Should I still contribute to my own CPF after I start my career in real estate? What other personal finance tips should I know as a self employed person? - Seedly
 

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Asked by Anonymous

Asked on 21 Sep 2018

Should I still contribute to my own CPF after I start my career in real estate? What other personal finance tips should I know as a self employed person?

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Rachel Yeo
Rachel Yeo, Content Strategist at Seedly
Level 5. Genius
Answered on 19 Sep 2019

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Jonathan Chia Guangrong
Jonathan Chia Guangrong, Fund Manager at JCG Fund
Level 8. Wizard
Answered on 27 Sep 2018

Mm if you are not investment savvy and are looking towards the long term, contributing to CPF after embarking on your new career is a good choice. Other considerations to take note of are your insurance protection coverage. Make are these are in place before you start in real estate. All the best in your new career

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Jeff Yeo
Jeff Yeo, amateur Social contributor at School of social sharing
Level 7. Grand Master
Answered on 27 Sep 2018

Emergency funds 

  • work out your basic expenses per month x 6 = emergency funds (x12 if market conditions are bad)

  • ​regularly review the monthly spending to make sure your emergency fund can always cover you for 6 months.

CPF

  • TOP up only after emergency funds are sufficent

investment

  • build a dividend portfolio that can supplement your income

  • stocks if your risk acceptance Is higher

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Loh Tat Tian
Loh Tat Tian
Level 8. Wizard
Answered on 26 Sep 2018

There are plenty to know for self-insured. The basics are

1) Know your income and expenses.

Income tax, medisave (declaration to CPF as self-employed)

2) Plan your cashflow very well. Plan for 1 year expenses first. (Self employed has unstable income)

3) Calculate your income tax. If assessable income more than $80,000 annum, do your tax relief (SRS preferred) to bring it to the lower bracket of 7%, Since your income tax rate will hit 15%. pass $80,000

With regards to your CPF, treat it as a bond segment if you are going BTIR, especially if you are doing retirement sum top up (tax relief up to $7,000).

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Yong Kah Hwee
Yong Kah Hwee
Level 8. Wizard
Answered on 26 Sep 2018

CPF is for retirement purposes. if you are disciplined enough and if you can get returns of more than 4% every year until you are 65, then you might want to consider not putting your money into CPF.

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Hi-5! I feel you!

This is my finance strategy in order of importance which you may consider:

(1) save 6-12 months worth of expenses to tide through rainy days

(2) set up a business operating account where I use this for marketing cost (ie. flyers, SPH ads, facebook marketing)

(3) Singapore Savings Bonds because I can earn better interest than FD but still able to redeem within 1 month if I need it if (1) is running low

(4) contribute to CPF OA as a lumsum when I am comfortable with the above 3 since this is very illiquid.

(5) Start contributing to both CPF SA and OA after OA has $20k

If you're considering in stocks, I learnt that we should consider our job as part of our portfolio as well. To diversify the risk, I would invest in non-property related stocks so that if the real estate market is doing badly, at least the stocks have less likelihood to be affected. Similarly, during property booms, we may be doing well in career and that should be able to mitigate the loss in the paper assets (if any).

Hope this helps! :)​​​

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Top up CPF special account got at least 4% interest which is good. But make sure you double confirm dunnid those money for a long period because you cannot withdraw them early.

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