Money keeps flowing into my pockets.

Following my last three blog posts, I checked three accounts today.

My bank account.

My SRS account.

My CPF account.

Why?

To see how much pocket money I am getting from the recent T-bill auction, the one that took place on 14 September.

People sometimes look down on small sums of money, especially in today's environment of high inflation.

"Walao! $2 only you also calculate!"

$2 is also money.

Small sums of money add up to big sums of money.

Being careful with small sums of money can only help in our journey towards financial freedom.

Don't kick a pup because when the pup grows up, it will come back to bite you.

OK, this is true for regular folks like AK.

For "jin satki" people or high-flyers who make hundreds of thousands or millions of dollars per year, please stop reading.

You have come to the wrong blog.

Still here?

OK, shocking numbers up next.

Anyway, here is the breakdown:

$186 from $10,000 cash.

$148.80 from $8,000 SRS money

$216.16 more in interest income from $52,000 CPF OA money.

So, $186 goes into my current day pocket. 

$148.80 goes into my pocket which can only be unzipped 10 years later from age 62.

$216.16 goes into my pocket which can only be unzipped 3 years later from age 55.

Shocking, right?

Some people might be wondering why "rich" AK bought so little T-bills.

AK is just a regular guy and not "rich".

Why some people don't believe me?

Sigh.

T-bills are risk free and volatility free.

Not a bad way to make sure I have more pocket money now and in the future.

However, I am very aware of re-investment risk as high interest rates might not be around for long.

I will continue to wait for better opportunities to invest for dividend income.

While waiting, there is nothing wrong with getting relatively attractive risk free returns.

If AK can do it, so can you!

T-bill or DBS, OCBC and UOB? 3.7% or 6% p.a.?

I received an SMS from CPF that went:

"You have a CPFIS investment deduction from your Ordinary Account."

I suppose this means that my competitive bid (using CPF-OA money) for the last 6 months T-bill auction that took place on 14 September was successful.

A quick check revealed that the cut-off yield was 3.73% p.a. and this is still relatively attractive.

This is relatively attractive when our local banks are offering much lower interest rates for 6 months fixed deposits.

Definitely, it is more attractive than the 2.5% p.a. offered by CPF-OA even when accounting for a loss of 7 months worth of interest income which would have been paid by CPF.

Why 7 months?

This is due to how CPF calculates and pays interest on our CPF savings, taking only the month-end balance into consideration.

So, all three of my applications using cash on hand, SRS and CPF-OA money were successful.

I find it strange that there seems to be less interest in 6 months T-bill now. 

It seems to be weaker compared to a year ago, for example.

I remember non-competitive bids being so plentiful that my offer to buy was only partially filled at times.

Could it be that more people are buying the common stocks of DBS, OCBC and UOB instead, given the higher level of public awareness of how attractive their dividends are?

After all, a 6% dividend yield beats 3.73% p.a. return hands down.

Could AK be doing something wrong?

OMG!

I can feel an anxiety attack coming.

Time to go sink some enemy warships to calm myself down.

Related post:
Must buy T-bill? 
(How to transfer from CPF-IA to CPF-OA?)