CPF fake news and financial prudence.

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?

Alamak!

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.