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CPF fake news and financial prudence.

Monday, January 13, 2020

When we use our CPF-OA money to purchase a property, we must be aware of the opportunity cost that comes with the decision.

When we use our CPF-OA money to purchase a property, we are losing out on interest payments made by the government to us.

Despite what some people say, we are not paying interest to the CPF for using our CPF savings in the purchase at all if we should sell the property with a capital gain.

We are, in fact, paying ourselves interest (to our CPF account) for the CPF savings we have utilised in the purchase of the said property.

Now, what if we made a loss from selling the said property?

Would we have to top up our CPF account to make up for the capital loss?


Real or Not?

Don't listen to hearsay!

Beware the fake news!

Watch this video for the answer:

As property prices have risen a lot in the last 10 years, some people find it hard to believe that there is a possibility that property investments could go horribly wrong in Singapore.

Well, they have gone horribly wrong before in the past and they could go horribly wrong again in the future.

The possibility exists.

We have to remember that not everyone has the ability to handle such a possibility even if they have the willingness to do so.

Those who have been swept away by euphoria and paid prices too high should beware.

Buying and thinking that property prices can only go up is speculation.

With the enormous price tags of private real estate here in Singapore, it is not an overstatement to say that it is speculation on a relatively large scale.

People rarely make money buying real estate in a market euphoria but they usually make money buying when Mr. Market is depressed.

Also, people do lose their jobs and for those who are financially leveraged to the max, it could be hell on earth.

Unless we have deep pockets, it is best not to participate as just one mistake could sink us.

Remember not to ask barbers if we need a haircut.

For sure, no one cares more about our money than we do.

For most of us, unless we are very rich already, our CPF money is our ultimate safety net in retirement funding.

The fact that we don't have to top up our CPF savings if we make a loss in the sale of our property doesn't mean we should just anyhow use our CPF savings to anyhow buy a property or, indeed, multiple properties.

This is not "masak masak".

Don't "suka suka".

Financial prudence might not make us rich fast but it will ensure we avoid painful falls, some of which we might never ever recover from.

1. Everyone needs to learn financial management skills.

2. Everyone wants a higher standard of living.

3. Everyone needs to think of all the bad things that could happen to them.

If you find this unfamiliar to you, you are probably rather new to my blog.

If you are interested to find out more, read the story:

From rich to broke?

Related posts:
1. Buy property in Iskandar, Johor.
2. $500,000 in bad property investment.


Siew Mun said...

Three years ago I planted a seed, by refunding the sales proceeds of an enbloc apt back to CPF OA. I topped up cash $25,000 to OA to accrued repay interest to myself. I downgraded by buying a HDB EA using cash fully with no mortgage. Now I am harvesting the fruits from the seed by collecting passive income from CPF. Thank you AK for your guidance.

Your Ka-ki! said...


Nothing beats being cash rich then being asset rich.

AK71 said...

Hi Siew Mun,

Your strong sense of responsibility and urgency drove you to take action.

You are a good example of how to make good use of the CPF to secure a good measure of financial security in Singapore.

Gong xi gong xi. :D

How to stop accrued interest we owe (CPF) from growing?

AK71 said...


"Too many people have too much of their wealth stuck in their homes.

"This is why so many people in a wealthy nation like Singapore must work till the day they die.

"Having healthy cash flow is always important."

Healthy cash flow is most important.

Your Ka-ki! said...


In 2013, you blogged about JB Properties

I wonder how many of these properties now are bringing in the dough for investors

AK71 said...


Incidentally, that blog is one of the related posts listed in this blog. ;)

Unfortunately, the situation is pretty gloomy over there.

The vacancy rate is really high and for those lucky enough to be tenanted, rental is much lower than what property agents were suggesting back in the day.

The writing was on the wall.

The Crown Prince of Johor said there was no oversupply?

Well, he could have been a barber in his free time. ;p

Your Ka-ki! said...


Comfort share has been dropping sharply again. Would you be interested?
At least we don't have to deal with Sultan of Johor on this one.

AK71 said...


As I already have a relatively large investment in ComfortDelgro, I am not adding.

However, if it were to dip further to $2.00 a share or so, I would be sorely tempted.

An incomplete analysis of ComfortDelgro.

gagmewithaspoon said...

how about Singtel then? its falling but I guess its because of Airtel. hard to tell with IN markets - seems very hard to make money there.

Rellangis said...


If I make a cash top up to my CPF RSTU in Jan 2020, will I be eligible for tax relief in the same year? Or I would only see the tax relief in the following year? (i.e 2021)


AK71 said...


I reduced my exposure to SingTel drastically middle of last year when its price ran up.

Currently, at $3.30 a share, it hasn't declined very much from where it was back then. ;)

Sell into the rally and stay invested.

AK71 said...

Hi Rellangis,

RSTU this year will be just like mandatory contributions made this year.

They will count towards tax relief for the following year.

AK71 said...

Some readers might be interested in reading this blog:
What is behind hitting the FRS?

"Reader says...
2 years ago, in my early 30s, after reading your wonderful blog, i decided to just pump in 10k into my CPF SA, never mind there is tax relief for the first 7k only."

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