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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Saturday, 26 December 2020

When Your Bank RM Called??? (5)

 Read? When Your Bank RM Called??? (4)

hyom 26 December 2020 at 09:09:00 GMT+8

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!


“She could sell ice to Eskimos”  LOL!

Pointers are "

1. Single premium insurance also contributes to your AUM computation for service fees.

2. Surrender value at $160K is more than $144K loan at Day One so there will be NO margin call and NO penalty fee.

3. Just treat it as $144K margin account with your own free up cash of $144K to take advantage of lower interest rate environment over the next 10 year or at least till 2023 as indicated by FED

4. $144K free up cash for higher return to offset loan interest. You savvy investor. Right? LOL!

What are the options for Eskimo after buying Ice?

1. As Saver

Voluntarily CPF Contribution of $37,740 per year for the next 4 years

CPF Allocation rate for above 65

OA 1% SA 1% MA 10.5%

Since Uncle8888 has already reached MA BHS so 10.5% allocation in MA will flow into OA i.e. OA 11.5% SA 1%

$37,740 VC into CPF to earn total interest of $988 in year 1 (negative return on loan of $144K)

$37,740 VC into CPF to earn total interest of $988*2 = $1,977 in year 2 (likely to be positive return on loan of $144K)

$37,740 VC into CPF to earn total interest of $988*3 = $2,966 in year 3 (more likely to be positive return on loan of $144K)

$30,780 VC (Total $144K over 4 yrs) into CPF to earn total interest of $3,772 in year 4 to 20 (Repay loan with no penalty at breakeven point) and monthly income from Month 37 onwards

2. As Investor leveraging on own margin account without Margin Call

Learn from FIRE Masterclass Guru

Leverage on basket of S-REITs?


  1. Hmm CW,

    I haven answer Hyom or I could not fathom enough. Any impact if interest rate raises? Is 10 years and is a long time

  2. Replies
    1. When future interest rate rises above CPF interests or investment return; I can redeem the loan and pump in own capital $144K and hold till Year 20 or surrender at breakeven year.

      If that scenario really happens; it proves that I am really suck at leveraging on lower interest rate for next few years to breakeven. :-(

      In 2020, something new happen LOL!

      1. Invest in ETF

      2. Expose to overseas mkt - HK Tech

      3. Leveraging on low interest rate

      But still Koala/Panda investor. Cant change much. LOL

    2. Recommend open TD Ameritrade Singapore.

      No brokerage fee even for stocks.

    3. HST, actually i intended to target 100 lots (sure get as it is IOP) from iOCBC but change my mind after talking aloud here and my brokers.
      Also Never like to pay any annual management fees.

      But hey so far not bad after 1st day trading till now.

      If i had bought 100 lots most probably i would already ready to sell some lots.

      Just for talk male chicken, talk male chicken

      But it is the truth U know.

      That's the Fun Or Funny Part of investing in the market lol-always wishy, washy lol.

      Liquidity (volume in trade daily) not bad too for an ETF in SGX.

      Have already learned never to regret in the stock market or else, don't think can survive long lol.

  3. Hi CreateWealth8888,

    Thank you for replying my comment in a new blog post. You know what you are doing. Hope it turns out well for you.

    “She could sell ice to Eskimos”

    Haha. I am imagining now that your RM is even more attractive than Wonder Woman.

    1. Hahahahahaha. Hyom.

      Sorry couldn't stop smiling inside.

  4. CW, 很好,活到老学到老。
    I have not tried 3. But unlikely to want to do it. Until I meet someone who can sell ice to Eskimo.

    I learnt a few new things too.

    How to use trace together.
    How to solve a rubric cube.

    Muhahahhahahaha all useless stuff.

    Have fun at HKex. I couldnt stop once I start

  5. Wonder woman attractive meh?

    OK. Beauty is in the eyes of the beholder.


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