The email address in "Contact AK: Ads and more" above will vanish from November 2018.

PRIVACY POLICY

FAKE ASSI AK71 IN HWZ.

Featured blog.

1M50 CPF millionaire in 2021!

Ever since the CPFB introduced a colorful pie chart of our CPF savings a few years ago, I would look forward to mine every year like a teena...

Past blog posts now load week by week. The old style created a problem for some as the system would load 50 blog posts each time. Hope the new style is better. Search archives in box below.

Archives

"E-book" by AK

Second "e-book".

Another free "e-book".

4th free "e-book".

Pageviews since Dec'09

Financially free and Facebook free!

Recent Comments

ASSI's Guest bloggers

TC bins are for burning joss paper, not other stuff.

Saturday, September 12, 2015

The haze is very bad today. I didn't want to leave my home which has an air purifier on 24 hours a day.

Then, I had a craving for Mee Pok. Sigh. I decided to brave the haze and went out for lunch. Almost immediately, my eyes started to itch and my nose became runny. What I would do for a bowl of Mee Pok.

Well, was it worth it? Yes, the Mee Pok was good but on my way back, I saw a man trying to poke some candles into the grass verge at the car park. He had a whole stack of joss paper on the ground too.

I think most of us have seen burnt patches of grass, concrete pavements and metal grills which cover the drains before. This is despite the fact that the town councils (TCs) have placed metal bins for the burning of joss paper for Taoists to practice their religion.

The grass patches, concrete pavements and metal grills are public property. We know we shouldn't damage public property. Of course, burning them also affects the aesthetics of the environment.


Source: NEA


Anyway, I told the man that if he was thinking of burning joss sticks and joss paper on the grass patch, he shouldn't. There are bins for that purpose. I told him he would be damaging public property. 

He was very defensive and said that he was only placing the candles and joss sticks in the ground. He said he was going to burn the joss paper in the bin behind the building.

I took his word for it. What else could I do? I couldn't stand there and watch him. 

When I drove past the same spot a few minutes later, I saw that he was gone. No candles and no joss sticks in the ground either. Good.

Singapore is a densely populated country and it would be a more pleasant place to stay if we are all more considerate towards others. Before we do something, think how it might affect the common spaces and other people.





I also had an experience of telling some people not to use the TC bins for burning other stuff. This was when I saw two men, probably South Asians, who were disposing big pieces of styrofoam in one such bin. 

They weren't just throwing them into the bins, they were burning them! Imagine the smoke and the smell!

I told them to stop immediately. I asked them if someone told them to do it or did they do it on their own? They pretended not to understand. 

Then, I told them if they were to continue burning the styrofoam, they were going to die soon because the fumes were poisonous!

I saw their eyes widened in fear and they started fishing out the pieces of styrofoam faster than they put them in earlier. I found a new way to teach people the English language. Fear.

I quickly left after that. I am sure my life shortened by a few minutes in that encounter but I saved the environment from greater harm, I told myself.


Please don't be afraid to tell people if they are not aware that their actions are harmful to themselves or others. Of course, we can only hope that they listen.

Related post:
Vandals and selfish cyclists.

Why increase the CPF MS and not pay 5% interest for SA?

A recent Q&A:

TKX:
One thing I have failed to understand about the cpf ms and rs.... It doesn't make sense that the government used inflation as a reason to increase the ms/rs because Sa interest rates, at 4%, is at least equal or usually beat inflation. Based on this school of thought, there is absolutely no grounds for the retirement sum can be adjusted upwards further right?


AK:
For all CPF members, they should want to make sure that their CPF-SA money continues to beat inflation. So, a 3% increase yearly in Minimum Sum (MS) requirement to take into consideration inflation makes sense for everyone.

The MS requirement must be at a level that will give CPF Life the ammunition to pay out more meaningful monthly income. So, unless the MS increases 3% per annum given current day assumption on inflationary pressures, inflation will make the CPF Life less relevant as time goes by.

The government is paying 4% interest on the money in our CPF-SA which is a good thing but without a 3% yearly increase in the MS requirement, would CPF members voluntarily set aside more money to be put into their CPF-RA at age 55? Would they consider the impact of their decision on their annuity that is CPF Life (which kicks in at age 65)? I wonder.



As an aside, I would like to share an exchange that took place on my FB wall on whether the government could pay a higher interest rate on our CPF-SA savings:




I believe CPF members already got a pretty good deal with an extra 1% interest for the first $60K in our CPF-OA and SA. 

Of course, for those age 55 and above, they will get another 1% on the first $30K now in their CPF-RA (without having to take on any risk).

Related posts:
1. Proposed changes to the CPF system.
2. Funding XX% of our retirement with CPF.

Tea with Kai Xiang: Two friends and their CPF savings.

Friday, September 11, 2015

I always enjoy a good story and Kai Xiang wrote a pretty good one to share with me. 

He has graciously allowed me to share the story.






A and B are good friends. 

They went to NS at 19 yrs old after finishing their poly diplomas and started work as technicians at the age of 21 with a starting salary of $2,000 (median gross for poly graduates).

Both A and B have the following balance after their 2 year NS stint:


OA: $2,738


SA: $708


MA: $962


However, B realised that the SA offers an excellent 4% interest rate and decided to match his CPF SA contributions every month with cash from his disposable income and plan for his retirement.


A didn't bother because he feels retirement is too far away and he would rather have his money with him.


Both worked at the same factory and received a salary increment of 2.5% of their last drawn pay annually.











At the age of 31, both had CPF balances like this:


(A and B) OA: $75,320


MA: $29,064


(A)SA: $21,868


(B) SA :$41,983


At the age of 36, both A and Bs' MA have reached the cap of $48,500 and any further increases to MA over this amount would be transferred to their SA.






At that time, their CPF balances look like this:


(A and B) OA :$125,190


(A) SA: $41,331


(B) SA: $76,929


All the way until this point, B had religiously matched dollar for dollar his CPF contribution to his SA. 


B decided to continue contributing cash to his SA every month but fixed it at $200 monthly.


B hits the MS ceiling for his SA at age 43, where he is no longer allowed to contribute cash to his SA. 


A hits the same ceiling about 6 years later at 49.






When both men eventually reached the age of 55, their balances look like this:


(A and B) OA: $400,848


(A) SA: $307,601


(B) SA: $414,973


A was able to withdraw about $140k from his SA while B was able to withdraw $250k.






Hope you enjoyed the story too. 

If you did, you might want to share it with your friends and family. 

I hope they enjoy it too.





Related posts:
1. A lot of money in my CPF SA...
2. If I had done this, I would have hit MS.

What we do with our CPF money is our business.

Tuesday, September 8, 2015

This blog post is in response to a comment by a reader: here.

The CPF is a topic I blog about frequently and regular readers would know why I consider it a cornerstone in my retirement adequacy strategy


I have also shared how we could essentially get the government to help part pay for our retirement, taking back our own money at age 55 in the process.

I have also shared how we could have the government pay for our medical insurance and, ultimately, our hospitalisation bills.






I think if people are willing to keep an open mind and meditate on what I have shared, my own experience included, they will see that what I have shared is viable.

I also have readers who wrote to me to say that after reading my blog, they put what I shared into practice and they are amazed by the results after just a couple of years.

Of course, the government might not tell you why the CPF is good the way AK has told the story. 

Maybe, they should.





Anyway, here is my reply to the reader:


AK says...

I supposed you are responding to Mike's comment but I will kaypoh a bit.

I think if the government should return all CPF money to CPF members at age 55 and then tell them that they are on their own from then on, it is risky to trust that most CPF members will be prudent with money. 

Notice I did not say "all".





Actually, most people are not even interested in improving their knowledge in personal finance. 

This is the honest truth which is also why blogs like mine have so much lower traffic compared to blogs on some other topics such as lifestyle or humor, for examples.





Then, we would also have very cautious people who decide to simply lock up their money in fixed deposits. 

If interest rates remain relatively low, they will deplete their funds relatively quickly. 

They won't get an income for life in their old age.





What about giving people a choice whether to withdraw all their CPF money at age 55 or not? 

I think this is a popular suggestion but, once again, it goes back to the question on whether we can trust people to be prudent with money, specifically, those who choose to withdraw all their CPF savings.

Could it become a case of the prudent paying for the less prudent in some years down the line?




If the government allows CPF members to withdraw all our CPF savings at age 55 and then say that what we do with the money is our own business, the government is throwing caution to the winds.


For the sake of the fellow Singaporeans who are financially more prudent, I would rather that the government err on the side of caution.


Do you think the government should let all CPF members withdraw all their CPF savings at age 55?





Related posts:
1.
Get free medical insurance in Singapore?
2. If I had done this, I'd have hit the min sum too.
3. How to upsize $100K to $225K in 20 years?
4. CPF: A simple case of so near and yet so far?
5. An annuity proposal: A Case Study.
(Yes, CPF Life is an annuity too.)
"What? You want satisfaction? Well, then, why stop at taking back our own money? Isn't it more satisfying to take the government's money (legally)?" 

From: A lot of money in my CPF-SA...

Life was difficult and I wondered if Santa Claus existed.

Monday, September 7, 2015

Many things people want to have or suggest that we have in Singapore are, in my opinion, luxuries for our very small country. 

We have no natural resources and our citizen population is going to shrink in future.





We can be idealistic but I believe in being pragmatic. Maybe, it has to do with the fact that my family almost went bankrupt at one time. 

I still remember the fear I went to bed with each night after my mother told me what being bankrupt meant. I was only 12 years old.

The many years that followed, life was much more difficult for my family but we pulled through eventually. 





My parents made many sacrifices to give us children whatever we needed in life, I am sure. Outwardly, things looked pretty normal but those years were probably very stressful for them.

To my parents' credit, they were self-reliant and did not see our MP to ask for help. 


I don't think it was something they even thought of. So silly, right? 







When they found out much later in life from a friend who migrated to Australia that unemployed Australians (especially if they had children) could get lots of financial help from their government, they were amazed. 

Why would people get paid for not doing any work?


We could cite cases of Singaporean families who must be careful with every single cent they have because they need to be and not because they want to be. My family was once like that.

I believe that we should try to help these families but not to the extent that they forget how to be self-reliant. I believe that they would rather receive help so that they can be self-reliant eventually. 








Of course, there will always be those who can never be self-reliant due to severe handicap but for those who have the potential to be self reliant, living life with dignity is definitely not about getting financial aid forever.


For those who have ample resources which can never be exhausted, being idealistic doesn't hurt. For those who are not in possession of such resources, it is better to be pragmatic than idealistic.

Does Santa Claus really exist? If he did exist, could he share with us the secret to the longevity of his financial resources?

A chit chat session with AK on REITs.

This was a recent chat with a reader on some aspects of REITs:


  • F

    AK, i read your S-REITs postings and your aims amp reit

  • 5:46pm




    but given the conservative outlook for the industrial sector



    it will undeniably affect them i'm sure



    what's your thoughts?





  • and the decline in SG economy


  • Assi AK
    6:21pm


    Affect their unit price or affect their operations? Ask yourself.







    What do you mean by conservative outlook for industrial sector?



    Decline in Singapore economy? Like how?



  • 6:30pm
    F


    Their operations



    Rentals may not remain at optimum capacity



    The management statement in their AR



  • Assi AK
    6:35pm







    What is optimum capacity of rentals?



  • 6:36pm
    F



    100% lo



  • Assi AK
    6:36pm


    that is maximum occupation



    ok, I am beginning to understand your question



  • 6:37pm
    F


    Maximum is optimal mah



  • Assi AK
    6:37pm







    nope



  • 6:37pm
    F




    No?? Why would you want to have empty units?



  • Assi AK
    6:38pm


    I didn't say that either



  • 6:38pm
    F


    Confused




  • Assi AK
    6:40pm







    If you own a store that sells mee Siam and let us say you have a capacity to cook 1000 plates a day. And you sell out every single day because you sell at $1 a plate. Are you optimising profits when a price consumers are willing to pay is $2 a plate?



  • 6:41pm
    F



    No.



  • Assi AK
    6:41pm



    Wouldn't it be better to sell at $2 a plate and maybe just sell 800 plates a day?



  • 6:41pm
    F



    Yes



    But if I can sell 1k played at 2 bucks



    Better



  • Assi AK
    6:42pm


    Of course. smile emoticon



    It is never as simple as a matter of achieving full occupancy means optimum performance. That is the point I am making.







    maximum occupancy might not mean optimum performance



  • 6:45pm
    F


    Ok.....



    But management has conceded themselves that performance might be weaker in coming fY



    What are your thoughts



  • Assi AK
    6:52pm


    I will leave them to do their jobs. So far, they have performed very well and I hope they continue to deliver. Our job as investors is to monitor and as long as the investment performs to our satisfaction, that is good enough reason to stay invested. What is good enough will depend on what we want out of an investment.



  • Assi AK
    6:53pm



    If you don't feel comfortable enough to be invested, it is best to stay out.



  • 6:53pm
    F



    Hmmmmmmmmmm







    I'm just wondering if prices might go lower



    In light of possible decline in revenue



    Got value



    But I'm uncertain on what is a good price to enter



  • Assi AK
    6:54pm







    I will leave the speculation to the speculators.




I don't always talk to myself, you know?


Related posts:

1. AIMS AMP Capital Industrial REIT: An opinion.
2. 6M 2015 passive income from S-REITs.


Monthly Popular Blog Posts

All time ASSI most popular!

 
 
Bloggy Award