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Unless we are rich, be pragmatic and not romantic.

Saturday, January 30, 2016

A conversation with a reader:

Dear AK,

Finally, my husband and I have set aside $10K as emergency fund and will be contributing to this fund on a monthly basis. T


o us, this is a "giant" step as we never have any such funds before we got married.

We enjoyed reading on the couple who could save $100K in 18 months and valued their beliefs. 


The post got us thinking, if we continue saving $2000 for 5 years, we would have at least $120K in cash.

I grew up in XXXXX and my matrimonial home is also in XXXXX. We like the convenience to town and the amenities the area provides. 


However, respectively to frugality, even if we buy a new HDB 4-room flat in XXXXX, it will cost at least $500K. We felt guilty even at the thought of it.

Sell our flat in XXXXX and move to Punggol/Sengkang, maybe? That is when we will see a profit from the sale of our flat. 


However, our hearts could not bear to leave XXXXX.

Have you had such dilemma before?






AK's reply:

Hi A,

I stayed in XXXXX for many years of my life. In my mid 30s, 
I bought a condo in XXXXX, stayed there for almost 5 years. 


Price shot up. I loved the place but I sold it. I am a pragmatist.

Singapore is a small place. Nowhere is really too far especially with so many new MRT lines now and in the future.

Having more money earlier is a winning combination for the financially savvy. Money needs time to grow. 


The earlier we have more money, the better.

Best wishes,
AK



I know this is an emotive topic and there will be people who will disagree with me. Feel free to disagree.

I believe that only the rich can afford to have romantic ideas about their possessions. The rest of us are better off being pragmatic and ensuring that possessions (or the lack of) afford us a better future.


Related post:
New money habits led to $100K in 18 months.

"Aiyoh, people so sour grape to say you how lian!"

Friday, January 29, 2016

An email from a very regular reader:

Saw your post on CPF balance. 

Aiyoh, people so sour grape to say you how lian. 







But nevermind, I support you to be how lian, k?


SMOL's comments soooo hilarious. Really made my day! ROFL. 


Honestly, OA savings aside, I think growing the SA is quite achievable.








In Jan 2008, I only had $17,084 in my SA, accumulated through the course of my active employment. 

Was contemplating to do the transfer earlier but decided to keep the money in OA for investments. 








I first transferred some funds from OA to SA in 2009 and by end 2009, I had $52,893 in SA after earning $1670 interest for the year.  

In 2010 I didn’t do anything cos I resigned from XXX and took 6 months sabbatical to finish my Masters.


No income, so nothing much to transfer. :P







Then I resumed the transfer in 2011 to 2013 till I met the prevailing CPF ceiling. 

My CPF-SA now stands at $182,213.73 after earning $7,474 of interest last year.







This year there will be more contributions accumulated since the ceiling has been raised to $6K. Happy!






So, don't say it cannot be done.

Never try, why say cannot?

Don't sour grapes.

Grapes can be sweet.






I know because I am eating sweet ones now.



Related posts:
1. AK is showing off his CPF numbers.
2. 2016 changes to the CPF and SRS.

Know our goals, have the right conditions and patience.

Wednesday, January 27, 2016

Regular readers know that gardening is one area I am spending more time in and I am enjoying my little planter in the sky.

Gardening suits my temperament. 

Plant the seeds, give them good conditions for growth and wait. If everything has been done right, the plants will grow. Sounds familiar?

Here are photos of my Basil plant which seem to be in the initial stage of flowering!


See?

For those with failing eyesight like mine.

When I shared this development with my sister who also grows Basil at home, she was amazed. However, she shouldn't want her Basil plants to flower because it means that they are moving from growth to reproduction which means less yummy leaves for her cooking.

Depending on what a person is after, it is either a good thing that a Basil plant is flowering or not. When we draw parallels, a parallel might be where we ask what do we want out of our investments? Are we investing for growth or for income, for example?

We can all enjoy positive results as long as we do it right and have the patience to wait. However, whether the results are desirable would depend partly on what are our goals.

Gardening and investing aren't so different, are they?
-------------
Updated: 24 July 2016



Sunflower.
Grew this from a seed.

-------------
Updated: 14 November 2016

"Gardening? I don't have the patience!"

I took a cutting from my Rosemary plant in May:





I transplanted it in September in a bigger pot (on the right):



And again today:




Having a bit of patience can be quite rewarding.

Moral of the story? Maybe, there is more than one.

(Oops. You saw more Rosemary cuttings growing in the background? Repeating a successful process? Believe it!)


Related post:
Investing or gardening, be ready to go to war!

Filial son working towards financial security (Part 2).

Monday, January 25, 2016

Our conversation continues:

Hi AK,

Firstly would like to say Happy New Year. Even thought its already mid of Jan. i writing this to you to update and share with you. I have transfer
my prudshield to NTUC enhance income shield advantage with assist rider. Then i have signed iterm for $200k term and $100k living rider(for CI) for 35years.


The Premium is $66.60/mth and till i reach 62 years old. Which is long enough. i know i may choose too little but its afforable and i feel much for comfortable in the long run. I also signed enhance income shield with basic assist rider for
both my dad and mum. So in any case, if my parents are warded, $30,000 bill just require to pay 10 percent which can be use by medisave
as well. i think its okay. i am paying giro and using my medisave to pay for both my parents. There is 25 percent premium subsides by gov. So its still within my afforable range.

At least if i get hospitalise, myself is full covered. But if my parents are warded, i use need to deduct 10 percent from my medisave. i know you
did advise me but i thinks and plan well before i done all these. if i earn more money, i will volunteer top up 7k to my MA in the future to deduct my income tax.

Secondly, i tried to share with alot of my frens all from different age, most of them earn alot but still think that OA is impt than SA because need to buy house. And they urge me to stop what im doing because they say i may face problem if im
buying house. But i know what im doing and i have still transfer full from my OA to SA for the next 3 to 5 years. i attached the interest i earn from OA and SA.

i only transfer all my OA to SA in Dec 2015. And i dont even have a gf now, so i just focus on funding SA first, so it will roll more interest through the years till my retire age.

Third, i also stop spending unnecessary money. i always think about what is the need and wants. And do i spend more money to buy smth just because of convenient. Just like what you shared. buying a can drinks in outside cost 1.50 where you go NTUC its only cost 70 cents. Start saving money and doing my best to focus on my studies and work.

Currently plan to save up $20k then go for 9 to 12 month FD. Meanwhile wait till i read enough before i start any investment such as S-reits etc.



you can use my screenshot and share on your blog. im okay with it.

sorry AK. i signed $200k term and $150k living rider(for CI) for 35years. The Premium is $75/mth and till i reach 62 years old. just to provide you in case people wish to find out

Lastly, thank you for the effort of keep posting and giving guidance. I still keep reading and following your blog and FB. All the best AK in your investment.


Warmest Regards
S






My reply:

Thank you so much for taking the time and effort to share with me your progress. I am very happy for you. I am sure you feel a deep sense of satisfaction and also a higher level of security now. Good job!






From S:

Yes AK, I'm feeling so much ease now. Hope you can continue to spread more knowledge to us. But I must admit it's hard to convince others about investment or transferring of oa to sa. But it's okay. As long as we know what we are doing and believe in managing ourself and the interest will prove through the years.

Related posts:
1. Filial son working towards financial security in 2016.
2. Beyond needs and wants is the price of convenience.
3. Do you know if your parents have H&S coverage?
4. A lot of money in my CPF SA...
5. AK is showing off his CPF OA and MA.


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