CPF is all we need unless we are very rich. (Why did AK build his CPF to the significant sum it is today and still building?)

Don't trust AAA rated Singapore government bonds and trust some people who say investing in wine or paintings is better?

Oh, puh-lease lah.

Many or most Singaporeans do not realise what a good thing the CPF is.

This is the truth.

Many do not trust the CPF but are willing to put their money in alternative investments.

It just boggles my mind.

The CPF will help us secure a measure of retirement funding adequacy because we will retire with 

1. an investment grade bond (excess beyond prevailing Full Retirement Sum can be withdrawn at age 55) 

and 

2. a lifelong annuity (CPF Life) that pays us monthly from age 65.

Which part of this is hard to understand?

Whether alternative investments or more conventional forms of  investments, in my opinion, they are not risk free nor volatility free.

Risk free and volatility free CPF gives me peace of mind.

Don't let people know how much you have in your CPF hor.

If you want to share, do it anonymously like AK. 

Don't copy my disguise hor.

I don't want police investigating.

Seriously lah, some might start having designs on your CPF savings lah. 

The horror!

"CPF savings do not form part of your estate and are not covered by a Will.

"Learn why it's important to make a CPF nomination and the different types of nominations available."

https://www.moneysense.gov.sg/articles/2018/10/cpf-nominations-what-happens-to-your-cpf-when-you-pass-away

I always say that if all else fails, I would still have my CPF savings.

Why else would I build my CPF to be the relatively significant sum that it is today and still building?

Really, our CPF is also protected from creditors so that we do not run the risk of becoming old and broke!

Before you touch your CPF money or let someone else touch it, think and think again.

Haven't reached the prevailing Full Retirement Sum in your CPF account and thinking of buying a bond fund?

If you have yet to hit the Full Retirement Sum, why bother?

For most ordinary Singaporeans, if they want to hold some bonds to prepare for retirement, maxing out their CPF membership benefits is all they need.

This is the truth.

Don't believe me?

See:
$1 million in CPF by age 65?

Unless we have lots of money sloshing around and have already maxed out our CPF membership, we should focus on building our CPF savings as it should form the bond component of our investment portfolio and if we want to hold bonds, I repeat, this is all we need.





Related post:
Don't do silly things and retire smart.

Once upon a time in China, Weibo says 铁公鸡AK 还好没结婚!

A friend told me recently that I have followers in an air mile club and that my blog's outreach is quite widespread.

He went on to share a screen capture when I expressed my disbelief.

Air mile club?

I haven't clocked a single air mile in years.






When I was much younger, I enjoyed taking flights but not anymore.

I find that it is uncomfortable and inconvenient in more ways than one.

However, the catalyst for this blog was really what a reader shared with me recently and it was something that happened in a Weibo forum in China!

Forumer #1
坚决以贫困收入过中产生活本土坡人，很多挺有钱的，却总以中产收入过着贫困线的生活，不舍得吃不舍得穿，铁公鸡一毛不拔，还归因于新加坡太贵啦什么的，明明就是自己格调太低、生活无趣、好吗

Forumer #2
你说的让我想起一个非常著名的新加坡人 AK47
他的博客在这里
https://singaporeanstocksinvestor.blogspot.com/

他47岁，不工作了，住永久地契的公寓，未婚，每个月股息红利超过10,000. 新加坡股息免税， 所以他一分钱所得税也不用交。

然而他每天就吃自己做的青菜。在家看书，听音乐，打游戏。好像也不出国旅游。我估计每个月花费不超过一千。

存在即合理。他之所以这样，部分和他小时候经历有关。他的父母本来中产偏上，后来经济危机，差点破产。所以他立志不要走上父母的老路。他年轻的时候曾经一起打三份工。现在，他说他想做他想做的事情。

他经常戴面罩演讲在投资论坛， 很有名。

Forumer #1
还好没结婚
不然我该同情他老婆或者老公了

(Use Google Translate. I did.)








LOL!

I fell off my chair!

ROFL!

See? I am doing all the ladies a favor by staying single.

AK hero!

Yes, I know.

Bad AK! Bad AK!





Actually, I like this more:

Why changed topic? I blur.

Related post:
How AK created a 6 digits passive income?

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.