Friday 24 February 2023

To play it safe or to take on more risks?


It's easy to set goals and make plans.

Come to think of it, anyone and everyone can do it!

Say, say only who cannot?

But when it comes to doing reviews and being honest with oneself, then not everyone and anyone can or willing to do it....

I like Real People Real Stories (stolen with pride from CW).

Below I'll link 2 interesting perspectives from 2 bloggers in our community:

1) Buying A Modest Home Has Been A Poor Wealth Building Advice For the Past 10 years 

2) 6 Lessons Learnt After Losing 551k In 10 Years Of Investing & Options Trading 


It's back to the Earn More or Save More paths to take right?

It would great if someone is willing to share their CPF voluntary contribution review versus if they had passively dollar-cost-averaged the extra funds into STI or S&P 500 ETFs over the past 10 years.

Or compare CPF versus dividend investing?

One thing is clear even without doing any reviews.

In bull markets, Earn More will beat Save More hands down. That's provided if you know when to take profits!

In bear markets, Earn More practitioners would have wished they never invested in the first place... 

So what if inflation is eating into your purchasing power long term since interest rates are negative in real terms?

The more you invest the more you lose hurts a lot more!!!

Then again, knowing Earn More is a necessary evil to beat inflation long term (you think why CPFIS was introduced if Save More was enough) is meaningless if you have the self-awareness that you are risk averse.

That's why is always back to KNOW YOURSELF.

Self-awareness is hard. We often own self lie to own self.

Harmony is when we are at peace with who we are and our chosen vehicles.

Jobs anyone and everyone can do, that's why they pay the salary they do.

Careers that few can do - like fighter pilot or surgeon - that's why they can command that kind of compensation.

We all know this intuitively. 

Then pretend it does not apply to the realm of Earn More....


  1. Can use CPFIS scheme as cash investing strategy i.e. 65% play it safe and 35% take risks. Big Daddy doesn't want members to play the market till no money to retire and teach us practical money management to take risks.

    1. CW,

      That is true.

      No need to black or white; there's always the barbell strategy too ;)

      That's why I say if CPF is a minority part of our net worth, we have done not too bad in life!

      But if CPF is the only vehicle we are banging on in retirement, that meant....

      I'm quite impressed with youths who voluntary contribute to CPF not for that 4%, but to invest under SRS or CPFIS.

      CPF is just a better yielding "money market fund" to park their "opportunity funds" when there's nothing to invest.

      You are right about big daddy; they have pivoted.

      There was a time they were so eager to get everyone and anyone to own shares (like owning their own homes) so that we all can profit from the growth of "Singapore Inc".

      They will never do that Singtel exercise ever again!

      Then again, like that Koptiam card thingy, if don't have that Singtel "incentive", how else to "coax" the average Singaporean to open their virgin CDP accounts!?

      Nowadays, we don't hear much from big daddy about using CPF to "Earn More", do we?

      It defeats the purpose of CPF Life if more Singaporeans would self-destruct their own CPF funds....

  2. Yersterday a few of us gave a farewell lunch to a 54 yo colleague. Among the litany of reasons he gave for leaving was that it was not right that he wasnt paying adequate attention to his investment. That caught us all by surprise.

    The few of us there were in the earn more camp and have always considered investing as a by-product of wanting to make our savings work for us. At least to me, investing should be as passive as possible and our focus should be on the job where the returns are the highest.

    At end of each year I would do an assessment of the ROI or ROC of my three minions, namely equity, rental and CPF interest income.

    Their ranking in terms of absolute cash flow:
    #1 : CPF Interest (because the capital is large)
    #2 : equities
    #3 : rental

    Their ranking in terms of ROI/ROC
    #1 : rental (through leverage)
    #2 : equities
    #3 : CPF

    Ranking in terms of capital appreciation
    #1 : investment property
    #2 : equities
    #3 : CPF Savings

    Actually it is a hard fight between equities and CPF when it comes to capital appreciation. We know CPF savings dont appreciate, neither do it depreciate, but for equities, it can depreciate substantially in a bear market, and appreciate substantially in an exuberant market.

    At the end of the day, what matters to me is the passive cash flow. As we approach retirement, we want the passive cash flow to be able to replace our employment income. The ideal passive cash flow must have the following qualities :

    1. Reliable and enduring
    2. Sufficiently large to cover the expenses of our desired lifestyle and then some.
    3. Able to catch up or better still, beat inflation

    Each of our three minions have some of these qualities but not all. For example, the CPF interests is consistent and is enduring but cannot catch up with inflation. The rental income and equities income are market driven and can catch up with inflation but are not consistent nor enduring, in that your invested capital can be decimated in a bad bear market. It was with this knowledge that I deployed my assets into these three classes; the CPF savings to provide us consistent and enduring income through interests, equities and investment property to provide us with an avenue to keep up with inflation.

    To sum up, at the end of the lunch, I told my 54 yo colleague to look for me if he got bored and wish to return to work.

    1. mysecretinvestment,

      Your younger colleague is "retiring" at the old retirement age of 55 ;)

      Now that I'm 55 at the end of last year, I feel a lot less sheepish sharing I'm semi-retired when strangers ask me what I do.

      I'm guessing your younger colleague has some animal spirits in him yet. I mean if he can catch the next bear/bull market over the next 10 years, he may do financially better than the income forgone?

      At 65, he can come down the mountain, if he so wishes, and park some of his spoils of war into CPF for safe keeping and regular cash flow ;)

      I can't find any private annuities better than CPF Life!

      But if he comes knocking at your door for his old job back, it may mean he has blown-up his investment account....

      I appreciate your sharing. I believe younger readers who can think for themselves at this watering-hole may learn a thing or two too ;)

      It's pretty crystal you are alpha shepherd in your day job.

      Management is Planning and Control.

      Most youths can parrot goal setting and planning, but many are weak at Control.

      I wonder how many have done the Control over their finances like you had? (Nope, calculating XIRR in 2 decimal places is just superficial "review")

      And before Planning, there's Analysis. There's no Analysis if you just blindly follow others....

      Then after Planning, there's Implementation. We know many just talk only, no action...

      No man is an island. We learn from others and stand on the shoulders of giants before us.

      But at the end of the day, we have to take responsibility for our own actions.

      My life; my path.

  3. At 55, CPF can be used war chest for this retiree turning over full time investor/trader.

    1. CW,

      That's provided he is willing to opt for Basic Retirement Sum (BRS) and get as much CPF out as possible at 55 ;)

      However, it seems everyone and their pet dogs are already moving their CPF out to park in fixed deposits or treasury bills...

      So CPF is already out-of-favour? That was quick!

      If one's chosen vehicles of poison are NOT in the approved list of daddy knows best assets - approved for investment under SRS and CPFIS - like forex, futures, options, overseas properties, cryptos, and Hello Kitty collectibles - then one should not voluntarily contribute to CPF in the first place ;)

      Then again, if big daddy had a change of heart and wants to compete with HK to be the crypto hub for Asia, maybe they'll approve the withdrawal of CPF to invest in cryptos under SRS or CPFIS!!!???

      See you on the moon!

  4. Hi Smol,

    I won't be surprised if the Authority changes its stance. It makes sense to expect any thing is possible.


    1. WTK,

      For those of us who lived through multiple moving goal posts and policy U-turns, anything is possible!

      Big daddy dangled the CPF carrot to grow Singapore as the wealth management hub in Asia.

      If we elect politicians who don't mind taking "donations" from crypto firms - like some 3rd world countries who shill cryptos - who is to say "questionable" big daddy of the future won't "encourage" CPF members to ride cryptos to the moon?

      Psst. You want to retire "old" at 65, or do you want to retire at 35?

      Eh... Who will do the work if everyone and anyone can all retire at 35 ???

      Foreign talent!

      And old fogeys like me who stayed away from cryptos :(


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