CPF interest is passive income and real money.

Reader says...
We were talking about the CPF during lunch and I said it is good passive income.

It is like investing in bonds and getting interest income.

Who said that? 

Who? Who? Ha ha.






My colleague said he would not refer to CPF interest as passive income especially interest in MA.

He said anyone who says CPF interest is passive income must be twisting logic. 

He insisted normal people will not think of CPF interest as passive income.

AK, you blur or not?

I very blur.






AK says...

You very blur?

I more blur than very blur.

However, that colleague of yours is the most blur of us all.

So, your colleague is normal and we are abnormal?

Ouch.

Alamak, I fell off my chair.






Interest income is income that is passive.

Interest income is passive income and it doesn't matter if it is paid on our savings in our bank accounts or in our CPF accounts.

Just like money in our bank accounts, money in our CPF accounts is real.






If it is not real, we would not be able to use the money in our MA to pay for H&S insurance.

If it is not real, we would not be able to use the money in our OA to pay for our homes.

Would insurers and property developers accept Monopoly money in payment?

You tell me.

I blur.





Related post:
A cornerstone in retirement funding.

Reduce volatility by having fixed income as we age?

Reader says...
Morning AK, as you get older, will you consider to be more defensive in your portfolio?

Means shifting more to SSB, CPF etc instead of blue chip stocks for example?

Just in case touch wood financial crisis then your portfolio less time to recover.

Appreciate your thoughts as always. 😉







AK says...
I guess your question is about reducing volatility in our investment portfolio.

Well, for most of us, that should be the job of our CPF savings. 😉

Why do I say "for most of us"?

Remember my blog on "unless we are very rich"?






Too defensive an investment portfolio and the returns would be compromised too much and might not be meaningful enough for us to have a comfortable retirement.

Again, this is "for most of us".

For those who have plenty of money sloshing around, they don't have to be as particular. 😉






I am investing for income mostly.

Volatility which could result in plunging share prices doesn't bother me.

I am more concerned with receiving dividends from my investments, during good and bad times.

In fact, I welcome plunging prices as that means I could buy more on the cheap. 😉






Related post:
CPF is all we need unless very rich.