Would my plan below lead to a possible FIRE (Financial Independence, Retire Early)? - Seedly
 

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Asked by Anonymous

Asked on 22 Aug 2019

Would my plan below lead to a possible FIRE (Financial Independence, Retire Early)?

SPR, mid-20s.

Thinking of converting Singapore Citizen if following is feasible:

  1. Convert to SC whenever possible.

  2. Accumulate CPF and cash on hand to have at least RM500k (~S$170k) and monthly income of RM100k (~S$3.4k) to apply for MM2H (http://www.mm2h.gov.my/index.php/en/home/programme/terms-conditions).

  3. Buy BTO/Resale whenever possible.

  4. Kids study in SG (better education system).

  5. Retire with RM500k FD, rental/dividend and small business in Malaysia.

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HC Tang
HC Tang, Financial Enthusiast, Budgeting at The Society
Level 8. Wizard
Updated on 28 Aug 2019

Hi Let me share my friend's experience here:

  1. Convert to SC whenever possible. - You're a SPR, if all is good, the conversion takes about 7 months (or lesser) if your conditions are desirable (working in MNC, contributed some time to SG economy by working here and finally the government quota/decision of SPR to SC given to ICA)
  2. Accumulate CPF and cash on hand to have at least RM500k (S$170k) and monthly income of RM100k (S$3.4k) to apply for MM2H (http://www.mm2h.gov.my/index.php/en/home/programme/terms-conditions).

= The terms for MM2H below 50 is " proof of liquid assets worth a minimum of RM500,000". CPF is not liquid, you cannot withdraw the funds and thus it is not "liquid". Refer to: https://www.mfa.gov.sg/Overseas-Mission/New-Delhi/Consular-Services/Citizens-Services/Withdrawal-of-Central-Provident-Fund-CPF-Contributions#targetText=You%20can%20also%20withdraw%20your,country%20for%20employment%20or%20residence.&targetText=If%20you%20wish%20to%20withdraw,for%20the%20application%20form%20here.

Point #3: You can only withdraw your CPF in full if you are about to leave or have left Singapore and West Malaysia permanently with no intention to either country for employment or residence. Otherwise, if you come back, you would need to top up the CPF $ withdrawn back to your CPF account. Hence you need to save a large portion of salary and invest to get the SGD170k (RM500k). The good news is that if you're doing it together with your wife, you can reach that saving goal much faster.

  1. Buy BTO/Resale whenever possible. = Possible. If you haven't become Citizen then, make sure your wife is Citizen then you can get BTO/Resale. But the down payment would deplete your cash you wish to save in #2, be sure to save enough.
  1. Kids study in SG (better education system). = As long as both one you are citizen, your kids would be SG citizen, then fees would be lower. Otherwise, the fees would be high and eat into your living cost.
  1. Retire with RM500k FD, rental/dividend and small business in Malaysia. = If you going for the plan, #2 is a must, so there's RM500 but I would rather show M'sia Immigration that your liquid asset is in SGD / Forex for better rates. Go ahead and try to run a small business in Malaysia, best is going for export / foreign business so that it hedges your cost. Earn high and keep the cost of living low in M'sia, it is then viable. For your considerations and possible planning. All the best! :)

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Question Poster

28 Aug 2019

1. Actually, I'm quite confident that I can get SC status before 30y/o. The only problem lies with my Malaysian spouse where SPR application will only start after we legally married. 2. Actually, I'm not expected to use the asset in CPF for the $170K FD. I did some calculation and confident with 10 years to hit this amount. So by mid-30s, I will start to apply MM2H. 3. I'm actually expecting CPF grants from gov here. Assuming I had $40k grant for HDB Resale, I will only need to fork out another ~$50k to set up the HDB including tax, renovation, fees. (Can save more here using SC where tax is waived for the first property) 4. Found out SG Gov done quite well in providing each and every child with a place in a local school. Education syllabus wise, it's very competitive as well! Going to ask them to opt for local Uni or scholarship. 5. Never think of withdrawing CPF here. Going to leave it there as one of my investment portfolios as it is more like a safe haven :) Renting out the HDB while staying in Malaysia seems like a good way of increasing retirement income. Recently also come across the news of a frugal couple trying for a road trip in their own van! Inspiring. https://mothership.sg/2019/08/singapore-couple-travel-europe-van/
HC Tang
HC Tang

28 Aug 2019

1. That's good. So get marry ASAP (if you guys are ready), and at the same time focus on yourself quickly get SC first so the cost will be lower for future kids educations in SG and helps in your wife getting SPR. To get SPR depends on another level of the circumstances too similar to how SPR gets to SC. 2. 10 years is just right, achievable. 3. Your estimation is about right. Besides those costs, don't forget about legal fees, stamp fees, agent fee (can be saved if you go to HDB download the checklist and DIY everything if is for resale). 4. Yes our education is world-class but then it is also very stressful for the kids, it is in the middle of change for Primary level, hope it becomes better for learning rather than for grades only that will not stress the kids too much. 5. Yes many does that where after 5 year MOP, they move to JB or other less costly city in Johor and use the rental income from HDB to fund the payment of the flat or if you use your CPF OA to pay for, then it will be your monthly income that may exchange to RM on amount needed for living or for biz. Finally, the couple is going for a very different lifestyle, vanlife :P. Not many willing to live like that. They are vegan, environmentalist, frugal, willing to do everything DIY to spend min amt of $ while travelling. Nevertheless, with careful planning, it is possible to FIRE your way in 10 years time :D All the best!
Aik Kai
Aik Kai
Level 6. Master
Updated on 30 Aug 2019

I am going to be a wet blanket and say no. Your plan is too simple and too many assumptions with no clear goal in mind.

1) Convert to SC. The application process is long and have you ever thought about how long it would take?

2) Accumulate CPF. You do know that CPF cannot be withdrawn fully unless you give up citizenship right?

Point 1 is going to take very long, which will then make point 2 even longer. And is 170K enough at the point? Inflation, the rising cost of living is going to push the number higher

Malaysia cost of living is also increasing. And If your 500K is in FD, it means you need more money as you need the capital for starting up a business.

I could go on and on. My point is, you need a proper plan with proper timeline and milestone. Your plan may work in an ideal world but the reality is way too harsh.

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Aik Kai
Aik Kai

28 Aug 2019

All the best!
Ninja

30 Aug 2019

The guy who post that question down vote every answer that goes against him. What a dumb ass, your plan is too simple.
N
Ninja
Level 5. Genius
Answered on 25 Aug 2019

Plan too simple. Lack of investment factors and insurance protection.

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