Thursday, 8 August 2019

How can investors ride on China's growth?

China companies might be the next big thing. How can investors tap on their growth?

Image credits

For the first time ever, China has surpassed the US in having more Chinese companies on the Fortune 500 list.

American companies have traditionally dominated this list, as history will show you. However, a total of 129 Chinese companies made it to the list this year, surpassing the 121 American companies which include the usual suspects, Apple and Google. 

I've no doubt that China offers one of the biggest investment opportunities today. For those of us who missed out on investing in US giants (eg. Amazon) because we were just too young then, China might be our next chance.

And I'm not the only one who thinks so. Even Charlie Munger feel the same way, and has been pushing Warren Buffett to invest more in China. As told to CNBC, Charlie Munger said,

"The best companies in China are cheaper than the best companies in the United States."

Munger also went on to say, "I don't think it would be all that hard for any smart person to find 4 or 5 great companies in China to invest in." He also revealed that his family is also "substantially invested" in China and begun buying stocks since 14 years ago.

Of course, there are still barriers to investing in Chinese companies, as their numbers are not always fully transparent, and they are not governed with the same strict compliance or regulations as companies in the US, Singapore or even Hong Kong are.

Nonetheless, never say never. I've begun my research into top Chinese companies and stocks that would be worth investing in, and will be dedicating a portion of my investment portfolio to it under the growth category. For those of you on my Patreon, you can expect a list of my shortlisted Chinese companies that I'll be putting on my watchlist shortly. But to hedge my risks, this time I'll be flying into China to do due diligence on the ground as well, since the Internet can't always be trusted when it comes to things you read and hear about China.

Till next time!

With love,
Budget Babe

Saturday, 3 August 2019

Who takes care of your child after your maternity leave?

Infant care, domestic helper or a babysitter?

About 2 months into my maternity leave, my husband and I knew that we needed to start looking at caregiving options that would allow me to go back to work when Nate reached 4 months of age.

As much as I loved spending time with my baby, it didn't make much financial sense for me to stay home and be Nate's full-time caregiver, especially given my earning power. Doing household chores and cooking aren't stuff that I particularly enjoy, either. So for those reasons, we decided it would be better to engage external help.

Most Singaporean parents usually opt for either one of 4 choices:

  1. Send their child to infant care
  2. Get grandparents to look after
  3. Hire a stay-in domestic helper
  4. Hire (or send) their child to a nanny / babysitter
We deliberated over the different options for quite some time and these were our main concerns:

Costs (monthly) Remarks
Grandparents $0 May hinder baby's English language development
May not do as much educational activities
Will be extremely tiring for them, given their age
No social interaction with other babies
Infant care $900 - $1,800
(after working mother subsidy)
Falls sick often
May need to take leave to look after when sick
Must rush down after work to pick up baby
Need to still do night duties (less energy for work the next day)
Domestic helper $580 - $700 Not sure if trustworthy, may ill-treat baby in our absence
Baby might become overly clingy to the helper
No social interaction with other babies
Will have to live with a stranger in our house
Babysitter $800 - $1,200 Not sure if trustworthy, may ill-treat baby in our absence
May not do much educational activities

*Accurate as of August 2019. Other online articles that I had initially read quoted lower prices, but I did not manage to find such low rates when I enquired directly with the various infant care centres near us, several babysitters and maid agencies. Note that for domestic helpers, $580 usually refers to fresh hires with little to no experience, based on current market rates.

Obviously, each option had its pros and cons. 

All of our grandparents are working, except my dad (who's too old and sickly to take care of Nate, anyway), so the first option was simply not a choice we could make. The babysitter contacts that we had were all not available to take care of Nate, so we were down to choosing between infant care or a domestic helper.

In the end, we chose the latter.

When we considered the money involved, the costs of an affordable infant care centre vs. hiring a domestic helper worked out to be almost the same. There was, however, one big difference. 

With infant care, we would need to not only take care of Nate at night (which means I needed to stop teaching tuition as a side gig, since my husband works till 11pm), but also potentially take leave from work to look after him when he falls ill.

On the contrary, if we could hire a good helper and entrust Nate in her care, we would be able to:
  • Expose him to someone who speaks good English
  • Get her to read books to Nate, and go through other educational activities planned by me
  • Go out to work and earn more income
  • Have someone cook healthy meals for Nate
  • No longer have to worry about doing household chores after work and on weekends
As such, the choice was clear, and we hired a Filippino helper through an agency. It doesn't really matter which agency you use (just avoid the ones with numerous bad reviews online), as it'll be more important to interview several shortlisted helpers before you find a suitable match. In our case, we approached 4 agencies and obtained 8 helper profiles, selected 3 to interview, and that was how we found our current helper.

Nate is always happy whenever "Aunty" is around
It has been about 5 months since our helper joined us, and it has reaffirmed our decision that hiring her was the best decision we've made for Nate thus far. Not only is she experienced, it is clear that she genuinely loves spending time with our baby; they are always having lots of fun and laughter together!

In terms of costs, we're currently paying this every month:
  • $700 salary
  • $60 MOM levy
  • $200 for marketing and food expenses
This $960 spent is the highest line expenditure in our household thus far, but it is worth every single cent as it has freed up our time and energy to go to work and grow our income.

What caregiving option did you choose and why? Let me know in the comments below! 

With love,