Saturday, January 4, 2020

The CPF Context Shows Exactly Why We Remain a Backward Society

This week alone, I've probably seen more than 50 cases of individuals taunting off their CPF publicly on various online portals and forums that appears on my message feeds, without bothering to explain the rationale of why they did so.

I'm sure the scene was meant to be inspiring but taken out of context on a larger picture, it seems a tad sad to mention because it shows once again why are a society of competing in the first place.

Being competitive was one of the main traits that has been engrained in many of the Singaporeans' mindset. That has kept most people going for more each time in a hungry world where we want to simply be better than our neighbour at all other expense.

From young, we are constantly being challenged to race ahead of others from grades to the number of tuitions to the type of holiday destinations that we go.

The benchmark for success for many people is their peers and neighbours and this out of tune illustrations will prove why it is a damaging bridge to the society.



Take this 3 cases below for instance.

Surely, your first reaction is they must have done pretty well over the years to have accumulated a sizeable amount of CPF balances. Assuming a maximum contribution of $2,220 per month based on your employment, you will minimally need to be working between 3.5 to 4 years based on your profile.

But that's about all the story it tells.

A person who posted these balances without explaining the rationale and information such as history of utilizing the CPF or whether the person has bought a house or have children will then be meaningless because the context can vary a lot.

For instance, what is the rationale of case 1 and 2 for having so much in their Special Account? Were they single at the time they made the transfer from OA to SA? Were they someone who were not planning to get married, purchase a house or have children? Or were they someone who has just cleared off all their outstanding home loans and now making a switch to accelerate their FRS retirement needs.

What if this person from Case 1 with a lower CPF balance but is younger and owns multiple assets and higher equities outside?

To have someone who writes that they are earning a free $5k, $7k, $10k or $25k interests from the government that are "risk-free" without explaining the context just irked me off because it doesn't add any sort of value to the public reading it for the first time other than the intention to show off.

Most of these stories are then taken out of context from the general public who brings about the wrong awareness of what CPF  truly has to offer.

From one of the reader that I've talked to recently, I also get a feeling that the CPF 4% interests narratives on the Special Account has also been overly emphasized and taken out of context from people who were following their peers blindly and were actually unsure of what they were really doing with their lives and having the things that they want or not.

The chase for higher returns and what every of their random online peers are doing push them into making some of these decisions that they might feel is not the best at their stages of lives.





Case: CPF 1

Case: CPF 2

Case: CPF 3

To be on the fair side, I think there's a good reasonable amount of people who actually bothers to explain the rationale of each allocation that they put inside the maths of computing their CPF balances on the path to eventual FRS needs.

And this is what we need especially when trying to reach out to a larger audience beyond someone who is already savvy in the personal finance space.

But judging by the amount of one liner post in the past 1 week shows exactly why the Singapore finance community remains a backward society despite the many recent successes of a growing community.

It forms a tribe and a new embryo of circle where people motivates one another through competing against one another and wanting to be better than peers of X age by Y amount.

In fact, there's hardly anyone who has actually benchmark against oneself over how that person has done differently over the years and what sort of circumstances led to that decision.

Instead, the focus has been competing for the highest absolute amount of CPF accounts balance with the most amount of top-ups competing against the benchmark of peers.

This is a first world problem and in another form of cannibal competing.

Thanks for reading.




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21 comments:

  1. Increase competition among bloggers on voluntary CPF top up and OA to SA is the current goal to reach FRS. :-)

    ReplyDelete
    Replies
    1. Healthy competition if can be viewed and done correctly.

      Delete
  2. Great article. I had been following your posting for many months now.
    interesting article to read:

    https://fiftharrowinvestment.blogspot.com/2019/12/alibaba-hk-ipo-investment-profit.html

    ReplyDelete
    Replies
    1. Thanks William

      Great article on Alibaba.

      Delete
  3. OMG !! Please don't "unfriend" me if I show my CPF outstanding amount and interest earned in 2019.... hahaha ... Cheers !!
    :D

    ReplyDelete
    Replies
    1. Hahaha STE, people know what's your current status profile so they will understand why you make certain decisions.

      Delete
  4. Got too much cash on hand and has No other means of deploying cash for next 1 or more decades; then it is good to dump into CPF as 10, 20, 30 or 40 long-term government backed bond

    ReplyDelete
    Replies
    1. Definitely a good way to spread out the equity risk if one is already heavy weighted to one side.

      Delete
  5. Disagree strongly. I think the sharing is good fun and inspiring. Writing a long blog post pooh-poohing other people sharing their achievements with a click-baity title (I took the bait, I know) is what signifies us as a backward society.

    ReplyDelete
    Replies
    1. Hi Anony

      The sharing here is inspiring only if it is backed by providing good reasons, such as why at this stage in your life you decide to transfer from OA to SA.

      The same sharing goes to people who just posted their profit returns without letting anyone know what stocks he buy and why he buy them, I don't see how that's useful to anybody.

      Delete
  6. fuck singapireans

    ReplyDelete
  7. The 'grandfather' of posting CPF amount has to be ASSI. He seems to have posted his CPF every year since Jan 2015 (those with better search skills might even find earlier posts).... Remember, if ASSI can do it, so can you!

    ReplyDelete
    Replies
    1. He wear white is it? ;)

      Delete
    2. Hi Hello World

      AK did well to educate the crowd actually and he gave full disclosure of his reasons much earlier in the years where he gets so much OA and why is he making the transfer and are maximizing his contribution.

      Delete
  8. There is an unwritten hierarchy of CPF members based on the amounts they have in their accounts.

    At the very top tier we have the CPF OA millionaires. These people have $1M or more in their OA and maxed out their MA to $60K. If they are 55 yo and above, these top tier members also maxed out their RA to ERS. I am here and my 2019 interests from all accounts is $45K. After 55 yo but below 60 yo.

    Just slightly below this tier is the OA millionaire like CW.

    And the 2nd tier comprised the CPF millionaires. Those who have a total of $1M or more in their combined CPF accounts.

    There are many other lower tiers below the CPF millionaires.

    One also cannot conclude that CPF OA & CPF millionaires do not own properties / condos etc. It really depends on individual earning capabilities.

    ReplyDelete
  9. Compare yourself to yourself rather than to the world.

    Chances than U will be happier and successful.

    Of course just learn from the World, what U can learn from the World.

    Period.

    ReplyDelete
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  13. I guess not everyone is eloquent or good writer thus showing the CPF numbers might be the best evidence... There are many who without understanding the mechanics of CPF system and because of pure biasedness toward the governing party (monopolistic party) chanted 'return my CPF''...I used to be one...

    ReplyDelete
  14. Hi Brian!

    Your posts are addictive and please keep us updated with more of your content.
    You are one of the reason why I decided to start out blogging on my own investment journey to financial freedom as well and I look up to you like a mentor. I was taught from young that investment is risky like gambling by my parents.. until i started researching more and chanced upon your blog. My end goal is to educate and share with as many people as possible so that it is not "too late" for anyone to start / try investing on their own.

    If you don't mind, I hope to exchange blog links with you.

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