Understand the function of each tool in personal finance.

People get confused sometimes what the CPF is supposed to do. We should be clear what each tool in personal finance is supposed to do for us. Don't be confused.

C

... May I know how much should I top up my SA cpf by cash if I want to avoid paying tax?

Assi AK

You could do MS Top Up to your SA. Tax relief will be given for the first $7K of top up per year.

C

Thanks. Tax relief meaning the entire tax payment is waived or only partially waived?

Assi AK

Well, if you taxable income is $20K and you do MS Top Up of $7K, your taxable income becomes $13K.

C

Alright thanks. Most ordinary folks will not be taxed so much so I think there is no point in topping up. I would also like to learn investment. Where can I start? I am risk averse though.

Assi AK

Risk free? CPF. ;)

Tax savings from CPF MS Top Up is just a sweetener. It should not be the primary motivation.

Learn how to invest? You can start by reading some books. Go to my blog's right side bar and look for the box with the heading "Food for thought".

C

Thanks AK. Am I right to say that if if I hold the stocks long term e,g. More than 10 years, I will not be making losses?

Assi AK

I don't think anyone can guarantee that...

Related post:
Build a cornerstone in retirement funding.

A couple of blog posts on selling winning investments.

Reader:

"Hi AK,

just curious about your strategy on handling rises in a share price. E.g if you had bought StarHub/ sph/ accordia etc for income, at what level would you consider it worthwhile to sell? Thanks!"

Assi AK

You might want to read this: http://singaporeanstocksinvestor.blogspot.sg/2013/08/when-to-buy-hold-or-sell-part-1.html

When to BUY, HOLD or SELL? (Part 1) | A Singaporean Stocks Investor (ASSI)

Assi AK

and this: http://singaporeanstocksinvestor.blogspot.sg/2015/05/should-i-sell-my-investment-to-lock-in.html

Should I sell my investment to lock in gains? A perspective. | A Singaporean Stocks Investor (ASSI)

"If we are investing for income, if the investment is still doing the job we expect it to do, generating attractive income for us, then, there is really no reason to sell unless we feel that there is another investment out there that can do a better job." - AK