Hit the FRS in CPF-SA by age 32! Stunned like vegetable?

Reader, Spotlessmind, says...

Discovered your blog a couple of months ago and found it both inspiring and educational.

Having read varied opinions on the topic of CPF, I felt compelled to share my thoughts.





Since I started working after graduation, I have been transferring all my money in the OA account into my SA account on the advice of my mother, who despite having only pre-university education, knows the power of compounding interest.

Many of my friends (regardless of whether they are single/attached/married) worry that they will not be able to afford a flat in the future if the money in the OA is transferred to SA. 

There is always a big "what-if" hanging over their heads.





On the other hand, I thought that I would remain single forever and thus would not need to buy a flat.

I will cross the bridge when I get to it.

So, I simply kept transferring.

I met my significant other just before I turned 30.

At 32, CPF stopped allowing me to transfer anymore money from my OA to SA :).





I am lucky that my job pays reasonably well, so I have been able to accumulate a significant sum in my OA for flat.

I think many young people have always thought that money in OA = Flat.

Many fear that if they cannot afford a flat, they cannot get married and risk losing their significant other.

Others who are single want to have the option of being able to use the money in OA when they want to.





My approach is considered very risky by my friends.

In my 20s, I was laughed at for being silly.

It is bad enough that we cannot withdraw the money in OA, but at least we can use it to buy a flat.

Why so silly to lock it deeper into SA when we won't see it until we reach retirement and have a minimum sum?





None of my friends took up my suggestion.

I can understand the rationale of those who need to buy a flat.

But I cannot understand the rationale of the rest.

After all, if we are single, we can only buy a flat when we reach 35.

Or maybe some intend to purchase private property.





In short, while a certain degree of skepticism in life is healthy, too much of it is a hindrance to progress.

We waste time when we hesitate, and as you have mentioned it, compound interest is magic that takes time.

I cannot agree more with you.





AK says...
If readers thought that my story is amazing, yours should rock them off their seats!

I am in awe!

...




Hit the FRS in the SA by age 32?

Stunned like vegetable?

It is possible and without using any out of pocket money either.

I am not saying that we should all do this.

After all, not everyone has the ability to do this.

Even for those who have the ability to do so, they should always carefully consider their own circumstances and priorities first.

Remember, the CPF is but one piece of the jigsaw puzzle called "retirement adequacy".









Related post:
Sensible to do OA to SA transfer?

Lost life savings and now in debt. (Investor or speculator?)

When are we investors and when are we speculators?

When we buy into something that has intrinsic value which generates revenue and ideally provides us with an income, we are investors.

When we buy into something that is the complete opposite but we feel that we could sell it for a higher price in future, we are speculators.





People often get into serious trouble when they think they are investors when they are really speculators.

Speculating is not for everyone.

People of more modest means would do better if they stay away from speculating and just stick to investing.










The value of all outstanding cryptocurrencies has fallen by about $600 billion, or 75 percent, since the peak in January.

The damage is likely to be particularly bad in places like South Korea and Japan, where there was minimal cryptocurrency activity before last year, and where ordinary investors with little expertise jumped in with abandon.

Kim Hyon-jeong, a 45-year-old teacher and mother, put in about $90,000 last fall.

She drew on savings, an insurance policy and a $25,000 loan.

She is down about 90 percent.

“I thought my family and I could escape hardship and live more comfortably, but it turned out to be the other way around.”





Twitter is also filled with complaints: “It’s really hard to stomach losing all my hard earned money. Just broke down and cried.”

On Reddit, a user posted a picture of the $100,000 loan that he had taken out in December to buy cryptocurrencies — and that he will now be paying back out of his salary for the next three years.

“I’ve made a mistake, and now I’m going to have to unfortunately pay the cost for the next few years.”

Source: New York Times.






Remember, no one cares more about our money than we do.

Before parting with our money, question if it is an invitation to invest or an invitation to speculate.

Oh, I don't even borrow money to invest with.

Borrow money to speculate with?

That is how some people "ki chia" lor.

Related post:
My final word on Bitcoin and friends.
"When people tell me that they invest in Bitcoin, I get the impression that they are either confused or they are out to confuse other people."