I was having lunch with a friend last week and we were talking about how difficult it is now to find value stock when STI is near to all time high and US market has been breaking new high. Both of us agree that this is probably not the good time to be aggressive. He shared that recently he has become more conservative, and increasing his cash holding so that he will be able to tap on in the near future when better opportunities present themselves.
Just recently, he went to UOB, a local Singapore bank, and placed $100K of fixed deposit(FD) with them. The conversation stopped here and I also stopped eating literally, He is in his late-thirties and he has managed to save more than $100K, I think this is a commendable achievement. He noticed the surprised look on my face, and I then asked how did he manage to do it.
He told me there is no secret and here's what he shared:
Forced saving - Since the day he started working, the first thing that he did, was to force saved a portion of his salary every month into another bank account which he has no access to. He shared that initially it was very tough but after 2 years, it became a habit to him. Over the years, this portion of the saving has also been increased to more than 20% of his salary now.
I then asked him, is that simple? We were having our kopi now, and he smiled and said yes, but the initial years will be tough and many people gave up.
He text me this morning about other FD promotions(offering better terms than his) by these banks, and thus I remembered our simple conversation last week. These banks are currently having promotion on their FD as well;