They chose financial independence over home ownership.

This is somewhat extreme but watch how this Canadian couple chose financial independence over home ownership.  They are in their 30s and,...

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Generous monetary legacy for children good or bad?

Thursday, January 25, 2018

This chat happened after I shared again a blog on a reader's intention to top up his new born's CPF SA account (see related post #1 at the end of this blog).

Reader says...
Imagine if it works... put 171k at age 0, get 2.18mil at 65, that's 2 mil from the government.

AK says...
Haha... it is very amazing. I know





Reader says...
The figure makes me think that there's something wrong with my calculation.

AK says...
If you have money to spare, i think it is ok to do it.

It is legacy planning.

I dunno about the hazards related to character building tho...





Reader says...

I think a graduate can easily earn 5mil in their lifetime. 

But if their habit isn't as strong by the time they found out abt their SA account, I'm afraid they have no desire to work hard. 

And when they meet obstacles, they might say "ohh I will just quit, I have enough for the future anyways." 

That's my biggest fear, snatching away their burning desire and drive.






AK says...
Yes, I know. I feel that way too... 

I mean I didn't like the idea of having to work for money but I had to do it. 

If I had a lot of money in my younger days, I might have stopped working even before I started. 😛

Reader says...
Ohh gosh so that's normal right, we humans won't work hard if we know we have enough! 

Hiez how ahh I want the government's 2 mil but I don't want to steal his drive?





AK says...
Hahaha... 

I am glad I don't have that hot potato in my hand. 😜

Reader says...
How uncle AK? 

How how how? 

What should my mommy do?

AK says...
Mommy should ask daddy. 

I blur... 😛





When my niece was still in primary school, we transferred money in her savings account to her CPF account. 

That is her own money (i.e. savings from ang baos and pocket money).

I think that is OK.

Teach children the importance of saving money and also explain to them how the CPF works.


儿孙自有儿孙福, 莫为儿孙作马牛.





You might also want to read a blog I published earlier today:
Pay home loan and HDB grant fast.


Related posts:
1. Leaving a $1.4 m legacy?
2. Retire by age 45.

4 comments:

Laurence said...

Decades of evidence shows that CPFB is not a dummy sitting there watching and doing nothing. When enough people do that for their descendants, the smart people in CPFB will sit up and tweak the rules again (maybe shuffle/wash the mahjong tiles).

P Lee said...

2 million from the Govt and it is risk-free money. The issue is whether can the Govt maintain such rate or when there is a change of govt in future. I dont mind to put that for my new-born. Take it like a legacy from the parents! Taking into account inflation 65 years down the road, $2m may not be worth much by then...

AK71 said...

Hi Laurence and P Lee,

Crossing fingers and for more than one reason. ;)

AK71 said...

Zach Zach says...
The more you do things for your kids, the less they want to do things by themselves ;)

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