My humble view on CPF scheme

[terryhoho]

In Short, Ponzi Scheme Ponzi scheme - Wikipedia, the free encyclopedia

Similarities :
1. Collect A's fund till he reaches 55/ 65 start paying bit by bit, meanwhile start collect B's fund (current age 18) till he reaches 55 / 65.
2. High interest

Difference :
100% Default risk vs nominal risk-free

Literally risk-free because investors always growing + Inflation.

Inflation keeps the scheme healthy,
in 1960s, people's salary assumption : $800 with 20% in scheme = $160.
in 2000s, people's salary assumption : $3500 with 20% in scheme = $700.

Ponzi did not invent the scheme (for example, Charles Dickens' 1844 novel Martin Chuzzlewit and 1857 novel Little Dorrit each described such a scheme),[4] but his operation took in so much money that it was the first to become known throughout the United States.

 

[lzydata]

First, CPF does not use new money to pay off old investors. Second, unlike all other Ponzi schemes, CPF is run by the only agency that has the power to tax, to levy and if necessary to print. So so long as there is a government and a viable economy in this country, it will endure.

If you want to be clever and call it a Ponzi scheme you can. I call it a commitment between present and future generations.

 

[pew]

Well....2 sides to a coin

Whether you want to see it positively or negatively, there's nothing you can do about it.
I choose to see it positively and be happy rather than see it negatively and be miserable.

 

[limkopilimteh]

Not totally a ponzi. It gave the gahment lots of money in The early days of independence . Without it, Singapore Would have trouble funding all the developments .

Over the years, things change. People now think tat cpf is for housing , since there is not much left after paying the instalment.

 

[studywithheart]

Interesting. Haha..but people here's response are so negative.like ts just insult part of their ego.

 

[studywithheart]

Well....2 sides to a coin

Whether you want to see it positively or negatively, there's nothing you can do about it.
I choose to see it positively and be happy rather than see it negatively and be miserable.

they paying 2- 4% Riskfree interest ofcus shiok (period) lol

 

[Majestic12]

You could argue that most, if not all schemes are ponzi in nature since they required a sustained level of population growth to continue running.

Whether it is good or bad depends on factors such as your stage in life relative to the scheme, macro factors, et cetera.

 

[DevilCurseYou]

A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation

What is CPF return to investors?
the 2.5 to 5% return(puny in my opinion considering it is an investment of 30 years)

What is profit earned by CPF?
2.6% HDB loan, and government special issue securities.

Is there any reasonable doubt that these cannot cover the investors return? So going by definition of wikipedia, how do you consider CPF as a Ponzi? You will then have to establish that CPF profit is substantially less than the return given to investor.

how do you differentiate refinancing and a ponzi?

 

[iCuteCube]

To me, this CPF scheme already win many other countries's system.

Some of the countries require high tax, and require younger generation to "sponsor" the older generation.

 

[Majestic12]

To me, this CPF scheme already win many other countries's system.

Some of the countries require high tax, and require younger generation to "sponsor" the older generation.

How is this different from the CPF? It all hinges on population growth.

 

[iCuteCube]

How is this different from the CPF? It all hinges on population growth.

You gain something, you lose something.

If everyone is as investment savvy, good finance control, probably you could do better WITHOUT CPF Scheme.

Personally, CPF hinders my finance goals and objective, but we have to live with it and take it as a cushion

Finance perspective from someone who is investment savvy probably you think it's a BAD system, how about for some others citizen? Are they the same? Looking from social perspective, without CPF probably there would be a lot of problems, medical issues etc.

There is no one system fits all, i am not saying or support CPF system say that it is good. However, after much consideration and discussion (with other people), it is not exactly BAD system on a WHOLE.

 

[Dividends Warrior]

How is this different from the CPF? It all hinges on population growth.

It also hinges on a young population, not an aging one.......

But there is no turning back oredi....

Our population is definitely aging......and it is aging rapidly.....

Make sure u have some healthcare stocks in ur portfolios.....

 

[henrylbh]

Without CPF, I doubt I will have more than 500k in the banks and it is earning min of 2.5%.

 

[DevilCurseYou]

How is this different from the CPF? It all hinges on population growth.

If the population shrinks...
in the US, there are less taxpayer and hence less benefits for the retirees.

in Singapore, CPF owes Singaporean 230 billions, and CPF in turn is owed by the Singapore government. Singapore government has 300 billions in MAS, 200 billions in Temasek, perhaps another 200 billions in GIC.

You foresee any problem that 700 billions have in paying back 230 billions gradually?

 

[Majestic12]

If the population shrinks...
in the US, there are less taxpayer and hence less benefits for the retirees.

in Singapore, CPF owes Singaporean 230 billions, and CPF in turn is owed by the Singapore government. Singapore government has 300 billions in MAS, 200 billions in Temasek, perhaps another 200 billions in GIC.

You foresee any problem that 700 billions have in paying back 230 billions gradually?

The numbers have been debunked by Chris Balding. Do a search.

 

[henrylbh]

The numbers have been debunked by Chris Balding. Do a search.

Can show where to read it? I like to re-read. First time, I read I cast it aside.

 

[lzydata]

The numbers have been debunked by Chris Balding. Do a search.

Chris Balding does not know what he is talking about. He puts out a completely speculative and logically flawed paper and all the anti-government types just lap it up.

 

[henrylbh]

Chris Balding does not know what he is talking about. He puts out a completely speculative and logically flawed paper and all the anti-government types just lap it up.

But I think the government don't want to, not can't, bring him to court.

 

[lzydata]

But I think the government don't want to, not can't, bring him to court.

Haha, of course they don't want to. That will play into his hands. He would love to become a "martyr".

I think it speaks volumes that the only major figure here to entertain his nonsense is Kenneth J. After Punggol East, I think we all know what to think of Kenneth J's judgement.