Too little passive income and too much money in CPF OA.

It is probably no secret that AK is pretty reclusive.

The COVID 19 pandemic has made AK even more reclusive, if that is at all possible.

Why so reclusive?

Well, I think a lot and some people would say I think too much.

Better be safe and not sorry, especially when I have aged parents whom I visit weekly.

Almost without exception, I would have a sleepless night after any form of social engagement as my monkey brain would replay the event again and again.

In the worst case scenario, I would get an anxiety attack.

Some people think that I was kidding when I revealed I was a patient at the little house on Buangkok Green.

I wasn't.

To be fair, it was probably just a contributory factor that led to my diagnosis and treatment at IMH.

As my blog got more popular and the blogger got more attention, there was a growing feeling of anxiety.

So, it was a good thing that Facebook did what it did to me and I took that as an opportunity to scale back on social media engagement.

Blogging is a hobby and hobbies should be something we do because they make us happy and not because they make us anxious.

I cannot remember who the people were by now but there were those who were pretty unkind.

They told me that if I could not take the heat, I should not be in the kitchen.

Then, there were those who were kinder.

They told me I should learn how to break and blog or I could suffer a burnout.

Well, both groups of people were right although their messages were "same same but different."

I am glad that I have reduced my social activity as a blogger in recent years and have confined myself to my blog.

The only way most people can get in touch with me now is through the blog's comments section and only if they have a Google account.

I know it is very restrictive but it is good for my mental health.

Yes, it is not just because AK is lazy which is what I always say.

This way, I rarely have to deal with trolls and bots.

I know I am missing out on new business opportunities too as an "influencer" but it doesn't really matter to me.

I am glad that I did what I did as I enjoyed blogging from the moment I started in 2009 and I want to continue blogging because I enjoy it.

Of course, I know that "a big tree catches the wind."

Talking to myself, if I have managed to inspire readers to achieve financial freedom, I am glad.

That is what I always say and that is primarily what I want my blog to do.

To inspire.

Although I do not like it, I cannot deny that my blog attracts some attention of the unwanted variety.

I try not to be like the proverbial blind men who each touched a different part of an elephant and gave their conclusions without the full picture.

Although I am uncomfortable with revealing or explaining everything about me, I make an effort to share enough information for readers to make their own informed decisions on stuff that I do blog about.

It isn't unreasonable because the really interested readers would read my past blogs for background information especially when I make an effort to provide hyperlinks to related blogs.

Despite keeping a low profile, I was made aware of two statements recently.

1. My passive income is growing too slowly.

2. I have too much money in my CPF OA.

I have watered down the statements which were somewhat offensive in their original forms.

Although I initially thought there was no need for me to respond to these statements, a good friend said I should.

To be honest, I don't want to do it but after some thinking, I think I should. 

Why?

It is only fair to readers especially those who have not been following my blog for very long to have me throw light on the matter.

After all, I cannot assume that my blog only has regular readers who have been following my blog for many years. 

They would probably have an idea how I would respond to both statements.

So, now you know the reason why I am crafting this blog.

I am going to get this over with chop chop.

My passive income has not been growing very much in the last few years as I retired a few months before I turned 45 years old and that was about 6 and a half years ago.

Since then, I have lacked an earned income.

So, although I could invest a big portion of my earned income and all my passive income when I was gainfully employed, I could not do so in recent years.

If we go back 11 years, my passive income was about $100K a year back then but it was $200K for the whole of last year.

Also, 11 years ago, my investment portfolio was very heavy in REITs and enjoyed very high yields which isn't the case today.

As for the money in my CPF OA, I do not think getting a risk free 2.5% per annum return from a volatility free instrument per se was a bad thing.

It looks like it is a bad thing now because interest rate has risen so much in less than one year.

So, what seemed like a good idea in the past does not seem like a good idea now.

Of course, there were people who did not think that having a lot of money in the CPF OA was a good idea in the past as well.

The proverbial blind men each touching a different part of an elephant comes to mind.

As a retiree who lacks an earned income and at my age, it is not a good idea to be too adventurous when it comes to investing my money.

I am aware that I could have invested some of my CPF OA money in equities for higher returns but do I need to do it?

I don't think so as it is probably quite obvious that I already have a substantial exposure to equities.

I also do not want to do it because I want to grow my portfolio's exposure to fixed income which would reduce volatility in the portfolio.

Also, most investors who used their CPF money to invest would have been better off leaving their money in their CPF OA and it could have been the same for me too.

I am not infallible.

For a person in my position, why trade something that is risk free and volatility free for something that is not for a possibly higher return?

"It’s insane to risk what you have for something you don’t need." Warren Buffett

What to do?

What I am considering doing is to use CPF OA money to get T-bills.

However, as I am mental and want to avoid visiting the bank if I can help it, I am waiting for online application to be allowed.

However, if T-bills should see yield climb much higher before then, I might make a trip to the bank, no matter how reluctant I am to do it.

Right now, not getting $700K of CPF OA money into a 6 months T-bill means losing some $10K in annual passive income.

What I am going to say next might be taken the wrong way by some people but, to be quite blunt, to me, it isn't a big deal.

I have not put in much effort in crafting this blog. 

I just typed whatever came to mind.

So, I apologize if it is not as diplomatic as it should be.

I just want to get it out of the way so that I can enjoy Genshin Impact's special program which is starting soon.

Don't want to have this at the back of my mind.

If you play Genshin Impact too, don't forget the free Primogems from the special program.

Good luck and have fun.

Recently published:
1. 2022 passive income.
2. More than $1.1m in CPF.