tag:blogger.com,1999:blog-7944902213075756335.post6036332084914858045..comments2024-03-29T19:12:08.223+08:00Comments on A Singaporean Stocks Investor (ASSI): Take your time to pay down your HDB housing loan.AK71http://www.blogger.com/profile/16832145412062954289noreply@blogger.comBlogger45125tag:blogger.com,1999:blog-7944902213075756335.post-14391726698475245782015-01-05T19:08:44.901+08:002015-01-05T19:08:44.901+08:00Hi Den,
Money in your CPF-OA is currently paid 2....Hi Den,<br /><br />Money in your CPF-OA is currently paid 2.5% to 3.5% in interest. There is no reason to pay down your home loan which cost only 1.6% to 1.7% in interest with your OA's money. <br /><br />However, if the interest on your home loan should one day rise to be higher than 2.5%, you could consider using money in your OA to pay down the loan.<br /><br />At Age 55, if you have AK71https://www.blogger.com/profile/16832145412062954289noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-2955690263381942572015-01-05T18:28:15.978+08:002015-01-05T18:28:15.978+08:00Hi AK,
Would like to hear your view.
I am curren...Hi AK,<br /><br />Would like to hear your view.<br /><br />I am currently late 40 yrs, and is servicing a hdb bank loan about 250k with 3 yrs fixed rate about 1.6 - 1.7%.<br /><br />My OA now is about 160k and SA about 90k.<br /><br />In your view, is it worthwhile to pay down a partial amount (say 20k) from OA in order to reduce the 250k loan ? or leave it as it is ?<br /><br />Another question denhttps://www.blogger.com/profile/12970614133811402631noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-44167583438956246402014-05-03T19:26:40.400+08:002014-05-03T19:26:40.400+08:00I was reminded to the fact there is accrued intere...I was reminded to the fact there is accrued interest charge when we sold a HDB flat using CPF money.<br /><br />"If you sell your HDB flat, you need to refund the principal amount you had earlier withdrawn for the purchase of the flat, including the accrued interest, to your CPF account. This interest is the amount you would have earned, had the savings not been taken out" <br /><br />Solacehttps://www.blogger.com/profile/08801978818033316328noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-41464001557322623772014-04-22T20:15:17.288+08:002014-04-22T20:15:17.288+08:00Hi xin,
Sounds like you have a plan to grow your ...Hi xin,<br /><br />Sounds like you have a plan to grow your money. Good on you. :)AK71https://www.blogger.com/profile/16832145412062954289noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-65388582837891959472014-04-22T18:28:29.533+08:002014-04-22T18:28:29.533+08:00Thanks for this post and all the comments! I'm...Thanks for this post and all the comments! I'm also pulling my hair out for this topic. and i'm a newbie investor, so not hitting that 10% on investment gains.. but i think gaining more than mortgage loan interest is possible. thinking to take 30 years loan, and pay it slowly, month by month. agree than opportunity cost of lump sum payment is high. would prefer to keep as cash to invest xinhttps://www.blogger.com/profile/00310566762981671045noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-22879990589817449722014-04-09T07:51:31.399+08:002014-04-09T07:51:31.399+08:00Hi yeh,
Yikes! Sounds like a domestic affair is c...Hi yeh,<br /><br />Yikes! Sounds like a domestic affair is creeping into the picture here. haha... You have to ask your hubby for a clear definition of "can't touch". If he means "break glass in case of emergency", then you better don't touch. We need a meaningful emergency fund. Of course, whether $190K is too much is for you and him to determine. :)AK71https://www.blogger.com/profile/16832145412062954289noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-14773586915193556342014-04-09T07:15:55.966+08:002014-04-09T07:15:55.966+08:00Hi AK.
I have cash + ntuc fund about 190k. Wonder ...Hi AK.<br />I have cash + ntuc fund about 190k. Wonder should keep it as emergency fund<br />Or use it to clear the debt.<br /><br />This is the money. Hubby said Cant touch!<br />Since cant touch for investment.<br />Maybe just wondering use to clear debt also good!yehhttps://www.blogger.com/profile/12571111570066245051noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-18806940891138160502014-04-09T06:54:32.199+08:002014-04-09T06:54:32.199+08:00If the loan cost is only 1.5%, probably there is n...If the loan cost is only 1.5%, probably there is no hurry to pay off the debt. This is especially so, if we know how to invest prudently to earn a better return.<br /><br />Ultimately, CPF-OA is earning interest of 2.5% which is higher than the cost incurred. Even for cash, the Time Deposit could earn you 1+% interest.PSTanhttps://www.blogger.com/profile/07397444817544977399noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-35187488626485118112014-04-08T23:18:00.851+08:002014-04-08T23:18:00.851+08:00Hi yeh,
Yours is what some would call a good prob...Hi yeh,<br /><br />Yours is what some would call a good problem to have. LOL. ;p<br /><br />Well, if my property loan has an interest rate of 1.5%, I wouldn't want to pay it down in a hurry with my CPF-OA money which is getting 2.5% in interest income.<br /><br />I would keep my CPF-OA as a war chest to seize investment opportunities if they should present themselves. :)AK71https://www.blogger.com/profile/16832145412062954289noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-88877493699383720892014-04-08T22:26:55.781+08:002014-04-08T22:26:55.781+08:00Hi . This is a very good discussion topic.
I also ...Hi . This is a very good discussion topic.<br />I also wonder should I use my cash+cpf to clear the hdb loan.<br />Currently I am still serving 280k bank loan with 1.5% interest.<br />I have enough cash to pay off the debt.<br />A friend ask me to settle ASAP.<br />Another one ask me to wait for property crash to buy one more property or use it invest in shares.<br /><br />Hubby also doesn want yehhttps://www.blogger.com/profile/12571111570066245051noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-3365340927960729972014-04-08T21:48:36.756+08:002014-04-08T21:48:36.756+08:00Hi Ken,
Thanks for this.
Yup, everyone's ci...Hi Ken,<br /><br />Thanks for this. <br /><br />Yup, everyone's circumstances and considerations are different. So, each person will have to choose a path most suitable for himself or herself. :)AK71https://www.blogger.com/profile/16832145412062954289noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-52826064098400338652014-04-08T21:37:06.368+08:002014-04-08T21:37:06.368+08:00Hi AK,
For Non-savvy :
A lump sum prepayment has...Hi AK,<br /><br />For Non-savvy :<br /><br />A lump sum prepayment has a better facade as compared to taking up any loan(s) - Be it HBD 2.6% Fixed or Bank Competitive SIBOR/SOR Rates<br /><br />A clear-cut reason is there isn't any interest payments. The definition of interests is to pay more than initial sum.<br /><br />Again, in a catastrophic or phenomenal event, it is good to be debt-freeModest Kenhttps://www.blogger.com/profile/10480766493295123542noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-91254048672429935112014-04-08T21:31:51.258+08:002014-04-08T21:31:51.258+08:00Hi kael1n,
I am a poor candidate for an example s...Hi kael1n,<br /><br />I am a poor candidate for an example since I have never been in a situation like this before. ;p<br /><br />Actually, I have a substantial sum of money in my CPF-OA which I am just leaving to fallow. I am not doing anything with it apart from using it to contribute $10 a month to a housing loan.<br /><br />My CPF-OA, for a while now, is one of my 4 war chests to be utilised AK71https://www.blogger.com/profile/16832145412062954289noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-62327255683779577782014-04-08T21:24:23.179+08:002014-04-08T21:24:23.179+08:00AK, I agree with all your comments which was why I...AK, I agree with all your comments which was why I caveat my statement by saying "all else equal" and basically just comparing the 2.5% and 2.6% in a vacuum. =)<br /><br />In a vacuum does not really exist in the real world, for someone that can use the funds and earn a return well in excess of 2.6% (yourself as a good example), the comparison is no longer straight-forward<br /><br /> kael1nhttps://www.blogger.com/profile/04273410196518019451noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-88969547010765927922014-04-08T17:12:02.504+08:002014-04-08T17:12:02.504+08:00Hi BP,
There are quite a few free to use calculat...Hi BP,<br /><br />There are quite a few free to use calculators online. I used this one:<br /><br />http://www.calculatorweb.com/calculators/amortcalc.shtmlAK71https://www.blogger.com/profile/16832145412062954289noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-10792036693756841282014-04-08T16:54:19.208+08:002014-04-08T16:54:19.208+08:00Can send me the armotising calculator?Can send me the armotising calculator?BPhttps://www.blogger.com/profile/16909857149096270885noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-78420974798996301022014-04-08T15:33:46.750+08:002014-04-08T15:33:46.750+08:00Hi PSTan,
Thanks for the nudge. Plugged a hole in...Hi PSTan,<br /><br />Thanks for the nudge. Plugged a hole in the blog post. Appreciate that. :)AK71https://www.blogger.com/profile/16832145412062954289noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-24683874244231661542014-04-08T15:23:18.266+08:002014-04-08T15:23:18.266+08:00Hi AK,
Obviously, if we know how to invest using ...Hi AK,<br /><br />Obviously, if we know how to invest using CPF-OA amount without losing it, keeping it in CPF-OA is definitely a better idea than paying the HDB loan with 2.6% interest rate in lump sum.<br /><br />However, for those who do not know how to make good use of the CPF-OA amount successfully, it is better off to just pay off the loan.PSTanhttps://www.blogger.com/profile/07397444817544977399noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-44750763762832963682014-04-08T14:05:04.663+08:002014-04-08T14:05:04.663+08:00Hi youngnewbie,
This is a common line of reasonin...Hi youngnewbie,<br /><br />This is a common line of reasoning I use on some people I know as well. If the most sophisticated investment we are comfortable with is a fixed deposit, then, we might be better off paying down all our loans instead.<br /><br />I like the angle you have provided on the NPV of money. This is something I always forget. ;p<br /><br />I don't understand this though: &AK71https://www.blogger.com/profile/16832145412062954289noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-5844925256478879712014-04-08T13:33:11.742+08:002014-04-08T13:33:11.742+08:00Hi AK71 and peers,
Understand that the conclusio...Hi AK71 and peers, <br /><br />Understand that the conclusion that most people had is to repay hdb loan asap. <br /><br />I had a different point of view. The rate provided by hdb is 2.6% which is much lower than the personal loan and car loan that banks provided. The rate offer by banks range from 5-7%. The lump sum payment can be used to pay of car or personal debts. <br /><br />In additional, Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-78403955616392746602014-04-08T13:17:44.980+08:002014-04-08T13:17:44.980+08:00Hi SnOOpy168,
We could use the CPF-OA funds to ge...Hi SnOOpy168,<br /><br />We could use the CPF-OA funds to generate higher returns from the stock market but people who do this must remember that it is also riskier to do so. Mr. Market provides no certainty while the CPF does. You have elaborated on this so well. :)<br /><br />Your girlfriend is lucky to have you as a military adviser. ;)AK71https://www.blogger.com/profile/16832145412062954289noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-77438550068731514652014-04-08T13:13:18.271+08:002014-04-08T13:13:18.271+08:00Hi Nick,
That crossed my mind but it makes the ca...Hi Nick,<br /><br />That crossed my mind but it makes the calculations a bit more complicated. So, I did not take that into consideration when I calculated how much $100,000, if left in the CPF-OA, could generate in interest income over a 10 year period.AK71https://www.blogger.com/profile/16832145412062954289noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-56327901442874117392014-04-08T13:10:34.238+08:002014-04-08T13:10:34.238+08:00Hi Steven,
Indeed so. I told Klein the same thing...Hi Steven,<br /><br />Indeed so. I told Klein the same thing in my reply that we will have to throw in a psychological bend to it all. What gives us a peace of mind?<br /><br />Of course, before we do anything, it is only prudent to consider all the things that could possibly be wrong or go wrong. We sometimes overlook certain details which is why a discussion like what we are having now is so AK71https://www.blogger.com/profile/16832145412062954289noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-25851388270857176732014-04-08T13:06:32.354+08:002014-04-08T13:06:32.354+08:00Hi Pips,
Well, it might look attractive to do tha...Hi Pips,<br /><br />Well, it might look attractive to do that but the level of risk involved is quite a bit higher. Of course, if we managed to get in with a fairly good margin of safety, then, it is less of an issue. Then, we could possibly get a free apartment from Mr. Market and this is what I want too! :)AK71https://www.blogger.com/profile/16832145412062954289noreply@blogger.comtag:blogger.com,1999:blog-7944902213075756335.post-30997717267866857372014-04-08T13:01:03.022+08:002014-04-08T13:01:03.022+08:00I must add that no thanks to that invisible fund c...I must add that no thanks to that invisible fund called cpf, everyone seems to have the mind set that "let cpf pay lah. It's my $ anyway". Also, that "it only cost 2.6%, when that funds can be rolled for 7-10% (or whatever) % returns. Why pay cash, when the funds are in CPF that you are unlikely to see the lump sum cash..... <br /><br />Sure, assuming that returns can SnOOpy168https://www.blogger.com/profile/16073641443037165395noreply@blogger.com