How to Pay Less for your Investments

According to TrasingEconomics.com, the Indonesian Stock Market (JCI) saw an increase in index points in February 2015. The mark of 5289.40 index points, recorded in January 2015, rose to 5400.10 index points in February 2015. Looking at the overall performance of the stock market, the average performance index stood at 1235.50 during 1983-2015. The index points in February 2015 are said to be the highest recorded performance of the market so far.

The above data just intensifies the fact that investment in shares (Investasi saham) is a very lucrative investment option available today. Many of us choose managed funds, since it is simpler. However, have you ever wondered if you are paying more for your investments than you ideally should?

After all, if other ancillary expenses are eating into your gains, the whole point of investing becomes null and void. So how do you know whether you are overpaying for the investments you make? Here are a few ways by which you can identify these areas.

Three Areas where you can Reduce your Costs

1.      Loaded Funds: There are thousands of investment fund options to choose from in the market. Take mutual funds, for instance. Since only a marginal percentage is offered to brokers, general investors have access to most of these funds. So when there are so many choices at your disposal, why choose front-end or back-end load funds? Look for no load funds to minimize the extra fees that you will otherwise have to pay.

2.      Taxes: When investments are not planned from a taxation outlook, these tend to attract hefty taxes. Investments under a year are categorized as short term capital gains. These attract more taxes than long term ones. You can reduce your taxes by holding your investments for a period that amounts to more than one year (long-term). Also, the services of a financial consultant and planner can help you manage your taxes better.

3.      Expense Ratio: For managed investment funds, it obviously means that a company is managing your investment bundle. The expense ratio will reveal the amount that is deducted as fund management fees. Look for low ratios, unless the product is worth the extra cost. Although all managed investment funds (investasi reksadana) cost a little extra, it is important to understand that some are more expensive than necessary. This is why it is essential to pick a reputed and transparent fund company. A little research can go a long way here.

Payment Assurance for You and Your Beneficiaries

Your buyer or seller, especially in a foreign market, can pose to be a formidable barrier when it comes to your trade operations. However, when you use tools like a banker’s guarantee or Standby Letter of Credit, the entire trade can function in a hassle-free manner. What this essentially means is that in the event that either party fails to fulfill their contractual obligations, the bank will ensure that the beneficiaries’ payment is honored upon receipt of a claim, in compliance with the terms of the guarantee.

What is the Required Process?

The process begins with the buyer and seller entering into a mutual contract, in line with the requirements of a banker’s guarantee. The parties are the applicant and beneficiary, respectively. The applicant approaches the issuing bank for documentary credit, drawn in favor of the beneficiary. The issuing bank sends instructions to the advising bank in the seller’s country to correspond the letter at the beneficiary’s end. Once the advising bank gives its confirmation, the guarantee is issued and the hard copy of the same is sent to the beneficiary.

Advantages a Letter of Credit to the Seller

With an appropriate banker’s guarantee, the seller is assured that full payment will be honored at the agreed time. It is a method for secure payment, as long as the set conditions are met. It also minimizes collection time. Here, the risk associated with non-payment lies with the bank, as opposed to the beneficiary. Also, on issue, the seller has easy access to any form of financing. It also enables them to transfer the full or partial value to a third party, such as in the case of raw materials or associated spare parts, etc. Also, currency fluctuations are mitigated by such credit documents.

Advantages to the Buyer

It provides security cover for the buyer as well. It ensures that the seller will honor his side of the trade, thereby protecting the buyer from non-performance and damaged goods. He can also instruct the contact to hold safeguards for him, such as good inspection, time of delivery and quality control. Also, the main benefit is that cash is not tied up. The buyer does not have to pay until he receives the title of the goods. Repeated use of this tool helps increase credibility in the international markets.

Thereby, through a banker’s guarantee, the buyer and seller are able to maximize control, mitigate high risk levels and optimize profits in relation to international trade operations.

Which Credit Card offers Good Freebies in Singapore?

Cash back cards pay you a certain amount every time you use them. This could translate to hundreds of dollars a year, when used optimally. The top cards pay an average of 5% cash back at selected merchant outlets. However, they also offer incentives for other regular purchases.

Credit cards typically come with some extremely lucrative offers; so why ignore the best, especially, when they offer so much? Apart from the convenience of instant money, the option of having rewards and offers is one of the biggest advantages of plastic money. While options like fancy restaurant discounts, birthday discounts and travel upgrades are fairly common in cash rebate cards, there are those that offer much more.

Hand-picking the Benefits 

An important criterion that comes into play while choosing a card is the goodies that it brings along. Sometimes, a few perks can prove to be more than useful. Also, one would want to pick a cash rebate card that has benefits for the entire family. While we think of additional benefits on entertainment related services, such offers in daily needs can be rather useful, especially for a large family with kids. Here are a few highlights of such family cards:

1.      Daily Essentials: Rebate options are available in major petrol stations and hypermarkets in Singapore and Malaysia, such as TESCO and AEON BIG.

2.      Health & Wellness: These cards also give benefits at chain stores like Watsons personal care stores and the Guardian, where you can buy personal and health care products for the entire family at a rebate.

3.      Fast Food Delivery: A weekly outing is more than common, with the entire family stopping at places like McDonalds, Pizza Hut and KFC, to name a few. And when you get more from your outing through your cash bank cards, you’ll be “lovin’ it” all the more!

4.      Other Retails: Many retail stores are also covered under such cards. You have the option of enjoying cash back at kids and mothercare outlets, online stores and book stores.

Maybank Family & Friends Platinum MasterCard is a classic example of the above features. Apart from offering the said 5% on the selected merchant outlets, it offers a 0.3% rebate on other purchases. It goes on to open the doors for a host of other privileges in Singapore, Malaysia and Indonesia as well. These privileges and discounts are usually detailed on the company’s website.