As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

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Sunday, 12 November 2017

Young CPF Members Should You Transfer CPF OA TO SA For additional 1.5% Compounding Interests Over Next Few Decades?


Read? How I Accumulate $1M In CPF OA!

Read? Top Up CPF SA From CPF OA? Depending On Who You Ask! (10)


Uncle8888 did once to transfer from CPF OA to SA and then realized .. oh dear and better stopped it!

One and only once!

Luckily; at that time personal finance and investment bloggers DID NOT EXIST yet to cheer the power of additional  1.5% compounding interests in CPF SA to reach FRS as soon as possible to secure RA well in advance.

For his $1M in CPF OA; 53% or $528K was from mandatory CPF contributions as employees from Aug 1977 to Sep 2016. It took him 39 years up to age of 60 to accumulate this sum!

How many more years from 60 can he still work harder to accumulate the next $472K to reach that $1M mark?


But, now he can congratulate himself of that decision made to stop transferring CPF OA to SA since he had really made his mind to invest and then spent days and nights learning over decades to become one competent retail investor.


In investing; your account size really matters! - CW8888

Stronger saver or investor. 

Now, you may understand why he went for larger CPFIS war chest instead of larger CPF SA.























9 comments:

  1. Welcome to $1M club!

    Very good... ~50% from OPM ... $300K from Mr Market, and $170 from compounding interest.


    Clap 3x

    ReplyDelete
    Replies
    1. This is after some of the scarify made .... no car, no flat upgrading.

      Good example of Asset light, Cash Rich.

      Delete
  2. Count myself lucky to to be able win the years of war against spouse to avoid upgrading of home and most lucky in those few unsuccessful balloting until spouse also gave up trying anymore.

    ReplyDelete
  3. "CPFIS war chest instead of larger CPF SA"

    Only never forget the risk is totally different.



    ReplyDelete
    Replies
    1. No free lunch. Collecting interests is NOT same as investing for total return on invested capital.

      Saving is NOT investing. Investing is NOT saving.

      Too many folks are confused over lending, saving and investing.

      Delete
  4. May be my time was different - 9 to 10 years earlier than yours, HDB just started 2 bites of the cherry.

    And the price of a 5 room flat was "cheap".

    i failed to convince my wife we should buy a 5 room HDB as our 1st flat.

    Only bought a 3 room.

    For the 2nd flat i did convinced her to buy a 5 room flat.

    It was a mansionette.

    Then somehow, we found living in a mansionette is not suitable for us as we grows older.

    We downgraded to a 4A 4 room flat and made a tiny sum.

    Many people who visited my house for the 1st time(including my past renovation contractors), asked the same question.

    "Is this a 5 room flat"?

    4A 4 room flat is the "biggest" of the 4 room flat variety loh.

    ReplyDelete
    Replies
    1. Govt over time also learnt. My time 4A no mor and became 4N. 4 New generation.

      Newer and newer generation are paying more for less for their home.

      Delete
  5. This comment has been removed by the author.

    ReplyDelete
  6. It should depend on individual situation, income, job stability, need, ability, willingness (psychological makeup).

    For high income earners, transferring from OA to SA is a no brainer.

    For those with "iron rice bowl" jobs, it's also a viable option.

    For other average or lower income, then need to be thought thru much more carefully.

    Any use of OA for stocks or property should be done eyes wide open. CPF is considered "safe" money. Hence margin of safety (price/value) of stocks & property should be much higher if using OA than using cash in the bank.

    I always wonder if govt had maintained CPF more like other typical retirement pension funds --- totally locked up till retirement age, not for housing or education, certainly not for stocks, flat 4% interest throughout. Would the retirement prospects of "most" singaporeans be better? Hohoho!!

    ReplyDelete

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