Singaporean Talks Money

Saturday, 8 May 2021

Is cash really useless now?

"No one holds cash nowadays, it is either in the stock market or in cryptocurrencies" I feel this is what a lot of people think nowadays as I have seen numerous videos about the printing of money by the FED, putting their stimulus money into stock market and also of inflation. I think the overall notion is that since cash can be so easily printed, why hold on to it as it's value will fall over time.

Instead, we can use cash to buy assets or items that will be worth more in the future. That is also why people love buying real estate as well. Explaining as well on the overheated property market in Singapore.

A lot of my friends have been entering the stock market since late last year and previously I used to only be the one investing, with the entry of Tiger Brokers and MooMoo + stock market bull run, many of my friends have chosen to put their cash into the stock market.

Cash is still king?

For me, I feel secure holding at least 6 months of my salary and would like to build it up more over time. Cash is still king as long as it is still our medium of payment. However, in terms of value appreciation or growth, cash is definitely not king. For many of the older generations, cash is and will always be king because from a young age, cold hard cash was what paid their bills. I came across this video recently called "Are we ready for the next crisis?" by DW Documentary, in the video, many people are being asked how does cash come about. Most of them were not aware with some of them saying that it comes from the bank or when we work we receive it. In a way, they are right but how does cash really came about?

How cash/money came about and how it might change in the future

A rough overview is that in the early times, there was no money but things were exchanged for example, you grew vegetables and you could exchange it for some meat by sharing your crops. IOU was also issued if you were not able to pay where debt was also created. Next we moved on to a time where money was in the form of metal or pebbles where for example some form of common and unique characteristics was found for money to make it not easily replicated but at the same time, something that was easily recognisable.

Eventually, societies moved away from using precious metals to make money. Known as representative money, the new paper bills and coins made of non-precious metals represented certain values that everyone in those societies could agree upon. Governments or banks would promise to exchange representative money for a specific amount of silver or gold. Today, most modern currency is not backed by silver or gold. Instead, today's money is known as fiat money. Money has a certain value today because it was given that value by government fiat or decree. - Taken from www.wonderopolis.org

Money today has a certain value because the value is given by the government and I believe Bitcoin was created in 2008 in response to the Great Financial Crisis where Satoshi Nakamoto wanted to create a peer to peer payment system that did not require a third party confirmation. This means that banks would not be involved in this equation. It is a simple idea, to eliminate the middleman/third party to optimise the whole process of payment.

Many people who invested in cryptocurrencies early on understand that this concept is here to stay as it is something that made sense, to remove admin fees and yet have everything still be processed and have a transaction record through a blockchain.

Regulatory problems

“You’d have to shut down the Internet” to ban Bitcoin, says SEC’s Hester Peirce. Even though, the governments want to have a way to regulate cryptocurrencies, it really is quite difficult to do so when internet is readily available although the government can still implement policies to ban them. Like in India and Turkey where the Turkey’s central bank banned the use of cryptocurrencies and crypto assets for purchases citing possible “irreparable” damage and transaction risks.

The government might want to implement regulations for cryptocurrencies when they realise that more people are adopting it. Just recently, Turkey has been facing many controversies with cryptocurrencies exchanges where the owner escaped with people's money. This is definitely not due to the cryptocurrencies themselves but the people who are managing the exchanges. This can in turn make the governments really step in if needed

Why you should still have sufficient cash on hand

For now, cash is still king and important to a certain extent in our asset allocation because it is our main mode of exchange to obtain goods. We do not know in the near and far future on how cash will be redefined, the world is evolving at a rapid pace and everyone will have to adapt to the changes as it comes along. Just like how jobs could be made redundant in a matter of years, cash or our own currency might just change. Or maybe things will still remain the same for a long time. Building up cash is still the priority so always remember to have an emergency fund or buffer to make sure you do not have to liquidate your investments to make payments. Hope you guys enjoy today's video and as usual, do subscribe and hit the like button!

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References:
https://www.reuters.com/technology/turkey-bans-use-cryptocurrencies-payments-sends-bitcoin-down-2021-04-16/

https://financialgym.com/blog/2021/1/2/bitcoin-101-what-is-bitcoin-and-why-was-it-created

Saturday, 1 May 2021

Does the college you go to determine your future? And is a degree really needed?

Hi guys, welcome back to another article/episode from SingaporeanTalksMoney! I was having a chat with a friend recently. She is a diploma holder and have been working in her company for a substantial amount of years.

Her work environment has changed due to some restructuring and her workload has been increasing due to people leaving however it is really difficult for her to find a new job as it is an administrative position and it is so difficult to find another position where they will pay the same and provide good benefits.

I also watched a Netflix documentary called Operation Varsity Blues: The College Admissions Scandal where it explained how the rich and affluent use the "side door" to buy their children into prestigious school as having that prestige will help them fulfil what they could not do. So some of the parents, even though their child would be able to secure a spot if they were to put in an effort had to still use the "side door" to ensure a spot for their children. This is because being from a prestigious college increases your chance of working at big companies and also the opportunities that will be offered or even just the first impression and bragging rights.

Singapore definitely places a lot of emphasis on education hence having the local university and private university divide. And then even to the course that you study where top students usually go for medical or law degrees. Since it is so important to be studying at a good school, does it mean your future is ruined if you do not get in? Of course not! But let's explore some biases/impressions that have been formed.

Degree = Higher Salary?

Having a degree is really a norm now in Singapore, it seems to be the entry ticket to a job and it really seems so when you go through job postings as most of them would have a requirement "minimum a Bachelor's degree". I went the polytechnic route and to be honest halfway through, I already knew I wasn't going to make it to a local university. I actually thought of not going for a degree since I wasn't very studious and wasn't even sure what I wanted to do. Thats why I took a gap year and worked full-time in a job that was related to the field I studied.

After a year of working, I realised what I didn't want although I still wasn't sure what I wanted hence I went on to study a general degree because during my one year of working, I truly realised that your starting pay is pegged to your education or rather if you have a degree, you will have a "better" starting pay in some cases. And also because I felt that getting a degree was a necessity for my career. I know of many cases where a degree is not needed and with grit and performance, diploma holders can also command a relatively competitive salary.

It was also during this time when I was exposed to knowing that first-class honours could command a higher starting salary of course, depending on the company that you will be joining. It really further cement the thought that a degree was really the entry ticket to getting a higher pay. In my case, as my job was usually research-based or in healthcare mostly in laboratory settings which was not something I wanted hence I went to take a non-related degree to broaden my perspective.

Communicative skills

After obtaining my degree and entering the working world, I have truly realised that a degree might be your entry ticket for certain jobs/industries but there are so many more factors involved in maintaining or advancing your career. One very crucial point that I have learned is communication skills. There are just so many aspects to this and it can really make or break relationships in your workplace. Being able to pitch an idea or provide feedback the right way to your colleagues and boss is so important especially so when we have now moved to virtual meetings. You and your boss are no longer in the same physical space and conveying an idea is much more difficult as physical cues are limited and the tone might also be different on video.

Some examples that I have seen are that if you are able to communicate well, people tend to also help you in tasks that you require assistance. I have had an ex-colleague who would always have catch-up chats with another team and share how her day was to easily reach them even as a friend capacity. This means that when she needs help, she can easily approach them and for them to help her, the other team are faster to respond since they are like "friends".

Similarly, being able to communicate well with your boss means that more opportunities could be given to you as your boss can convey instructions easily and know what you are working on. Unfortunately, for me, I am an introvert and I have to admit that I am too comfortable in my comfort zone of not speaking up. I have seen opportunities being given to others partly because I did not voice out my opinions that I am capable of handling the project.

This has overall made me more of a listener and to be honest, many things appear in my mind but I cannot seem to articulate it out. I am trying to work on being more expressive and to make myself be heard. Whether in terms of the work I do or just an update.

Learning new things

Besides of course improving your communication skills, a lot also depends on your learning. Learning to improve your current workflow or learning a new skill that will earn you extra money or push you ahead in your career is really crucial. The world is really changing in terms of the demand and supply of knowledge and jobs. Technology is now the dominant sector and even primary school children will have to incorporate coding into their curriculum, this just tells us how much the materials that the younger generation needs to be exposed/studied will have a change

Is a degree needed?

I would say yes, in current situations. Of course, this depends a lot on the industry you are going into and what you are studying. Most if not all industries nowadays require constant knowledge update through short courses throughout your career and you can also study part-time although it requires huge perseverance and determination. I think what matters more is your attitude towards learning. Hope you guys enjoy today's video!