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CPF versus CASH
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cashiertan
Elite |
24-Oct-2006 19:56
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From my experience and observation, Investing is not for everyone, it requires talent. no matter how one do it, some can never achieve the ROR which the special ones can get. However there is strategy that allows above average returns for almost 90% of ppl. This strategy is a sound money mgmt strategy with discipline to ride the rise high and cut lost low. rouge trader, actually u can complain the agent and his/her institution and i know of cases which the persons recovered their loses. tanglin boy, good luck to ur journey of DIY investments. |
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tanglinboy
Elite |
24-Oct-2006 13:44
Yells: "hello!" |
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I'm really glad that we have solid experienced people contributing to this forum. I totally agree with cashiertan. I have met many agents trying to hard sell different financial products. Because I don't have a financial background, I get confused easily by all the charts, figures and promises they talk about. After a while, I decided to learn about investing and do it myself. |
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rogue_trader
Master |
24-Oct-2006 01:49
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Hi cashiertan, Fully agreed with you coz my mum was soothed-talked by a banker into believing that an investment product she bought was a "FD", and ended up $8000 poorer. I trust stocks much much more than unit trusts which is why I am thinking of encashing all my cpfoa unit trusts into shares since only nw the tech fund is rising after so many years. Btw, are u a remisier? |
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cashiertan
Elite |
24-Oct-2006 01:09
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Hi i am Cashiertan, i am here to share my experience with you guys. 2 years back, i was working as a Financial Planning Consultant with a financial institution, took my M5, M9 and other certs to qualify me to sell Investments and insurance. The paper was easy and i passed it with brezze. however after working for 1 year, i was totally disgusted by the unethical sales tactics the insurance industry is and blindly conned ppl to buy investments, which is useless, charges high hidden cost/fees and worst, unethical sales of UTs w/o detail explanation and false guarantee for the consumer. many is naive and fell to the tricks. the sick part is that those top sale agents are those that scored the lowest or have the most difficulties passing a simple investment papers. i was like OMG, ppl are buying from these ppl becoz of these ppl are good in sales tactics. most, if not all have min knowledge in investment. all they know is sell sell sell ... blindly.. Insurance agent should stick to selling insurance products which is useful whether u bought it with emotion or not, however, investment is not. investment is abt timing and strategy, knowledge and common sense. for me, i decided to leave this dark industry altough there are some ethical ones. i took charge of my own investment and managed my relatives and close friends. i dun give them any guaranteed return but my sincere wish to grow their CPF/Cash as much as possible and as long as i can. I am glad to say that thou i did not do a spectacular job but nevertheless. i beat base index returns and grow their money are double digit returns annually. |
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rogue_trader
Master |
23-Oct-2006 23:43
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Hi Jiu, I think your "IA" differs from mine. If you see the earlier postings, someone mentioned fundsupermarket as a IA (Investment Adminstrator) status, and currently there are 4 institutions that have this status. So if one will to buy units trusts through this 4 IA status institutions, one can enjoy great savings as compared to bank charges. I understand CPFIS-OA as the standard term used for CPFOA investment account. I haven't come across any terms such as CPFIA. Hope this helps too. |
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rogue_trader
Master |
23-Oct-2006 23:35
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Hi Jiu, I hope u no misunderstood my intentions too. I was asking whether can one trade share through a IA and not CPFSA. I had consulted my remisiers and they told me that one can only trade unit trusts via IA (Investment Administrator) and enjoy the great savings. To buy shares using CPFOA, one can only go thru the local banks or other approved institutions but the quarterly charges and related fees still apply. From this topic and if i nt wrong, no one had actually go through IA to buy shares using CPFOA and to enjoy the savings as mentioned by someone in the earlier post. Hope you can understand what I mean. |
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YongJiu
Veteran |
19-Oct-2006 22:35
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Hi rouge, I hope you are not confuse with the following term: CPFIS - CPF Investment Scheme CPFIA - CPF Investment Account OA - Ordinary Account SA - Special Account MA - Medisave Account I guess what you mean is that we can't buy share via CPFIS-SA right? guess this is the safety net to avoide people to put all their money into high risk stock mkt. Hope this help. |
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rogue_trader
Master |
19-Oct-2006 21:47
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Hi YongJiu, I understand the limits but pls look at Annex A, point number 9 at this website http://mycpf.cpf.gov.sg/Members/Gen-Info/FAQ/Investment/INV.htm , it stated that shares of company, units of property funds or property trusts, and corporate bonds can only be used via CPFIS-OA only. I was wondering if CPFIA could be used in shares purchasing. |
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YongJiu
Veteran |
19-Oct-2006 09:06
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Hi rogue_trader, Yes you can invest your CPF-IA OA investible savings: - 10% in Gold - 35% in Share / Corporate Bonds / Property Funds (or real estate investment trusts) - 55% in professionally managed products. (Unit trust / Bond fund)
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cheongsl
Master |
19-Oct-2006 07:03
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CPF-IA can also be used to buy shares, but not the full sum in the ordinary account, and not all shares can be buy using CPF-IA. |
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rogue_trader
Master |
19-Oct-2006 02:56
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Pls correct me if I am wrong, bt earlier in this topic, someone mentioned that to use fundsupermarket or something like that to buy shares to enjoy cost savings. But for CPF-IA, they can only be used to buy unit trusts and not shares, right? Pardon me if I am wrong. Cheers! |
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chipchip66
Master |
12-Oct-2006 11:36
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tks for sharing colorado! It seems the banks would like to leave their foot in every kind of financial business. Hope they do provide ethical selling! |
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ten4one
Master |
12-Oct-2006 09:06
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Totall Agreed with colorado. These so-called 'Financial Expert' only tell the good stuffs and show you the figures you should be getting at the end of the term. Many have been conned into believing the story. These people suck big time! Cheers! |
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colorado
Member |
12-Oct-2006 00:27
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Hi Tonersweat, I beg to differ. If you are talking about independent financial advisers, they are already regulated by MAS unlike insurance agents who come under the umbrella of their company. I personally feel that the MAS should monitor the bank officers dispensing advice in banks. My own mum was sucked into buying structured deposits when I told her to just walk into the bank to withdraw her 50k to put into another bank offering her a higher interest rate. By the way, she is already 71 and they have locked in her money for 5 years. Does she understand anything about structured deposits, of course not, as she is illiterate. And she is not the only one who got "burnt". These bank officers have very high targets to meet monthly and they often prey on the old by luring them with high returns. I have heard of many cases already and I often wonder why MAS do allow it. On top of that, banks can also entice people to buy unit trust or insurance from them by offering free gifts, a practice not allowed by insurance companies. |
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billywows
Elite |
11-Oct-2006 22:05
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Hi Rickytan We won't be able to use all our CPF to buy stocks as there's a limit. This limit is to prevent pple from draining dry their CPF so they can still pay their monthly home installments. |
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allantanhc
Veteran |
11-Oct-2006 21:07
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Just share my experience. I have used OA to finance the purchase of the house I live in now as well as a condo which I rent it out. Will ride the rising trend of property prices now and may consider selling it at the right time. Beside that, I used it to buy shares and some single premium insurance policies which I reckon will give me slightly more than 4% pa return plus insurance coverage. Used some money to buy annuity some years ago when the rate was good. Now annuity rates are just 2.75%. This is not attractive. It is a good practice to top up your SA with your OA money if your SA has not exceeded the limit. Once your limit is reached, you cannot top up any more but your regular CPF contributions can still go in. In this way, you will have more CPF money earning 4% interest compared with 2.5% in O.A Beyond share limit, you can buy bonds. You either buy these from banks or there are also bonds listed on SGX eg LTA, JTC etc. Not exciting but at least you get around 3.5 to 4% depending on the duration to maturity. Lately, banks are also trying to attact CPF money by paying 3 or slightly more than 3% interest rate for their FD. |
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rickytan
Veteran |
11-Oct-2006 20:17
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Hi billywows, I thought it is more prudent to leave some monies in the ordinary account in case one is out of job, or there is a pay cut, or cut in cpf contribution rate etc.... If one dont have sufficient funds in the ordinary account, he may end up having to pay cash for his housing instalment.... |
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billywows
Elite |
11-Oct-2006 18:40
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Hi YongJiu I had used my CPF to buy my home. And within the stock limit, of course buy stocks and insurance lah. No point leaving excess CPF to earn the miserable 2.5% OA interest ya. |
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rickytan
Veteran |
11-Oct-2006 10:30
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If one dont invest in shares/funds, can also consider transferring from Ordinary Account to Special Account to earn the 4% interest instead of 2.5%. However, the transfer is irrevocable and cannot be transferred back from Special to Ordinary. |
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tonersweat
Member |
11-Oct-2006 10:21
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Hi all I rather to place my money in CPF earning gurantee 2.5% . Altough I will not be rich and gurantee I will not loose money if I am going to put money in the hand of so call "FundManager" . I will get rich if I know what stock to pick. If I loose money I will not be so upset as I invest my money with the "FundManager". Some "Financial Advisor" even tell you to buy high risk unit trust if you want to earn extra pocket money. I wonder why MAS do not impose strick rules on all these "FundManager" or "Financial Advisor". They are making the ignorence people like us to loose money. To them, they just give excuse "market no good because of sars, etc". Do you believe? |
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