectancy is 81.8 years old while the current retirement age is 62 years old, that means we will have almost 20 years to live on our savings. Will you have the finances to retire and live life as before retirement?
Let's take our expenditure after retirement as half that of an active working adult. If your current expenditure is $1,000 per month, you will need $500 per month after retirement. Take into account, this year's (2007) inflation is 2.9% (average inflation is about 3-5%). This means, the $500 should be inflated to (median age till retirement being about 24 years) $987 by year 2031.
With 20 years to live from retirement till motality, we need to have $987/mth for first year, and $1,727 on 20th year, thus average monthly expenses will be $1,357 per month upon retirement in year 2031. This means, we need at least $325,680 for retirement. If we were to save $500 per month, with interest (average savings interest being 0.29% pa), upon retirement, we will have less than half the amount we need to retire. Scary facts!
Let's look at how we can build funds for retirement. If we are able to invest $500 per month, at an average growth of 5% per year, we are only able to retire and have an average life, minus car, minus holidays. But is the average working adult able to save $500 per month?
Forget about your CPF. Our CPF Ordinary Account's funds are largely drained into housing installments. We still need to pay in cash, for the upkeep of the household. An average Singaporean's monthly income range from $2,000-$3,000 (guess-estimate). If the average income is $2,500 per month, $500 goes to CPF, which leaves us with $2,000 take home pay. If the individual owns a car, they are expected to spend $1,000 - $1,200 per month on car. What does that leave you with? Sadly, no more than $1,000 per month. How do you expect yourself to save $500 per month for retirement?
It is either, we start making more money, or make our money start working. Else, continue slogging till death do we part.
- Male : 79.21 years
- Female : 84.59 years
- Average life expectancy being 81.8 years
- Median Age : 37.8 years
(info accurate as at Year 2007's statistics. Extract from https://www.cia.gov/library/publications/the-world-factbook/print/sn.html)
What gotten me wondering is, why does the government initially propose the withdrawal age at 85 years old, and now SM Goh counter-proposed it at 80 years old, when most males will be dead by then, and not many females will be living past 85 years old? This seems too funny, or rather, unfair to ordinary citizens like us. Is it really for the benefit of the general public, or will insurers benefit more from this? Shouldn't it be based on individual's preference, to opt-in if they like? Alternatively, the government could propose Endowment Funds provided by CPF where we get monthly payout from certain age for certain years, and remaining cash to be paid to next of kin should the member pass on prematurely.
Back to facts and figures. If the average life expectancy is 81.8 years old while the current retirement age is 62 years old, that means we will have almost 20 years to live on our savings. Will you have the finances to retire and live life as before retirement?
Let's take our expenditure after retirement as half that of an active working adult. If your current expenditure is $1,000 per month, you will need $500 per month after retirement. Take into account, this year's (2007) inflation is 2.9% (average inflation is about 3-5%). This means, the $500 should be inflated to (median age till retirement being about 24 years) $987 by year 2031.
With 20 years to live from retirement till motality, we need to have $987/mth for first year, and $1,727 on 20th year, thus average monthly expenses will be $1,357 per month upon retirement in year 2031. This means, we need at least $325,680 for retirement. If we were to save $500 per month, with interest (average savings interest being 0.29% pa), upon retirement, we will have less than half the amount we need to retire. Scary facts!
Let's look at how we can build funds for retirement. If we are able to invest $500 per month, at an average growth of 5% per year, we are only able to retire and have an average life, minus car, minus holidays. But is the average working adult able to save $500 per month?
Forget about your CPF. Our CPF Ordinary Account's funds are largely drained into housing installments. We still need to pay in cash, for the upkeep of the household. An average Singaporean's monthly income range from $2,000-$3,000 (guess-estimate). If the average income is $2,500 per month, $500 goes to CPF, which leaves us with $2,000 take home pay. If the individual owns a car, they are expected to spend $1,000 - $1,200 per month on car. What does that leave you with? Sadly, no more than $1,000 per month. How do you expect yourself to save $500 per month for retirement?
It is either, we start making more money, or make our money start working. Else, continue slogging till death do we part.
Saturday, October 20, 2007
Delay Gratification
I came across people who find excuses to change car, excuses to spend, excuses to pamper themselves. Some will say, "I only lived once", "I'm young only once", "I can earned back what I spent", etc.
I've learnt that since I lived only once, I should make the most out of it. Since I am young only once, I have to make sure I do not look back later and say to myself that I shouldn't have spent like that. I had my share of desiring a better car, only to look back and told myself "I would have been $30,000 richer if I had not changed car those few times".
What we have spent, cannot be earned back. We only get to earn new income, but not what we spent. It is easier to spend than to save and grow these funds, so that we have more in future and are more able to afford things.
Rather than spending $500 on a new watch, or many thousands to change to a new car, we could have set aside this money and invest it so that it multiplies so that we have more to spend in future. Changing car, getting new and more fashionable clothings, new gaugets such as handphones, pda, computer, etc, are not a necessity but many finds it necessary to change.
Take car for example, if we were to change to a brand new entry level car (eg, those that cost less than $50k), we may loose $25,000 (depreciation) over 3 years. Calculation as follows:
- Purchase Price : $48,000
- 3 years paper value : $20,000
- Body value : $3,000
If existing car has another 7 years left, why not drive it on? Rather than wasting more money, save up this unnecessary funds and invest. With the earnings some years later, you could afford a new car and still have left overs to spend or invest again. Think again.
I've learnt that since I lived only once, I should make the most out of it. Since I am young only once, I have to make sure I do not look back later and say to myself that I shouldn't have spent like that. I had my share of desiring a better car, only to look back and told myself "I would have been $30,000 richer if I had not changed car those few times".
What we have spent, cannot be earned back. We only get to earn new income, but not what we spent. It is easier to spend than to save and grow these funds, so that we have more in future and are more able to afford things.
Rather than spending $500 on a new watch, or many thousands to change to a new car, we could have set aside this money and invest it so that it multiplies so that we have more to spend in future. Changing car, getting new and more fashionable clothings, new gaugets such as handphones, pda, computer, etc, are not a necessity but many finds it necessary to change.
Take car for example, if we were to change to a brand new entry level car (eg, those that cost less than $50k), we may loose $25,000 (depreciation) over 3 years. Calculation as follows:
- Purchase Price : $48,000
- 3 years paper value : $20,000
- Body value : $3,000
If existing car has another 7 years left, why not drive it on? Rather than wasting more money, save up this unnecessary funds and invest. With the earnings some years later, you could afford a new car and still have left overs to spend or invest again. Think again.
Friday, October 19, 2007
Start Investing with Nothing
That sounds like a joke. How do I start investing when I have no money? Many people perceived that they have no money and avoid the topic altogether. Let me share some insight.
I had done a little reading this year. I hate books, I'll doze off upon the first paragraph and exams are a torture. I had a few great men to thank. Three of my clients had told me "you must read this book 'Rich Dad Poor Dad'. It will change your mindset about money". How could three guys who have seen more than me, better fortune than me be so wrong about it? They told me, "the $10+ dollars investing in this book will pay off and it'll give you an idea why a lot of people are still stuck in their rat race".
It took me months, till repeat recommendation rang in my ears, gotten me curious about this 'great book'. Now, I thank these men, and the author Robert Kiyosaki for changing my mind.
Some who had read this book commented that there is nothing to gain from it. I learnt from what the author wanted me to understand, "reduce your liability and expenses, increase your assets and income". This will not make me rich, but it will help me avoid being any poorer than what I am now. It helped, I started asking myself, since I couldn't increase my asset (for now), I could have at least, reduce my liability and expenses. Good financial planning must be embraced early (it's never too late).
Coming back to my agenda of this blog post - How to Start Investing With Nothing? If you think you do not have the funds to invest, have you consider where you could raise funds? I have chanced upon one advice from one of the three men. Invest with others' money! If the cost of funds is 8%, and I can show you a potential returns of 10% per year (NETT), would that sound workable? If you think it's a joke, maybe you can stop reading.
Some people think they do not need money, or they are happy as they are now, being happy with little, maybe they want to start looking at being happier with more. Money is Not Everything, but Everything is Money. You are spending even as you sleep. Don't forget utility bills, other running cost of a home, etc.
It is time to change the way we think, take action and stop procrastinating. Money don't come to you, you have to find ways to make it yours. Stop self consolation that you can earned it back. Once money slips out of your hands, it's gone forever and you will have to earn again.
The big question now, How to Invest with Nothing! As taught by Robert Kiyosaki, reduce your expenses (and that will increase your disposable income). If a person has no savings to begin with, I will show you one opportunity where to find money for investment.
This sounds stupid to some, but idea to others (go on, laugh at my stupid idea). Invest using other people's money and pay interest on the funds you utilize. I can show you, making more than $1,000 a year, with nothing to begin with. Since you begin with nothing, $1,000 is a lot of money in return.
Let's take Line of Credit for example. If you borrow with prime interest rate of 7-8% pa, that is the cost of funds. If I can provide you guaranteed returns of 15-20% pa, don't you get a lot of money with nothing to begin with? If you think this is a scam, maybe you will stop reading.
Remember Robert Kiyosaki's words, reduce expenses. If you borrow $10,000 with interest of 8% pa for 2 years, your liablity is now $11,600 (based on compounded interest). If you pay back this borrowing over 24 installments, the monthly repayment is no more than $483/mth. Reduce your expenses, say, by $200 per month, you could be paying off these liability faster than you know.
At the end of the investment period (2-3yrs), you will get a return of between $14,470 to $15,960. The installment is your forced savings. You could either benefit from a returns of $2,870 (2yrs) from nothing, or see a savings and returns of $12,870. Did I showed you something practical and achievable?
It is time to start thinking and take action? Welcome to the world of money. I hope my idea benefit you.
I had done a little reading this year. I hate books, I'll doze off upon the first paragraph and exams are a torture. I had a few great men to thank. Three of my clients had told me "you must read this book 'Rich Dad Poor Dad'. It will change your mindset about money". How could three guys who have seen more than me, better fortune than me be so wrong about it? They told me, "the $10+ dollars investing in this book will pay off and it'll give you an idea why a lot of people are still stuck in their rat race".
It took me months, till repeat recommendation rang in my ears, gotten me curious about this 'great book'. Now, I thank these men, and the author Robert Kiyosaki for changing my mind.
Some who had read this book commented that there is nothing to gain from it. I learnt from what the author wanted me to understand, "reduce your liability and expenses, increase your assets and income". This will not make me rich, but it will help me avoid being any poorer than what I am now. It helped, I started asking myself, since I couldn't increase my asset (for now), I could have at least, reduce my liability and expenses. Good financial planning must be embraced early (it's never too late).
Coming back to my agenda of this blog post - How to Start Investing With Nothing? If you think you do not have the funds to invest, have you consider where you could raise funds? I have chanced upon one advice from one of the three men. Invest with others' money! If the cost of funds is 8%, and I can show you a potential returns of 10% per year (NETT), would that sound workable? If you think it's a joke, maybe you can stop reading.
Some people think they do not need money, or they are happy as they are now, being happy with little, maybe they want to start looking at being happier with more. Money is Not Everything, but Everything is Money. You are spending even as you sleep. Don't forget utility bills, other running cost of a home, etc.
It is time to change the way we think, take action and stop procrastinating. Money don't come to you, you have to find ways to make it yours. Stop self consolation that you can earned it back. Once money slips out of your hands, it's gone forever and you will have to earn again.
The big question now, How to Invest with Nothing! As taught by Robert Kiyosaki, reduce your expenses (and that will increase your disposable income). If a person has no savings to begin with, I will show you one opportunity where to find money for investment.
This sounds stupid to some, but idea to others (go on, laugh at my stupid idea). Invest using other people's money and pay interest on the funds you utilize. I can show you, making more than $1,000 a year, with nothing to begin with. Since you begin with nothing, $1,000 is a lot of money in return.
Let's take Line of Credit for example. If you borrow with prime interest rate of 7-8% pa, that is the cost of funds. If I can provide you guaranteed returns of 15-20% pa, don't you get a lot of money with nothing to begin with? If you think this is a scam, maybe you will stop reading.
Remember Robert Kiyosaki's words, reduce expenses. If you borrow $10,000 with interest of 8% pa for 2 years, your liablity is now $11,600 (based on compounded interest). If you pay back this borrowing over 24 installments, the monthly repayment is no more than $483/mth. Reduce your expenses, say, by $200 per month, you could be paying off these liability faster than you know.
At the end of the investment period (2-3yrs), you will get a return of between $14,470 to $15,960. The installment is your forced savings. You could either benefit from a returns of $2,870 (2yrs) from nothing, or see a savings and returns of $12,870. Did I showed you something practical and achievable?
It is time to start thinking and take action? Welcome to the world of money. I hope my idea benefit you.
Ignorance to Investment
A lot of times, when it comes to investing, people faced restriction from several reasons including:
- Conservative
- Had setbacks
- Procrastinate
- Misunderstood, wrong perception
- Excuses
Some people I've met had excuses such as:
- I've no money to invest
- I don't believe in investments
- If it's too good, there must be something I don't know
- I'm not ready
- I will get to that later
- I lack financial know-how
- I've been burnt before
- The risk is too high, etc.
I used to have such negative mindset after being burnt from mistakes during the Asian Crisis (1997) and Bursting Internet Bubble (2000). I was in denial when the market started falling during the months after April 2000 and refused to exit the market as I had no knowledge what was going on and gave myself excuses to leave my funds there only to see my funds plummeted by more than 50%, some losing more than 70%.
That was painful and I dare not touch investment again for the years to come till I started to relook at what went wrong and re-strategised my funds with some consolidation and taking painful cuts. The result from such an exercise with some brief knowledge saw my fortune recovering, though not back at the entry but at least I reduced my losses.
Recently, I looked at the market once again and asked myself if there is any potential market correction in the making. Since early this year (2007), there were 2 corrections, one in Feb/Mar and the second in August (U.S Sub-prime). Looking at the second correction, it shouldn't have affected the stock market but it did. I started reading into news reports to at least understand what the situation is and pondered what will happen in the coming months.
U.S Sub-prime was caused partly (i could be wrong though) by borrowers / home owners who took huge loans on their property mortgage (up to 100%) and the banks permitted it because of appreciating property prices in recent years. The first year of loan was faced with very low interest rates but rates will increase drastically on the second year or later and a good handful of borrowers couldn't afford the big jump in their regular mortgage installments.
With financial constrains, some borrowers default on mortage payment, some had to dump their investments and cash out to pay for mortgage, etc, thus ripple effects happened to the stock market. Of course, there are also other reasons that I have not analyse or not presented (too much info). Property sizeure happened, property market slowed down and prices started to depreciate, causing further problems.
U.S Fed Reserve had to take action to prevent a fallout on financial markets. Reading into potential action, they would likely reduced lending rates from 5.25%, bringing it down by 0.25% to 0.5%. The next Fed Reserve announcement would be on 18 Sept 07 and I took a calculated risk that interest rates will go down, thus stood by my beliefs and hung on.
I was guessing that the reduction will be by 0.25% but hoping that it would be a huge reduction of 0.5% instead. News were announced on 18 Sept 07 and interest came down by a whooping 0.5%. With that, I scheduled my exit from Unit Trust and happily took my money into another investment that gives a guaranteed return (15-20% pa).
I am learning and I hope to share my little knowledge or perception as I gain along the way.
- Conservative
- Had setbacks
- Procrastinate
- Misunderstood, wrong perception
- Excuses
Some people I've met had excuses such as:
- I've no money to invest
- I don't believe in investments
- If it's too good, there must be something I don't know
- I'm not ready
- I will get to that later
- I lack financial know-how
- I've been burnt before
- The risk is too high, etc.
I used to have such negative mindset after being burnt from mistakes during the Asian Crisis (1997) and Bursting Internet Bubble (2000). I was in denial when the market started falling during the months after April 2000 and refused to exit the market as I had no knowledge what was going on and gave myself excuses to leave my funds there only to see my funds plummeted by more than 50%, some losing more than 70%.
That was painful and I dare not touch investment again for the years to come till I started to relook at what went wrong and re-strategised my funds with some consolidation and taking painful cuts. The result from such an exercise with some brief knowledge saw my fortune recovering, though not back at the entry but at least I reduced my losses.
Recently, I looked at the market once again and asked myself if there is any potential market correction in the making. Since early this year (2007), there were 2 corrections, one in Feb/Mar and the second in August (U.S Sub-prime). Looking at the second correction, it shouldn't have affected the stock market but it did. I started reading into news reports to at least understand what the situation is and pondered what will happen in the coming months.
U.S Sub-prime was caused partly (i could be wrong though) by borrowers / home owners who took huge loans on their property mortgage (up to 100%) and the banks permitted it because of appreciating property prices in recent years. The first year of loan was faced with very low interest rates but rates will increase drastically on the second year or later and a good handful of borrowers couldn't afford the big jump in their regular mortgage installments.
With financial constrains, some borrowers default on mortage payment, some had to dump their investments and cash out to pay for mortgage, etc, thus ripple effects happened to the stock market. Of course, there are also other reasons that I have not analyse or not presented (too much info). Property sizeure happened, property market slowed down and prices started to depreciate, causing further problems.
U.S Fed Reserve had to take action to prevent a fallout on financial markets. Reading into potential action, they would likely reduced lending rates from 5.25%, bringing it down by 0.25% to 0.5%. The next Fed Reserve announcement would be on 18 Sept 07 and I took a calculated risk that interest rates will go down, thus stood by my beliefs and hung on.
I was guessing that the reduction will be by 0.25% but hoping that it would be a huge reduction of 0.5% instead. News were announced on 18 Sept 07 and interest came down by a whooping 0.5%. With that, I scheduled my exit from Unit Trust and happily took my money into another investment that gives a guaranteed return (15-20% pa).
I am learning and I hope to share my little knowledge or perception as I gain along the way.
Thursday, October 18, 2007
Investing your Funds
Where do you park your spare funds? Keeping all funds in one basket is unwise, leaving it all in the bank depreciates your money, uninformed investment exposed you to loosing it all. There are just so many investment vehicles out there.
We could be doing a proper diversification on our investments into:
- Short term, high liquidity investments
- Mid-term and sound investments
- Mid-long term investments to lock away funds
Investments with high returns (10% or more) are usually exposed to high risk as well. This could be in the form of stock market investment, Unit Trust, etc. Average investments (average of 2-5%) includes Insurance based products, bonds, blue chips, etc. Low returns investments are the 'safest' but gives you pathetic returns and they includes savings (current savings interest being 0.29% pa).
Remember, economic analyst projected an inflation of about 2.9% for this year, 2007. If you keep your funds in investments that pays lesser than inflation, your money has depreciated. You loose almost 3% just keeping it in the bank. You loose even more, eg 7%, if you spent it (7% GST).
Give this a thought, a mid-term investment that gives you an average of 15-20% Guaranteed Returns, plus Capital Protection. Sounds too good to be true? That's because you've not been exposed to such opportunity or info.
We could be doing a proper diversification on our investments into:
- Short term, high liquidity investments
- Mid-term and sound investments
- Mid-long term investments to lock away funds
Investments with high returns (10% or more) are usually exposed to high risk as well. This could be in the form of stock market investment, Unit Trust, etc. Average investments (average of 2-5%) includes Insurance based products, bonds, blue chips, etc. Low returns investments are the 'safest' but gives you pathetic returns and they includes savings (current savings interest being 0.29% pa).
Remember, economic analyst projected an inflation of about 2.9% for this year, 2007. If you keep your funds in investments that pays lesser than inflation, your money has depreciated. You loose almost 3% just keeping it in the bank. You loose even more, eg 7%, if you spent it (7% GST).
Give this a thought, a mid-term investment that gives you an average of 15-20% Guaranteed Returns, plus Capital Protection. Sounds too good to be true? That's because you've not been exposed to such opportunity or info.
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