Asked by Anonymous

Am at age 26 soon and going to use my cpf to pay for housing, curious to ask was your house funded by OA in cpf and how long did you take to save back the Amt used in OA? ?

Also, what are some of your recommended investment vehicles beside cpf?

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  • Jim Ng
    Jim Ng, Digital Marketing Specialist at Https://swiftturnmarketing.com
    Level 5. Genius
    Updated on 26 Dec 2018

    My flat is funded fully from CPF, I have zero cash outlay for it.

    Recommended investment vehicles besides CPF:

    Risk averse investor:

    SSB, STI ETF, FDs

    Moderate investor:

    Mid cap, small cap and blue chip stocks

    High risk investor:

    CFDs, Forex, Options trading

    Ask yourself first, what is the time horizon you're looking at to set aside the money? What is the amount that you're trying to achieve through investments? Are you reliant on your investments to generate income for the long term? Do you have any emergency funds parked aside outside of your investments portfolio?

    That way, you can determine which investment vehicle is most suitable for you.

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    • Teo See Hwa
      Flat funded fully from CPF will go into negative equity when the capital appreciation is lower than the CPF accrued interest do take note. To be more accurate you also need to add the interest pay. Double interest.
      26 Dec 2018
    • Jim Ng
      Great points See Hwa! What you said is 100% accurate. I am comfortable having the cash flow to generate greater returns by touching alternative instruments. You are right, I am also incurring 2.6% interest on the loan that I have taken as well. However, I am more than happy for that interest to accrue because it is a risk I am willing to undertake to invest with the excess cash flow, confidently generating more than 2.6% annually.
      26 Dec 2018
  • Loo Cheng Chuan
    Loo Cheng Chuan, Founder at 1M65 Movement
    Level 6. Master
    Answered on 07 Nov 2018

    It all depends On my phase of life.

    The most important point is : Don’t Over Stretch Yourself in your home purchase.

    I have always stayed in a HDB flat. Started with a small one and gradually move to a bigger one. We are still staying in one after all these years. Clearly I don’t believe in properly investment (but that just me) .

    When i I was young and starting out, I use more CPF OA, soon, I discovered 1M65 so I moved to less CPF and More cash. It was easier then as I don’t have a big flat. I believe that housing loan is quite a ”healthy loan”, i.e. I can put money into SA and get up to 5% and housing loan charges only 2.5%.

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  • Teo See Hwa
    Teo See Hwa, MArketing Associate at Propnex
    Level 3. Wonderkid
    Answered on 05 Nov 2018

    One need to know how much is in the housing and for how long.

    Alway restructure your property portfolio to get the appreciated value out for reinvestment.

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