Real life lesson as retiree depending on dividends and trading profits in SGX!
Somehow; we hardly hear it loud and clear from dividend investing gurus/trainers that investing for dividends for FIRE or retirement is not that difficult. It is nothing more than a Game of Capital and War Chest against your expected household expenses during FIRE or retirement across future market cycles.
It is how you calibrate your war chest to generate sustainable cash flow from investment portfolio is critical. In short; it is about Method, Mind and Money Management!
What we can control and manage is our Mind and Money (deploy or accumulate war Chest) to build sustainable investment income across market cycles!
One picture tells the lesson learnt! Large war chest deployment into the market JUST to maintain past year investment income!
It is NOT that simple narrative or advert for FIRE movement that passive income exceeds expected expenses can FIRE across future market and economics cycles! Chun bo?
Posts
CW,
ReplyDeleteMakes you wonder who are the "more and more" people that are making voluntary contributions to CPF right?
I mean if investing/trading to FIRE were that easy!
In fact, when people go to those self-styled "gurus", its like when we sick, instead of going to a proper doctor, we prefer to trust talisman, holy water, magic stones; etc...
Why?
To feel good mah!
Suddenly you are not alone; you are part of a flock.
Got shepherd to listen and take care of you too!
Its the same modus operandi as starting a new religion or cult ;)
If you believe me, follow me!
Dividends can also be reduced. Will rising interest cut dividends?
ReplyDeleteUncle8888,
ReplyDeleteOne thing's for sure ... it's NOT passive investing lol!
I remember during the hey days of dividend & reit investing pre-Covid, some did suggest the dividends/coupons etc be at least 150% of expenses before even thinking of firing your boss.
People who RE just on investment returns without a stable consistent base e.g. CPF interests, CPF Life, pension, or annuity, will need to be flexible & downgrade lifestyle when necessary.
Worse will be those who believe in building up leveraged dividends to FIRE!
DeleteOn the topic of CPF, is it possible to withdraw interest earned in MA when one is above 55 ?
ReplyDeleteOnce our MA reaches BHS, interests from MA will flow to OA so indirectly it can be withdraw.
DeleteStill pressing CPF for the numbers and not those standard replies.
ReplyDeleteThere are changes to this withdrawal sequence?
ReplyDelete1) the interest earned in the Special Account (SA) then Ordinary Account (OA) from the beginning of the year up to the month before the withdrawal, followed by
2) the contribution/refunds credited to the SA then OA in the same month of the withdrawal, and lastly,
3) Monies in the SA then monies in the OA.
You have not replied to my questions. If you don't have answers, pls help to escalate to your experts to answer.
ReplyDeleteEvery month of Dec since 2017; I have been withdrawing $24K. from CPF. Last year; the withdrawal from CPF SA and CPF OA is as followed : CPF SA : $1,545 and CPF $22,455.
Please help to confirm if there any changes when I withdraw $24K from CPF in Dec 2022
How much withdrawal from CPF SA and CPF OA? Pls help to provide the numbers as follows:
CPF SA = ? and CPF OA = ? Total withdrawal from CPF = $24K
Thank you!
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CPF's reply to my question:
As part of the Board’s ongoing efforts to ensure our administrative practices are aligned with the market practice, we have revised our practice such that only the savings in your CPF accounts can be withdrawn.
While CPF interest is earned every month, it is only credited into your CPF accounts to form part of the account balances at the beginning of each year, and withdrawable from then on. This is similar to market practice, where your bank interest is only withdrawable after it has been credited into your bank accounts. Hence, if you make a partial withdrawal, savings from your SA will be paid first followed by savings from your OA.
I dropped an email to CPFB to ask if the withdrawal sequence i mentioned above is still valid.
ReplyDeleteUncle8888,
ReplyDeleteWah, all the CPF supporters up in arms lol.
This will make the SA-shielding even more valuable. If have enough SA, can just withdraw the credited SA interest every Jan.
Next internal CPF project: find "market practice" methods to block SA-shielding lol!
PS: I can think of 1 method ... after 55, all refunds of CPFIS-SA to go to RA (if BRS or FRS not met), or OA (if BRS or FRS met). Win liao! 🤣
CPF should plug this SA shielding loophole! LOL!
Delete