Use CPF OA or cash to pay for HDB flat?

This is something I have blogged about many times before but I want to remind readers that I am not telling them what they should do.

It is really up to them.

Take into consideration our circumstances and our beliefs before making a decision.

Your flat.

Your CPF.

Your cash.

There are many questions we must ask but, ultimately, there is one question that would determine if we would have peace of mind and it has to be asked.






Reader says...
I would tink paying for my hdb with oa would free up my cashflow for taking on more risk, ie expanding or going into new biz venture, or picking up financial assets and increasing cashflow.

U share that everyone shld do it within their ability and we do not need to copy their own plans.

My question to is shld i do so? 

As i am at the start of paying for my resale hdb.

Ur advise will be greatly appreciated so i can review my position.






AK says...
Ask yourself if you want more stability or are you ready to stomach more volatility and you will have your answer. 😉


Reader says...
Thanks ak. Always happy to have a small conversation as it was short n simple and not overcomplicating.








Watch the video.







"Rule of 72 is a simplified way to determine how long an investment will take to double, given a fixed annual rate of interest.

"By dividing 72 by the annual rate of return, investors can get a rough estimate of how many years it will take for the initial investment to duplicate itself." 

Source: Investopedia.




AK is just lazy lah. Shh. :p

Related posts:
1. Pay home loan and hit MS ASAP.
2. Pay home loan and grant fast.

Topping up our CPF savings can wait for some.

Reader says...
Thank you for providing clarity on my current situation.

I will stop using my CPF OA for my mortgage payment, since my rental is able to cover this obligation.

To date, I have used about $87K of CPF for my property purchase ($85 plus K for principal and $1 plus K for accrued interest).






If I have limited cash at my disposal, am I correct to say that I should first prioritize repaying CPF the amount of money used for my property purchase, so as to reduce the amount of accrued interest which continues to grow as long as the amount of money remains unpaid?

In other words, voluntary contribution and retirement sum top would have to wait while I repay CPF the amount used for property purchase.

I am not sure if my above understanding is correct. Hope to hear from you on this. Thanks!

AK says...
OA savings can be used for other purposes if the need arises.

SA savings is strictly for retirement funding.

For those who want some flexibility because cash is tight, growing SA savings might have to take a back seat in the meantime.






It is like not stretching our finances to buy a condo or to invest in stocks.

It is only sensible not to top up the SA even more so because it is a one way street.

When you become financially stronger, you can build your SA.

Of course, make sure to do everything we can to become financially stronger.






Do you want?
More passive income than richer friends.

Remember,
If we are not rich, don't act rich.

Rich Dad, Poor Dad? 
2 are better than 1.

All in good time.






AK's closing words:
Remember, all of us have different circumstances and it is rarely a good idea to simply copy what someone else is doing.

What is suitable for one person might not be suitable for another.

We must have the ability and the will to see things through.





Although I like to think where there is a will, there is a way, sometimes, we have to be realistic and do what is within our ability to do.

The will must be strong but the ability must be present too.





Related posts:
1. Stop CPF accrued interest growing.
2. Know how to grow our CPF savings.
3. 4 ways to boost our CPF savings.