More than that, the monthly contributed CASH is eventually counted as part of 1M CPF!
I believe that is the biggest misleading!
I am yet to meet anyone with 1M CPF!
The Google sheet has the same mistake of effective rate. We need to list the cash flow.
1M in CPF is doable. not that hard. The maximum contribution you can put in CPF a year, either via employment income, or voluntary contribution, is 6k * 17 * 37% = 37.7k. This the max of "ordinary wage" + "additional wage". (So in aggregate it is about 3k a month, max). If your 1st pay check is >6k and you get at least 5 month bonus yearly, then well before 20 years of working you will get >1M easily. )
I said 1M in CPF *SA* is impossible. because any amount in excess of minimum sum goes back to OA. The "minimum sum" is also the "maximum sum". With 160k from day 1 compound even at 5% for 25yrs you get about 500k only. More over, you dun get 160k in SA at day 1. Contribution towards SA has a yearly cap, in same contribution % proportion, from the cap above. And once SA reach minimum sum, you cannot do any voluntary contribution to it.
The article talks about "in addition, monthly cash voluntary contribution of 3k". that's nonsense. The maximum amount you can put in a year is only 37k plus. 3k cash monthly is already 36k. So his employment mandatory CPF contribution *per year* is only $1,700 ??
I think this article is cooked up one.
Not possible now (2016) due to the Full retirement sum ceiling of 161k for 2016.
By 2020, the full retirement sum will be 181k (CPF board est figure) base on 2.5% inflation.
By 2029, the full retirement sum will go up to 221k base on 2.5% inflation.
If the father is rich & have the excess money. He will start to voluntary contribute in his son (or daughter) at early age of 3 yrs old.
By the time , his children reach age 18, the son will have a full control of his CPF & start to transfer to the max $221k. full retirement sum ceiling (2029)
So by age 55 (37 yrs later from age 18) , his special acct of 221k (age18) will become $1.015million .
40kX5% compounded for 27 yrs = $243k
181k X4% compounded for 27 yrs = $772k
Total $1.015 milllion in his special acct.
Possible if CPF-SA interest rate remain the same for the next 40 yrs ...
http://singaporeanstocksinvestor.blo...=1471316084996.
This guy CPF acct as follows in 2015 at age 45. He really reveal his CPF statement in his blog.
CPF accounts at the end of 2015:
OA: $418K
SA: $200K
MA: $50K
Assuming that he stop contributing to his CPF account from 2016, He should have at age 65:
OA: $652K
SA/RA: $438K
MA: $109K
Total by age 65: $1.2m in his CPF acct.
https://www.cpf.gov.sg/Members/FAQ/s...-for-employees
There is no minimum age to qualify for CPF contributions. As long as you are a Singapore Citizen or Singapore Permanent Resident and are employed under a contract of service, CPF is payable at the prevailing rates.
40 years later to just have 1M? That's a no brainier.
Baby bonus ($8000) + CPF Medisave acct 4% ($4000)
==========================================
The Baby Bonus cash gift will be increased by $2,000 (from $6000 to $8000), and will be given out between the first 12 and 18 months after a child's birth.
The Medisave grant for newborns will also be raised by $1,000 (from $3000 to $4000) to a total of $4,000, which will help pay for their Medishield Life premiums
and other medical expenses.
When you open a child development account (CDA) & top up $8000 (given 15 yrs to top up) . Govt will also match $8000 & deposit into
your Childen development account (CDA) . So total amt is $16000 earning 2.5%.You can use the savings in the CDA to pay for educational
and healthcare expenses of all your children at the following Baby Bonus Approved Institutions.
If there is still balance in your children CDA acct when he (she) reach age 30. It will auto transfer to his (her) CPF-OA. I prefer to leave
untouch at $12000(old baby bonus scheme of $6000). At age 30, his (her) CDA acct will grow to $25,000 & auto transfer to his (her) CPF-OA.
Money printing.
This guy CPF acct as follows in 2015 at age 54. He reveals his CPF statement
CPF accounts at the end of 2015 = $735,143
CPF OA interest earned = $12,174
CPF SA interest earned = $7,575
CPF MA interest earned = $1931
------------------------------------------------
Total interest earned = $21,681
------------------------------------------------
Graduated from NTU in 1987, age 54, retrenched in Feb 2004.
Stay in 3 rm HDB flat near Orchard, fully paid from CPF.
Total CPF interest earned in 2015 - $21,681.
He don't understand why there are people who are against CPF
I think people are against CPF for following reasons:
1) Money got locked up against their will (now min RA = $161k and min MA = $50k means total $211k!)
2) They can earn more than what CPF is giving
3) CPF Life giving return of <1.9% p.a. even if you live till average age (80 years old for men and 85 for women) and yet you can't take out your money despite such poor return given to you
4) (what else I miss?)
Think FV = $368,284.49 is not quite correct because this was calculated where the interest was compounded annually.
By right interest should be compounded monthly, and hence FV should be = $$371,369.14.
Thus, if you live till 85 years old and obtain payout of $1,770 monthly, the return you obtain for your CPF Life (for women) = 1.37%
Thus, if you live till 85 years old and obtain payout of $1,920 monthly, the return you obtain for your CPF Life (for women) = 2.23%
It is not possible to calculate what return you would obtain if you can only live till 70, 75, 80 years old etc as CPF has not released the bequest figures (if say you die at 70, 75, 80 years old) etc for ERS. However, suffice to say, your return is likely to be very very low if you die before 85 years old (and possibly negative if you die at 75 years old or earlier).
Last edited by teddybear; 23-08-16 at 00:17.
However now rental is quite low. Hard to get $2.5k per month for 1 bedder that is $700k. Need to pay maintenance fee, agent fee, property tax, income tax if u r still working.
Some tenants will not take care of your property likely damages. Still need to deduct some repair cost per year too. But overall after deduction still can have more than $15k if property is fully paid up.
Last edited by star; 25-08-16 at 03:15.
The calculations in the housing market are very incredible.
Maybe about a few months to a year ago I shared how a 600k property max leverage rented out at 1,800 earns 6%. That same property is now valued at 733k but rent still at that previous level.
The valuation gains I already not sure how to calculate. May be time to ask to refinance and draw out some gains then see how.
The three laws of Kelonguni:
Where there is kelong, there is guni.
No kelong no guni.
More kelong = more guni.
Wife wants to sell HDB FLAT to buy a CONDO
===================================
Advise from a property investor .
i once bought a condo and held it for it for 15 years. i bought at $680K and sold it at $800K. For that 15 years, only four years it exceeded its buying price, that was the first two years and last two years. In between the property was a negative asset. That is, its value is lower than our bank loan and we could not sell it.
If discounting the final two years when the property recovered its value, i had to live with a negative asset for more than eight years. In that eight years, we forked out $12,000 for repainting and redoing the kitchen cabinet as it was infected with termite. So, property investment is not smooth sailing all the time. Especially if you are late into the game and miss the early-bird boat.
For that eight years, we cant do any investment as all our money was tied up in that one property. Imagine the opportunity cost lost! Hence, please consider carefully as not all property investment is pau jiak one.
i see history repeating itself. The property had inflated further to $1M and now it has regressed back to $900K. So if the market soften further, she probably ended up where she had started. I dont wish that but who knows...
Buy what you can afford and need.The cost of wrong timing can be excruciatingly painful.
The thing is which investment can guarantee won't drop in value. For some investments, it doesn't drop in value, it plummets to zero with papers that are worth less than toilet papers.
With bricks and mortar, in the worst case scenario of plummetting, you or family members can unlock its value via living in it or renting out.
This "property investor" has happily lived in it ("rented it") for 15 years! Even at rental value of $1500, it will be $270K "saved" drawing down only 15 years of lease, left maybe 70 or 80 years.
And with 70 or 80 years of lease, still can sell above buying price after being so thoroughly used. Any goods (cars, watches, clothes, anything) can rival this scenario?
"Negative value" is just a term for those who want their cake and eat it. If it happens (as it does sometimes in property), you gain double! If it doesn't happen, you pay for its fair use, and don't lose.
The three laws of Kelonguni:
Where there is kelong, there is guni.
No kelong no guni.
More kelong = more guni.
Don't know can share my property investment experience.
Bought $680k
Assume the following :
Downpayment - 20% = 136k
Borrowed - 544k
Assume loan of 30 years.
After 15 years, loan amount is assume 300k. So paid up is 244k. (Technically should be 1/2).
Assume rental top up of 5k per year for 15 years = 75k. (Let's say rental cannot cover mortgage).
Rework cost 12k
Sold 800k
Now let's work it out:
Down payment - 136k
profit - 800-680= 120k
Capital repayment = 244k
Total gross = 364k
Expenses = 75k+12k+20.4(3% of 680k)+16k(assume he generous and give agent 2%of 800k) = 123.4k
Net profit = 364-123.4= 240.6k
Why never make money??????
For an investment of 136k, make 240k in 15 years???
If he hold for another 15 years, condo will be fully paid?????? By tenant???? Why did he sell???? Can anyone answer that question?????
Feel free to correct and edit any portion if you think the computation is wrong.... Or put your own assumptions....
Bro Chestnut, u need to deduct property tax for 15yrs, maintenance fee, if u r working u will receive a huge income tax because income + property rental income likely exceed $100k.
For the expenses, you still need to include:
(1) Agent fees for getting rental tenancy
(2) Property taxes
(3) Maintenance fees
(4) Repairs to make good the property for next tenant / existing tenant (eg air-con spoilt, re-painting, etc)
(5) Property rental income taxes
(6) Housing loan interest rate rises significantly
(7) 15 years is 1.5 property cycle and if this property is in OCR means may be 3-5 years no rental income or rental income drop by a lot?
(8) What if the property price stay stagnant (because 99-years lease reducing and the drop compensating against rise in inflation (so no price profit)?)
(9) (What else did I miss???)
May be you can re-work your figure to include the above (and specifiy loan instalment amount, rental per month etc) and still see whether there is profit or not?