Becoming CPF Millionaires Forum Talk:
($1M at 65, $4M at 65, $5M at 65) - By Loo Cheng Chuan.
Now learn here how you can by maximizing your options for your CPF accounts .
Winning strategy.
Becoming A CPF Multi-Millionaire.
Disclaimer:-
1. I don't work for the CPF Board nor the Government of Singapore .
2. I don't collect a single cent for doing this sharing.
3. I'm doing it for non profit and this is really a social movement, okay.
First, we need to address this issue, okay.
●The CPF is one of the most powerful money making machines for Singaporeans/ Permanent Residents of Singapore ๐ธ๐ฌ, yet sadly misunderstood by many people.
●It helps many CPF members ( mostly Singaporeans) to be able to make a lot of money.
● And as a result of this misunderstanding, many Singaporeans missed out their golden opportunity to make lot of money out of their CPF contributions. Okay.
●I am here to address this myth and also to tell you as a CPF member, how I made more money using CPF monies, so that many of you can change your attitude towards your own CPF accounts.
●I know some of you may not like the CPF Board. And some of you also don't like the CPF policies. I understand. Some of you don't even like the ruling party and government of Singapore. I understand, okay.
●You don't need to love the Singapore government. You don't need to love the CPF Board .
●You just need to love their money. Okay.
●So, the CPF Board gives you money , will you take or not take? Okay.
●So, there is no emotion involved in this, okay.
●Either something is money-making or it's not money-making for you, okay.
●So, you do not have need to have any emotional judgment about this CPF Board.
●History . 1997 — 2001. I was hit badly by a lack of financial knowledge.
●1997, Singapore was badly hit by the Asia financial crisis. Okay. It's only on par or matched by the recent pandemic crisis. It was really really bad, okay.
●I was made a bankrupt at age 24 years old, basically. Grateful that I was saved by my father who was a school teacher, okay.
●And from that day onwards, I realized that, hey, you know, I really got to beef up my financial literacy. I met a financial mentor, and that changed my life. Okay.
●And my financial mentor taught me about how to build and about compounding financial literacy.
●2001 — 2003: I built my financial safety net.
● This is the concept of compounding:
COMPOUNDING
$1 at 1 % over 30 years = $1.35
$1 at 4 % over 30 years = $3.24
$1 at 8 % over 30 years = $10.06
$1 at 10 % over 30 years = $17.44
●For some of you , you may know compounding . And some of you, compounding may seems very far away.
●In a simple way, everybody can understand, if you put your money in something with higher interest for 10 years, initially it is boring; but after sometimes the returns you get will go exponential. And that is money-making from your saving as you go on with your life.
●COMPOUND INTEREST IS THE EIGHTH WONDER OF THE WORLD. HE WHO UNDERSTANDS IT, EARNS IT. HE WHO DOESN'T, PAYS IT. — ALBERT EINSTEIN
●Okay, if you don't understand compounding, you will give it (money) to the person like me, okay, who understands compounding.
●So, you better understand compounding because it's a secret to money-making in a big way. Okay.
●So , I was looking around the world ๐ for what is a good way to make a extra compounding interest rate.
●The only good way is the CPF contributions . Fortunately or unfortunately, okay.
●HOW YOUR CPF SAVINGS CAN GROW AT UP TO 6% WITH EXTRA INTEREST AND ADDITIONAL EXTRA INTEREST.
●[+1% ADDITIONAL EXTRA INTEREST
On the first $30K of combined CPF balances (up to $20K from OA)] after 55 years and above .
●Before 55 years old; [+1% EXTRA INTEREST. On the first $40K of combined CPF balances (up to $20K from OA)
●2.5% INTEREST; Ordinary Account (OA)
●4% INTEREST; Special & Medisave Accounts (SA & MA)
●4% INTEREST; Retirement Account (RA)
● The CPF has three accounts when you're a member below 55 years old.
●And when you're post 55 years old , you have one more account, Retirement Account.
●There’s an Ordinary Account that .makes you 2.5 percent interest .
●And then there is a Special Account which makes you 4 percent interest.
●And then there is a Medisave Account which also gives you 4 percent interest.
●Many of you do not know that even Medisave Account gives you 4 percent
●So, 2.5%, 4%, 4% and then somewhere along the years the government decided for the first $60,000.00 to give you one more percent (1%) interest.
●So, effectively, for the first $60,000.00 you know the Special Account, you can get 5 percent interest.
●Now 5 percent at least is risk free, you know, is risk free.
●And then you know when you are above 55 years old , with an additional $30,000.00 , they give you another 1 percent interest.
●So, it's 46 percent interest.
●Now, somebody will say, ah lah mak la, the government take my money and lock it up, you know, and after that don't give me back.
●If you think about it in a more positive way , sometimes we locking up our money and letting it to grow , is actually a good thing.
●So that your itchi hands won't go and touch it . And go withdrawal and stupidly go and invest in some things that cause you lose money.
●So, CPF interest rate is a powerful tool to let it compound , okay.
●And I found that wow you know .
●At that point in time, 1997—2001 , you know, even in 2003, everything looked so gloomy, you know, there was Asia financial crisis 2001 , there was dot.com bust and then there was the September 11th bombing crisis and finally in 2003 there was the Bali bomb blast. ๐ฃ
●Everything looks so bad , forget it, just throw money in the CPF , and then live life as usual. Okay.
●And this is the secret formula, okay. To how I create a financial safety net with CPF;
●How?: I topped up /maxed out my Special and Medisave Account as well as my wife's .
Compound: $130,000 x(1+0.04)^35 years x 2 person
Results: S$1 MILLION
●So , this safety net has changed my life.
●So at about 30, me and my wife decided we will max out our CPF Medisave account. Okay.
●So how do you do it is that you at that point of time , the CPF minimum sum, that means the maximum you can put in is about $100,000.00 . Okay.
●And the Medisave at $30,000.00. So we max out both. And then , you know, I'll max and then my wife at that point in time was thinking about it. So I maxed it out first. So end of the year I decided , the beginning of the year , early January CPF board issued a letter and says this amount of interest you have.
●I say , "Whoa so many ". I waved the letter in front of my wife, neh neh neh neh neh , teasing her. See I got so much.
● Well, then my wife said, "I also want" , you know. So, both of us race .
●We race, we race , we race, compete with each other and eventually, you know, both of us hit the max in our CPF contributions.
●If you have, at 30 years old, have $130,000.00 and it compounds at 4 percent interest rate , do you know what you will become when you retire at 65 years old?
●Yes, you become $1 Million combined, husband and wife. Okay.
●Somebody say, ai yah ! This one hau siau one , you know.
●You know, this combined $1M is not alone.
●But combined you have $1M. You know.
●Some of you say , "$1M is not enough for me."
●Okay, for you maybe not enough .
●I think for 90 percent of Singaporeans it is more than enough, okay. Because most or majority of Singaporeans do not even have anything close to that amount at retirement because they simply didn't know about this formula and didn't apply it.
●So , me and my wife have decided, now we have put in a minimum sum. And from that day onwards, we know that at 65 years old , we will have $1M waiting us in retirement.
● But that assumes that we do not need to work forever, from 30 years old to 65 years old , and we still have $1M.
●I think some of you catch no ball, so I am going to talk about this again. Okay.
●At 30 years old, if you put $130,000.00 into your CPF accounts, and your wife puts $130,000.00 into her Special Account and Medisave account, you do not need to work anymore for the rest of your life. And you're still at retirement at $1M.
●Which means that if you continue to work , you will accumulate your CPF monies, right? You think you will have only 1 Million dollars when you retire at 65 years old, okay.
■ Total CPF at 48 years olds today :
S$1.5 M
●So, as for 48 years today. okay. My wife and I have S$1.5 M in our CPF accounts.
●At 45 years old , we already crossed
$1M , you know. And the accumulation go very fast, you know.
●Just going up, you know. Because we are at after the initial ( boring slow) years, very flat. Now we are at this band right now. This is how compounding works.
●At the rate we are going, you know, I'm now 48 years old , going to 49 years old this year , so what will we have in future, you know. Okay.
●What will our combined CPF accounts be in future , you know.
●Let’s make some predictions. Okay. What we ... so during COVID-19 time was very good because I have a lot of time to stay at home , use spreadsheet and calculate.
●So when I first work out on Excel to predict my CPF when I reach 65 years old , the numbers came out , and I was shocked.
●So I didn't believe it. So what I did was that I asked my wife and Excel experts to verify my Excel sheets. Okay.
●I sent it to a group of 13 experts. And they help me verify my numbers, you know what. My calculation turned out to be right. Okay.
●In fact, it was slightly wrong on the low side, okay.
●Most of them calculate a higher figure.
●So what will my wife's and my CPF combined be at 65 years old? You'll be S$3.5 M at 65 years old.
■Assume we (both husband and wife) work till 65 yrs old...
Total Projected CPF
S$3.5M
-All CPF contribution into OA / SA / MA uninvested
-Monthly Income of S$6000 with 13th Month AWSCPF Contribution Rates and Interest Rate unchanged
-Ignored current CPFIS Investments
-Including CPFIS balances would add $175K (0% gwth/yr) to $600K (7% gwth/yr)
●Assuming we do nothing different. Okay. We continue to earn our income . Okay.
● Don't need to be high income. A monthly income of $6000 and above. Okay.
● Above $6000 is useless, because the CPF care only about up to $6000 . And the rest of it will continue as usual. Okay.
● Take note , whether you are high income or low income, it doesn't really matter. Okay. Because the government has put in a lot of check and balances to make sure the rich people do not take advantages of the CPF .
● So this one is not so much an ability of the rich, by its ability or whether you start early and , you know, your know-how. Okay.
● So as long as we continue to earn and do our job and continue to contribute (as employee) , let it just progress , we will have $3.5 M . Okay. And by the way,
● I am not going to let my Ordinary Account (OA) sit there and do nothing. You know. Only at $2.5 M just not so exciting anymore.
● What if we in ested all our OA into S&P500 or equivalent?
● What I actually have done , is that I invest quite a lot of my OA into S&P500 ETF¹, okay.
[¹ Note: Exchange-traded funds (ETF) that track the S&P 500 are the cornerstone of countless investment portfolios. Over the long term, it’s close to impossible to build an investment portfolio that outperforms the S&P 500, which is why it’s used as a basic investing benchmark.
Trillions of dollars are invested in funds that track the performance of the S&P 500. ]
● Let’s say hypothetically, you know, my wife and I all our OA monies into S&P500 and assuming that the return would be a 7% , which is even much lower than their historical return over their last 100 years. Okay .
● So what would be number be? Okay. Instead of $3.5 M, you will become over $5M . Fi e over millions dollars.
■ Assume we work till 65 yrs old + invest all our OA into S&P500 or equivalent at 7% returns
Total Projected CPF would be
S$5M+
-All CPF contribution into OA invested into S&P500 or equivalent of 7% CAGRSA / MA uninvested
-Income of S$6000 with 13th Month AWS each
-CPF Contribution Rates and Interest Rate unchanged
-All CPFIS Investments grow at 7% CAGR
-Housing mortgage to be paid in cash
● That's how you become a multimillionaire just using a CPF . I'm not even talking about using my cash . Okay. I'm not talking about my house. Or any precious things.
● My point is that just your CPF alone , my wife and I combined, if we put our OA monies into S&P500 fund, which we do, by the way you know, you will go up astronomically to $5 M +. Okay. Five millions plus dollars.
●When I make this discovery and I wrote an article about it , you know, wow it generated a lot of interest among the readers.
● Becoming a CPF multimillionaire and then someone actually told me , theoretically, limit is not five millions dollars combined. It's ten millions dollars per person. $10 M .
● I actually went to calculate, and there is an article that published out. Okay.
●So, really you know now, that is pushing the limit too far. So may e five millions dollars is a too big a stretch.
● Someone says you know I always lose money in stock market. Okay. Don't invest too much in stocks market, okay.
● I think four million dollars by 65 years old is very achievable. Okay. If you follow my journey. Okay.
● I'm really on a journey there. I'm already reaching there. Okay. I'm only 49 years old now.
● So having $4M in CPF by 65 years old is achievable.
● 4 million by 65 is achievable!
● Use the CPF Predictor calculator to see what your estimated CPF balance would be at retirement, 65 years birthday ๐.
● From there that will shape your personal financial outlook.
● So that's how I built the multi-layer income investment approach. Okay.
● My Financial Gut was built up ...
● So from year 2001 , after I built my financial safety net , I know that at 65 years old I have few millions dollars , my financial gut was built up, I was gutsy. Okay.
■ ARE YOU READY?
Ready to retire - at 42 years old.
"Based on Mr Loo and his wife's income and savings in 2001, he calculated that the CPF instruments would helpthem to set aside a milliondollars combined by the ageof 65 - a discovery that hedescribed as "phenomenal"in shaping his financial outlook."
Retirement planning for Mr Loo Cheng Chuan started in his 20s. That's why at just 42 years old, the father of three children has reached financial freedom-all with the help of CPF's retirement schemes, he says.
● And then, I started invested a lot in stock markets, even using cash.
● So my kung fu was being discovered by CPF Board and the Board interviewed me .
● Initially , I didn't really want to talk about it because being a Chinese , sometimes when you make money you want to keep quiet. Right? Later I think think think , you know, this is not something ๐ค I share with people .
●You will cost me make less money , right? So I said, I think is good to share with people.
● So in 2015, I started sharing with people that CPF is a powerful machine to make money when you learn how to do it before retirement.
● There are people who don't believe it, unfortunately for them.
■ CPF: How to Accumulate $1m in your CPF by 57?
"So it looks like it is possible to make $1million from your CPF. Actually it is nothing magical about it. It is just power of compounding at work." —Wilfred Ling
I read from the CPF's ARE YOU READY facebook about a man who believes he can accumulate S$1M in his CPF. Is this really possible?The article did not provide any mathematics. I decided to do the math to find out more.
Before I show you the calculation, it is necessary to understand some CPF jargons and limits.
● They challenged my thinking and they calculate it . And they realized that I am right after all. Okay.
● You can actually make a million dollars not a couple ( combined amount) .
●You can make a million dollars alone. Okay. Alone by 57 years old .
● Then after that many people start to have disbelief in this thing. Okay.
●The Strait Times came to interview me and I shared about 1M by 65, one million dollars through CPF,
● This is a powerful machine that makes money.
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