Ever since the CPFB introduced a colorful pie chart of our CPF savings a few years ago, I would look forward to mine every year like a teena...
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It has been a while since I blogged about a movie although I have watched quite a few since the last time I blogged about one. Star Wars: The Force Awakens. In one word, epic!
C3PO and R2D2, move over!
BB8 is the new star of the show!
I watched my first Star Wars movie in Capitol Theatre when I was in Primary 3, if I remember correctly. I have watched every single Star Wars movie since. Yes, I am a big fan. If you are a fan like I am and if you are a male in your 40s, you should be and you would want to watch this latest episode. I enjoyed the movie partly because it was like a family reunion with all the original cast although all much older now. Yes, I know. Sentimentality is a sign of old age. Although I suspected that it would happen, it was still very sad when Hans Solo died at the hands of his own son (whom he fathered with Princess Leia). Their son who called Darth Vader his maternal grandfather went to the Dark Side, in case you are wondering.
I will miss Hans Solo.
OK, on to a delightful find. The Millenium Falcon! Yes, older and dirtier but it still packed a punch! I dreamt of flying in the Millenium Falcon when I was a boy. Luke Skywalker had the easiest job in the movie, appearing only at the end, standing on top of a mountain, looking contemplative. We don't have to contemplate too much. We know to look out for the next episode. I am not going to say very much else except to thank my broker for the treat.
It is always very heart warming to receive thoughtfully written emails from readers and I would like to share another one here.
Hi AK,
My name is C and I am Pig too (younger batch though). :P
I was introduced to your blog 2 months ago by a friend who is a avid stock trader/investor, a month before my birthday, hence I see it as a God-given birthday gift because it really is.
I initially suspected his intention of pestering me to invest in shares since he has lost quite a sum of money in stock market (due to Ezra). "Why would he pull me down the muddy water" I thought to myself before, as I have always been frugal and risk-averse (which means I am those kind that sitting on cash). However I started to appreciate his intention after reading your blog posts and others (Tan Kin Lian and some of your guest bloggers).
These are what happened to me after reading your blogs:
1) I realised that I have double cover for H&S (Aviva My Shield Plus and AIA HealthShield Gold Prestige) from 2 different insurance agents. Excess payment of $1400. I am cancelling AIA one.
2) Liquidated unit trusts which I placed through my insurance agent, paying 5% front-load fee and other charges which I ended up suffering capital loss of $2xx. Plus $2k loss of CPF-OA 2.5% compounded interests, not to mention the future compounded interests on this interest lost. *heartache*
3) Open OCBC 360 account to maximise idle cash while waiting for opportunities
4) Open CIMB trading account and nibbled on OCBC counter at $8.70. Thinking of nibbling on FCT and Ascendas REITS.
5) Contemplating of cashing out Tokio Marine life insurance which I bought 5 years ago and buy term life instead. $2k annual premium for 25 years for $200k sum assured upon death/TPD/CI seems insufficient. Guaranteed return is low at 1.5% IRR while non-guaranteed is between 2.5% to 4% upon 67 years old, while the benefits illustration stated 3.75% to 5.25% *roll eyes*
6) Thinking of transferring some money from CPF-OA to SA and leave the rest for my first property at age 35. May consider MS top up of $7k to benefit from tax relief. But CPF website is down, couldn't do bank transfer for the time being. Duh -__-
7) Your blog posts on property investment broke the old beliefs I had. Used to think that house is an investment even if it is owner-occupied and I used to want a big house. Now, I feel blessed renting than buying, as the rental cost $600 p.m. is cheaper than the monthly mortgage instalment. Not sure if property market will revert to 2009-2010 pricing in near future, but it changed my mindset when comes to house-hunting in the near term.
Although you always say that blogging is a hobby and you are just talking to yourself, your knowledge and experience sharing undoubtedly serves a higher purpose- helping those financially-illiterate folks like myself to seriously look into own finances and make full use of the limited cash to achieve financial independence and better, financial freedom. After-all, aren't we all striving for a better life and money is a mean to get to that?
I guess it is fated that it is a year of massive change for me - not only that I was introduced your blogs and I diligently reading it, I have just joined a new company few months ago, and there are female colleagues that are also into stock/ppty investment and one of them even threw a question on why I paid so much for my whole life insurance for that sum assured!?!?!?
All these events are like a nudge for me to review my own finances and make good of what was lacking, and then seriously put money to work, to benefit from the beauty of compounding interest and probably the deep correction in stock market, if it ever happen.
Not to mention that I feel ashamed for making so many mistakes in personal financial management, especially so that I am a Chartered Accountant. Like my sister said: "Accountant also lost money? that's a mission impossible."
Anyway, I have come to term that I made silly mistakes and I still could make things right. I am writing just to let you know that PLEASE keep on blogging, you wouldn't know how many ppls you have helped indirectly along the way. Thank you, AK!
Keep in touch,
~ C
I could talk to myself until the cows come home but we must want to make changes to be better off financially.
To everyone who has taken the first step, soldier on and you will thank yourself in future.
I have been following your blog for quite a while now! I would first like to thank you for setting up a blog like that! It has helped me gained much knowledge in the world of investing! We actually have met twice so far! Once in your Talk with AK and once at InvestXCongress (I was the guy who told you I fell asleep for the first half and post lunch half >< )
Anyway! If it is possible, I would like to share some analysis with you and see if it is actually sound (and hopefully learn more from you (: )
1) Recently, Hong Fok's two charimen have been buying back huge amounts of their shares.. Attached herewith is an excel sheet (3rd page) with the details i tabulated from their website and also some layman analysis (page 1 and 2) that I have done. I intend to buy in as a short term trade but potentially holding on till End Feb as that is about when they release their FY reports.
2) Attached herewith is a Cordlife image. Normally, after a dividend, one would expect the share price to drop however, it seems not to be the case for Cordlife. I intend to have my TP at 1.65.
Sorry that the two questions I have are mainly about short term investments. I am trying to build up some more capital to increase my warchest. (Teacher pay not enough >< )
Hope to hear from you soon!
J
Hi J,
Ah, I think I remember you. :)
1. Hong Fok. I happen to know the family quite well. I wouldn't buy Hong Fok's stock unless I am thinking of possibly having the value unlocked one day through privatisation. It could take forever.
2. Stock prices don't have to fall on XD. It just so happens that they often do. Prices are a function of sentiments in the short run.
If you would like to increase your capital in the stock market in the short run, you might be better off learning Technical Analysis and becoming more of a trader.
I have always been an income investor but I did quite a bit of trading in my earlier years too.
Egg and cheese prata. Pan fried with butter. Lots of black pepper. Now, read the rest of the blog. One year ago in December 2015:
Regular readers probably know that AK is on a special diet by now and has enjoyed some early success.
Dieting, like many things in life such as being frugal, requires discipline. Often, people give up after a while because they get too extreme and feel deprived. This applies to both dieting and being frugal. What do I mean by feeling deprived? It is like meeting a Dementor (as in the fantasy creature from Harry Potter) and having all the happiness sucked out of us because we were denied all the food that made us happy. Dieting shouldn't be like that. Dieting should be a happy process of discovering ourselves with a healthier body weight. I shared in an earlier blog post that I find it hard to have zero carbs and zero sugar in my diet. It is especially hard because I have a sweet tooth. So, I go for as little carbs and sugar as possible. That is the best I could do. My weight loss process might be a little slower, as a result, but I am still losing weight. Dieting is not a race. Of course, it would be good to be able to lose weight faster but if I must become unhappy to do so, then, the diet can go where the sun never shines. After several weeks, today, I cheated big time on my diet:
Hot chocolate, cakes and cookies.
It was a real treat! It was also free of charge and that made me feel less guilty about cheating. LOL. If we are following a diet, being too extreme is not a good idea. A gradual weight loss is better than a drastic one. We shouldn't have to be too concerned with being right with what we eat all the time. This brings to mind what Peter Lynch said about how being right 6 times out of 10 times would make us better than most investors. We cannot be right all the time as investors and dieters. We should just aim to be right most of the time and that should make us quite happy. ----------- Added on 24 April 2016:
I find this a pretty good compromise for my diet:
Just another egg omelette with coconut oil and olive oil?
It is filled with curry potato and cheese!
Protein, good fats and good carbohydrates. Yummy too!
Not too long ago, I blogged about being on a new diet. So, have I noticed any changes since starting on this diet? The thing to hit me quite quickly is the increase in expenses when it comes to food!
Salad is very expensive and it takes more to fill me up too. $4 for a bowl of salad in the food court compared to $2.30 for economic rice, for example. Salad is cheaper in the supermarket but it is still rather pricey. Animal protein also costs more than carbohydrate.
Got this at a food court. $4.00.
I think that my food bill must have at least tripled or, maybe, even quadrupled in size. I don't know exactly how much because I no longer keep track of my expenses. Has been the case for a few years. So, this is just a feeling.
$5.00 from NTUC Fairprice.
Pan fried in butter. Powdered with black pepper.
Romaine lettuce on the side drenched in salsa sauce.
The tangy salsa sauce goes well with the salmon too.
When I talked to a friend who is a doctor, he said that the diet does make sense. Cut down on carbohydrates and sugar and we will probably be healthier. Many overweight people are overweight because they take too much carbohydrates and sugar which are what comfort food is packed with.
Roasted chicken on lettuce. About $4.00.
Pan fried Batang and ginger. About $4.00 too.
Being on this diet, I do miss ice cream which is one of my two biggest weaknesses in the world of food. As for chocolate, the other weakness, I am allowed dark chocolate but not too much. I also miss fish ball mee pok dry, char kway teow and chye tow kway. I also miss eating sandwiches which I used to make frequently and, definitely, my daily bowl of oatmeal.
Greek yogurt, banana slices and lettuce.
Pan fried Batang steak in garlic salt and turmeric powder.
Well, I do look a bit trimmer without having increased my level of physical activity. In case you are wondering, I do plan on doing something about this.
In fact, I lost more than 3 kgs in almost 4 weeks. I also seem to have less gas (if you know what I mean). I will continue with this diet and see if I manage to gradually lose more weight over the next month or so. I would be quite happy to be another 3 kgs lighter by then. Added (6 Jan 17):
The CPF Board's response is appended below. I've edited the questions and part of the response to mask personal information hence, the flow of CPFB's reply may not make sense but I trust that the key points of interest are in there. Feel free to reproduce it:
Question: How would the extra 1% interest earned on OA + SMRA be earned?
The extra 1% interest per year is currently paid on the first $60,000 of a member’s combined CPF balances.
The priority of the accounts that make up the $60,000 is as follows:
1. Retirement Account (RA), including balances used to pay for the annuity premium under CPF LIFE
2. Ordinary Account (OA), up to $20,000
3. Special Account (SA)
4. Medisave Account (MA)
In general, CPF interest is computed monthly, and will be credited and compounded to your respective accounts yearly.
Any excess of the FRS will remain in the OA/SA which the member can apply to withdraw.
There are no restrictions on when a member, age 55 and above, can make the withdrawals throughout the year. Now, they can apply for withdrawal at any time as long as they have the withdrawable monies and the Board will assess their applications.
Question: Assuming FRS of $X and MSTU of $(X + Y) including interests. At age 55, can $Y be withdrawn?
No, the top-up monies of $Y cannot be withdrawn as these are meant for recipient’s retirement needs.Hence, the member cannot apply to withdraw the top-up monies:
(a) for payment of education, investments, insurance, housing, etc;
(b) by pledging his property in lieu of the Full FRS; and
Several years ago, I tried to grow cherry tomatoes on my balcony. I had three pots and they were all growing well. They flowered and eventually I had some fresh cherry tomatoes.
Unfortunately, the good times didn't last very long because the plants were infested by white flies and eventually died. White flies are nasty insects and usually cling to the undersides of leaves in large numbers. Once infested by white flies, the fruits from the plants are not safe to eat either. Well, the important thing is that I had a lesson in gardening which I remember.
So, when I decided to renew my efforts at gardening in the last one year, I decided not to grow cherry tomatoes despite suggestions by some people to do so. Instead, I decided to grow plants that would ward off all sorts of nasty insects. I have a pot of Basil, a pot of Rosemary, a pot of Lemon Balm and two troughs of Catnip. These ward off mosquitoes, house flies and other nasties.
Rosemary.
Basil.
Lemon Balm.
Catnip.
I am also trying to grow Rosemary from seeds.
Here is a photo taken today:
The one on the right is ahead in the race.
I am also pleased to share that my Alliums have flowered today:
Waiting for them to bloom fully.
Alliums (the onion family) repel many insects, apparently. I also recently tried to grow some Nasturtiums which are originally from South America. The whole plant including the flowers are edible, apparently. Peppery in taste or so I read.
Got the seeds from NTUC Fairprice Xtra.
The main reason for planting Nasturtiums is not for eating although I could try. What I really want is their ability to ward off those cherry tomato plant murderers, those white flies! Today, I see the first Nasturtium seedling emerging from the soil:
Hope the rest of the seedlings follow soon.
Once the Nasturtiums are fully grown, if I should try my hand at growing some cherry tomatoes again, I wouldn't have to fear those nasty white flies!
Whether investors or gardeners, our chances of success would be higher if we are ready for war!
I have been trying to cut down on sugar but one of the things I like to eat is yogurt which apparently has lots of sugar. You know the type with bits of fruit? I particularly like those with bits of mango. Although I have been told that natural yogurt is sour, I have not tried it before, well, until today. On my first attempt a few days ago to get natural yogurt in the neighbourhood supermarket, I could not find any. All the yogurt I found had more than 10 grams of sugar per 100g. Most had between 12 grams to 15 grams of sugar. If you cannot imagine what that means, Vitagen Less Sugar has about 9 grams of sugar per 100g. Jia Jia Liang Teh Less Sugar has about 5.5 grams of sugar per 100g. So, most of the yummy yogurt on the shelves in the supermarkets have relatively more sugar. Anyway, today, I found this:
4 grams of sugar per 100g. Great!
So, what does it taste like? OMG! It is sour! Sour! SOUR! Anyway, if you want to try this, I got this from NTUC Fairprice Xtra. It was on special offer. Two servings for $2.95 instead of $3.95.
Yup. It costs more than the usual Low Fat or Non Fat yogurt with bits of fruit which I like so much. Well, I guess this is healthy yogurt and it still isn't as pricey as those frozen yogurt from brands like Yami Yogurt, Yoguru or llaollao which probably have tons of sugar.
(Confession: I used to enjoy Yami Yogurt and Yoguru from time to time. I never did try llaollao because it is so expensive.) My food bill is growing in size! That will be another blog post.
I have been spending less time blogging and it will probably stay like this for a while more. The primary reason is that I have become more introspective lately. I have been spending more time meditating, gardening and going back to doing some yoga. I have also been eating differently, following a diet which is very different from what I was used to.
Gardening is a good and inexpensive hobby. Growing plants also means that I am doing my bit for the environment. I fancy myself to be a bit of an environmentalist and recycle whatever I can. As with all new hobbies, learning about gardening takes up quite a bit of my time. I am learning new things all the time about plants. I enjoy spending time in my little outdoor space with my plants.
In the evening, it is rather calming, especially this time of the year. There is always a cool breeze and with soft lighting, it is a perfect spot for meditation. Before I knew it, I had lost an hour just sitting there.
As for my new diet, it demands much more attention from me. It is not as convenient as what I was used to. So, I end up having to spend more time preparing my own meals, more than before. The selection process is really a learning experience. It is hard to have no carbohydrate and no sugar in my diet. The best I can do is to try to have as little carbohydrate and as little sugar as possible. It is about being more careful. The results have been encouraging so far and I will probably blog about the initial success of my diet a bit more in a separate blog post.
Tuna, eggs and lettuce.
Oh, I should mention that I have been spending more time visiting doctors, doing check ups and stuff. It is only prudent since I am past 40. Frankly, there are certain health issues which probably should have been addressed years ago but I had swept them under the carpet as they were not life threatening (and I didn't want to spend the money, ahem). For exercise, I continue to take long walks which I do usually in the evenings. I like taking in the sights on such walks. Today, I decided to go for a morning walk instead and there were reminders everywhere that Christmas is just round the corner.
As we count our blessings, let us not forget to bring some cheer to the less fortunate. Be charitable and remember that true charity does not discriminate amongst the needy.
I remember telling a friend who was disgruntled with the CPF that we don't really have a choice. It is like being married and not liking our mother-in-law. We can kick our mother-in-law in the butt if we divorce our spouse. We can kick the CPF in the butt if we give up our citizenship. Fortunately, I rather like my mother-in-law, er, I mean, the CPF.
Some might not have mandatory contributions to the CPF for various reasons and might wonder how the CPF fits in their lives?
Here is one example:
Reader:
I accidentally came across your blog only this year, find it very sensible & rational. So, I took few weeks to read all your past articles since Day 1 (I think).
Need your advice or please to talk to yourselvesJ
I’m a self-employed & have been doing max voluntary contribution to CPF some of the years to service our HDB mortgage through our CPF…
We have no intention to fully pay maybe until when we buy our 2nd property
My question iswhat is the downside to continue doing VC with the ultimate aim to buy 2nd property using CPF(I’ve set aside the Basic Retirement Sum needed in SA)?
I’m confused on paying back CPF &accrued interests part when & if I were to sell the property
Am I worst off when compare those who bought using Cash???
Awaiting your enlightenment
Thank you J
AK:
Welcome to my blog. I am glad you enjoy my muttering and mumbling. ;)
With regards to the CPF, people must remember that it is really meant to help Singaporeans fund our retirement.
For people who do not have sufficient cash on hand or other means, they could use their CPF savings in the OA to help pay for their homes but that is not the primary purpose of the CPF.
However, for people with sufficient cash on hand or other means, especially in an environment of low interest rates, they don't really have to use their CPF savings to purchase their homes.
They should look at their CPF savings as a back up only to be utilised in case they have to. Well, at least that is how I look at it.
There is an opportunity cost to using our CPF money meant for our retirement to purchase real estate whether for own stay or investment.
I would do VCs to my CPF account if I were self employed because I want some sense of financial security in retirement down the road and not really for anything else.
It is very often a matter of perspective.
How we look at something would determine the way we treat it.
If we have planned well, we should be able to meet and even exceed the CPF Minimum Sum when we reach age 55.
If we should exceed the CPF Minimum Sum at age 55, we would be able to withdraw probably much more than a token $5,000 then.
Hi AK
Where is the best place to keep the “untouchable” portion of our retirement money (ex-CPF money)
Would be delighted to hear you “talk to yourself”
Thanks for a great blog
R
Hi R,
It would depend on whether it is our only source of retirement funding. If it is our only source of retirement funding, then, we should not take much risk with it. Fixed deposits with promotional interest rates (e.g. 1.8% interest per annum) are safe options.
If we have other sources of retirement funding, then, this could be seen as extra money. Then, it might not be that "untouchable". We could take a bit of risk investing in REITs and dividend paying blue chips then.
We could always opt to buy annuities too, of course.
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