Asked by Anonymous

I won't get any CPF contributions in my pay, how can I properly invest my first salary to equal or better the returns of CPF in order to pay for a house, have more passive income and retire in future?

My employment contract is not entered in Singapore as I work offshore. Hence my employer is not required to contribute to my CPF. Is it better to still make personal contributions to CPF or what should I do as my first investment?

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  • Loh Tat Tian
    Loh Tat Tian, Ex-Financial Advisor, Founder at Singapore Insurance Value Finding
    Level 6. Master
    Answered on 31 Jan 2019

    It depends on the tax structure.

    Are you OK with CPF being illiquid (for OA only a few uses like education and housing?) Are you able to beat the 3.5% / 5% returns for the first 60k of CPF (low hanging fruit and pretty risk free except for political risk).? Can you stomach the volatility (will you lose sleep if your asset drop 10% suddenly, but will rise back up in 2 years time?) Can you also stomach the fact that if you do not take risk, your returns will be mediocre?

    If not, what else can we do? It got to do with mindset and knowing what you want a lot. I will follow up with more only if you know what's your end goal.

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