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Zen Rogue Xuan

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Zen Rogue Xuan

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Zen Rogue Xuan

  • Answers (67)
  • Questions (8)
  • Reviews (6)

Resale HDB

Property

CPF

AMA 1M65

Zen Rogue Xuan
Zen Rogue Xuan
Level 6. Master
Updated on 04 Dec 2019
Hi OP, Using cash to pay for your HDB loan is a wise choice. In essence, you are leaving CPF monies to compound in your OA at a generous rate of 3.5% while your HDB loan is only at 2.6%. In this manner, you get to enjoy an "inversion", in which your CPF monies will be working harder than the cash in HDB loan. ! Also, the money in your CPF OA can act as a a security net to cover about 1-2 years of HDB loan mortage payment if you or your spouse face financial difficulties due to retrenchment or illness of a loved one. Lastly, if you are even more bold and care less about liquidity(CPF OA can be used to pay for education and housing), you can do an OA to SA transfer and let the amount compound at a staggering 5% risk free interest, which will bring out the power of compounding- the sum will grow to 4 times the principal in 30 years time! Do note that this transfer is irreversible though. ! All the best in reaching FRS!
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CPF

Investments

Savings

Property

Zen Rogue Xuan
Zen Rogue Xuan
Level 6. Master
Updated on 04 Dec 2019
! The answer is no, especially if it is the "first" 30k in your OA. This is because the first 60k of your CPF monies earns an additional interest on top of prevailing rates so you enjoy an "inversion"- in which your CPF monies would be working harder than that of the loan . HDB loan is 2.5-2.6% interest loan but your 20K in OA will yield you 3.5% so you get more money each time- $180 a year to be exact. In fact, I would suggest a 10k OA to SA transfer so that it can be compounded at 5% yearly, which will x4 in 30 years time! ! Also, the sum that is withdrawn for paying your HDB will have interest accrued, which means that if you choose to instead of CPF paying you interest , you will "own" yourself interest if you utilise CPF monies for your home loan ! If you sell your property, not only will you have to pay back the principal(30k), you also need to pay back the interest accruded as if it was sitting in your CPF OA. ! Lastly, your 20k in CPF OA can also act as a back-up plan if you lose your job(touch wood) - it can probably ride you 1-2 years of HDB payment while you look for a job. This safety net will given you a much needed sense of security- imagine trying to secure a job, and worrying about your loan at the same time.
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SeedlyTV EP06

CPF

Lifestyle

Giveaways

Zen Rogue Xuan
Zen Rogue Xuan
Level 6. Master
Updated on 04 Dec 2019
My best CPF would be NOT choosing to utilise all your CPF OA monies to pay for your BTO HDB flat . Why would I do that? The answer is simple. The sum that is withdrawn for paying your HDB will have interest accrued on it, which means that by choosing to utilise CPF for your home loan you will "own" yourself interest, instead of CPF paying you interest! In other words, when you sell your property, not only will you have to pay back the principal(20k), you also need to pay back the compounded interest on it as if it was sitting in your CPF OA. ! On the other hand, by paying in cash, the 20k of your CPF monies left inside earns an additional 1% interest on top of prevailing rates(bonus interest applies to first 60k of your CPF monies accross the three accounts: OA, SA, MA) so you enjoy a wonderful thing called "inversion"- in which your CPF monies would be working harder than that of the loan . This is because HDB loan charges a 2.6% interest , which is 0.1% on top of the current OA rate of 2.5% interest. However, the first 20K in OA will yield a 2.5% + 1% = 3.5% interest so you get 0.9% more every year! Also, the 20k balance in your OA can also serve as a security net to cover the monthly mortgage instalments for your BTO in times of need eg retrenchment or unexpected illnesses. This can really help you ease your mind in hard times- you don't have to spend sleepness nights worrying about how can you service your mortage loan. In fact, if you were more adventerous, you can do an OA to SA transfer and that can net you a wonderful 4%+1% = 5% interest rate! Such an act would let you witness the awesome power of compound interest: the amount you put in will x2.5 in 25 years time!

CPF

Family

Loans

HDB BTO

Resale HDB

Zen Rogue Xuan
Zen Rogue Xuan
Level 6. Master
Answered on 23 Sep 2019
It depends on your outlook towards CPF: how do you view it? If you are disgruntled with the system and have no confidence in the increasing minimum sum, as well as the constant raising of withdrawal age, then one would use CPF to pay off the loans. However, do be aware that on top of mortgage interest, any sum withdrawn for housing would have accrued interest. Essentially, whoever that used their CPF for housing would penalized with a double whammy - you will be paying interest twice: 2.6% to HDB, and 2.5% to yourself . In other words, you will be forgoing a the CPF OA's higher-yielding instrument in favour of servicing a lower cost of debt. This was the situation that many Singaporeans found themselves in as they speculated on the housing market, which resulted in them being "asset-rich, cash-poor"! If you choose to use cash only, you will face liquidity risk ie too little cash flow and maybe overwhelmed by emergency events eg sudden loss of job/hospitalisation. As such, the better option would be to use a mix of both CPF and cash. The best way to approach such a decision is to think of it this way - if you use CPF to pay your monthly instalments, would you be disciplined enough to diligently set aside the extra cash-on-hand and earn a return equivalent to or higher than CPF OA (2.5% - 3.5%)? If yes, then go ahead and pay your mortgage off with CPF. If not, then stick to cash and allow the CPF monies to accumulate a risk-free return of 2.5%. You can see a more elaborated answer here: https://seedly.sg/questions/is-it-possible-to-pay-for-bto-with-cash-and-cpf-also-what-are-the-pros-and-cons-with-using-cash-or-cpf

Stocks Discussion

Zen Rogue Xuan
Zen Rogue Xuan
Level 6. Master
Updated on 18 Sep 2019
When would be a good time to buy the stock? I answered a similar question here, and will now elaborate on it. This is one of the questions people have been asking themselves since the dawn of money. Why buy something if its price falls in the future? Or don't buy, and watch as the price goes up, then regret not buying it cheaper? Famously narrated by Aristotle in part XI of Book 1 of his ‘Politics’, Thales of Miletus, the 6th century BC Greek philosopher, went to the olive-presses owners in Chios and Miletus to strike a bargain for the exclusive use of the presses after the harvest. Because the harvest was in the future, and nobody was sure if the harvest would be plentiful or not due to natural disasters like drought or fire, from the olive press owners’ point of view, they were protecting themselves against a poor harvest, by earning at least some money upfront, regardless of how things turned out. The harvest was excellent and there was heavy demand for the presses. Since Thales held the contract, he was able to enjoy a monopoly by renting them out at a huge profit. Thales was brilliant as he had shrewdly calculated that a poor harvest would not lose him much in terms of lost deposits, whereas the upside of a good harvest was enormous. “Thus he showed the world that philosophers can easily be rich if they like, but that their ambition is of another sort”, wrote Aristotle. In effect, Thales had exercised the first known options contract, more than 2500 years ago. Today, we would term it as buying a ‘call option’, the option to buy something at some designated price at some future date for a fixed fee (or ‘premium’). Put another way, it is an agreement that gives the purchaser the right (but not the obligation) to buy a commodity, stock, bond or other instruments at a specified price (the ‘strike price’) at the end of, or within a specified time period. When the price exceeds the strike price, the option is said to be ‘in the money’. Alternatively, there is also sell a "put" option, which will give the buyer the right to sell the underlying asset at an agreed-upon strike price before the expiry date. The party that sells the option is called the writer of the option. The option holder pays the option writer a fee — called the option price or premium. In exchange for this fee, the option writer is obligated to fulfil the terms of the contract, should the option holder choose to exercise the option. Properly used, options are an excellent vehicle to manage your risk. See how you can hedge your portfolio using options at my answer in https://seedly.sg/questions/how-do-i-hedge-my-portfolio-with-options-futures

CPF

Zen Rogue Xuan
Zen Rogue Xuan
Level 6. Master
Updated on 13 Sep 2019
What you must understand is that CPF Life is a public annunity that is compulsory in nature whose payout is based on premiums that you contribute into the Lifelong Income Fund, and the plan you choose: Basic/Standard/Escalating. For the basic plan, 10% of your RA is deducted at age 55. The rest – about 90 per cent – of the Retirement Account savings is untouched and can continue to grow and compound with interest. Near 65, two months before your birthday, there will be a second deduction. This time, it will be approximately 10 per cent of the new money that has built up between your 55th and 65th birthday. The rest of your Retirement Account savings will stay put until your payout eligibility age. In comparison, for the standard and escalating plan, for those who join this plan at age 55, there will be two installments deducted as annuity premiums just at 55 and near 65, just like the basic Plan – but the percentage of deductions differs. Members who join this plan at age 55 will have the Retirement Account deducted for their CPF Life annuity premiums in two installments – at age 55 and near 65. The first deduction is up to the current Basic Retirement Sum of $80,500. The premium goes into the Lifelong Income Fund. Two months before you reach 65, the balance Retirement Account savings will be deducted as the second installment of your annuity premium and channeled into the Lifelong Income Fund. This will include any new money, including interest earned or refunds from sale of property or investments that you have built up between your 55th birthday and 65. For members who join the Standard or Escalating Plan on their payout eligibility age or after, there will be only one annuity premium deduction, which is all the sum in their Retirement Account, made at the time of joining. CPF Life is structured such that 3 out of 4 people will only “obtained" what that has been put into the amount.

Investments

Loans

Zen Rogue Xuan
Zen Rogue Xuan
Level 6. Master
Updated on 12 Sep 2019
For 3 years, I would suggest you put into a single premium short term endowment, which typically has a minimum premium amount. Below is a list which I saw posted in Seedly's FB group recently !
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General

Zen Rogue Xuan
Zen Rogue Xuan
Level 6. Master
Answered on 11 Sep 2019
It depends on what your needs are. If you want to continue to stay in your existing flat, you can explore the Lease Buy Back Scheme. Silver Housing bonus is put in place such that older folks can downgrade to a smaller flat and enjoy the 20,000 grant. 60,000 in your CPF RA gives you about $450-$550 of monthly income

GOMO

Zen Rogue Xuan
Zen Rogue Xuan
Level 6. Master
Answered on 11 Sep 2019
I assume that you are porting over your number. Once you have inserted the sim, they will assign you a temporary number first which will expire once the number porting happens.

Stocks Discussion

Investments

Zen Rogue Xuan
Zen Rogue Xuan
Level 6. Master
Updated on 09 Sep 2019
Volume is one of the best indicator of the trend. Think of the price as a constant war between buyers and seller: Buyers are longing the market, as they feel that the price of the stock is undervalued and that it will apprecate in the future. On the other hand, Sellers are shorting the market, as they feel that the price of the stock is overvalued, and will fall in the future. This constant war between buyers and sellers will thus dictate the price- if there are many buyers, and few sellers, demand is more than supply and prices will go up, as people want to get into this presumed undervalued stock. On the other hand, the converse hold true- many sellers and few buyers would meant supply is more than demand, and that prices will go down, as people want to get out of the presumed overvalued stock. When would be a good time to buy the stock? Volume then, would be the key indicator of price as it would reflect the trend- bullish(appreciating) or bearish(deppreciating), and can signify trend reversal- the bulls or bears may be becoming exhausted, and the other party would take over. Ultimately, it depends on your mindset as an investor, and how you view the value of the stock. If you think that it is overvalued, then sell it. If you think that said stock is undervalued, then buy it. Ideally, volume would help you to guide your decision.
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