How many 20 years and $29,000 do we have?

Friend, sighing, "I should have listened to you."

AK, "Huh?"

Friend, "I finally surrendered my PruLink policy."

AK, "Oh, congratulations!"

Friend, "Congratulate what lah? I put in total of $29,000 since 1996. Every year put in money. 20 years and I took back less than that! I lost money!"

AK felt like saying "I told you so" but AK kept quiet. 

Friend, "Leave money in the bank or fixed deposit also better. Should have terminated long ago. My agent told me to continue paying for another few years and maybe it will make money. Stupid, right?"

AK, "Er... Ahem..."

Friend, "I still remember you said to terminate and put the money in my CPF-SA. How much would I have now if I did that?"

AK, "Well, I don't think you want to know..."

Friend, hesitating, "Ya, you are probably right. Haiz. Sad lah."






My dear readers, are you curious?

If my friend had placed the yearly contribution of $1,450 into his CPF-SA for 20 years instead of the Investment Linked Policy (ILP), how much would he have today?

About so much:

Calculator at:
http://www.moneychimp.com/calculator/compound_interest_calculator.htm

$48,000.

A hard truth and the truth hurts.




That's not all. 

My friend would also have had the benefit of income tax relief which is given for the first $7,000 of Minimum Sum (MS) Top Up. 

In my friend's case, the income tax savings would have probably been a few hundred dollars a year. Multiply that by 20 years? Ouch.




The long and short of it, buy insurance for the sake of insurance. 

Don't mix insurance and investment.


Related posts:
1. Should I terminate an expensive ILP?
2. Free ILP or Term Life policies?
3. How to upsize $100K to $225K in 20 years?
Hey, sexy S A! Oppa AK style!

She is $600 richer each month without any risk.

I have been doing quite a bit of cooking at home instead of eating out. 

Er, I think I heard a few of you going "Isn't that something you always do?" 

OK, I have been doing a lot more cooking at home.

Today, I received a message from a reader:

"My hubby and I are your readers. I started first when I asked a colleague who sat next to me at work what was she reading on her phone. She showed me your blog. She suggested to follow you on fb because you do a lot more sharing there than in your blog.

"For months now, we would prepare food to bring to work for lunch. Recently, we started lunch pooling. We are very pleased with the idea. It doesn't take much more to make another set of lunch for each other. 

"We have you to thank for this because you are constantly sharing about preparing your own meals. Please keep sharing photos of your meals. They keep us going.

"Since doing this, we have saved much money. We were eating out everyday before this. It also made me examine our family food expenditure. Instead of eating at restaurants every weekend, we now do it once a month or not at all.

"My husband is actually more enthusiastic about the changes now than I was when we first started because he sees the money. Roughly, we are saving $600 more every month now.

"Since preparing our own meals saved us so much money in the last few months, we have bought tickets to your first meet the readers session next month. lol"

I usually update my wall on Facebook with photos of my cooking but not here in my blog. 

OK, for those who do not follow me on Facebook, here are photos of my lunch today:

Fried rice with potato and egg.

Steamed some vegetable.

AK's Donburi!

If AK can cook, so can you!

Remember, saving money is probably difficult in the beginning but you will get better at it. It will become a habit and, suddenly, that $100,000 target doesn't seem too far away.

“The first $100,000 is a bitch, but you gotta do it. I don’t care what you have to do—if it means walking everywhere and not eating anything that wasn’t purchased with a coupon...” 
- Charlie Munger

Related posts:
1. My food bill and my weight.
2. First "Evening with AK and friends" in 2016.