Is there a danger if I put so much into my CPF? What happens if there is a change in political power? Will it affect my CPF? - Seedly
 

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Asked by Anonymous

Asked on 07 Nov 2018

Is there a danger if I put so much into my CPF? What happens if there is a change in political power? Will it affect my CPF?

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Loo Cheng Chuan
Loo Cheng Chuan, Founder at 1M65 Movement
Level 6. Master
Updated on 07 Jun 2019

In short, the key is there is no such thing as 0% risk in any investment. Hence, let’s talk about probability. The probability of this happening in Singapore is very low, compared to the alternative out there. I would and have taken my chances with the CPF and it has proven to be very lucrative.

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Teo See Hwa
Teo See Hwa

10 Dec 2018

Risk is about how much one know about what one is doing. e.g. if a person don't go for driving lesson and chose to drive without a licence what is the risk compare to a person who got a licence. Both driving the same car.

Unlikely the government will just take your money; too much push back for that to happen.

However, if you are doing long term planning based on rules now; do note they could be adjusted - eg you might be thinking no problem to meet FRS until recently announced increase and so you would need to change your plans to suit.

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Jason Sin
Jason Sin
Level 8. Wizard
Updated on 07 Jun 2019

Nothing is certain in investment. The political parties or climate may change. The interest rate of 2.5% for OA, 4% for MA and SA could also drop. Anything could happen and there is why you need to diversify your risk. Nonetheless, it is still better to build up your CPF because the risk is lower compared to other investment instruments. Just my humble opinion.

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Jason Sin
Jason Sin

10 Dec 2018

I don't understand the relevance of your answer to the question. Please enlighten me. Thanks.
Teo See Hwa
Teo See Hwa

18 Dec 2018

Risk is high when you got limited info or data. Leverage is Risky when you do it the wrong way, Not levering is even more risky because you confirm will not be able to hedge against inflation.
Teo See Hwa
Teo See Hwa, MArketing Associate at Propnex
Level 5. Genius
Updated on 07 Jun 2019

I took a loan of $200,000 from CPF for my 5 room HDB in 1995 for 25 years after I sold my 4 room HDB for a profit of $180,000.

Use the cash to buy a 2 Bedroom in 2006 with the cash 20%.

You can take the CPF out by selling your HDB and buying another but now you need to give back 50% of the profit before they loan you.

This way you reduce your CPF holding too much of your Money.

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Leong Wen Fong
Leong Wen Fong

10 Dec 2018

Hi See Hwa, I sent you an email, but I think you might have missed it! Do drop me a facebook PM/SMS whenever you can! my number is 90303665
Teo See Hwa
Teo See Hwa

10 Dec 2018

PM