Serious Saving $1m through CPF

[scroobal]

It was David when he joined him as partner that taught him about properties. From tax, Satpal started to focus on construction, development etc. He ended up acting for Malaysians Queks for properties in Singapore.

Satpal's Partner, Dr. Wong of Khattar Wong also made out like a bandit on properties. The top guy I know personally, who I shall not reveal here in this forum, has a portfolio of over 100 landed properties in Singapore, many of them in District 10. All bought through a couple of decades and placed in a ltd company held by their family. Imagine how anyone can have 100 landed properties in singapore!! The started when bungalows and semi Ds were less then $100,00 in outlying areas, in the good areas, maybe $250K.

 

[yahoo55]

The ridiculous home prices are killing many Sinkie families. Due to PAP's greed for higher land prices and higher construction-related levies, younger Sinkies have to pay through their nose and squeezed into overpriced small units that is terrible for family development.

Living costs are so high and homes are shrinking, yet PAP wonders why Sinkie birth-rate is so awful amongst younger Sinkies.


http://business.asiaone.com/news/dont-count-property-alone#sthash.H2UN3saj.dpuf

Don't count on property alone

The New Paper
Monday, Sep 05, 2016


Singaporeans believe - wrongly, I say - that the best investment remains property and it will eventually fund their retirement.

So downgrading becomes the buzzword.

I will get to the second way of downgrading later but the most common way is to sell your home and move into a smaller place. And this is where it becomes a challenge.

In 2014, Associate Professor Lum Sau Kim from the National University of Singapore said the use of Central Provident Fund (CPF) monies for housing payment had constrained retirement adequacy.

"If so much of CPF funds are dedicated to housing, then we have poorly diversified household portfolios... the nest egg that we have will be vulnerable to housing sector shocks and greater risks," she said at a seminar.

Consider this: A home loan of $800,000 can mean your paying about $1.3 million in all.For a $1 million home, that is $200,000 for the down payment, $800,000 for the principal and close to $300,000 for the interest. That is for a 30-year loan at an interest rate of 2 per cent.

 

[Bad New Brown]

There is a Home Protection Scheme to cover your HDB mortgages so don't be a fool to fully redeem your housing loan too early

 

[Boliao]

By the time Mr Loo was 34, he had hit the cap of around $120,000 on both accounts. Assuming the interest rate remains at 4 per cent, his savings and those of his wife in these two accounts could compound to almost $1 million by the time they reach 65, even if they choose to stop working a few years after they turn 34 and contributions to these accounts cease. And if they continue working until retirement, the combined amount would be much higher than $1 million.

Unfortunately, this is not only completely untrue, it is also a lie.

Assuming that both of them stopped work at 44 (so-called a few years after 34), they would only have $322k in SA combined and compounding the 4% interest on that amount till they are 65 yields only $495k. A far cry from the $1m mentioned. Technically, you cannot top-up to SA if you've already hit the limit.

The CPF minimum sum is based on the future value of $80k in 2003. In 2015, this amount is $161k and you can reverse engineer to get the effective interest rates used as 5.52%. Using the same interest rate, the minimum sum in 11 years would be ~$290k. Meaning the couple would not be able to much even if the goal post does not change by then.

Ever wonder why your CPF contribution is first allocated to Medisave, followed by Special Account and then whatever is left goes to Ordinary?

Also, read the following 6 Reasons not to Voluntary Top Up your CPF Special Account with Cash or CPF Ordinary Account

 

[Boliao]

In 2014, Associate Professor Lum Sau Kim from the National University of Singapore said the use of Central Provident Fund (CPF) monies for housing payment had constrained retirement adequacy. "If so much of CPF funds are dedicated to housing, then we have poorly diversified household portfolios... the nest egg that we have will be vulnerable to housing sector shocks and greater risks," she said at a seminar.

Yeah, right.. move along. Don't ever trust what local press reports.

 

[garlic]

The ridiculous home prices are killing many Sinkie families. Due to PAP's greed for higher land prices and higher construction-related levies, younger Sinkies have to pay through their nose and squeezed into overpriced small units that is terrible for family development.

Living costs are so high and homes are shrinking, yet PAP wonders why Sinkie birth-rate is so awful amongst younger Sinkies.


http://business.asiaone.com/news/dont-count-property-alone#sthash.H2UN3saj.dpuf

Don't count on property alone

The New Paper
Monday, Sep 05, 2016


Singaporeans believe - wrongly, I say - that the best investment remains property and it will eventually fund their retirement.

So downgrading becomes the buzzword.

I will get to the second way of downgrading later but the most common way is to sell your home and move into a smaller place. And this is where it becomes a challenge.

In 2014, Associate Professor Lum Sau Kim from the National University of Singapore said the use of Central Provident Fund (CPF) monies for housing payment had constrained retirement adequacy.

"If so much of CPF funds are dedicated to housing, then we have poorly diversified household portfolios... the nest egg that we have will be vulnerable to housing sector shocks and greater risks," she said at a seminar.

Consider this: A home loan of $800,000 can mean your paying about $1.3 million in all.For a $1 million home, that is $200,000 for the down payment, $800,000 for the principal and close to $300,000 for the interest. That is for a 30-year loan at an interest rate of 2 per cent.

Wrong calculation... 30-year loan @ 2%, effective interest rate one pays is 81%. For a $1m property, with 800k loan, $800,000 x 81% = $649,089 Interest. Therefore, a $1m property actually costs $1,649,089 nett, excluding yearly property tax, stamp duties about 30k, lawyer fees and monthly maintenance.

a straight-line calculation of 2% over 30 years is already 60% (480k), your 300k nett interest already calculate salah, bro.. Further more, past 40 years inflation for sinkieland averages 2.5%, there is no way over the course of the 30-year loan the interest rate remains at 2%. Maybe first 3-5 years banks attract with very low rates to lock you in, but subsquent refinance will prove costly and hence be prepared for higher interest rate for the tenure of the loan. Therefore, the article is right, investing in property is not the only way to grow money. REITS prove to be the smarter way to invest in property... ignore those past and huge profits one hears every now and then on the paper on condos and GCBs, those are minimum > $3m to begin with.. and we are talking about now.. At the end of it all, Sinkies really hard to retire... PRs buy HDBs and go back Jiu Hu relax, that is the bestest... :p

 

[frenchbriefs]

Wrong calculation... 30-year loan @ 2%, effective interest rate one pays is 81%. For a $1m property, with 800k loan, $800,000 x 81% = $649,089 Interest. Therefore, a $1m property actually costs $1,649,089 nett, excluding yearly property tax, stamp duties about 30k, lawyer fees and monthly maintenance.

a straight-line calculation of 2% over 30 years is already 60% (480k), your 300k nett interest already calculate salah, bro.. Further more, past 40 years inflation for sinkieland averages 2.5%, there is no way over the course of the 30-year loan the interest rate remains at 2%. Maybe first 3-5 years banks attract with very low rates to lock you in, but subsquent refinance will prove costly and hence be prepared for higher interest rate for the tenure of the loan. Therefore, the article is right, investing in property is not the only way to grow money. REITS prove to be the smarter way to invest in property... ignore those past and huge profits one hears every now and then on the paper on condos and GCBs, those are minimum > $3m to begin with.. and we are talking about now.. At the end of it all, Sinkies really hard to retire... PRs buy HDBs and go back Jiu Hu relax, that is the bestest... :p

Thanks bro,reits are definitely the smart way to grow money.even in usa which has undergone one major housing crisis,growth and recovery of US reits and real estate etfs are incredible,averaging nearly 9% returns p.a. over the last 20 years comparable to equities in the long term.

 

[Porfirio Rubirosa]

Not sure about Satpal wanting to flog that house to Ang Mo for a premium but he hit pay dirt because of a some sort of URA zoning issue which occurred after he had purchased the Anderson road property which was adjacent to his old Stevens road property. Think this was the start of his big fortune.

My understanding was that he wanted to flog the house to Ang Mo for premium but no Ang Mo takers. His agents told him that Ang Mos prefer swimming pools thus he applied to get it done.
.

 

[Porfirio Rubirosa]

Yes' Doc Wong' as David was known in the trade came from then then University of Singapore Law fac, specialty being property. Think Doc Wong was Satpal's class mate in law school previously. Satpal first came out on his own from Iras to set up a tax boutique law firm. Doc Wong joined him a year or two later. These 2 chaps were very canny shrewd lawyers with business minds as well, quite rare in those days. From a very small 2 partner firm the both of them grew it into the largest law firm in Singapore in the early 90s, overtaking the local 'magic circle' firms at that time like A&G, D&N etc...R&T had yet to go on its own expansion, WP was still in its infancy( with a young Menon, now CJ) and Suet Fern had yet to start Stamford. Also KW was the first to expand rapidly in the region as well.

Satpal handled the connections side and Doc Wong managed the firm. Satpal is not only close to Quek Leng Chan. He is also very close to the PAP establishment, probably started with Hsu Tse Kwang from Iras days and just kept growing exponentially from there all the way to OTC and GCT.

Unfortunately for KW the law firm, once Satpal got more involved in his own PE stuff and relinquished control of the firm, it went down hill and has never looked like returning to its golden period in the early 90s.

It was David when he joined him as partner that taught him about properties. From tax, Satpal started to focus on construction, development etc. He ended up acting for Malaysians Queks for properties in Singapore.

 

[Papsmearer]

Yes' Doc Wong' as David was known in the trade came from then then University of Singapore Law fac, specialty being property. Think Doc Wong was Satpal's class mate in law school previously. Satpal first came out on his own from Iras to set up a tax boutique law firm. Doc Wong joined him a year or two later. These 2 chaps were very canny shrewd lawyers with business minds as well, quite rare in those days. From a very small 2 partner firm the both of them grew it into the largest law firm in Singapore in the early 90s, overtaking the local 'magic circle' firms at that time like A&G, D&N etc...R&T had yet to go on its own expansion, WP was still in its infancy( with a young Menon, now CJ) and Suet Fern had yet to start Stamford. Also KW was the first to expand rapidly in the region as well.

Satpal handled the connections side and Doc Wong managed the firm. Satpal is not only close to Quek Leng Chan. He is also very close to the PAP establishment, probably started with Hsu Tse Kwang from Iras days and just kept growing exponentially from there all the way to OTC and GCT.

Unfortunately for KW the law firm, once Satpal got more involved in his own PE stuff and relinquished control of the firm, it went down hill and has never looked like returning to its golden period in the early 90s.

Satpal has always been business minded. That is why he struck out on his own from Inland revenue. If he stayed, he could have retired as the number 1 or number 2 guy there. I think he got it from his father. He ran his father sports store business when he was still in school, that is where the business mindedness came from. U are right in that Dr. Wong was the behind the scenes guy at KW. But he is very very smart. One of the shrewdest persons in the law and property field. Satpal did the networking, he is a very nice and genuine person, people naturally connected with him. Regarding his connection to the PAP establishment, yes he was at one time very close to them. But the declined offers to be an MP on more then one occasion. And for a time, he was actually on the PAP CEC, so he could have made himself a Minister if he wanted. LOL. I think for a while he might have tried to change the PAP culture a little from within, but after he got investigated by CPIB, as a warning, I think he gave up. I was a shocked that some one so high and connected had a complaint filed against him. Really, within the PAP, its a dog eat dog world. After he was cleared, I think he just concentrated more on properties for his own portfolio. When you practice law in singapore, u really have to sell your soul to the devil.

He is a really nice guy and he is one of the elites, although not as close to the PAP as before, that I really admire and respect. He earned every thing he got. Not born with a golden spoon in his mouth, did not rely on marriage or family, and did not become an ex general or some other shit like that to get to where he is.

 

[Papsmearer]

Unfortunately for KW the law firm, once Satpal got more involved in his own PE stuff and relinquished control of the firm, it went down hill and has never looked like returning to its golden period in the early 90s.

Actually, I think KW is coming back. They recently merged with Whithers, and they have some serious heavy hitters in the firm now. EW's daughter and grandaughter is there and not at Papa's old firm Lee and Lee. LOL. I wonder what that says?

 

[Papsmearer]

Not sure about Satpal wanting to flog that house to Ang Mo for a premium but he hit pay dirt because of a some sort of URA zoning issue which occurred after he had purchased the Anderson road property which was adjacent to his old Stevens road property. Think this was the start of his big fortune.

I can tell you Satpal does not care who buys his house. Scroobal is pissing out his ass on this one. Angmos can't buy landed property, so they have to use their company. But Satpal sold his house (the one with the swimming pool) for over $20 million if i recall. that was many years ago, and I could be wrong in the price. But damn hard for a singapore subsidiary to request angmo home office to approve a purchase this size. Usually, in those days it was Indonesian tycoons or Malaysian royalties and tycoons that can afford it. Not sure who bought it in the end.

 

[Boliao]

Wrong calculation... 30-year loan @ 2%, effective interest rate one pays is 81%. For a $1m property, with 800k loan, $800,000 x 81% = $649,089 Interest. Therefore, a $1m property actually costs $1,649,089 nett, excluding yearly property tax, stamp duties about 30k, lawyer fees and monthly maintenance.

Yahoo55 is correct in his calculations. Yours is wrong. Use an online mortgage calculator if you can't use an excel. You cannot simply use a standard EAR/APR calculator as interest is compounded on remaining principle and non linear. That is why it is bad for home owners to keep refinancing their loan. The interest is $264k (to be exact) on a $800k loan at 2%; not $649k.

http://www.propertyguru.com.sg/mortgage/calculators/mortgage-repayment

 

[scroobal]

Reminds me of your claim that Sentosa had hotels in 1982.

Foreigners can buy landed property if the Commissioner of Land approves. That has been the case since independence. The approval process is highly selective. Certain locations such as Binjai Park, Cluny were off limits. They relented with the Chinese Billionaire property tycoon for Binjai Park but he later became a Singaporean. I was surprised however that MasterCard previous CEO for AP an Australian was allowed to buy property in Cluny. He retired to Sydney but was appointed to DBS Board.

I can tell you Satpal does not care who buys his house. Scroobal is pissing out his ass on this one. Angmos can't buy landed property, so they have to use their company. But Satpal sold his house (the one with the swimming pool) for over $20 million if i recall. that was many years ago, and I could be wrong in the price. But damn hard for a singapore subsidiary to request angmo home office to approve a purchase this size. Usually, in those days it was Indonesian tycoons or Malaysian royalties and tycoons that can afford it. Not sure who bought it in the end.

 

[scroobal]

Have to agree with Profiro, KW is now a pale shadow of its former past. Both Deb and Carla, EW's daughters more or less run the firm. The granddaughter is not a lawyer, lost her way in academia is now a aspiring singer. None in the management team are up there. There is a lawyer in the management that is with PAP and has been doing town council work hoping to be MP. Carla recently got involved in the latest SCC management intrigue that even Rashid would have avoided.

Actually, I think KW is coming back. They recently merged with Whithers, and they have some serious heavy hitters in the firm now. EW's daughter and grandaughter is there and not at Papa's old firm Lee and Lee. LOL. I wonder what that says?

 

[scroobal]

Don't ever touch REITs even if someone holds a gun to your head. The management fee during good and bad times covers much of the cost and provides good income for the property developer, the risk is passed to the those who buy into REITs. If it is a blue commercial property, it will not be REIT.

Thanks bro,reits are definitely the smart way to grow money.even in usa which has undergone one major housing crisis,growth and recovery of US reits and real estate etfs are incredible,averaging nearly 9% returns p.a. over the last 20 years comparable to equities in the long term.

 

[Papsmearer]

Yahoo55 is correct in his calculations. Yours is wrong. Use an online mortgage calculator if you can't use an excel. You cannot simply use a standard EAR/APR calculator as interest is compounded on remaining principle and non linear. That is why it is bad for home owners to keep refinancing their loan. The interest is $264k (to be exact) on a $800k loan at 2%; not $649k.

http://www.propertyguru.com.sg/mortgage/calculators/mortgage-repayment

This is poor advice. At 2%, you will not find cheaper money anywhere else. Its better to refinance your home at 2% and invest it in something that can yield 6% or higher. The spread is your profit. If you have a successful business and want to expand, why go to the bank for a commercial loan. Its much cheaper to refi at 2% then borrow from the bank at much higher rates.

 

[Boliao]

This is poor advice. At 2%, you will not find cheaper money anywhere else. Its better to refinance your home at 2% and invest it in something that can yield 6% or higher. The spread is your profit. If you have a successful business and want to expand, why go to the bank for a commercial loan. Its much cheaper to refi at 2% then borrow from the bank at much higher rates.

Learn to read. I said it's bad to keep refinancing as mortgage contributions will go mainly to interest than principle in the early years of repayment. I did not say not take a loan or that loan is bad.

 

[garlic]

Yahoo55 is correct in his calculations. Yours is wrong. Use an online mortgage calculator if you can't use an excel. You cannot simply use a standard EAR/APR calculator as interest is compounded on remaining principle and non linear. That is why it is bad for home owners to keep refinancing their loan. The interest is $264k (to be exact) on a $800k loan at 2%; not $649k.


http://www.propertyguru.com.sg/mortgage/calculators/mortgage-repayment

Yup, my bad.. Shouldn't find nett compounded effective interest rate, should be decreasing balance..

 

[SNTCK]

Anybody can advise
SRS or cpf SA TOP up 7k, which one is good.
Mainly for tax relief purpose