"Purpose of CPF is to make the rich richer."

Reader:
My view is. Cpf is workable for rich ppl ......high educated/ professionals group. This system can help them richer.

It’s not really help those below average. Only can make sure they got food when they old n can’t work. No luxury.

In other word, cpf is workable for those above average n PR. But not for those below average Singaporean，who really need money to survive ( except 月光族）。So, what is the main purpose for CPF ?

AK:
Your question is rhetorical because you gave your answer in your first paragraph. So, is the main purpose of the CPF to make the rich richer?

The CPF is meant to help the masses. 

It is not meant to help the rich.

This is quite obvious when the CPF has annual contribution limit and a limit to top ups to the SA and RA. It prevents members with a lot more cash to exploit the system.

This is quite obvious when the CPF gives 2% more interest for the first $30K and 1% more interest for the first $60K of CPF savings. It is to help members with less savings.





The real problem lies in the lack of simple financial prudence and basic financial literacy amongst the masses.

Lacking in simple financial prudence, they spend all the money they make or more than what they make. 

They are too easy with spending money.

Lacking in basic financial literacy, they allocate capital foolishly. 

Some losing money to simple scams like magic stones or elaborate scams like PONZI schemes or buying expensive financial products or locking up funds in illiquid non-productive assets.






The CPF is a system that is meant to help the masses to help themselves.

If we think the system cannot help us, it is probably because we have not tried to help ourselves.

Of course, there will be some who are physically or mentally handicapped and these are people who genuinely need help. 

They cannot help themselves.

However, for most of us in Singapore, we don't really have anyone to blame but ourselves if we languish in poverty.





Read a couple of emails from readers who have helped themselves:
Power to become financially stronger is within us!

Chatting and charting in "Evening with AK and friends".

I hope that everyone had fun at "Evening with AK and friends" and, of course, I hope it was helpful in one way or another.

"Evenings with AK and friends" are chit chat sessions of epic proportion and this was probably the largest ever session as we had almost 100% attendance (160 strong audience). It felt a bit crowded and very warm!

We chatted about stocks, CPF, insurance, real estate and dieting. Yes, dieting too. Basically, anything I have blogged about was fair game.




I was surprised that almost everyone stayed until 10 pm when we called it a night. So, I guess it must have been fun. Learn nothing, never mind. Must at least be fun. Right?

A few readers made me work overtime. You know who you are. Ahem.

I also spent quite a bit of time talking about Technical Analysis (TA) this time. Here is the blog with the recommended books:
http://singaporeanstocksinvestor.blogspot.sg/2012/12/recommended-books-for-fa-and-ta.html

More recommended books in the right sidebar of my blog under "Food for thought".

A recent example of TA in my blog:
http://singaporeanstocksinvestor.blogspot.sg/2017/09/technical-analysis-of-comfortdelgro.html




I am not trading ComfortDelgro per se but the chart is helpful in showing where the supports are.

If we want to make some money trading stocks, we should learn TA. If we don't know TA, we are fighting blind.

Having said this, remember that TA is not the Holy Grail although some might think it is. 

TA gives us a glimpse into Mr. Market's psychology. 

TA is about probability and not certainty.

A stock can stay oversold or overbought for a long time. Refer to MFI.

A negative or positive divergence can have longevity. Refer to price, volume and MACD.

Always pay attention to the trend.

Fibonacci lines show us the support and resistance but not if they will hold or break. Look to the golden ratios 38.2%, 50% and 61.8%.





I joked that talking too much about TA diluted my reputation as an investor for income. Some might remember that I have revealed in my blog that I made a bit of money as a trader before. So, it really shouldn't be surprising.

Trading was helpful in growing my capital.

Refer to point number 5 in this blog:
http://singaporeanstocksinvestor.blogspot.sg/2015/06/how-did-ak-create-6-digits-annual.html





Finally, remember, that not everyone has the temperament to be a trader.  I feel that it is fair that I say this again after sharing about TA and trading in this session.

TA and FA are useful but the most important knowledge is self knowledge. We have to know ourselves.

Related post:
When to buy, hold or sell?