When Theory Meets Reality in M&A

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What the Textbooks Miss in Valuation Practice (Part 1/2)

Have you ever sat down with someone who built a billion-dollar empire from scratch and realised they couldn’t name a single valuation method? I did. It was a family business—no fancy tech, no groundbreaking innovation—just savvy operators in a tough industry who built massive moats using mergers and acquisitions (M&A).

And here’s the kicker: Not one of them had a college degree. Forget MBAs—they probably thought “DCF” stood for “Don’t Care, Friend.” Yet, they managed to achieve something most of the smartest folks from top business schools only dream of—adding a third comma to their bank accounts.

I’ve worked with incredibly sharp minds, dissecting valuation methodologies with managing directors from every big investment bank you could name. They had successful careers, no doubt. But billionaires? Not quite.

The magic formula these self-made billionaires used wasn’t some complex valuation model. They didn’t calculate terminal growth rates or lose sleep over internal rates of return (IRR). Instead, they had an uncanny ability to buy assets and businesses at prices so low, they simply couldn’t lose.

The Art of Patience and Simplicity

Their strategy was beautifully straightforward: find good assets being run poorly, and wait. Sometimes for years, even decades. When the time was right, they’d swoop in, buying at or near book value. They’d improve profitability, integrate the asset into their core operation, and voilà—instant value creation. They bought at book values and held or sold at an earnings multiple.

They understood that valuation isn’t a precise science. It’s more like art. You can analyze all you want, but at the end of the day, if you try hard enough, you can justify any price within a range. It’s a minefield of cognitive biases and conflicts of interest—something I’m sure you’ve seen before.

Enterprise Value vs. Equity Value: Let’s Break It Down

Before we dive into methodologies, let’s clear up two critical terms: Enterprise Value and Equity Value.

  • Enterprise Value is the total value of a company’s assets, excluding its debt and cash. It’s like looking at a car’s price without considering how much gas is in the tank or if it has a loan on it.
  • Equity Value is what you’d actually pay to buy the business. You start with the enterprise value, add cash, subtract debt, and adjust for working capital.

Why does this matter? Because acquisition offers are typically made on an enterprise value basis. The tricky part is bridging enterprise value to equity value, which is why valuation conversations often start with enterprise value—it keeps things clean and comparable.

Valuation: The “Science” That Often Misses the Art

Ever heard the saying, “A business is worth whatever someone is willing to pay for it”? Yeah, I hate that cliché. It’s not just unhelpful; it’s misleading. It ignores the massive information gap between buyers and sellers. It’s like saying, “A house is worth whatever the highest bidder offers,” without mentioning if the roof leaks or if it’s haunted.

For us finance nerds, there are three main schools of valuation theory:

  1. Discounted Cash Flow (DCF) – The purist’s method. It calculates the present value of future cash flows. It’s technically perfect but relies on forecasts, which are, let’s face it, often just educated guesses.
  2. Multiples of a Metric – The practical approach. You apply a multiple (derived from similar deals) to a business metric, usually EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). It’s less precise but more real-world.
  3. Asset-Based Valuation – Common in distressed sales, this method values each asset separately. It’s like selling a car for its parts instead of as a whole.

In part 2, I will share my experience on a textbook method that seems to fall short.

Singapore Budget 2025: What It Means for You (time for huat)

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Image source: PM Lawrence Wong’s facebook

Picture this: you’re sitting across from me at our favourite kopitiam, you are drinking kopi siew dai and I am drinking kopi o kosong (as we are conscious about taking less sugar as advised by minister Ong Yee Kung, yea we followed him on TikTok). We’re catching up, and naturally, the topic of Budget 2025 comes up. “Ugh, another budget speech,” you groan. “Just tell me—what’s in it for me?”

Alright, let’s break it down—no finance-speak, just the stuff that actually matters to you.

1. Tackling Cost Pressures

Prices have been creeping up, and the government knows it. To help, every household is getting $800 in CDC Vouchers—$500 in May and $300 in January next year. Half can be spent at supermarkets, and the other half at hawkers and heartland shops.

If you live in an HDB flat, you’ll also see extra U-Save rebates—up to $760 this year, which should help with utilities. Plus, families with kids get a $500 LifeSG credit per child under 12, which can be used for everyday expenses.

And here’s a little birthday gift for everyone—Singapore is turning 60, and all Singaporeans aged 21 and above will receive $600 in SG60 Vouchers. Seniors aged 60 and above get an extra $200, bringing their total to $800. These work just like CDC Vouchers, helping to ease daily expenses.

2. Helping Workers and Businesses Stay Competitive

The job market is evolving fast, and Singapore is doubling down on SkillsFuture. If you’re 40 or older, you already get $4,000 in SkillsFuture Credit. Now, there’s also a training allowance of up to $3,000 per month if you take selected full-time courses. Working while studying? You’ll get $300 a month to help with expenses.

For businesses, the Enterprise Compute Initiative ($150 million) will make AI tools more accessible. Plus, a 50% Corporate Income Tax rebate (capped at $40,000) will ease some financial strain for SMEs.

3. Investing in Sustainability and Innovation

Singapore isn’t just thinking short-term—it’s betting big on clean energy and tech. A $5 billion Future Energy Fund will help secure sustainable power sources, including potential nuclear energy research (yes, really!).

The government is also setting aside $1 billion for R&D, focusing on biotech and semiconductors. If you’re in these industries, expect more support and funding opportunities.

4. CPF Changes for Seniors

If you or your parents are 55 and older, CPF contribution rates are increasing:

  • 55 to 60-year-olds: 34% total CPF rate
  • 60 to 65-year-olds: 25% total CPF rate

To help businesses adjust, there’s a CPF Transition Offset, where the government covers 50% of the employer’s increase for one year.

5. Transport and Housing Updates

Got an electric heavy vehicle or bus? Road tax changes are coming, with a phased-in Additional Flat Component starting in 2026.

Housing-wise, more shorter-wait BTO flats (less than three years) are being launched, and resale cooling measures will continue to stabilize prices. If you’re in the market for a home, this could make things a little easier.

Final Thoughts

Budget 2025 is all about helping Singaporeans manage rising costs, future-proofing jobs, and investing in sustainability. Between the SG60 Vouchers, CDC Vouchers, tax rebates, and SkillsFuture boosts, there’s something for nearly everyone.

Reflection: Beyond the Numbers – The Transformative Journey of Big Old Media Company and TEA

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Disclaimer Note: The following account is based on my personal experience leading end-to-end M&A activities. For confidentiality and legal purposes, the names of the companies have been changed, and any resemblance to real organizations is purely coincidental. This article is intended solely for educational purposes and aims to share insights and lessons learned with the professional community. It does not reflect the views of any specific company or entity.

Beyond the Numbers: The Transformative Journey of Big Old Media Company and TEA

It all began over coffee. Somewhere in a quiet restaurant in Dempsey, the leaders of TEA and Big Old Media Company (BOMC) found themselves in a conversation that went beyond small talk. They spoke about the challenges of running a media business in an increasingly digital world, the hunger for fresh ideas, and the vast opportunities in Southeast Asia’s thriving tech ecosystem.

It was an unassuming meeting, but by the end of it, a seed was planted. Months later, in late 2023, that conversation blossomed into a groundbreaking merger. BOMC announced its acquisition of TEA. For BOMC, it was a bold step to embrace a younger, tech-savvy audience. For TEA, it was a chance to secure resources and expand its mission-driven vision. Together, they embarked on a journey that they hoped would reshape the regional media landscape.

A Shared Vision in a Changing Industry

For over a decade, TEA has been the go-to platform for tech enthusiasts and startup founders across Asia. Founded in 2009 as a personal blog, it grew into a trusted source of news, insights, and events. TEA’s annual conferences drew thousands, while its media offerings became indispensable for understanding the region’s fast-evolving startup ecosystem.

BOMC, on the other hand, represented legacy media. Known for its stalwart publications like the Old National Newspaper and the Old Business-Focused Newspaper, it dominated print and digital news in Singapore. Yet, the rise of digital platforms and shifting reader preferences meant BOMC needed to innovate—or risk losing relevance.

The two companies were paper and keyboard apart. TEA was nimble and entrepreneurial; BOMC was established and methodical. But both shared a common challenge: staying relevant in an era of digital disruption. The deal became not just about financial returns but about reimagining the role of media in a rapidly changing region.

The Merger: Navigating Complexity

When BOMC announced its intention to acquire TEA, it sparked excitement and curiosity. The details revealed a deliberate and well-thought-out plan. BOMC pledged to let TEA operate independently for 12–18 months post-merger to preserve its innovative spirit while ensuring a smooth cultural integration.

For BOMC, the jewel in TEA’s crown wasn’t just its newsroom but its events business. TEA’s flagship conferences and meetups, particularly in Singapore and Jakarta, had become must-attend gatherings for the tech community. These events presented BOMC with an opportunity to tap into an entirely new revenue stream and deepen its regional presence.

For TEA, this meant navigating the pressures of being part of a corporate giant while retaining the freedom that had fueled its success. However, challenges loomed. BOMC’s structured, hierarchical culture needed to adapt to TEA’s agile, experimental approach.

Turning Challenges Into Opportunities

The integration process revealed some hard truths about merging two distinct entities. Early on, BOMC leadership recognized the importance of open communication. Regular town halls, collaborative workstreams, and cross-company task forces became staples of the post-merger environment.

It wasn’t always smooth sailing. For example, aligning editorial standards required extensive discussions. BOMC’s newsroom was steeped in traditional journalistic practices, while TEA thrived on fast-paced, community-driven storytelling. But by focusing on shared values—such as a commitment to quality and relevance—the teams found common ground.

On the events front, the synergies became apparent quickly. TEA’s expertise in organizing tech conferences complemented BOMC’s corporate muscle, leading to double-digit growth in sponsorship revenue within just six months. Collaborative events, such as a joint summit in 2024 under the Old Business-Focused Newspaper banner, demonstrated the power of the partnership.

A Tale of Two Cultures

Perhaps the most compelling part of the story was the cultural journey. For BOMC employees, working with TEA’s team felt like stepping into a startup for the first time. Decisions were made quickly, experiments were frequent, and failures were treated as learning opportunities.

For TEA’s team, the transition brought its own lessons. They gained access to BOMC’s vast resources and experienced the nuances of its structured and hierarchical culture, necessary for operating within a larger organization. A sense of shared purpose emerged as both sides realized the potential impact of their combined efforts.

Lessons for the Future

Looking back, the BOMC-TEA merger offers a blueprint for successful acquisitions in the media world:

  • Empathy Drives Integration – Respecting the culture and identity of the acquired company is as important as financial metrics.
  • Focus on Shared Goals – By rallying around a common mission—enhancing media’s role in Southeast Asia—the two companies achieved alignment despite their differences.
  • Leverage Complementary Strengths – BOMC’s scale and TEA’s agility proved to be a winning combination, creating value that neither could achieve alone.

The Road Ahead

Today, the partnership is still evolving. While the merger has already yielded tangible benefits, such as stronger event revenues and an expanded audience base, the true test will be how the companies adapt to future challenges.

Will TEA retain its innovative edge within the BOMC fold? Can BOMC fully embrace a more digital, entrepreneurial mindset? These questions remain unanswered, but one thing is clear: this is a partnership built on possibility.

I reflect on this journey not just as a business deal but as a lesson in adaptability, collaboration, and vision. The BOMC-TEA merger isn’t just a story about balance sheets and synergies—it’s a story about people, purpose, and the power of working together to build something greater than the sum of its parts. It is a true tale of one plus one equals three.

Unlocking Value Through M&A: The Art of Seeing the Unseen

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image credit: https://www.cartoonstock.com/cartoon?searchID=CS419207

Ever been in a situation where you’re convinced you’re right, only to have someone prove you completely wrong—and teach you a lesson you’ll never forget? Yeah, me too.

Years ago, I was deep in the trenches of an M&A deal, arguing with an MD from a global investment bank. Let’s call him Andrew. We were running a divestiture, and the first-round bids were in. Two bidders were solid contenders, a third was ruled out, and then there was this fourth guy—offering 20% less than even the one we’d just rejected. In my mind, this was an easy call. Cut them loose.

But Andrew? He was adamant.

“Forget the bid,” he said. “This is Round 1. They’re the right buyer. They just don’t know it yet. We haven’t done a good enough job showing them why. Give me time—I’m confident they’ll end up at the top.”

I wasn’t convinced, but I made him a deal: If he was wrong, he’d kiss half a million dollars of his fee goodbye. He agreed.

And then, I watched a master at work.

Andrew reverse-engineered every part of their valuation. Without even seeing their model, he figured out where their assumptions were off—underestimating revenue growth, overestimating marketing costs. He worked his magic, guiding them to see what he saw. A few weeks later, they’d raised their bid by 30%. Meanwhile, the other bidders lost confidence and lowered theirs.

The result? The buyer I wanted to kick out won the auction—by 15%.

Andrew didn’t just find the best buyer; he made them the best buyer. And I learned a lesson that’s stuck with me ever since: In M&A, success often comes down to seeing the signal in the noise.

Why M&A?

At its core, M&A is about finding the best possible owner for a business. And the best owner? They’re the one who can extract the most value—whether through synergies, financial engineering, or just pure operational excellence.

But here’s the kicker: The best owner doesn’t always start out as the highest bidder. That’s why deals fall apart when buyers overpay based on flawed assumptions, or when sellers fail to see potential in the “wrong” places.

And if you’re thinking, Well, it must work pretty well if companies keep doing it, consider this: 70–90% of M&A deals fail. Yep, fail—as in, they destroy shareholder value. Harvard Business School says so, and who am I to argue? I don’t even have a business degree from Harvard. 

Why Does M&A Fail?

Most deals go wrong for one of these three reasons:

  1. Wrong Target – Poor fit, bad strategy, unrealistic expectations.
  2. Wrong Deal – Overpaying, weak due diligence, terrible timing.
  3. Wrong Execution – Botched integration, cultural clashes, operational chaos.

And let’s be honest—ego plays a huge role. Execs love empire-building. Bigger companies mean bigger paychecks, bigger influence. But size doesn’t equal success. And when CEOs think they’ve got the Midas touch, things get dangerous fast.

The 10–30% That Get It Right

Enough with the doom and gloom. Some deals do work. What separates them from the disasters?

Four things:

  1. A Strong Core Business – M&A can’t fix a broken company. If your house is on fire, don’t go house shopping—put out the flames first.
  2. A Solid Acquisition Case – If you can’t validate the numbers, you’re gambling, not investing.
  3. A Lean, Expert Deal Team – No fluff, no politics, just the best people making smart decisions.
  4. Flawless Integration & Execution – Great plans don’t matter if you don’t have rockstars leading the charge.

M&A isn’t just a financial transaction—it’s a high-stakes game of strategy, psychology, and execution. And like any game, the best players see what others don’t.

So, next time you’re looking at a deal, ask yourself: Are we seeing the real opportunity, or just the noise?

And if you’re ever unsure—find your own Andrew.

Company Analysis – Bristol-Myers Squibb (BMY)

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*These information are as of 07 February 2025.

1. Executive Summary

Key Points

Bristol-Myers Squibb (BMY) is a global biopharmaceutical leader specializing in innovative therapies for oncology, immunology, cardiovascular diseases, and neuroscience. Recent performance highlights include:

  • Q4 2024 Revenue: $12.3B (+8% YoY), driven by growth in key products like Eliquis (+11%) and Opdivo (+4%)1515.
  • Full-Year 2024 Revenue: $48.3B (+7% YoY), with a GAAP net loss of $(4.41) per share due to acquisition charges.
  • 2025 Guidance: Revenue projected at ~$45.5B (down ~6% YoY) due to generic competition, with adjusted EPS of $6.55–$6.85.

Investment Thesis

BMY presents a mixed outlook:

  • Strengths: Robust pipeline (10+ new molecular entities by 2030), strategic cost-cutting ($2B savings by 2027), and leadership in oncology.
  • Risks: Near-term revenue decline from patent expirations (Revlimid, Eliquis, Opdivo) and high debt ($10B repayment target by mid-2026).

2. Business Overview

What the Company Does

BMY develops and commercializes therapies for serious diseases, with key products:

  • Oncology/Hematology: Opdivo (cancer immunotherapy), Revlimid (multiple myeloma).
  • Cardiovascular: Eliquis (anticoagulant).
  • Neuroscience: Cobenfy (schizophrenia, approved 2024).

Industry Positioning

  • Leader in oncology and immunology, ranked among top global pharma companies by revenue.
  • Niche player in neuroscience after acquiring Karuna Therapeutics ($14B).

Competitive Landscape

  • Major Competitors: Merck, Pfizer, Roche, Johnson & Johnson.
  • Differentiation: Strong oncology portfolio (Opdivo), diversified pipeline, and strategic acquisitions (e.g., Karuna, RayzeBio).

3. Financial Analysis

Historical Performance (2020–2024)

Metric20202021202220232024
Revenue ($B)42.546.446.245.048.3
Net Margin (%)15.218.920.417.8-15.3
Operating Cash Flow ($B)10.211.112.010.510.5

Key Ratios (2024)

  • Profitability: ROE = -16.64%, Net Margin = 17.83%.
  • Efficiency: Asset Turnover = 0.39
  • Valuation: P/E = -16.64, EV/EBITDA = 21.93
  • Leverage: Debt-to-Equity = 2.99

Cash Flow & Dividends

  • Generated $10.5B operating cash flow (2024)
  • Dividend yield = 4.14%

4. Growth Prospects

Market Opportunities

  • Oncology: Expanding Opdivo indications and cell therapies (e.g., Abecma).
  • Neuroscience: Cobenfy expected to generate $1B+ annually by 2030.

Management Guidance

  • Targeting $45.5B revenue in 2025 (-6% YoY) due to generics impact.
  • Prioritizing R&D reinvestment and cost optimization.

Innovation & R&D

  • Invested $28B in R&D over 2022–2024
  • Pipeline includes 50+ compounds, with 10+ potential approvals by 2030

5. Competitive Advantages (Moats)

Economic Moat Analysis

  • IP Portfolio: 30+ major lifecycle management indications in 2025–2030
  • Oncology Leadership: Opdivo remains a standard-of-care in melanoma and NSCLC

Sustainability

Moat durability hinges on successful pipeline execution and offsetting ~$10B revenue loss from generics by 2028

6. Risks

Industry-Specific

  • Drug pricing reforms (Inflation Reduction Act impact on Eliquis)
  • Generic competition for Revlimid, Eliquis, and Opdivo

Company-Specific

  • High debt ($10B repayment target by 2026)
  • Integration risks from acquisitions (e.g., Karuna)

7. Valuation & Recommendation

Intrinsic Valuation

  • DCF model suggests fair value of $464.62[User-provided prior analysis].

Comparative Valuation

MetricBMYIndustry Avg.
P/E-16.6421.0
EV/EBITDA21.9313.5

Uncle’s thinking: Hold. Near-term risks offset long-term pipeline potential.

8. Conclusion

Key Takeaways

  • BMY’s growth portfolio (+21% in Q4 2024) shows promise, but generics will pressure revenue through 2025.
  • Cost-cutting ($2B by 2027) and pipeline execution are critical.

Actionable Insight

Monitor:

  1. Cobenfy’s commercial uptake and Phase III trials.
  2. Progress on debt reduction and margin improvement.

Guiding Principles Applied

  • Economic Moat: Strong in oncology but challenged by patent cliffs.
  • Valuation Discipline: High EV/EBITDA suggests limited upside.
  • Risk Assessment: Diversification needed to mitigate generics impact.

No-Nonsense Guide: Using Your CPF to Invest in Treasury Bills (T-bills)

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This is one out of two series where you can level up your CFP money.

Uncle’s Guide: How to Use Your CPF to Buy T-Bills in Singapore

Ah, investing with CPF money. Not as complicated as you might think, so let Uncle break it down for you. If you’re wondering how to use your CPF to buy Treasury Bills (T-bills), follow these steps, ok? Don’t worry, it’s not rocket science, but you must follow properly or else, headache later.

(yes, uncle know how to use AI for this)

Step 1: Are You Eligible?

First things first, are you Singaporean or Permanent Resident? Good, that’s sorted. Now, check your CPF Ordinary Account (OA) – you need to have at least $20,000 inside after this investment. Don’t go using all your CPF, need to leave some buffer. Ok, still good? Let’s go.

Step 2: Open CPF Investment Account (If You Haven’t)

Next, you need a CPF Investment Account. No account, no talk. Go and open one with any of the CPFIS-approved banks: DBS/POSB, OCBC, or UOB. This is where your T-bills will sit quietly after you buy them.

Step 3: Make Sure You Have Enough Funds

Quick check – do you have enough cash in your CPF OA to make this investment? Go and log in to CPF and see how much you can use for investments (there’s this option called “Amount available from Ordinary Account for professionally managed products”). Got enough? Ok, we move on.

Step 4: Pick Your T-bill

Now it’s time to choose which T-bill you want to buy. There are usually two types: the 6-month T-bill and the 1-year T-bill. You decide which one fits you better, lah. Both are issued by the government, so it’s pretty safe.

Step 5: Submit Your Application

Here’s the fun part, submitting your application. Just like ordering online, but for investments. So, this is how you do it:

  • Log in to your bank’s internet banking (either DBS/POSB, OCBC, or UOB).

  • Go to the investment section and look for “SGS” or “T-Bills.”

  • Choose the issuance code for the T-bill you want.

  • Now, you decide if you want to place a competitive or non-competitive bid.

If you’re the kind who likes things simple, just go for the non-competitive bid lah. Put your investment amount (in multiples of S$1,000), confirm everything looks good, and hit submit. Cannot anyhow make mistake here because once you submit, no take-backs.

Step 6: After the Application

Now you just wait for the auction results. The results will be out either one or two days before the auction date. You can check on the MAS website or log into your bank’s platform to see how you did.

  • If successful: Congrats! Your CPF OA will automatically be debited, and your T-bills will be credited to your investment account three days after the auction.

  • If not: No worries, the money will be refunded to your CPF OA in one or two days.

Step 7: When T-bills Mature

Fast forward six months or one year, and your T-bills will mature. Time to collect your money, but be quick lah. Transfer the proceeds back to your CPF OA as soon as possible – if you leave it hanging, no interest will be paid on that money. You can do this online, so it’s pretty easy.

Also, don’t forget to monitor your investments. Check your statements and the CPFIS dashboard once in a while to see what’s happening with your T-bill holdings.

There you go, simple right? Just follow these steps, and you’ll be able to make use of your CPF money to buy T-bills easily. Good luck, and remember, slow and steady wins the race!

Uncle's Simple Guide: How to Open a CPF Investment Account in Singapore

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This is the 2/2 part of the series – where you can level up your CFP money. Ready to invest like a pro? Let’s go!

Uncle’s Simple Guide: How to Open a CPF Investment Account in Singapore

Alright, young one, today Uncle’s going to teach you how to open a CPF Investment Account (CPFIA) with the big boys: DBS, OCBC, or UOB. It’s not as hard as you think, just follow Uncle’s steps and you’ll be done in no time. Let’s go!

Opening a CPF Investment Account with DBS

First, let’s talk about DBS. If you already got a DBS/POSB account, you’re halfway there. But before anything else, you need to make sure you’re ready for this.

  1. Check Your Eligibility: You must be at least 18 years old and have more than S$20,000 in your CPF Ordinary Account (OA). No $20k? Sorry, cannot play.

  2. Complete the Self-Awareness Questionnaire (SAQ): Go to the CPF website and take this quiz to check if you know what you’re doing. Uncle says it’s better to know before you start.

  3. Log into DBS Internet Banking:

    • Already a DBS customer? Good. Log in to your DBS internet banking account.

    • Go to the “Investment” section and look for “Open CPF Investment Account.”

  4. Fill Out the Application: You just need to provide your details, nothing too difficult.

  5. Submit Your Application: Once you’ve reviewed everything, hit submit. Wait for SMS or a letter in the mail—usually takes 3-5 working days.

  6. Get Your Account Number: After your application is approved, DBS will send you your CPFIA account number. Now you can start investing like a pro.

Opening a CPF Investment Account with OCBC

Next up, OCBC. Same process, but a bit different flavour.

  1. Eligibility Check: Make sure you’ve got the age and at least S$20,000 in your CPF OA. You know the drill.

  2. Complete the SAQ: Don’t skip this. Go to the CPF website and take the test to make sure you’re ready for investing.

  3. Log into OCBC Internet Banking:

    • Got an OCBC account already? Perfect. Log in to your online banking.

    • Find the “Investment” section and click on “Open CPF Investment Account.”

  4. Fill Out the Application Form: Fill in all the details OCBC asks for.

  5. Submit Your Application: After double-checking your info, submit it.

  6. Account Confirmation: OCBC will notify you in a few days. Once approved, they’ll send you your CPFIA account number. You’re now ready to invest.

Opening a CPF Investment Account with UOB

Last one, UOB. Pretty much the same, but let Uncle guide you step-by-step.

  1. Eligibility Check: You know the rules—18 years old and at least S$20,000 in your CPF OA.

  2. Complete the SAQ: Same process. Go to the CPF website, take the questionnaire, and show that you understand what you’re getting into.

  3. Log into UOB Internet Banking or Visit a Branch:

    • Got a UOB account? Log into their online banking.

    • If not, no worries. You can visit any UOB branch to open your CPFIA in person.

  4. Fill Out the Application Form: Same as the others, fill in all the necessary details.

  5. Submit Your Application: Review everything, submit either online or at the branch.

  6. Receive Confirmation: UOB will notify you once your account is ready, and you’ll get your CPFIA account number. Easy peasy!

Important Things to Remember

  • You can only have one CPF Investment Account, so don’t go opening one with each bank, ah.

  • Double-check your information during the application. If you mess up, you might get rejected—then troublesome!

  • Once your CPFIA is open, you can start investing with your CPF OA funds according to CPF guidelines. Remember, don’t anyhow gamble lah, invest wisely!

There you go. Easy steps to open your CPF Investment Account with DBS, OCBC, or UOB. Now you’re all set to grow your CPF savings with smart investments. Happy investing!

The ABC of Investing and Finance

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Uncle want to share knowledge

This is the first series of the jargon and terminology used in investing. Will link other list at the bottom of the post for future reference.

A

Asset Allocation: Like chicken rice, your portfolio shouldn’t just be rice and chicken! You will need a little bit of vegetable, chili and dark soy sauce. Diversify your investments across asset classes (stocks, bonds, cash) to balance risk and potential returns.

Appreciation: Think of your investments like a vintage jacket – their value increases over time, making them worth more when you sell.

Annual Percentage Rate (APR): The true cost of borrowing, expressed as a yearly percentage. It’s like reading the ingredients on a candy bar, but for loans.

Ask Price: The minimum amount a seller is willing to accept for an asset. Just like haggling with your durian seller, in the investing world, a good negotiator gets the juiciest deals.

Asset Class: Groups of similar investments. Think of it like sorting your clothes: shirts with shirts, pants with pants, and stocks with stocks (unless you’re feeling very rebellious).

Amortization: Spreading the cost of an asset over its useful life. Imagine paying for a new phone in tiny installments instead of one big chunk.

Accumulation Phase: The exciting years when you’re actively growing your wealth, like watering a tiny seed until it blossoms into a money tree.

Alpha: The elusive “secret sauce” in investing. It’s the extra return you achieve beyond the market average, like scoring a perfect soufflé while everyone else’s falls flat.

Average Annual Return: The historical average gain (or loss) of an investment over a specific period. It’s like looking at a restaurant’s average rating before deciding to dine there.

Ask Bid Spread: The gap between the highest price someone is willing to pay (ask) and the lowest price a seller will accept (bid). Think of it as the haggling space at a pasar malam, the wider the spread, the more room to negotiate.

B is for Building Your Financial Fortress

Bear Market: When the stock market takes a long nap and values hibernate. Don’t panic, grab a good book, it’ll wake up eventually. Means everything is low, many people will lose money if they sell.

Beta: in short, the difference between the value of your investment against the market movement. This is the chart that you see in those stock markets movie. High beta wiggles like a disco queen, low beta sways like a gentle waltz.

Broker: Starts with the word broke, their job is to help you buy and sell assets. With the the current day and age, they are your online brokerage (think: Moomoo, Tiger Trade and etc).

Bid Price: The maximum someone is willing to pay for an asset. Think of it as offering your highest price for a juicy durian at the market.

Blue-Chip Stocks: The tried-and-true giants of the financial world, like reliable sneakers that never go out of style. (Nike Cortez?)

Bond: An IOU from a government or company, promising to pay you back with interest.

Bull Market: When the stock market throws a wild party and prices are on the rise. Enjoy the champagne, but remember, every party eventually ends.

Budget: Your financial roadmap, charting your income and expenses. Treat it like a GPS, it helps you navigate towards your financial goals.

Balance Sheet: A snapshot of a company’s financial health, revealing what they own and owe.

Benchmark: Your investment performance yardstick. Compare yourself to similar assets or indexes to see how you’re stacking up, but remember, sometimes focusing on your own race is wiser.

C is for Cultivating Your Financial Garden.

Capital: The seeds of your financial harvest. It’s the money you use to invest and build wealth, like fertile soil for your financial plants.

Capital Gain: The sweet sunshine that warms your investment returns. It’s the profit you make when you sell an asset for more than you paid.

Capital Loss: The occasional cloud passing over your financial sky. It’s the money you lose when you sell an asset for less than you paid.

Compound Interest: Your financial magic beanstalk! Reinvested earnings snowball over time, making your money grow exponentially, like watering a tiny sprout that becomes a towering money tree.

Cash Flow: The lifeblood of your financial kingdom. It’s the money coming in and going out, like the gentle ebb and flow of a healthy river.

Collateral: The security deposit for your financial adventure. It’s an asset pledged to secure a loan, like leaving your bike with the pizza guy until you pay for your extra-large pie.

Call Option: The right, but not the obligation, to buy an asset at a set price by a certain date. Think of it as chope-ing a table at a restaurant, with the option to cancel if something better comes up, but you need to pay to buy the option.

Covered Call: Renting out your reserved table at the restaurant that you paid earlier! You sell a call option on an asset you already own, collecting a premium but giving up the potential for higher gains if the price soars.

Correlation: How two asset prices dance together. Some tango in perfect harmony, while others do the awkward shuffle, understanding their relationship helps diversify your portfolio.

Cost Average: Smoothing out the bumpy investment roller coaster. You buy smaller amounts of an asset at regular intervals, averaging out the price over time.

🇸🇬💰🇸🇬💰🇸🇬💰 – 2024

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Before you spend your money, you gotta plan how to spend.

🇸🇬💰💰💰

https://instagram.com/p/C1YSLfhSac0/

TLDR: 2024 hard times, but govt will make sure we spend wisely!

Singapore government is working on their budget for 2024! In fact, it’s a pretty big deal at the moment.

Here’s what we know so far:

  • Delivery Date: Deputy Prime Minister and Minister for Finance Lawrence Wong (also future Prime Minister, if PAP wins the next election) will deliver the Budget Statement on Friday, February 16, 2024, in Parliament. Can watch it here.

  • Public Feedback: The government is currently gathering public feedback on the budget until Friday, January 26, 2024. You can share your views online through REACH’s Budget 2024 microsite or attend physical engagement sessions.

  • Key Priorities: While the specific details of the budget haven’t been released yet, some experts anticipate that it will prioritize sustaining economic competitiveness, easing the cost of living, and driving innovation. The 30th anniversary of GST and potential international tax reforms are also likely to be influential factors.

You can also follow Ministry of Finance’s Telegram channel here

No brainer guides to investing.

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Get rich slowly but never die trying to get rich.

Recently uncle read this book, “The Bogleheads’ Guide to Investing. It’s like me la, your wise uncle giving you long winded (loh soh) advice, but for investing.

It tells you how to grow your money slowly but surely, without acting like a crazy stock market cowboy. All about smart saving, smart investing, and staying cool. Uncle share this quickly with you.

“Because nobody want to get rich slowly” – Warren Buffett

Part 1: The Bogleheads’ Guide to Investing – Simplifying Your Financial Future

Feeling overwhelmed by the world of investing? Don’t worry, you’re not alone! The Bogleheads’ Guide to Investing offers a straightforward and practical approach to building wealth, perfect for young professionals like you.

Here are the key principles to remember:

  • Focus on long-term investing: Don’t get caught up in short-term market fluctuations. Invest for the long term (10+ years) and avoid chasing “hot stocks.”

  • Keep costs low: Minimize fees and expenses by choosing low-cost index funds. These passively track the market and offer excellent returns without the high costs of actively managed funds.

  • Diversify your portfolio: Don’t put all your eggs in one basket. Spread your investments across different asset classes, like stocks, bonds, and real estate, to minimize risk.

  • Rebalance regularly: Over time, the market will cause your portfolio’s allocation to drift. Rebalancing ensures your investments remain in line with your risk tolerance.

  • Stay disciplined: Avoid impulsive decisions and stick to your plan. Remember, investing is a marathon, not a sprint.

These principles may seem simple, but they’re the foundation of successful long-term investing. By following the Bogleheads’ guide, you can confidently navigate the financial markets and achieve your financial goals.

Part 2: Building Wealth with Just Three Funds

Investing doesn’t have to be complicated. The Bogleheads’ guide recommends a simple three-fund portfolio for most investors. This portfolio provides diversification, low costs, and the flexibility to adjust for your individual needs.

Here’s the breakdown:

  • Total Stock Market Index Fund (70%): This fund tracks the entire US stock market, offering broad exposure to various sectors and companies.

  • Total International Stock Market Index Fund (20%): This fund invests in stocks from developed and emerging markets, diversifying your portfolio beyond the US.

  • Total Bond Market Index Fund (10%): This fund provides stability and income through investments in government and corporate bonds.

Remember, this is just a starting point. You can adjust the allocation based on your age, risk tolerance, and financial goals.

Part 3: Resources and Next Steps

Ready to start your investing journey? Here are some resources to help you get started:

  • The Bogleheads’ Guide to Investing: This book is the cornerstone of the Bogleheads’ philosophy and provides comprehensive information on investing strategies and principles.

  • The Bogleheads’ website: This website offers a wealth of free information and resources, including articles, forums, and calculators.

  • Online investment platforms: Many online platforms offer low-cost index funds and fractional shares, making it easier than ever to invest.Like this or this or this and this.

Investing is a powerful tool for building wealth and achieving your financial goals. By following the Bogleheads’ principles and starting early, you can set yourself up for a secure and fulfilling financial future.

Remember, the key is to be patient, disciplined, and stay informed. With the right approach, you can unlock the power of investing and achieve your financial dreams.