SG Investor Hub Blog

Are Laser Facial Treatments Worth the Hype?

With laser treatments becoming increasingly popular these days, a friend of mine asked me if I thought it was worth the hype. I’ve always thought facials were a waste of money, especially when you can DIY at home, but laser facials? With the …

The Memo All the Serious Investor Should Read

"When I see memos from Howard Marks in my mail, they’re the first thing I open and read. I always learn something, and that goes double for his book," Warren Buffett has said.

 Here  ( Click )  is the latest memo from Howard Marks on " Expert Opinion " ! 

Quoted below summary on his view about  expert opinion and making economic forecast .

// Quote //

My Opinion of Opinions

Misconception of Re-Employment Age Extension

Singapore Parliament have recently made changes to the Retirement and Re-employment Act, these changes will act to protect and encourage older workers to participate in Singapore’s economy.

Some of the changes made includes:

Companies must now o…

2016 in Retrospect, 2017 Looking Ahead

I’m late. Some bloggers started writing such posts about 2 weeks ago already! I guess I’m the last blogger to come and play this game, eh? Well, the good news is that maybe during that 1 week where every other post was about the same new year thing, ma…

New Year, New Lobang for You!

I’m a bit late to the game of reviewing 2016 goals and posting about my 2017 goals, but I’ve got a lobang which I thought I should share!Udemy is an online course learning platform and you can pretty much learn anything you want there. I wrote about th…

Betting Against the STI Component Stock Changes

Buying and holding a stock index is considered as passive investing. However, the STI is not entirely passive. Every quarter, the STI would be reviewed to determine whether certain stocks should be dropped from or added to the index. This can be likene…

Are you neglecting your wealth: you have more CPF savings than you think

Let me start this post by the following statement:

At least 31% of your wealth are in CPF
Rub your eyes, stare at the statement again. <No, this is not a typo> If your only source of income is your full-time employment, then a whooping 31% of your income goes to CPF, and the remaining 69% are the cold hard cash you receive as monthly take-home pay. 

Are you kidding me? 31%?

For readers who are convinced, you may skip to the next section. Otherwise, read on for a quick explanation. 
For employee below 55, 20% of your wage will be contributed towards CPF, while your employer contribute an additional 17%. This means that for a person earning $1k per month, take-home pay is only $800, and total CPF contribution adds up to $370; this equates to 69% and 31% respectively. 

In fact, you (very likely) have more CPF than cash savings

Unless you save more than half of your income, I would bet a burger that your total current CPF* saving is more than your cash savings (including cash-equivalent asset such as investment portfolio). 
*Include CPF savings for other purposes (such as property, investment etc.)
This fact may be surprising, but is actually a highly probable situation for many of us, especially for young working adults like Max.
Using the same guy with $1k gross income as example: By saving half of his take-home pay, his total saving is only $400 ($800/2), as compared to $370 of CPF saving. With interest rate of 2.5% and 4% for OA and SA savings, it is not unlikely for CPF savings to exceed total cash savings.
A quick check: as of today, Max’s CPF total saving is double of his total cash savings. How does your CPF savings compare with your cash saving? Why not have a quick check? 😎

So, how does that affect me?

With a significant portion of wealth in CPF savings, it is worth putting extra emphasis towards growing our CPF savings.
After all, unless you are able to build up a portfolio huge enough to generate passive income for a comfortable retirement lifestyle, the CPF scheme has to be tap upon to cover the gap.
There are many people (including myself) who can better utilize the relevant schemes to optimize our CPF growth. Some of these (non-exhaustive) are:
  1. CPF investment scheme: investing OA and SA account
  2. Transfer savings from OA to SA account
  3. Voluntary cash top up to SA account

Better don’t touch my CPF leh

I am sure many people are not actively trying to maximize their CPF savings due to a lack of financial know-how to evaluate their needs. This is especially true as these decisions made are irreversible. Indeed, careful considerations have to be made before ant actions on your CPF savings, your retirement nest.
Personally, I have transferred some of the OA savings to the SA account, and have top up SA account with cash. Will be elaborating on this in later posts as a case study for reference.


Ending note

For now, remember that 31% of your wealth are in CPF. Don’t just live with it; rather, embrace and optimise it to put it to your advantage.
Are your CPF money reaching it’s fullest growth potential? Are you neglecting the other significant half of your wealth?
I hope you are not.

Upcoming posts

1. More about myself – posted on 6 Jan 2017
2. Do you have a plan for early retirement – posted on 21 Jan 2017
3. My financial philosophy
4. Review of my 2016 stock investing performance
5. Why do I top up my CPF SA using cash
6. Big spending – Invisalign

2017 (Monthly) Money Saving Challenge

Now that a brand new year has started, this is the time where many people typically decide to improve their personal finances as part of their New Year’s resolutions. One popular savings challenge that has been attempted for many years is the classic 5…

New Talk: Money Or Love?

Check out this NUSWhispers post from a girl who’s torn between two guys: Guy A: A rich gentleman who drives a BMW and wines and dines her at restaurants Guy B: Her boyfriend who’s serving his NS and prefers saving money On the surface, it’s easy to judge the girl for even thinking of leaving her current boyfriend. How ungrateful! He’s doing […]