You will build a complete, dated ladder for one real future expense using the instruments from this course.
Wei Ling and Jun Hao have read every lesson in this module and talked through their ladder over dinner more than once. What they do not have yet is a single sheet they can open in a year and act on without rereading anything. This project produces that sheet for one real goal of yours. Allow 50 minutes, and have your bank, MAS and SDIC pages open.
Build a complete, dated ladder for one real expense one to five years away, using the instruments from this course. A home down payment, a wedding, a course fee or a car are all good choices. The goal needs a known amount, or a good estimate, and at least one date.
The finished ladder must show that the money for each payment will be in your account, in full, before the payment is due, and what you will do as each rung matures. It uses rates from official sources with the date you checked them, and made-up figures only where no current rate applies.
Start by pinning down the goal. Write the goal at the top, with the total amount. Then break it into payments, each with an amount and a due date, as you did in lesson 8.2, Match rungs to the dates you need money. Mark each date as firm or estimated.
Wei Ling and Jun Hao's made-up goal is S$45,000 across four payments: S$3,000 in two months, firm; S$12,000 in eleven months, firm; S$15,000 at key collection in about two years, estimated; and S$15,000 for renovation about thirty months away, estimated.
Next, split the sum into rungs. Give each payment a rung, or several rungs if the amount is large or the date uncertain. For each rung, choose an instrument for access and safety: savings account, fixed deposit, T-bill, SSB or SGS bond. Leave out bond funds and anything else that could be worth less than you put in on the day you need it.
Set each rung's maturity two to four weeks before its payment. For SSB rungs, allow about a month, because of the redemption timing from lesson 3.3. For estimated dates, use an instrument you can exit without loss, or aim earlier and accept some idle weeks.
For every rung, write the rate, where you found it and the date you checked. Use the MAS website for the current SSB schedule and recent T-bill cut-off yields, the bank's own rate page for fixed deposits, and the SDIC website to confirm cover. For a rung you will only place later, such as a T-bill a year from now, there is no current rate, so write a made-up planning figure and label it as such.
Wei Ling and Jun Hao's made-up rungs: the S$3,000 stays in savings. The S$12,000 goes into a ten-month fixed deposit at 2.8%, earning about S$280. The key collection S$15,000 goes into an SSB, using the year-one and year-two rates from the issue they apply for. The renovation S$15,000 goes into a two-year fixed deposit at 2.7%, earning about S$810 if interest is simple, then into a six-month T-bill at a made-up planning yield.
Then add the maturity action plan. For each rung, write what happens on its maturity date: spend, roll forward or add a new rung at the far end, as in lesson 8.3, Running the ladder as rungs mature. Include the maturity instruction you have set for each fixed deposit, and the next SSB window or T-bill auction you would use if you roll.
Then add the calendar reminders, two to four weeks before every maturity and every application date you might need.
Go down the rungs one by one and ask: on its maturity date, could this rung be worth less than the payment it covers? A fixed deposit, T-bill or SGS bond held to maturity, and an SSB redeemed at face value, all return at least what you put in, provided you stay within deposit insurance limits and SSB holding limits. If any rung relies on selling something at a market price before maturity, mark it and change it.
Also check the totals. The rungs, before interest, should add up to at least the goal. Wei Ling and Jun Hao's do: S$3,000, S$12,000, S$15,000 and S$15,000 make S$45,000, and the interest becomes a small cushion.
A finished ladder is one spreadsheet. Each row is a rung. The columns show the payment it covers and its due date, the amount, the instrument, the rate, the source and date checked, the maturity date, the maturity instruction and the planned action. Below the table sit the total check, a list of calendar reminders and one line confirming that no rung could be worth less than needed on its date.
Someone who has not taken this course should be able to follow your sheet and know exactly what to do on each date. Build yours now for the goal you chose.
Submit a ladder spreadsheet for one real goal with rungs, instruments, rates and sources, maturity dates and the action for each rung.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).