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

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

It is here where I share with you how I did it! FREE Education in stock market wisdom.

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Friday, 25 December 2020

When Your Bank RM Called??? (4)

Read? When Your Bank RM Called??? (3)

After clearing his 5 years HDB housing loan 28 years ago and becoming debt free; now Uncle8888 is back into debt with his POSB Front Page showing "Cards and Loans" in RED whenever he logged in.

Interest rate payable for Month 1 is 0.99%

Countdown to Month 37 for monthly income from annuity plan. Not sure got kena snake oil into taking advantage of leveraging on lower interest rate over the next 10 years???


  1. Hi Uncle8888,

    A bit late for buyer's remorse ... free-look over... I'm guessing the first 3 years is sianz coz -ve cashflow ... no panadols for 3 years, bear the pain. 😂

    Anyway, trade (or save?) according to the plan. Ehh, yours is accurate to 1 decimal place LOL.

    Your plan allows for the interest rate to rise to beyond 6%, and still get XIRR of 2.5%.

    Besides tracking interest rate, the other main thing is to monitor the projected return is on track.

    I'm assuming the monthly payouts are guaranteed while the maturity lumpsum amount is projected.

    Every 3 years, just ask them to generate the latest BI to check the projected returns.

    1. Ha ha! Not too bad. Actually, this single premium $200k is counted towards monthly AUM for waiver of monthly service fee so it will free up $144K cash to invest.

  2. CW,

    Well, at least you made one RM happy! Kaching!

    Commission for annuity just as juicy like for Endowment and Wholelife ;)

    The best bang for the buck when it comes to annuities is CPF Life (I can't believe I just said that).

    I hope at least you had fun flirting with the RM! Enjoy tight skirts and chiffon must pay up!

    Not everything has to be money, money, money ;)

    1. Of course it is juicy commission for all parties concerned with the product. Three years worth of Panadols for distribution to them

    2. If ii convert my WL to Annuity, will have to take 2 or 3 years panadols too.

  3. Hi Uncle8888,

    How's the interest rate through till payout?

    1. It is currently based on monthly SIBOR + 0.75% and will be switched to SORA + 0.75%

  4. Hi CreateWealth8888,

    From reading your blog, it seems like you are a fan of CPF. To persuade a savvy CPF fan to buy an annuity is really quite an achievement for a salesman, even if the product is good.

    If you don't mind, may I ask what is your rationale for buying the annuity? Mainly for the low interest? If interest rate shoots up later, are you allowed to exit? If yes, at what penalty?

    I wish you all the best in this new annuity plan!

  5. ///////////////

    Let’s look at an example.

    Let’s say you could invest $100,000 in an immediate annuity and receive $8,000 a year for life. Let’s further assume that you decide to make this investment at the age of 65 and you live another 15 years. Here’s why the investment stinks.
    You invested $100,000 and you receive $8,000 a year, but your return isn’t 8%. If you live for 15 years you’ll receive a total of $120,000 in payments (15 years at $8,000 each year). If y0u calculate the total return (on a simple basis), it’s about 1.67% per year. That’s because the $8,000 the nice big insurance company sends you is mostly your own money.

    Above is an extract from an annuity article.

    Is the author's example correct in his calculations?

    Looks to me is correct. - where got so good investment 8% return on principal for 1st 15 years?
    Now how many % return is CW8888's annuity? (Can compare or not?)

    Hey, my own money leh for 1st 15 years though seems so good 8% ROC.

    Each time i am trying to buy an annuity, i got cheese off because can not look at it as investment but as insurance (and aka one of the lesser insurance product).

    And Author recommend,

    "There might be some cases where the investor doesn’t care about total return and only cares about cash flow…and in that case, they might be OK."

    How many think it is OK?

    i think it is OK only for people who need people to look after them for life- like a trust?
    Yet Insurance company not allow to sell any trust products?

    1. For this annuity plan by insurance; we may have to think along the line of CPF RSS @ 2.5% over $200K @ 65 and monthly payout after three years or Month 37. CPF RSS is also monthly capital reduction i.e. taking back our own money

  6. "CPF RSS @ 2.5% over $200K @ 65 and monthly payout after three years or Month 37."

    CPF RSS is 4% ++ p/a interest rate why 2.5 % only - BTC?

    1. Hard to find anunnity plan that beat CPF RSS 4% . Matching 2.5% possible. Can use CPF OA to create our own RSS @ 2.5%


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