Ferrari Me (Ferrarilim)

How to fight 3% inflation when you retire? Some say $1,000 per month is enough to retire; another say $3,500; yet another say $5,000.  And that is assuming no inflation effect that capsizes our plan. Assume if you can retire with $5,000 per month singly. How to do it? Using my default Vindeep Xirr calculator, this policy gives xirr: 3.57%. ~~~~~~~ Yr0: Age 47 (2012): Bought $100k policy. (Before my birthday at age 48 in 2012) Yr3: At Age 50 (2015): $5k payout cash started Yr4 to Yr11 (2016 to 2023): Age 51 to 58: $5k payout cash.   I have been collecting guaranteed $5,000 p.a. for past 8 years. Yr12 (now) at age 59 to Yr 19 at age 66 (= 8 years more before policy matures).  Yr20 at age 67: maturity sum $118k payout (which can be drawdown at $5k for next 23 years.) or $8k p.a. for next 8-years to account for inflation. Yr-21 to Yr-21+22: another 23 years drawdown $5k. ~~~~~~ 2.  My own retirement expenses This article, I hope to share with you how one can retire ...

Who says MY bank home loan is very high, more than 5%? Why rely on hearsay or rumour? Why not ask someone who owns MY property for more than a decade ago? Since TOP till now, my bank loan interest rate is fixed at 6.6%  - 2.4% = 4.2%; 6.6% being Basic Loan Rate (BLR) & 2.4% being fixed cost of finance. In other words, my MY home loan has been 4.2% fixed for many years.   (I jusy checked.  In fact my loan rate is now 4.05) Imagine 10-years ago, RM:S$ = 2.5; now RM:S$3.23   Translate to S$ loan interest, it's equivalent rate would be 4.2%/3.23 = 1.3%. So, 1.3% fixed rate, so long as the BLR is 6.6%. 1. Someone asks: "But that also means the actual value of your house has dropped via depreciating exchange rate." My reply: "Contrary, your purchased price is now discounted at 30% saving due to forex advantage for SG. 2. Someone asks: "But if you sell now? Current asset value…" I would reply, "It is always a blessing to enlarge our boundary and a good Pl...

Sharing on the outcome of my MrFerrari Blog postings (within this month). The hits may give some indications of  "What Interest 1M65?" Top-10 hits (with numbers) 1.  Can retire with $1k? (426) 2. Blessing our children (314) 3. Why hurry to retire ? (282) 4. Which CI would I buy? (137) 5. Endowment vs Resale Endowment (135) 6. FI at 40? (119) 7. $3.5k p.m. realistic or not? (88) 8. Crystal Ball for Longevity (86) 9.  Is Endowment better than our SA ? (79) 10. With $1.8M, can retire? (77)

"Overseas property Purchase checklist#1" makes easy Bettter to hear from someone who has own overseas properties for more than a decade;  live in them, manage them & even going through past few years of closed borders during recent Covid Pandemic. Buying into an overseas property, esp. your first, can be a scary plunge, going through the sales processes and financing.  It takes time to learn. It will be a long term investment, minimum 3 years; not like buying into stocks, where buy and sell within a minute! Off the cuff, I list out a reality checklist#1 to hopefully guide you into your first plunge into the whole new world of Plan B or/& proud property owner beyond our shores. This checklist is actually basic. Hopefully it helps you start-off your thinking before you plunge into it. Woes or Blessings you interpret.   Checklist#1 - Buying O/S Property 1. Why do you decide to buy an overseas property?  2. Which country & city would you wish to stay or ...

I have ever asked a MY working in SG. $3k p.m. can retire in SG? She hesitated and replied: "Hard." I asked again, "Can RM10k retire in MY ?" Without hesitation, she replied: "Can!". And that was 5-years' ago question. But I think that it is still Valid as $3k p.m. is a good buffer.    Imagine if I settle with $1k or RM3.2K p.m. retirement, the reply would be "Very Hard!" now with rising cost. Of course, one can still scale down to $1k p.m. (or RM3.2k p.m.).  But we dont treat ourselves badly in our last leg. Being frugal is one, but really, no $ no talk.   Old age has old age problem and cost, aggravated by inflation.  So don't anyhow declare FIRE blindly now and becomes someone problem 30-years later. Cannot hao-lian one. In other words,  1. If MY is the retirement road to take, maybe Act Now and find out more. 2. If it is ours & children Plan B or to follow Mr Loo for "Good Food", maybe Act Now and find out more. But make...

With $1.8M portfolio, can retire at age 55? Someone ever asked if $2M portfolio can retire comfortably in Singapore? (and assume excludes our home asset). I put in some numbers for clarity.  It is always easy to understand with illustrations. But it assumes retiring at age 55, where one can draw out from our CPF Annual interest. Generally, safely assume that $1.8M is distributed as follows, in 4 Taps: CPF: ~$1M (our most valuable asset) SRS: $100k (build-up for tax saving; lockup till age 62) Stock Dividend:$500k Endowment: $200k, with 3% annual cashback One can achieve $3k p.m. for retirement passive income. $950k cpf @age 55 RA: ~$300k (FRS: $198.8k ERS:$298k). No payout till age 65. MA: $60k (assume don't touch $) SA: $100k: $4k OA: $490k: $12.2k Total interest: $16k p.a. ($1.3k p.m.) (oh ok.  Drawdown SA then OA, we assume SA: $0 after 6-years and no SA interest.) srs: $100k (cannot touch till age 62). (After age 61, srs can takeover to contribute). $500k @3%,  Divide...

One of my cohorts shared on his recent NEW endowment policy bought with AIA after 1 Jul 2021. It was his first endowment bought. Jul 2021: Single Premium: $45k paid at age 57 After Year-10,  Projected payout of $1k p.m. (or $12k p.a.) annually every year from Year-11 to Year-20 (at age 67 to 77). ($45k becomes $120k.) I worked it out on the Xirr calculator to be compounded return of 6.6%; wow it is simply too very good to believe. Based on my knowledge, I shared that if, by then, it's actual payout is $750 p.m. or $9k p.a., he should be laughing every month, at 4.6% compounded xirr rate of return; (highly unlikely to get $1k p.m.) While I agree that AIA is one of the best performing fund for past few years, this projected payout is too good to believe. I also shared a similiar 20-year INCOME Revoretire of $60k premium, payout Year-11 to 20 payout of $9.3k p.a. or $93k p.a. ($60k will become $93k) I am not insurance agent.  But I spoke to him with 10-years experience buying 18 ...

XIRR or CAGR more practical ? For a layman who tries to invest, if he can gain more than Bank FD and don't lose his capital, it is already a blessing. Of course gain 1,000% is even better. Let me share my two simple calculators which I usually use; xirr & cagr for my investment return. From Web-search of Xirr & cagr: 1. XIRR stands for Extended Internal Rate of Return is a method to calculate returns on investments of multiple transactions at different times. 2. XIRR is an annualized form of return over a time period if the annual return is compounded. 3. XIRR is our personal rate of actual return on our investments. Don't really understand, nevermind. We read on. As for Cagr: Compound annual growth rate is a business & investing specific term for the geometric progression ratio that provides a constant rate of return over the time period.  Oops! Nevermind I show you by an example. ~~~~~ 1. I use both xirr n cagr to compare my investment and to cross-check. 2. M...

With CPF changes from Sep 23 for Senior (between 55 to 60),  this increases monthly contribution from max cap of $6,000 to $6,300 in Sep. For my cohort between age 55 to 60, our contribution rate is reduced from 37% to recently adjusted 29.5%; (that is, employer contributes $14.5%, employee contributes $15% per month.) From Sep onwards, CPF topup is 29.5% of $6,300 per month. In other words, now we can topup slightly lesser with this extra $300 per month into CPF. I usually try to topup my CPF annual contribution to its max $37,740. --- For those above age 55 to 60, this year 2023 total CPF contributions will be: Jan - Aug 23: $1,770 x 8 (= 0.295 × $6000 x 8) = $14,160 (for 8-months) Sep - Dec 23: $1,858.50 × 4 (= 0.295 x $6,300 x 4) = $7,434 (for 4-months) Assume Add:  3-mth bonus in Jul: $1,770 x 3 = $5,310 AWS in Dec23: $1,858.50 Total whole year CPF contribution = ($14,160 + $7,434)+ ($5,310 + $1,858.50) = $28,762.50 Additional $ to topup to $37,740 max = $37,740 - $28,76...

Further sharing on Resale Endowments. 1. Possible to share what are the things to take note before taking up the resale endowment policy?  Off my mind: 1. Budget  (if digestible). 2. Tenure.  Keep it short, within 5-7 years (if possible to lower risk) 3. IRR, learn to compute if it's true as per middleman computed. 4. Guaranteed vs non-guaranteed payout ratio.   This is dependent on insurer.  Only trust local ones, if possible.  If guaranteed can't even breakeven your total premium paid, then don't bother as it can be risky for me. 5. Those with annual cashback is better as it can lower your annual payout.  I usually reinvest the cashback, generally at guaranteed 3%~3.5%; I don't withdraw and collect it as higher maturity payout. 6. I buy policies long enough to trust that insures will pay nearer to higher BI.  But experience may be different.   7.  I choose TES Capital and Conservation Capital. These are two of the seven middl...

I just reserve to buy 2 more resale endowments.  They will add to my 9th resale endowments. Part1:  As an illustration of one of them. Simply, at age 47, I bought: First Insurance from GE direct: 1st policy of $100k; pay $20k p.a. x 5 year.  In this case, I talk about (one  $20k) bought in 2012, matured and payout ($29.1k) in 2023 (after 11years).   This is a new endowment which I bought from GE insurance directly.  At that time, I don't think that there is such Resale Insurance market yet. Second insurance. Resale Endowment: After 10-years, this first endowment matured last year. Started to payout on 11th year.  That's when I reinvest into Resale Insurance. This matured sum of $29.1k is then recycled to reinvest in 2nd resale policy, which will mature in 6-Yr in Year 2029. (My age 65). It's combined IRR: 4.47% Invested $20k,got $29.1k which then reinvest $18.4k to get $24.3k. In summary for Part1: $20k --》($29.1k - $18.43k) + $24.32k  $20k -...

It's a good and cool weekend R&R after a long week. When we hear of people able to retire with $1k p.m., we would usually react that it may not be adequate.  I agree that we should not judge on how low or high?   Agree that to each his own.  In the end, some may just cheer or jeer. Web-search survey shows $3.5k p.m. is possible to retire with in SG for a household, maybe with no car and staying in hdb or frugal expenditure ? I am a bit KS. If $3.5k p.m is enough, then: My quoting of $5k p.m. is to pitch higher than the typical norm that $3.5k p.m. is enough.  Generally some better-off say the realistic monthly expenses, for now, is $5k p.m.   I quite agree with this practical and realistic number. Better to aim high, but expect the worst. Certainly not $1k p.m. as my cohort had earlier shared and I shared earlier.   See my blog. For his case, he stays in condo, have aged dependency and married.   But for singles without any obli...

  FI at 40?  Can or not? Someone tries to compute the means to achieve $1M for FI at age 40. Say he started salary at $3.5k, which is about current glassdoor salary for some industry. I thought it is too low bar for Gen Z.  Some New Age starting pay is already near $6k. Anyway, who are we to judge if the bar is too low? To each, his own.  Good reminder. I had wanted to compute how much the under-40 can save $1M in CPF.  But realised that it is too academic and not practical.  Simply because they need to pay for their new home loan.  They also need to support new family expenses and children dependencies. That's life in SG or anywhere.   But count our blessing that our Income Tax bracket is capped at 22% for now. Count ourselves as blessed, enjoying food, shelter, job opportunity, security & safety in SG. New Age benefits, new age opportunities and challenges. Just one email and we are out of job for the New Age. To achieve FI at 40, it ma...

Those were the days our father brought home the bacon, gave us the education & provided us an environment for success. These days, I am glad that parenting go beyond what our parents had shown us; especially in the new world of uncertainty and job market competition. We cover our children with insurance, topup their CPF,  ... best parenting plan for them... As I am reading the WORD, "price" and "prize" came to me. Let our gifts to our children be a prize to them; and not be a price they have to pay. Then how do we tell if it's prize or price？ Simple.  Does this gift bring warmth, love and bonding? or tear family apart ? Make it a blessing; not a burden to them. Remember, Wealth Whisper; just don't tempt the evil ones.

 New endowment vs Resale endowment Thought it would be good to share. I like Resale Endowment better as it fast-forward policy maturity and better payout due to shorter tenure takeover. ~~~~~~ 1.  What is difference between Annuity n Endowment?  From web search, most annuity plans pay a regular income for as long as one lives. On the other hand, endowment plans are typically insurance policies which help you to save. However, the difference between such plans is getting increasingly blurred as insurers respond to market demands and become more creative with their product offerings. It is now common to find Endowment plans that have features which also pay a regular income over a fixed period. ~~~~ 2. What brands of annuity do u recommend? This era I wouldn't buy annuity for now. T-Bills and FD returns are better for now. I have leveraged annuity,  like GE/PLG6 or PLR6.  (I earlier bought PLG1 & PLG3). Pay in single premium & loan the rest. You can pay in...

 What high inflation? No scare! After 55yo, CPF monthly contributions, salary cap at $6k p.m @29.5% rate = $1,770 Employee: $900 p.m. (15% of $6k) Employer: $870 p.m (= 14.5% of $6k) Total CPF mthly contribution : ($900 + $870) = $1,770 Annual CPF contribution: $1,770 × 13 = $23,010 Imagine one works from 55 to 63: It adds: $23,010 × (62-55) = $161,070 over 7-years For a working couple , combined CPF earning : $161,070 p.a. x 2 = $322,140 p.a. for 7-years . Critics would say still need contribute into MA too.   But no matter, keep it simple.These additional contributions earn annual interest; we yearly use it to topup our MA or even RA. With $322,140 from working from age 55 upto 63, the retirement options are plentiful. In summary,  -if health permits,  -work half-time allows,  -still keep salary above $6k singly, or $12k couple, you are ready for Fat R; this alone can fund 5.4-years @$5k p.m household expenses. ($5k pm x 12 mth) x 5.4 years = $324,000). ...

Recent T-bills high 4% interest rate may have created much turbulence in Insurance Industry; esp. in Annuity n Endowment sales.   Coupled by MAS guidelines of triple whammy lowering of the lower & higher Illustration of Investment Return from: 3.75% ~ 5.25% 3.25% ~ 4.75% (from 1 Jul 13) 3.00% ~ 4.25% (from 1 Jul 21) Buying of new endowment policies are not so attractive now, aggravated by high T-bills interest rate. While insurers can say these  illustration benefits are just guidelines; insurers can still give higher payout above these higher illustration;  Say what you like, which insurer would be so generous to pay higher than what they are obliged to?   So far only NTUC Income ever did it, during Mr Tan Kin Lian era.  It ever gave higher than the 5.25% illustrated for 20-year policies. It went on the Papers. Tokio Marine has never cut its bonus for past 110 years. I am no insurance agent.  But if I were to buy endowments again, beyond my c...

Which Critical Illness Termlife would I recommend?  Four TermLife policies with CI which I would recommend: 1.  Mindef-Aviva Group Term Life .  Top recommendation, but good for upto 60, even though it can costly cover upto 70-yo.  Need read T&C for eligibility. Star Best Buy. 2.  Singlife-Aviva My Protector .  Perpetual 35% lifetime lock-in premium discount. But pay for whole lifetime at lock-in premium.  Star Best Buy.  (Note: Last year was 35%; this year perpetual discount was reduced to 30%). Medical just gets more expensive over the years. 3.  Ntuc Income VivoLife-350 or -180.  But it's name has since changed "Star Secure".  It's premium has risen.  It is limited pay over a desired tenure, say pay 10-year for lifetime coverage; can tailor or tradeoff cost between early CI & Advanced CI.  This is good for our children as they need not pay after tenure and covers their wholelife. Anyway, medical cost will always...

  https://www.businesstimes.com.sg/international/asean/malaysia-refresh-appeal-iskandar-southern-growth-corridor-singapore Hopefully this includes High Speed Rail to Melaka and KL What a game changer to come.

  Someone who is my cohort just retired last year.  He candidly shared that his average monthly expenses is less than $1000. Some background that I gathered: 1.  Married with a working adult child. 2.  Stay in condo; ever spinned n profited from few property sales. 3.  Still need to support aged parent with 4 siblings. 4. No car. So I did some quick calculation to see sure or not to retire with $1k monthly expenses. Think his $1k p.m. is thin retirement. Utility & PS, water : $100 p.m. Telco: $20 p.m.  MCST: $200 p.m. (where got so low maintenance?) Medishieldlife: $800 / 12= $66 p.m. (can pay by CPF-MA) H&S Shield Plan: $1200 / 12 = $100 p.m. (excluded $680 deducted from MA) Support his parents: $2000/5 = $400. Basic fixed monthly overhead:  100+20+200+100 + 400 = $820 With just $1000 p.m., net available for meal = $1000 - $820 = $180 p.m. (or $6 per day) Not forgetting that he just retired, he need to fully pay his last year personal income t...

I had my late dinner yesterday at IMM, thinking it was still open; but most food shops have closed for the day; except for noodle shops & MacDonalds. Wonder if anyone faced my makan dilemma; to choose: 1. A plate of standard dumpling wanton noodle, nett $10.50 dine-in, or 2. A Pontian wanton noodle $5, Mac Apple pie $1.70, choco-cone: $1.20, Teh-O: $1.80; nett $9.70. Guess which one I chose? And which you would choose ? On my way back, glad to meet Ah Loo and family walking in the Park.  His hair has grown. Some sharing: Think city living offers so much food choices that we become more picky. For someone who shared his trip in Yunnan high mountains then, where choices were limited to only bread and buns for breakfast.

  My reflection learnt from last year: 1. Whisper your boast;  Whisper your health; Lest the Devil be envious of it. 2.  Watch where your treasures be, there your heart will be also. 3. Hold on to your loved ones; that they will know your care. 4. Be content with all you have; then you will find His joy and blessing. 5.  Healthy Lifestyle does not guarantee good Mental capacity. 6.   Watch your Health and it will watch yours too. 7.  Don't overwork Health; Lest it will overdo you. 8. Learn to be a gardener; you will see Nature around you.  Others will see nature in you. 9.  Water is my best medicine.  Rest, my generator. And toilet, my doctor.

Allow me to share my ILP Prudlink and traditional Manulife Signature Protector wholelife insurance which I bought for my children in 2008. Buying ILS insurance during Recession ILP is investment link policy.  Interestingly, it so happened to buy these policied during  Global Financial Crisis of 2008-2009 is widely referred to as “The Great Recession  due to Sub-prime Housing Bubble burst.   Over the next few years, the Recession persisted.   These few years of Dollar-Cost-Averaging (DCA) premium paying of buying into the subfund units were cheaper.   Encash; not policy loan; not surrender my policy. By the time the global stock market covered, The subfund units recovered. I  sold some of my ILP units. In 2012, I managed to cash withdraw from my Prudlink wholelife insurance plan.   Then I use it to buy a leveraged GE PLG1 endowment of $150k.  I borrowed $108k, paid a single premium $42k. Today this PLG1 is in its 8-year, ne...

Anyone wants to build up a "Endowment Tap" for Retirement Passive Income? Me! But how?   People say Endowment payout will not be even better than interest earned with our CPF Ordinary Account which earns annual 2.5% interest rate. Some would say better to invest in high dividends paying stocks and Reits. Others swear by Property or Commercial Property investment to collect steady flow of rental income. I would say why not invest in all?  Er... if you have all the monies. -------- Tenures My Endowment investing journey approach is nibbles in multiple small bites, accumulating new and resale endowments and paying up premiums regularly over 10-years, since 2011. Premium Types To date, I have accumulated 16 endowments; of different types from various insurers, local and f foreign; leveraged or through single or limited pay premiums. Total premiums invested To-date, I have built up a tidy sum of $700K premiums; bulk of them had already been fully paid. My fruits - Payouts Afte...

Which should I choose for my CPFLife; Basic, Standard or Escalating Plan? I wouldnt agree that Life Escalating or Std Plan makes much better sense.   1. Longevity means sure live beyond 94. Only when you sure able to live beyond 94 (+ 1 month) old, you gain.  Can anyone sure guarantee to live beyond 94? Escalating Plan breakeven with Standard Plan total payout at age 94. Area under the Payout-Tenure curve. I vaguely remembered counting the area under the curve during CPF Roadshow. 2.  Std Plan vs Basic Plan total payout at Std Lifetime Bequest at 85 yo in SG, difference sum of: ~$200 p.m x 12 mth x (84-65) = $45,000. (Should be less than $200 p.m. payout difference; but no matter for more buffer). If you can save this amount, and drawdown, don't even need to consider Std Plan.   And with $45,000 topup in RA @4%, you earn perpetual $150 p.m. for lifetime. (=$45,000 x 0.04/12). In addition, you save your $45,000 more for bequest.   Also Basic Plan b...

With God blessing and good health, imagine that we are able to topup our children CPF SA with this $216k in their 20s; (see my earlier blog of deriving $216,000 [= $18,000 p.m × 12 mths]. Just an example: [That is to save one year of salary, assume $18k p.m.  Don't laugh that my pay is so low or so high.  Earn more, save more.   Earn less, save less and work longer.   It can be household combined monthly salary. It can be just an illustration. ] In 35-years time, at their age 55, their CPF SA would be $850,000, being [=$216,000 x 1.04^35]. In other words, if health permits, survives any toxic or stressful work environment, why hurry for early retire? say wait a year or two? Bless them a little more, would you?

Indeed the work income usually constitutes the key contributor to our passive income. When we started work past 35-year ago, say our salary was $1.8k p.m. If our salary is now maybe $18k p.m, the compounded internal return (6.8%) would be: $1,800×1.068^(35) = $18,000 p.m. At older age whereby one is able to save the full annual salary, ($18,000 x  12) = $216,000;  assume bonuses n 13-mth pay the income taxes, CPF contributions n insurance premiums; whereby esp. that we have no dependents or loans. ----- Just to work an extra year, would support your retirement @$3.5k p.m. for 5 years [=($18000 x 12) / (3,500 x 12)]. That's why retirement later, even postponing for one year, can buffer our retirement expenses for 5-years. ---- One would ask; your pay so high ! where do you work ? It can just be an example lah.  Scalable.... Earn more save more; earn less save less n work longer. It can also be combined household income.

  Just sharing on Paynow. Usually we use Paynow by keying Recipient phone number to pay. But when institution uses Paynow to pay "us", they pay by keying Recipient Nric number to receive.   If your Paynow setup did not register your Nric link to Paynow, you won't be able to receive the money from the Institution. In summary, use online to add your Nric in your Paynow Profile Setting.  Only then, we can receive by "Nric way of Paynow" instead of Phone number. ----‐ Why I learn it?   Recently one of my policies has matured, Ntuc Income was unable to send my Matured Sum through Paynow to me; because I didn't setup to register my Nric with my bank Paynow. With this Matured sum adds to my annuity yearly payout. My passive income (from "Endowment Tap") is guaranteed sum of $67k + $3k p.a. from my leveraged endowment for this year.