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Monday, 21 September 2015

Preaching to the choir boys on CPF top-ups

I don't like to talk about this CPF thingy as the headline pretty much sums up how I feel about it.

But now that there's an opportunity to poke both sides of the debate, how can I let it pass? 

Here's my contribution to muddying the waters a little more!

Muddy waters

Look, if you can earn and save $100K per year, how is voluntarily making a $7K yearly CPF top-up (optimise tax relief) a bad thing?

OK, $100K is over-kill. How about $50K then? 

You still have plenty set aside for opportunity and/or emergency funds. You win liao lor!

But if someone earns and saves $10K per year and make a monkey-see-monkey-do voluntary $7K CPF top-up, wait, what is that dumb-fxxx doing?

Ah! See? So easy to jump to conclusion...

What if that person is in his late 40s or early 50s, and has decades long track record of making losses in properties, equities, mutual funds, etc. 

A Charlie Brown when it comes to investing. You still want to give advice against him topping up his CPF?

How about someone in his early 20s, haven't bought his first property yet, doing a transfer of his CPF ordinary account to special account?

Ah! Now you smarter!

Before opening your big mouth, you verify first the context and perspective. 

Yup, this young person's daddy and mummy already invested in a 2nd rental investment property when he was a toddler. How's that for a 21st birthday gift? Song bo?

Do you still have the urge to give advice to people better off than you?


Brush up on your Literature

Still remember your Sec 1 and 2 literature classes?  

You know what's more fun than figuring who's arguments are more correct or wrong?

It's to analyse and study - who said what - like characters in a play or storybook.

You may identify who are climbing up the mountain, who are coming down; who are speaking from land owner/shepherd/sheep perspectives; who have holes in their hearts; who have an axe to grind; who sees the world through rose-tinted glasses; who have blinkers on; etc... 

I find reading people infinitely more interesting!

P.S.  Isn't the markets about people? Sentiments and emotions?  



  1. I very much enjoy the way you presented this topic. Thumbs UP.

    SMOL definitely has his style :)

    1. Thanks Solace!

      Tree big attract wind.

      Somebody got to have the bleeding heart's six ;)

    2. Good post!

      Nothing wrong with his advice. Just the prescription of it in a manner that it applies to everyone.

      Looking at the way it can changed from being dispensed in a one size fits all manner into a less categorical manner with caveats will be a better solution.

      By the way, no one who buys when there is blood on the streets and sells into euphoria and collects dividends off the back of paying employees less than they could and participates in a market knowing no one in it is your own father mother, no one is a bleeding heart.

      Let's be open about that.

      Good post!

    3. SMK,

      Thank you!

      I think I've succeeded in being balanced (have you had your yogurt drink today?) when two knights on opposing sides of the realm come with bouquets instead of sticks and stones?


      If we can't laugh at ourselves from time to time, we are trying too hard.

      Investing should never be moody moody, face black black...

  2. HI SMOL,

    Agree. Two thumbs up.

    I see a lot of wong fei hong's followers just whacking everything into SA. Some are just undergraduates who just started working. No need to buy property ah? No need to get married ah? Got house no need renovation ah? All thinking about the future self. I think the present self will hate the future self! LOL

    I think pple need to sit down and reflect upon their current situation for themselves. Wong fei hong can fight the boss of White lotus society single highhandedly, but the disciples of wong fei hong better stick to fighting wooden figurines first. You 一代宗師 level then we talk HAHA

    1. LP,

      It can be difficult for those not familiar or exposed to the Oriental philosophies of Hinduism, Taoism or Buddhism.

      Especially when all that you were brought up were based on the Western management techniques of goal settings and planning - which is based on living in the future...

      Yet Western companies like Google has embraced Mindfulness, Compassion, Empathy, etc. And that's being in the here and now.

      I suspect we have a reading skill challenge here in Singapore.

      It seems some readers have a lack of imagination, can't read between the lines, don't read widely and outside the syllabus in school, or simply don't read at all after work? Not even for pleasure? You know, those fictional fantasy make-believe stuffs...

  3. Good post! And what happens if the grad is on a job with little prospects and he himself thinks he has a bleak future and his parents are retired and his family home is not fully paid up and the whole family has got no medical insurance?

    The whole thing goes south faster than a grasshopper plays the fiddle and faster than the ant can gather.

    Unlikely scenario? More common than you think.

    Why so many people disgruntled with the cpf and pap?

    Good post.

    Nothing wrong with wong fei hong's medicine but if you prescribe the same medicine to everyone irregardless of body constitution and illness and then when every ah huat and ah huey follows you because of reputation, and you claim you were just walking down the canton streets carrying a promo sign for your medicine and no one needs follow it in the first place.....

    The truth of the matter is every medicine needs a prescription (let's not go into debate on panadols and off the shells, that would be petty as in petty cash)

    1. SMK,

      Big daddy "over selling" last year there were $500 million in voluntary CPF top-ups is just a statistical trick - its a drop in the bucket when we take the whole CPF contributions in totality.

      Just like SRS, it won't take long before more people realise these CPF top-ups and transfers from OA to SA mainly benefit those in the higher tax brackets...

      Walk away, nothing to see - if you are the common man riding the Comfort Delgro bus or SMRT train.

      Thankfully someone in big daddy's team saw the loop-hole and introduced the Singapore Savings Bonds.

      Before anyone complains, shove a lollipop in their mouths.

      Now everyone has something ;)


  4. We can easily trust; but how to verify, verify and verify that they are still good for us.

    1. CW,

      Never buy shoes on-line.

      Buy shoes only when we can shove our feet into the shoes.

      It's our own feet.

      Ownself check ownself!

    2. Remember reading one smart guy doing "Ownself check ownself!" in the shop and then order online. Same same but different. LOL!

    3. CW,

      Typical "giam siap gui" smart shopper!

      If everyone like that, I'll lose my weekend sales job, and more brick and mortar retail shops will close..

      When that happens, see what happens to those yield hogs who are vested in retail REITs!

      And don't give me the crap that I'll convert my retail space to restaurants, fast food outlets, cafes, etc.

      Will you go to a shopping centre that only sells food?

    4. i would! but wouldn't be invested in those retail reits. lol

    5. Ah. Allow me to share my observations.

      I think many malls in SG have evolved quite a bit over the years due to the changing retail climate i.e. kena pressure by online shopping. Those who don't, face the inevitable fate.

      Rather than being called a mall or shopping centre, increasingly we see malls having libraries, roof top playgrounds, cinema, tuition centres, clinics, classes, salons, spa, telco, banks, and of course F&B etc. Are they selling more and more services compared to products now? Seems more suitable to call them multi-purpose lifestyle centres eh?

      Many times, I walk into a shopping mall in countries like Australia or Taiwan and think to myself, "Wow, now THIS is a shopping mall". Leisure walks there quickly drove home the significance of intangible factors like standard/cost of living, climate and weather, changing lifestyle, accessibility, population density etc.

      Indeed, I have observed many brick and mortar shops closing over the past few years. I'm afraid the trend may continue.

      I hope you don't lose your job! *fingers & toes crossed*

      (Don't mind my ramblings! I'm usually intrigued by the topic of shopping.)

    6. Kevin,

      No worries!

      I can reinvent myself to become a weekend waiter or fast food outlet crew member.

      I face very little competition from locals!


  5. I find the concept of mindfulness surprisingly refreshing and applicable in this day and age. The present and now, is just as important.

    Wong Fei Hong.. LOL.. I think I have a good idea of who that might be..

    1. Kevin,

      I prefer to call him Ip Man Blues Brother ;)

      Just as long we don't mix the spirituality part with philosophical part, I think that would be more palatable to most people.

      I guess some staring at the red ink in their portfolios today were wishing they were more Mindful during the early part of 2015 when there were opportunities to take some money off the table...

    2. ya he really looks like!
      quite cute at times. i like some of his more insightful articles. but he can get so defensive siah. not unlike the moat builder.

      lucky we took some off together in early 2015.

      maybe next year will aiyah why sept/oct 2015 never show hand

    3. SMK,

      Like a broken clock, we can console ourselves we are "right" twice a day mah ;)

      No need wait till next year. I already got eggs on my face on why I did not show hand during 2014 :(

      What to do?

      My circumstances different. No regular job and not exactly a young turk anymore...

      Safety first!

      Ah! Youth, I miss you!

  6. Hi Smol

    Guilty of that too , alas 4% is better than 2.5 % too , but wait wait , cannot U-turn Liao ..

    For Ssb , isn't big daddy playing with big boy ? Timing very zhun zhun .

    1. Small Time Investor,

      No, with a cap of $100K and being capital guaranteed and all, its what I'll call a pity-fxxx for us ikan-bilis.

      Big boys are not interested to deal with ikan-bilis. That's why big daddy stepped in to fill a void - free market capitalism may not work all the time.

      This is a social initiative rarely seen in other countries.

      It's better than giving extra % interests in our CPF. Why? It encourages us to take our own initiative to take responsibility for our ownselves.

      If we can secure higher returns on our own outside of SSB? Stay away. If can't, now we know WHY SSB is good for us ;)

      Tip: If a person can invest directly in bonds (minimum $250K per pop), this person is likely to be a millionaire or accredited investor.

      You already have the assistance from private bankers; don't need tender loving care from big daddy. Shoo!

  7. Hi SMOL,

    Before making a decision, good to look at both sides of the argument. Then you are doing it with your eyes wide open.

    But still, not enough. Know your own unique situation first.

    I think I should just stick to sharing my own actions.... oopss...

    1. 15 HWW,

      Just have fun and be yourself.

      We need to celebrate the diversity in our community!

      Let 100 flowers bloom!

      We all have our own niche and role to play.

      I'm the class clown :)

    2. Hi SMOL

      Courtesy from Taiwan. Hi Singapore.

      This is 1 of the best post I can understand from you fully except who is the 20s giving advice on cpf top up. Haha.

      I could be your direct competitor for waiter job.

    3. Frugal Daddy,

      I love Taiwan! Many fond memories there. People super nice and friendly.


      If got opportunity, do check out the 槟榔西施.

      With children then no; with wife only can one!

      She'll enjoy checking out the competition too ;)

      Welcome to the service industry!

      Come! Together we play our part as the Singapore core :)

  8. Hmm...

    A bit OT here, but SMOL, are you observing code of engagement here? Since the main poke is Wong Fei Hong and his Adversaries. I dun know his adversaries, especially when the comments are super directed.

    I remember you giving a lecture of code of engagement. It applies both way too.

    Of course, you just working and you wacking ALL SA to OA, you are stupid.

    I start moving SA to OA every year after my house. I do it only for 4-5 years, because i thought i might have future use of OA.

    But now, when I have a boutiful bonus, I still transfer, although very callibrated.

    I do think it is very scary how compounding work even with a small sum.

    As of ALL advice, you make your choice and dun cow bei cow bu.

    I ask you buy property, because sure earn money... you buy, you responsible. Simple.

    I am responsible for what I say, you are responsible for what you do.

    1. Sillyinvestor,

      How can it be out of topic when you are making an attempt to poke me?

      I stand by my rules of engagement ;)

      I only gave the oily man a "kick" on rules of engagement.

      He has since "let it go". Why are you still holding on?

      I don't recall ever "kicking" you? Pokes yes a plenty!


      (And yes, I just gave you another poke)

    2. Lol, SMOL,

      Then let me return with a poke. As u say, there is nothing to let go, since I am not the one you pole anyway.

      How did u know he let go?

      Are u hiding behind philipspohy with double standards. No worries, u let go, I let go. It get past you, ok liao.

      Just a friendly reminder and mirror if u wish. If the mirror is wasp. No problem, throw it away.

    3. Sillyinvestor,

      Thank you, thank you, for letting go :)

      If we put all the characters in our community into a play or storybook, it sure makes interesting reading!

      Like analysing the 108 characters in Water Margin ;)

      You are definitely one of the more interesting characters in our realm!

  9. We only used our OA to top-up our SA yearly to the maximum when we were working because we had "extras" or surplus lah after everything was taken care off. In fact, some years when the SA exceeded the maximum amount allowed, the excess would be transferred back to the OA. If i can remember correctly.

    Cash into SA ? How can? Money in my pockets is always better than in someone's pocket. Simple logic. Unless i really have to much money and don't know where to hide. Ha! Ha!

    1. temperament,

      See? An ITE graduate like you can figure it out all by yourself! (I say this with pride and utmost respect)

      I hope no one has to pay $3K to a financial seminar to be told what's "best" for them when it comes to optimising our CPF!


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