Ferrari Me (Ferrarilim)

Few days ago, I happened to meet my JC cohort.  I remembered that I ever saw her at Bkt Batok some 15~20-years ago.   While I did not chat with her, she seemed to be a full-time housewife bringing up her children then. Fast forward now, she just stood behind me in the food queue.    This time we chatted.   I was correct that she quit her job after 5-years to look after her 4 children. That day she was returned from NUH awaiting for her eldest daughter age 33yo delivery her first child. A grandmother soon.  I am happy for her.  ~~~ Long story short, her hubby is a full-time church staff, her elder son is budding Pastor. ~~~ I didn't want/wish to find out their retirement plans then.  Maybe got to wait for another 15~20-years to chat again? Sometimes this is opportunity.  Once over, one would have to wait or guess.

Dream on, wake up from reality? 1. I did a quick survey and pose a question to see people' reactions? 2. My question: "If one's passive retirement income "singly" can achieve $16k p.m. (or $190k p.a.)? 3. I saw surprised reactions: * some asked if one really needs so much to retire?  * few just lol. * few said it's impossible. 4. In one APEX webinar, passive income can be categorised as: * Core Portfolio (fixed income stream) * Satellite Portfolio (variable) 5. Either or both can constitute to the whole retirement passive income. 6. Everyone can set some realistic or dream target to work on it. Better aim then aimless. ~~~~ 7. For example, Core Portfolio (income stream) *CPFLife payout: $3k p.m. *CPF interest: $2k p.m. *Endowment + FD: $3k p.m. ($36k p.a.) *SRS payout: $1.5k p.m. ($18k p.a.) Satellite Portfolio (variable) *Rental income: $1.5k p.m. *Stock Dividend/Trading: $5k p.m. Total: $16k p.m. ($190k p.a.) ~~~~ My takeaway: 1. Set some realistic num...

 https://sg.news.yahoo.com/invested-10-000-st-engineering-100000695.html In 2014 , if you have invested $10,000 in ST-Engineering shares. In total, you would have received S$1.52 per share in dividends over 10 years. Based on the 2,500 shares that you own, you would receive S$3,800 in dividends. These dividends would have yielded a 38% gain over your original investment sum of S$10,000. Together with the capital gain mentioned above, you would enjoy a 51.5% gain over a decade which translates to a total gain of 4.2% per year. ~~~ My takeaway: 1. Hindsight wisdom. 2. But, let I check: * Anyway, depending when you bought it, its share fluctuated; say $3.70. * Now $4.72.  Increases by (4.72-3.7)/3.7 × 100% = 27% (no such 51% gain !!) 3. But one certainty about putting into CPF SA to earn 4%!! $10,000×(1.04^(10)) = $14,800 ($14.8k-$10k)/$10k * 100% = 48%.  Our SA did earn 48% if you invested 10-years ago. 4.  Even my INCOME SAIL-SP Policy paid $20k to get $29.9k in 10-...

Someone recently said that ILP n Endowments are no longer attractive.  I agree with him. But I am not so sure of indexed UL ILP which tracks the S&P500.  If hold till death, its bequest payout is good. I would say that it depends how savvy one uses the investment: 1. Disciplined form of forced savings which we otherwise may not be able to accumulate diligently. 2. Just another passive income tap, better than FD.  3.  RESALE W/LIFE plans > For me, I bought resale wholelife plans from young Assured person; solely from INCOME, to save as Cash "Critical Insurance" payout if needed when I surrender.  >These W/Life plans already cost breakeven based on their current actual Surrender Value (SV).  Their SV arestill tracking their projected SV Table based on the updated BI when I bought over the policies. >If I buy CI, its premiums are sinking fund, but I can still cash-out my premiums which adds to the SV. (not that I have choice, at my age, CI riders ...

  Part 2: Should I put money in my children SA? On far longer horizon, 50-years!! Effective very long-term compounded SA interest rate is 12%.  (1×(1.04^(50)−1)÷50×100 = 12%!! I wouldn't say risk-free for no one can predict the CPF future in next 50-years !!! In other words, $1 ---> $12 (after 50-years) $100,000 ---> $1,200,000 (after 50-years)!! ~~~ Critics may ask if CPF would still be around? I will reply if CPF would be around to pay us 4% p.a. for next 20-years?

  Investment perspective of OA & SA One colleague shared his view on the breakeven return rate for the below: 1. Should we invest using SA? 2. Should we invest using OA? ~~~ 1. Should we invest using SA? To assess if an investment is viable, we check SA @4% p.a compounded for 10-years. 10-year effective SA compounded interest: (1×(1.04^(10 years)−1)÷10 years ×100% = 4.8% p.a. In other words, for 10-year compounded at 4% p.a., for SA pays an effective rate of 4.8% p.a. ! Risk Free. Not many investment can guarantee payout @4.8% p.a My Takeaway: 1. Keep your SA balance in CPF.  Don't invest with it. I wouldn't. ~~~~ 2. Should we invest using OA? To assess if an investment is viable, we check 0A @2.5% p.a compounded for 10-years. 10-year effective OA compounded interest: (1×(1.025^(10 years)−1)÷10 years ×100% = 2.8% p.a. In other words, for 10-year compounded, for OA pays an effective rate of 2.8% p.a. ! Risk Free. Are there many investment which can guarantee payout @2.8% ...

 I spoke with few from my cohorts on their use of their OA: 1. REIT . I bought REITs. Small bites for now. (But firstly, with my T-bills maturing in Nov 24, I can invest ~$100k from my srs) 2. ILP . One invested almost all OA into Annuity; he mentioned AIA; 3. ANNUITY . One in Prudential product, maybe not all OA Balance. 4. OA . Few still keep in OA, to earn 2.5% 5. STOCK . One already invested all in local stocks as dividends. He mentioned Banks n Reits. 6. CASH . One withdrew all and self-invest. 7. PROPERTIES . One withdrew to buy properties for children. 8. O/S EDUCATION . One finances his children overseas education. 9. CASH . One was told to withdraw all in CPF as he was no longer a SG, including his RA Balance. 10. LG500 ETF . One couple is all into Endowus LG500!! 11. O/S PROPERTY . One invested in MY property. Caveat : OA balance has to put aside bare minumum sum of $20k which cannot be invested or withdraw. My takeaway : 1. Thanks to the enabling CPF for our retire...