Dear Gabriel,

I always see advertisements in the newspaper about investment companies claiming that they can get clients huge returns. They say that it’s possible to earn profit hourly, weekly or monthly, even when the stock market is down. Some advertisements claim that a client earned up to $70,000 in just six months. Not only that, I recently read an advertisement saying that potential clients can be millionaires if they invest through their company using the ‘Bill Gates method’. So are these advertisements true? If they are, is it really safe to invest money through them?
Rasul, Singapore

  Dear Rasul,

I have taught at reputable institutions such as the Asian Development Bank, Singapore Exchange (SGX) and Institute of Banking & Finance, and I have prepared students for the Chartered Financial Analyst exams. In all this time, I have yet to discover a full-proof method of becoming a millionaire. I think it would be foolhardy to invest money through such companies. By the way, Bill Gates became a billionaire through building up Microsoft, not through investments – thus, I doubt there is a “Bill Gates method” in investments.

  Dear Gabriel,

What’s your opinion on credit cards? Is it better to wait for your year-end bonus and pay in large amounts or to enrol in their ‘easy pay’ programmes with fixed amounts to be paid in four years? How about cash loans offered by banks? Are the figures/multipliers they provide to determine your monthly payment fair or are they overly calculated?
Maridel Punzalan, Philippines

  Dear Maridel,

Credit card interest rates are the highest – normally above 20 percent annualised – among all forms of bank loans or overdraft facilities. So it makes sense to pay your credit card bill in full when due. Twice the monthly salary is the usual credit limit given, and this is usually administered by the respective country’s central banks. The policy varies depending on the credit policies of each country.

  Dear Gabriel,

I am a second year part-time MBA student and I want to build a school to develop talent from my hometown. I’d love to hear your personal thoughts on how I should start out.
Marinel, Philippines

  Dear Marinel,

Tenacity and determination is what you need to start a school in your hometown. In the various aid programmes for Charitable Aid Foundation, which I advise, starting schools can be tough, both physically and mentally. Finding a good piece of land is a challenge, as this requires a high fixed capital expenditure. Thereafter, you have to contend with other fixed asset purchases. You need to get the necessary government approval, if one is needed. Remember a school takes a long period to break even from a cash flow basis. Thus, having sufficient reserves is an important consideration.

  Dear Gabriel,

I’m a financially stable 18-year-old student who wants to start investing young in order to be financially independent. I’ve got about S$10,000 ($7200) that’s sitting in a low-yield savings account. There are many guides on the Web on what to do, but none of these seem to apply to the Singapore context. What are some of the capital guaranteed investments you would recommend?
Kash, Singapore

  Dear Kash,

There are hardly any capital guaranteed investments, unless they yield very low returns of less than one percent. You can adopt a conservative strategy of investing in Term Deposits in higher yielding currencies like the Canadian, New Zealand or Australian dollars. For example, my Australian Term Deposit at the Commonwealth Bank of Australia, yields six percent for a 12-month deposit. If you are more aggressive – and you can afford to be as you’re rather young – you can opt for good stocks that pay higher dividend yields like Starhub, M1, SMRT or SPH. Of course, buying them at attractive prices when they fall is another key factor.

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