As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons 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

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Sunday, 25 October 2020

When Your Bank RM Called??? (3)

Read?  When Your Bank RM Called??? (2)

Spur 24 October 2020 at 21:46:00 GMT+8

Hi Uncle8888,

The interesting part is the 2 statements of the "Disclaimer" in very fine print. ;)


Read? Singapore Three Month Interbank Rate1995-2020 Data

After 55, money in CPF is Uncle8888 Best Saving Bank while money in POSB is his Worst Saving Bank.

To continue leaving extra cash in his Worst Saving Bank or having 27% more fixed income on top of his CPF RSS since the gross return is same as 2.5% CPF OA CAGR?

In the worst case; just redeem the $144K loan and paid penalty. The penalty may or may not end up with cut losses after X or XX yrs.

Ant really thinking too much on Maths! LOL!


  1. CW,

    Ants really like to drill down to the details...

    This time I don't poke you. You have improved.

    You are now precision up to only 1 decimal place ;)

    Eh? You still have an outstanding loan?

    Grasshoppers think in broad strokes.

    1. If loan interest is HIGHER than CPF, isn't it obvious what to do?

    2. If loan interest is LOWER than CPF, wait! Can borrow more to park in CPF for positive carry?

    1. If taken RM proposal on Premium Financing on $200K 20 yrs annuity plan. You see kiasu and kiasi Ah Pek also can do leverage! LOL!

  2. Hi Uncle8888 & Smol,

    Sometimes good to drill down to details ... then got info to make broad strokes, haha! :)

    I calculated the overall XIRR depending on different premium financing rates.

    Premium financing : XIRR
    1.5% : 6.7%
    2.0% : 5.6%
    2.5% : 4.5% (This is the assumed long-term steady state by the RM)
    3.0% : 3.3%
    3.4% : 2.4%

    After 3.4% financing, the xirr drops to below CPF-OA rate. So if rates stay above 3.5% for couple of years, maybe time to calculate penalty cut loss?? LOL!

    The other big factor is the performance of the insurer's Par Fund.

    We are all working on the assumption of 4.75% CAGR.

    This is relatively easy to get. Just ask the RM to go back & get the past 20-30 year performance of the par fund.

    What is printed out in the Benefit Illustration is usually only the calendar returns of the past 3-5 years.

    1. Spur,

      You are kind. I do appreciate you never write Uncle SMOL ;)

      If you wife and mom have differences, I have faith you can keep both of them believing you are on their side.

      I noticed what you just did. What good to drill down to details... then can do broad strokes...

      You snake oil you!

      I remember the first time I learnt how to calculate discounted cash flows to get the Net Present Value (NPV).

      My initial euphoria in "discovering" an easy method to calculate "intrinsic value" quickly fell back to earth. Hello! I noticed we ae making lots of assumptions this, assumptions that!?

      This illusion of "precision" is just a clutch for those who needed that extra nudge (little lie) to move us into making a decision ;)

      Anyone who has bought wholelife policies 20 or 30 years back can verify for yourself.

      The illustration of benefits look like the "precision" of CW's excel file above.

      Well, what's the REALITY today?

      The assumption back when you bought the wholelife policy is interest rates will not be zero bound...

      Just like those voluntarily contributing to CPF today is making the assumption they will never experience NEGATIVE real interest rates in their lifetime....

      Everything we do in life is a speculation!

    2. Smol,

      LOL! Insurance & RM snake oils will turn that around to say ... we're already scraping the bottom of the barrel for interest rates --- if they remain at zero we give you 4+% better than CPF; if go up that means risk on & our stock positions will hoot tua tua for you; and if the whole world goes Japan v3.0 and Europe v2.0, then hey! our bonds will chiong!

      How to lose?!?!?! Insurance products only go up!! LOL!

      PS: Ehh, cannot call you uncle lah, otherwise I have to call myself uncle liao. Think we're only couple years apart. :P

    3. Spur,

      That's what landowners hire snake oils like me for!

      Turn every objections by customers into $$$ :)

      Sheep (meek) and dogs (obedient) are easy to "wash". We can "wash" until say the Earth is flat they will also believe!!!

      But cats are tough. You can't herd cats :(

      P.S. I've grudgingly accepted being called Uncle. But when the Sheng Siong cashier asked with good intentions, "Uncle, you got senior citizen card? Got discount!"

      A little bit of me died...


    4. SMOL,

      With the virus going on, many children have asked their elderly parents to stay home and taken over the task of buying groceries. So, kind Sheng Siong allowed their children to get discount on Tuesday or Wednesday by presenting the senior citizen card on their parents' behalf. So, what probably happened is the staff knows you have been taking care of your mom and asking about the senior citizen card with that in mind. Not because she really thinks you are senior citizen. I guess you're joking and already know that. Haha.

      I buy groceries nowadays on Tuesday or Wednesday night using senior citizen card nowadays. 3% discount.

      Everyone wears mask these days. Can't see face, so most people will judge the age by amount of white hair. You don't have a single strand of white hair on your head. So, can't look that old. Finally, read this article

    5. hyom,

      So that's the reason why!

      I thought I looked quite cool with my bald Kojak look ;)

      During my weekend sales gig, I never use Uncle or Auntie ;)

      Even 80 plus female customers I'll call her "Da Jie or Jie Jie".

      You should see the smiles on their faces ;)


    6. I know people are trying to be respectful by addressing me uncle but personally I do not like it. The first time I was called uncle by a stranger, I was utterly shocked. I mean, come on, I was only in my mid 40s then! But I have since embraced this "title" with humility.The ageing process has calming qualities.

      However, I would prefer being addressed as "sir". In western countries, people addressed us, strangers, as "sir" or "Ma'am". We do likewise to them.

      In office, we are all "boss" to one another. Like I will "jio" my colleague for lunch with : "Boss, lunch now!", and he will reply "Sure Boss!"

      Strangely when I do my marketing on weekends, the fish, vegetables and fruit sellers will call me boss. Likewise, I address them as boss in return.

      Fruit seller : "Morning boss! Today grapes very nice! From US one!"
      Me : "Morning boss, grapes good ah? Then give me two kg! Thanks"

    7. mysecretinvestment,

      I'm very well trained by Robinsons.

      Yup, I address channel 5 customers Sir or Madam. Very British prim and proper. I'm not into the American casualness by addressing even their dads by their first names!?

      Channel 8 customers I'll use "Da Ge", or "Da Jie". I'll definitely not call another man "Ge Ge"... LOL!

      "Jie jie" is reserved for those I'm flirting to ;)


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