Finance Smiths

Had a busy weekend and still feeling a little tired. We went out for dinner with friends on Sat and the whole group went back to our place to have dessert and drinks while watching the French Open tennis women’s finals match. It was a lot more exciting than expected. I played badminton on Sun before heading to the gym with my wife for a bit. By the time we prepared dinner and sat down to watch the French Open tennis men’s finals match, we were both quite wiped out. It wasn’t as exciting but I’m stoked Nadal won his 10th French Open title (La Decima). I’m a big fan and really happy for his achievement!

It’s tough balancing the work week and weekend activities. The schedule gets packed from trying to squeeze a mix of stuff in and it’s easy to burn yourself out by not getting enough rest. Oh well, we are still relatively young although age is starting to take its toll given our longer recovery times from doing anything. Haha, plus I imagine things will change if we have kids.

Not much is happening on the personal finance and investments aspect on our side. The automated monthly investment plans are working well with regular purchases of the Singapore ETFs. Things have been picking up on the robo-advisor space though. It looks like Smartly and StashAway should be launching in Singapore soon. I know there are a few differences between the investing approach and portfolios built & maintained by both robo-advisors.

However, the primary concern for me is the fee structure when I first try out any new investment platform/product. StashAway’s annual fees seem to be lower than Smartly at most investment asset levels for now. This could change depending on the amount of fund inflows each robo-advisor receive upon launching and over time. But it’s already a significant factor to consider for any investor thinking about signing up to a robo-advisor. Nobody likes paying higher fees.

As for my wife and I, we are planning to sign up to a different robo-advisor each. One for Smartly and the other for StashAway. We will contribute cash funds with the same amounts and at the same frequency, date and time. It’s not the most cost-effective way to build a robo-advisor portfolio since we could combine the investment assets to lower the annual fees even more. However, it would be an interesting experiment to see which robo-advisor provides the better performance and user experience.

It will take some time for both of our robo-advisor portfolios to stabilise so we can automate the regular cash fund transfers into them. We plan to keep the amounts as consistent as possible and only increase them when the markets dip or crash. Not ideal to keep changing the contribution amounts since that will require us to constantly monitor the markets. The less time we spend on investing, the more time we have for ourselves. Looking forward to that!

It’s mid-week and my wife & I have been busy at work. Given the way things are going, I guess we should count ourselves fortunate we still have work to do and a job to go to? Haha. Oh well, we just have to take it one step at a time.

I read Mr.WealthMachine’s recent post on: How much did I make driving Uber for 1 week? I also read his previous post on him driving Uber for the past few weeks. Great stuff!

First up, I am sorry to hear about the terrible graduate employment market. I have an intern who joined our team a few weeks ago in his penultimate year of university and mentioned how his girlfriend who just graduated is struggling to find a job as well.

I reckon it does depend on the course you studied at university and the industry sector/firm you are looking to join. Sadly, the accounting industry is always looking for fresh graduates because the burnout rate is so high. But it’s a good place to start your career if you have no idea what to work as because of the nature and transferability of the skills you will pick up.

I graduated in 2009 from Melbourne University (Australia) in the aftermath of the 2007/2008 Global Financial Crisis. So I know and understand a little about how crappy a bad graduate employment market can be. It’s frustrating because you will most likely not end up starting in any of your preferred jobs but instead have to route around using other jobs to gain experience. This will cost you time and money while taking up additional effort to get through it.

Having gone through it myself, I don’t envy what’s about to happen to you if things don’t improve. I would like to say it made me tougher but that’s only because I survived it. Back then, the gig economy wasn’t anywhere near what it is today. Which is why Uber continues to be a source of fascination for me. Just imagine, tapping into your free time and driving license to earn what I think (based on Mr.WealthMachine’s posts) is a reliable source of weekly income.

By the way, the costs and earnings information on his blog is useful in gauging your possible net weekly income driving Uber as a beginner and going forward. From what I can see, your take-home earnings can hit S$700 each week after taking into account the various costs and incentives. This is assuming you don’t fall sick and drive consistently almost every day.

Now for the fun part. How would I apply his data to my situation if I have to drive Uber after getting retrenched? The entire section below is based on my simplistic predictions and estimates on what might happen.

Actions taken and assumptions

Firstly, I will borrow my parents-in-law’s second car. I know it’s cheating but desperate times will call for desperate measures. Plus I already drive it every weekend to get us around so I’m familiar with it. Secondly, I will only drive it for my normal work week and hours i.e. Mon to Fri 9am to 7pm if my wife is still working. Still not desperate enough to burn my weekend and will rather spend the time with my wife, family and friends. If my wife is retrenched as well, haha, then maybe she can be my relief driver?

Month 1 as new driver with bonus and incentive

Total Average Weekly Earnings – S$800

Average daily trips: 12

Average weekly trips: 12 * 5 = 60

Average daily fare: S$120

Average weekly fare: S$120 * 5 = S$600

Sign-up bonus: S$100

New driver incentive: S$100

Total Average Weekly Costs – S$220

Average daily petrol costs: S$40

Average weekly petrol costs: S$40 * 5 = S$200

Average daily carparking costs: S$4

Average weekly carparking costs: S$4 * 5 = S$20

Net Weekly Earnings for Month 1 – S$580

Month 2 as experienced driver without bonus and incentive

Net Weekly Earnings for Month 2 – S$380

Wow, the bonus and incentive does make a big difference. And it looks like a normal 5 day work week and hours with Uber is going to be tough going if you plan to rely on driving Uber as a long-term full-time job with minimal savings and investments. You need the 6th day of driving to hit the higher incentive target and generate cash for savings and investments.

However, if you have already been working full-time and built up significant savings and investments, it is possible to drive Uber as a replacement job with the same work days and hours for quite a while after getting retrenched. Especially if your partner is still working.

In my case, my wife’s salary income is already sufficient to meet all the expenses for the month with no reduction. I could be saving all my earnings from Uber and still have enough to invest. Nice, I shall pitch this as a contingency plan to my wife since the maths work out.

This wouldn’t work if it’s the other way around. My salary income is only sufficient if we cut some expenses. Plus my wife has no interest in driving Uber. Time to find another contingency plan for her!