facebookFor someone who has yet to purchase a house and has plans to use CPF for it, is it still wise to invest parts of the OA with the robo-investors? - Seedly

Anonymous

04 Aug 2020

SeedlyTV

For someone who has yet to purchase a house and has plans to use CPF for it, is it still wise to invest parts of the OA with the robo-investors?

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Discussion (4)

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Pang Zhe Liang

06 May 2020

Fee-Based Financial Advisory Manager at Financial Alliance Pte Ltd (IFA Firm)

Firstly, we need to create a well-defined goal. In detail, this means that we need to know:

  1. Timeline to purchase your house

  2. Cost of House

  3. Type of Loan

After we have set the parameters, we have a clearer idea on the funds available at our disposal. For example, if you intend to buy a house in 3 months time, then investment may not be the best option to consider.

On the other hand, if you intend to buy a house in 10 years time, then we may consider investing after conducting a comprehensive financial review. In addition to the funds available in your account, we will want to include your ongoing contributions.

After we have done a comprehensive calculation, we will have a better direction on whether you should invest, and how you should do it.

I share quality content on estate planning and financial planning here.

Shengshi Chiam, CFA

04 May 2020

Personal Finance Lead at Endowus

Hi Anon,

Just to share, Endowus is the first and only digital platform that allows CPF investments. On top of our risk profilling and portfolio management services, we also give our clients a globally diversified portfolio at the lowest cost possible.

You got to do your sums if you want to invest parts of your OA.

Things you need to consider:

  1. Are you purchasing a BTO flat?

  2. Are you intending to take a housing loan?

  3. What is the value of the property you are buying

These 3 factors will affect your CPF outflows, which in turn affects how much you should invest your CPF with.

One more tip - you may want to keep some "mortgage emergency fund" for your mortgage payment in case that you are in the midst of job change. ​​​

Budgeting your home before committing investments using your CPF-OA would be useful.

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