newbie for managing money

simplelifez

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hi all,

I never had the time to sit down and count my savings/asset and just let it accumulate in my bank. sat down today and i realise that it may be stupid of me not to plan ahead. so here goes

liability
= property 520k
= renovation 30k

Asset
CPF OA = 100k
CPF SA = 30k
Cash = 100k

any idea what should I do with the cash such that I can level off my liability?

I can park the cash long term investment wihout using it
 

wira

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hi all,

I never had the time to sit down and count my savings/asset and just let it accumulate in my bank. sat down today and i realise that it may be stupid of me not to plan ahead. so here goes

liability
= property 520k
= renovation 30k

Asset
CPF OA = 100k
CPF SA = 30k
Cash = 100k

any idea what should I do with the cash such that I can level off my liability?

I can park the cash long term investment wihout using it

if by renovation you mean renovation loan, i suggest paying off that loan first as reno loan interest is usually quite high
 

simplelifez

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Yup, will be paying with cash, but not sure what are the choices available for 70k.
not very much, but enough to start investing
 

Prof. Utonium

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Pay off your reno loan. It's horrible.

Are you paying your mortgage by CPF OA?

Transfer bulk of it to SA. Leave some in OA for emergency so that you can still cover your mortgage if you are out of job.

Consider your SA as bond and invest the rest in diversified equities.
 

wutawa

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Before u park your spare cash into a decent long term investment, i hope it is currently under a good saving acct such as dbs multiplier or ocbc 360.

Btw, why r u taking up the renovation loan when u have more than enough cash? Is the cash getting more yield than the loan int?
 
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simplelifez

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the liability is actually upcoming cuz I buying a house soon, will be using cash as payment:)

what options do i have with the spare cash?

do u guys do diversification?
abit shares, abit reit, abit futures.. or speciality in one type
 

simplelifez

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Before u park your spare cash into a decent long term investment, i hope it is currently under a good saving acct such as dbs multiplier or ocbc 360.

Btw, why r u taking up the renovation loan when u have more than enough cash? Is the cash getting more yield than the loan int?

unfortunately not :(
I park it in various bank so I will "forget" the money and not spent it. will be lumping them into one ocbc account, and will only use ocbc cc for spending
 

starfish.starfish

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Hmmm it’s not a lot.
I would:
1. Pay off reno - don’t take loan.
2. $50k as emergency fund into a high interest rate savings account.
3. $20k for any opportunity in stock market when/ if bear bear comes or down payment for property though not sure if it’s enough.

For investment- start with shiny thing thread or go google assi to learn more.
 
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d9_lives

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How old are you?
You do have emergency fund right?

If I were you...
Max transfer of OA to SA.
100k cash - > 30k reno and 70k to SA/MA.
 

wutawa

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unfortunately not :(
I park it in various bank so I will "forget" the money and not spent it. will be lumping them into one ocbc account, and will only use ocbc cc for spending

I understand where u r coming from but "forgetting" your money is poor financial management. Well done in saving up $100k though. U can try posb invest saver. It will make u save up mthly and invest.
 

simplelifez

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Hmmm it’s not a lot.
I would:
1. Pay off reno - don’t take loan.
2. $50k as emergency fund into a high interest rate savings account.
3. $20k for any opportunity in stock market when/ if bear bear comes or down payment for property though not sure if it’s enough.

For investment- start with shiny thing thread or go google assi to learn more.

shiny thing thread got too many posts le, saw etf recommendation but I need to know if got diversify other type or not
 

simplelifez

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I understand where u r coming from but "forgetting" your money is poor financial management. Well done in saving up $100k though. U can try posb invest saver. It will make u save up mthly and invest.

will look into it tks!
I'm also looking for returns >5% not sure if it can generate
 

RMCWMR

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hi all,

I never had the time to sit down and count my savings/asset and just let it accumulate in my bank. sat down today and i realise that it may be stupid of me not to plan ahead. so here goes

liability
= property 520k
= renovation 30k

Asset
CPF OA = 100k
CPF SA = 30k
Cash = 100k

any idea what should I do with the cash such that I can level off my liability?

I can park the cash long term investment wihout using it
Use the $100k cash to payoff yr reno loan first. Then take your entire OA of $100k to pay down the $520k property loan. The remaining $70k cash you either invest in SSB if you are scared of risk or just buy DBS stocks which yields 5% Div. Remember to keep 6 months worth of expenses as liquid cash just in case
 

simplelifez

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Use the $100k cash to payoff yr reno loan first. Then take your entire OA of $100k to pay down the $520k property loan. The remaining $70k cash you either invest in SSB if you are scared of risk or just buy DBS stocks which yields 5% Div. Remember to keep 6 months worth of expenses as liquid cash just in case

thanks for advice, I'm looking into slightly more aggressive plan cuz return for ssb is quite low
 

BBCWatcher

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CPF OA = 100k
CPF SA = 30k

I'm also looking for returns >5% not sure if it can generate
I guess I'll have to be the first poster to point out the following amazing fact.

Unless your MediSave Account currently has at least $10,000 in it, you can earn >5% (CPF bonus interest) right now by topping up your MediSave Account (if within the CPF Annual Limit) and/or Special Account with tax relief, to pull your SA+MA up to at least $40,000. You can earn >4% with the same top up(s) otherwise, up to tax relief limits.

It's >5% and >4%, respectively, because of presumably available tax relief(s).

If you want/think you can reliably earn >5% otherwise, then I humbly suggest you're not off to a great start if reading a series of forum posts would be too hard/too time consuming/too much work. (Or you could plonk down $8 to buy the book, but then you'd have to read it to get anything out of it.)
 

BBCWatcher

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Then take your entire OA of $100k to pay down the $520k property loan.
This idea is a particularly bad one when interest rates are low, as they are now. Imagine using OA dollars, earning 2.5%, to accelerate repayment of a ~2.0% bank mortgage -- and possibly with a prepayment penalty!?!? :eek: That's madness, really, unless you're already mad in particular ways.
 

simplelifez

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In that case, please don't transfer OA to SA. :)

Should pay off your reno loan completely, and put the rest into OCBC 360 as you intend.

Anything above $70k (limit for most of the bonus interest components in 360) can be invested into low-risk instruments such as SSB. Self am currently maxing out 360 before putting the rest into retail bonds.

yup, I do think its risky to put all the money into sa , considering that my income is not high. will look up into ocbc rebates and boost :)
but ssb return is too low, dun mind slightly higher risk cuz the money can park long term and not considered emergency funds
 
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