Do you have enough @ your Retirement Pot?

[frenchbriefs]

Does the S&P guarantee this 8% or even 6%???

Maybe not.theres no guarantees in life but even then even if u fail to achieve 8% there is no way u cannot achieve 2.5% life time return unless u are a certified idiot which most sinkies are cause they sell their soul to the government for 2.5% and a whole bunch of rules.

By submitting yourself to higher powers and the men in white,u have already admitted yourself to be a failure.

 

[focus1974]

I only know property value and rental will keep up with inflation.
this is the safest investment for most people. Not stocks, not bonds, not ilp.

 

[frenchbriefs]

I only know property value and rental will keep up with inflation.
this is the safest investment for most people. Not stocks, not bonds, not ilp.

Look at american housing market,boom,crash,kaput,2008 economic crisis.nothing is ever safe,singapore will suffer the same fate.u can only keep a bubble inflated for so long,2030 come,singapore 6.9m population,sinkies live underground.maybe ur rental and hdb can go up.

 

[NewInvestor]

I only know property value and rental will keep up with inflation.
this is the safest investment for most people. Not stocks, not bonds, not ilp.

This is the wisest thing I have read in a long time.

 

[frenchbriefs]

This is the wisest thing I have read in a long time.

If u have 250k now after winning 4d will u take 250k and dump it in a portfolio with 65% stocks 30% bonds 5% precious metals and divide ur stocks into 70% us and 30% international.

Or take 250k dump into hdb,pray PAP stay in power next 20 years,pray they keep importing 100k foreigners every year,pray economy doesnt slow down,pray mrt doesnt break down,pray sinkies still got jobs and cpf to pay their hdb mortgages,

 

[doody_]

Once again we have fallen into the CPF trap again. There will always be a group of people who hate the CPF and another group who loves it.

Well if you are so smart then please let us know how we can all withdraw our CPF before retirement and continue being Singaporeans, cos I think that's what most of us here want.

 

[Perisher]

Although you are usually correct (congrats!), I am afraid I have to correct you this time. The CPF Act states that the minimum interest to be paid is 2.5%. The govt can of course amend the Act but I doubt they will so that since they have not done so during the last decade of low interest rate.

The often spoken S&P return is an average. If you buy the S&P index at its height, you will have to wait a very long time for that average to kick in.

So I keep some, but not all, money in CPF earning 2.5% (better than FD) and if the S&P does a significant correction, I will shift some of the CPF money to a low cost S&P etf. That ought to earn me the historical 8% return. Barring that, 2.5% is not the end of the world.

Don't see where I'm corrected? You basically just agreed that anything can change except it's unlikely?

As for the S&P average, yes, it's an average, but if one DCA in, that average still works because it's still an average over a long long time. It doesn't matter where your 1st $1000 goes, it will average out over that 20-30 years if you invest consistently till you retired.
On the other hand, if you managed to dump in 1 lump sum at absolute low or near that, you are likely to get way more than the averaged 8%.

I do agree, however, that one should only use CPF to invest after GFC hits. As to me, cpf is a backup warchest.

 

[Perisher]

If u have 250k now after winning 4d will u take 250k and dump it in a portfolio with 65% stocks 30% bonds 5% precious metals and divide ur stocks into 70% us and 30% international.

Or take 250k dump into hdb,pray PAP stay in power next 20 years,pray they keep importing 100k foreigners every year,pray economy doesnt slow down,pray mrt doesnt break down,pray sinkies still got jobs and cpf to pay their hdb mortgages,

Perhaps do both?

Use 120k to pay downpayment for a HDB or 180k for condo depending on salary.
Use the rest to invest and save abit as warchest.

 

[dork32]

Anyone who has more than 100k sitting in their cpf account has to be the biggest idiot in the world.imagine the amount of capital,time and interest appreciation lost when ur money could be elsewhere earning much higher returns.even a 1% difference interest compounded over 30 to 40 years can mean a loss of 50 to 60 thousand.

Calculated using moneychimp,6k invested in cpf every year at 2.5% vs 6k invested in the s&p every year at 8%,the difference after 40 years is 400k vs 1.8 million.

400k when u retire vs 1.8 million can mean 3 meals a day at hawker center food court or restaurant.

I reccomend anyone with more than 100k in their cpf give up their citizenship and migrate.dont make the government rich,make urself rich.

i am that idiot. i have quite a lot in my cpf. it is in my ordinary earning that 2.5%. i also have quite a lot of housing loan that is costing me 1.6%. now i shake leg do nothing, i still sure earn that 0.9% difference in the cpf.

should interest rate turn against me, i will use my cpf to redeem my loan immediately.

i invest, when interest rates rise, share prices will drop. i get hit on both sides. so why take the risk?

if i am so stupid and forego the 8% for the 2.5%, then banks are the greatest idiots. they employ so many traders, yet they lend me money at 1.6% against 8% that they could have earned. ever think why our banks are so stupid?

 

[Shiny Things]

if i am so stupid and forego the 8% for the 2.5%, then banks are the greatest idiots. they employ so many traders, yet they lend me money at 1.6% against 8% that they could have earned. ever think why our banks are so stupid?

This is a bit of a nitpick, but banks generally don't own that many stocks (except if they run an equity market-making business). They generally either lend it out, invest in bond-like stuff, or park their cash at the central bank; banks are a hugely-leveraged, opaque pot of cash, and the volatility you get from stocks doesn't look good on a bank's balance sheet.

 

[dork32]

This is a bit of a nitpick, but banks generally don't own that many stocks (except if they run an equity market-making business). They generally either lend it out, invest in bond-like stuff, or park their cash at the central bank; banks are a hugely-leveraged, opaque pot of cash, and the volatility you get from stocks doesn't look good on a bank's balance sheet.

this is not a nit pick.

if banks do such things and make money, why can not i do it too?

to me cpf is the guy i lend money to, it is like the bond like stuff.

the amount of money i borrowed to put into my cpf is ugly. i am highly leveraged.

i dont want the amount that i borrowed to experience the volatility of stocks.

i am idiot?

 

[NewInvestor]

this is not a nit pick.

if banks do such things and make money, why can not i do it too?

to me cpf is the guy i lend money to, it is like the bond like stuff.

the amount of money i borrowed to put into my cpf is ugly. i am highly leveraged.

i dont want the amount that i borrowed to experience the volatility of stocks.

i am idiot?

No you are not a or the idiot. What you are doing makes great financial sense. Borrow cheap n earn higher and stable interest elsewhere. Banks do it all the time.

Shiny and Perisher are not wrong. Both of them are experienced etf and stock investors and obviously comfortable in what they are doing. There is sense in what they said. But I am still learning etf n stock investment slowly n will need a lot of time getting comfortable. In the meantime, CPF's 2.5% is a brilliant alternative to putting FD in a bank.

 

[dork32]

No you are not a or the idiot. What you are doing makes great financial sense. Borrow cheap n earn higher and stable interest elsewhere. Banks do it all the time.

Shiny and Perisher are not wrong. Both of them are experienced etf and stock investors and obviously comfortable in what they are doing. There is sense in what they said. But I am still learning etf n stock investment slowly n will need a lot of time getting comfortable. In the meantime, CPF's 2.5% is a brilliant alternative to putting FD in a bank.

i am comfortable with stocks and shares. i do have a sizable portfolio and am making money from it. i am using my spare cash to do such things. even if i lose everything, i am still ok with this.

i borrowed a lot of money on my property. i am not willing to take big risk on this amount of money. putting it in the cpf is very safe compared to the other instruments.

2.5% is brilliant only if the it is higher than the loan interest rate.

 

[NewInvestor]

i am comfortable with stocks and shares. i do have a sizable portfolio and am making money from it. i am using my spare cash to do such things. even if i lose everything, i am still ok with this.

i borrowed a lot of money on my property. i am not willing to take big risk on this amount of money. putting it in the cpf is very safe compared to the other instruments.

2.5% is brilliant only if the it is higher than the loan interest rate.

Well done!

What I don't understand about this thread is why people say that a person needs only 3K per month for retirement. I think it is at least 5K a month per person. Especially with a car.

 

[Soul77]

Not everybody had the financial knowhow on investing, or no luck.

I took out part of my CPF to invest in unit trust during the 2007 just before the crisis. Went down 30% and only break even sometime last year.. compared with 2.5% x 8 years I should be getting If I left it there..

So when the govt said 80% ppl who invested their cpf making loss vs the cpf interest, I kinda believe it as I'm one of the 80%.

 

[wts2013]

Not everybody had the financial knowhow on investing, or no luck.

I took out part of my CPF to invest in unit trust during the 2007 just before the crisis. Went down 30% and only break even sometime last year.. compared with 2.5% x 8 years I should be getting If I left it there..

So when the govt said 80% ppl who invested their cpf making loss vs the cpf interest, I kinda believe it as I'm one of the 80%.

yes, this shows that timing of entry/exit is very important, we cannot just believe those statistics that tell u to buy and hold for 10-20 years with sti etf and u will make more than 100%, it depends which 10-20 year history u are looking at. Buy at 2007 top and u are still losing or make nothing much 10 years later lor, hahaha

 

[anfielder]

Well done!

What I don't understand about this thread is why people say that a person needs only 3K per month for retirement. I think it is at least 5K a month per person. Especially with a car.

To each his own.. everybody has different expectations. Not everybody needs a car especially in retirement.

 

[NewInvestor]

yes, this shows that timing of entry/exit is very important, we cannot just believe those statistics that tell u to buy and hold for 10-20 years with sti etf and u will make more than 100%, it depends which 10-20 year history u are looking at. Buy at 2007 top and u are still losing or make nothing much 10 years later lor, hahaha

I absolutely agree. Anyone who bought blue chips when STI was 3,800 have still not recovered their principal. And that was nearly 10 years ago? Eventually the 6%-8% return on STI will work for you. But if you entered at the wrong time, you may have to wait several decades.

If you entered at the right time, say, during a significant correction, you don't have to wait long for the 6% - 8% return to work for you.

 

[lovesleeping1981]

zero savings at 34. How to retire? Singaporean slave. Forex keep losing. Stopped forex already. Thought it could be my big break when I profited 20k in Jan 15. Till today left 1.5k. Gg to withdraw remainder later today already.

 

[reinphd]

I absolutely agree. Anyone who bought blue chips when STI was 3,800 have still not recovered their principal. And that was nearly 10 years ago? Eventually the 6%-8% return on STI will work for you. But if you entered at the wrong time, you may have to wait several decades.

If you entered at the right time, say, during a significant correction, you don't have to wait long for the 6% - 8% return to work for you.

Just sharing his blogposts that may give some insights:

http://www.investmentmoats.com/pass...f-near-the-top-of-the-great-financial-crisis/

http://www.investmentmoats.com/stoc...ca-investing-at-the-top-of-the-bear-market-2/

http://www.investmentmoats.com/weal...ight-before-great-financial-crisis-revisited/