Business Start Up!

Posted on December 2, 2016 in Uncategorized

The most common question I’m regularly asked is “what is the best business to start”? I always respond with “what’s the biggest problem you encounter on a day to day basis”? The way to get a business idea is not to try to think of an idea, but to look for a solution to a problem. The best business ideas usually have a number of things in common & this usually includes a solution to a problem or an improvement to an existing solution. The most common mistake start-ups make is to solve problems no one has or to operate in a market saturated with business offering a similar solution.

The way to look at things and the way a social entrepreneur would see things is by living in the future and then build what’s missing. This is the way many of the well known start-ups grew to become global giants. Apple, Google & Facebook grew out of ideas their founders built because they were living in the future & they saw a progressive gap in the world with the advances of technology. A good start-up idea should seem obvious, when you find one but you may feel that you’re too late. Never let that deter you. Everyone will have a different perception to a problem but often don’t realise it until they see a solution. Worrying that you’re late is one of the signs of a good idea. Do your research & a browse the Internet for 10 minutes or so, this will usually answer the question. Even if you find someone else working on the same thing, you’re probably still not too late. It’s exceptionally rare for start-ups to be squashed by competitors, so rare that you can almost discount the possibility.

Once you’ve found your start-up Idea. You’ll be spending day and night in the office, fuelled by energy drinks and pizza. However I suggest you ditch the crazy working hours and instead build a productive and incredibly solid daily routine which will make you much more efficient. “You shouldn’t sacrifice today for tomorrow”. Many people often assume that if you run your own business you’re “in the money”, this isn’t always the case especially at the infancy of your start-up with limited capital. You should be focusing your attention on growth and reinvest, reinvest and reinvest. This is the most important thing for any start-up.

With technology making the world a smaller place it’s considerably easier to take your business global with the power of social media and you can do this at very little or no cost… if you know how. The cost of starting a company is minimal. You can work from home (for most start-ups), marketing online, websites & hosting is cheap & with the number of loans now available in the market all the tools are there to get you started. There are number of organisations including those that are government backed to help get you started. Some of these Include: A government backed scheme to fund and mentor young entrepreneurs & help kick-start and support a new generation of entrepreneurs, aged 18-30. The Federation of Small Businesses is the UK’s largest campaigning pressure group promoting and protecting the interests of the self-employed and owners of small firms. Formed in 1974, it now has 200,000 members across 33 regions and 194 branches.

All you need now is the motivation, passion and resilience to make your start-up idea a reality.

Singapore Mortgage Refinancing

Posted on November 30, 2016 in Uncategorized

Mortgage refinancing can bring you quite a lot of benefits, especially if the current mortgage no longer works for you. It can also mean a major difference in your finances on a long-term basis, and you should really consider it when the lock-in period of your loan ends. Most banks in Singapore will give you a penalty if you repay within 2 years for floating rate loans and 3 years for fixed rate loans.

Before making a decision, you will need to know a few things, such as the outstanding loan, the current interest rate, the tenure, the end of the clawback period, and current monthly repayments. After that, you may use a mortgage broker or research the market yourself, talking to banks about your current status and the options they can offer you, or get on the Internet and find out for yourself.

The next step is to decide what type of loan you want to get.

SIBOR/SOR? The Singapore Interbank Offered Rate (SIBOR) and the Swap Offer Rate (SOR) are daily reference rates set by the Association of Banks in Singapore. SIBOR reflects the rates at which banks pertaining to Asian time zones borrow unsecured funds from other banks in the region. SOR is the cost of borrowing SGD synthetically, by borrowing USD for the same tenor and swapping it out in return for the SGD. Since SOR is tied to the foreign interest rates and exchange rates, it is much more volatile and risky than SIBOR. In contrast, the latter is much more stable.

Fixed/Floating? Fixed rates are traditionally more stable than floating ones, as loan packages based on these will use a pre-determined interest rate for a given period of time after which the rate becomes variable and the package essentially turns into a floating rate package. With floating rates, the interest rate will follow the trend of the benchmark rates. Since in Singapore the daily references are SIBOR or SOR, floating rates follow their movements.

Why refinance?

To lower monthly repayment: after the lock-in period the interest rate is bound to rise, and so in order to lower your monthly repayment you can refinance to a bank with a better package.

To lower the interest rate: if you choose a bank with a more appealing interest rate, you will reduce your monthly payments by quite a bit.

To pay off your mortgage faster: The ugliest part about mortgages is that they are a burden that you’ll carry for decades. Paying them off faster is incredibly appealing, and if you feel more confident about your ability to make bigger payments, you can refinance your mortgage to minimize the duration of the loan.

To cash out on your home equity: this particular feature is not applicable to HDB flats, and is recommended if you need funds for education costs, renovations, business startups, etc; in these cases you might consider a home equity loan. However, this means you will have to get a new mortgage and use cash to service the home equity loan, as CPF is not allowed in this case.


Discount Airlines Proliferate In Asia – How Much More Expansion Will the Market Handle?

Posted on November 28, 2016 in Uncategorized

Generally speaking the flights are full in Asia, and the entire air traffic system is maxed out. Still, airlines continue to add more aircraft, and new airlines are showing up to compete as those economies grow, and growing they are. Why? Well, thanks to the Federal Reserve printing money and with the US trade deficit that money quickly flows overseas. If you’ll look at a time-map of GDP growth in emerging Asian Markets and compare it to the FED’s QE you will quickly note the main driver, it’s fairly obvious.

The Boeing Company has noted the intense demand for new aircraft between now and 2030 and under anything close to the current growth rates, those numbers are under-represented, but Boeing economists are wise, and know that nothing can have exponential growth forever. Still, what about the competitive element? Discount airlines expand the pie of the number of people in the flying public, but entrenched competitors also need to deal with their amortized costs, unions, and legacy obligations – fuel of course being equal.

Now then, in the Wall Street Journal there was an interesting article published on December 17, 2013 titled; “Budget Airlines Are Crowding Asian Skies – At Least 10 New Budget Carriers Are Expected in Region Next Year; Some Expand Into Taiwan and Hong Kong,” by Joanne Chu and Guarav Raghuvanshi. Also please read an article ABS-CBN Online News on December 16, 2013 titled; “China Airlines, Tigerair to set up Taiwan budget carrier,” republished from Agence Frane-Presse.

With the rise of Asian Airlines operating with a discount strategy – you can expect more pressures on the Import Export Bank to stop making loans for aircraft when in direct competition with incumbent and entrenched airlines in the Asian markets – especially emerging markets. Easy money and FED QE shut-off will tank those airlines there and whereas, the discount airlines with their lower cost structures have a better chance of survival, beware of a pull-back in near term airliner sales and bankruptcies and mergers in airlines specializing in Asian routes with little to fall back on.

If the Asian emerging markets take a hit for lack or even fear of the lack of future money flows due to these unbalanced trade flows, we could see some challenges. I expect some fallout even if no actual aircraft end up falling out of the sky. I see long-term airline and air traffic growth in that part of the world. As middle classes grow, so too will the number of air travelers in Asia, even if there is a temporary plateau in those middle class incomes and the GDP growth of these emerging nations. Please consider all this and think on it.