Very few flags flying

[donut88]

There are 2 schools of thoughts. One supported CPF scheme while the other opposed to it. There will no clear winner at the end of the day. You can argue or debate for the whole day until the cow comes home.

The government has listened to some of the opposed voices so they have twisted a little bit of the CPF scheme recently.

Just remember that Singapore will never be a welfare state, so CPF will stay firm.

Good that u point out the word "welfare state"

Can anyone tell me which country in the world that has some sort of welfare system is doing well today?

As far as I know, its zero "0". Look at the obvious example of Greece.

Don't tell me about oil rich countries. We all know that underground oil won't last long. Once the oil finish, the fun stops.

 

[donut88]

I have to strongly disagree with you bro.
CPF is at most the 2nd best system in the world.
The 1st bestest system is a policy called Asset Enhancement Policy!
Logically speaking, why pay $200+k for a 4 room when you can pay $400+k, right? :bsmilie::bsmilie:

Yeah I heard of that too. Go buy house in JB or Batam lor. Everything cheap cheap.

 

[s1221ljc]

I agree with you on this. It is important to note that the interests calculated are not paid to any bank or the government. They are not, in actual fact, an expense as the term would normally imply in this instance. These interests go back to a CPF holder's account & are HIS OWN money, subject of course to CPF rules.

To put in perspective, take this example. One withdraw $200k to buy a HDB flat. At the end of 20 years, say the value of the flat has gone up to $400K, giving a "profit" of $200K in the form of capital appreciation. If the flat is then sold at this price, the CPF a/c holder has to deduct $438,224.63 (P+I @ 4%) from the sales proceeds back to his CPF. In the past, the CPF A/C holder has to make up for the shortfall of $38,224.63 from his own pocket. But the rule that required shortfalls to be covered was found to be a great burden on citizens so it has been changed with the shortfalls waived. If the CPF does not calculate & get back the so called interests, then there would be very much less in the CPF holder's a/c for retirement. Also, it would encourage people to speculate on the property market by buying selling flats to make a quick buck in capital appreciation.

If the money has been left unused in the CPF a/c, the CPF would have paid the a/c holder the compounded interests of $235,224.63 (at 4% pa 20 years). In a way then, the interests forgone represent the opportunity cost if a CPF a/c holder decide to use the funds for other asset acquisition. The CPF or government has NOT cheated us in any way, as has been accused by some. We only really pay interests, as an expense, when we borrow money from the bank or HDB or anyone for that matter. Thus we are always reminded to consider our financials carefully & not over-stretch ourselves.

Look at the scenario illustrated in another way, we earned interests on our capital & get to stay in a flat "rent free" for 20 years If the value of flats for sale do not increase over time in the long run, then something is wrong, its not possible as it would mean there is zero inflation, no wage increases etc. If HDB asset value rise, people complain, if it falls, people also complain, what to do??? I see uninformed/ignorant people incl opposition politicians claiming falsely that we, the citizens,have been cheated, we have to pay double etc over this when we are not. Bottom line, make sure we save enough for our future.

And don't spend too much on camera gears acquisition :bsmilie:

Of coz its all right to pay interests.

The govt is paying YOU interests for the money in your CPF account. So if u wan to use the money, it makes sense for u to pay the interests back.

If u expect not to pay back interests when u use the money, then CPF is not fulfilling its primary objective of a retirement system.

You want everything and eat the cake too? Where got such thing?

Be glad that our lives in SG are not like these people in the news.
http://www.channelnewsasia.com/news/world/migrants-brawl-on-greek-i/2052732.html

Considering that you are using your own cpf $ to buy your hdb flat.. then you have to pay interest using your own $$ in the first place.. I should be "smiling"

 

[albertri]

And don't spend too much on camera gears acquisition :bsmilie:

Bro you hit me direct to the heart lolz

 

[albertri]

I see a lot of people complaining property price in Singapore... Yes it's one of the highest in the region but I have a friend in HK and his flat cost twice as my flat and his flat is half the size of mine plus his location was almost out of nowhere.... For him to travel to CBD or Kowloon easily more than 1 hr by train. I am also a home owner in SG and to make worst bought my flat from resale market I know the pain others are feeling now but I am still thankful as I am in much better than my HK friend.

I even heard Beijing and Shanghai property process specially near the city proper are much more expensive than Singapore. And right now middle class cant even afford to buy flat there you can get but outskirt of the city area.

PS I also have 30yr loan so I will be darn old hopefully with grand children even before I can pay off my flat lolz... Oh well let see how it goes for now just work and earn money save a bit and enjoy life when you can...

PS. very good stress reliever is shopping! so let's go buy more Camera Gears! :bsmilie:

 

[donut88]

I agree with you on this. It is important to note that the interests calculated are not paid to any bank or the government. They are not, in actual fact, an expense as the term would normally imply in this instance. These interests go back to a CPF holder's account & are HIS OWN money, subject of course to CPF rules.

To put in perspective, take this example. One withdraw $200k to buy a HDB flat. At the end of 20 years, say the value of the flat has gone up to $400K, giving a "profit" of $200K in the form of capital appreciation. If the flat is then sold at this price, the CPF a/c holder has to deduct $438,224.63 (P+I @ 4%) from the sales proceeds back to his CPF. In the past, the CPF A/C holder has to make up for the shortfall of $38,224.63 from his own pocket. But the rule that required shortfalls to be covered was found to be a great burden on citizens so it has been changed with the shortfalls waived. If the CPF does not calculate & get back the so called interests, then there would be very much less in the CPF holder's a/c for retirement. Also, it would encourage people to speculate on the property market by buying selling flats to make a quick buck in capital appreciation.

If the money has been left unused in the CPF a/c, the CPF would have paid the a/c holder the compounded interests of $235,224.63 (at 4% pa 20 years). In a way then, the interests forgone represent the opportunity cost if a CPF a/c holder decide to use the funds for other asset acquisition. The CPF or government has NOT cheated us in any way, as has been accused by some. We only really pay interests, as an expense, when we borrow money from the bank or HDB or anyone for that matter. Thus we are always reminded to consider our financials carefully & not over-stretch ourselves.

Look at the scenario illustrated in another way, we earned interests on our capital & get to stay in a flat "rent free" for 20 years If the value of flats for sale do not increase over time in the long run, then something is wrong, its not possible as it would mean there is zero inflation, no wage increases etc. If HDB asset value rise, people complain, if it falls, people also complain, what to do??? I see uninformed/ignorant people incl opposition politicians claiming falsely that we, the citizens,have been cheated, we have to pay double etc over this when we are not. Bottom line, make sure we save enough for our future.

And don't spend too much on camera gears acquisition :bsmilie:

Yeah. That's the primary objective of CPF system.

I hope everyone can fully understand the objective of CPF

don't listen to lunatics like Roy or Huihui. They are just out to destroy this country

 

[ArchRival]

I see a lot of people complaining property price in Singapore... Yes it's one of the highest in the region but I have a friend in HK and his flat cost twice as my flat and his flat is half the size of mine plus his location was almost out of nowhere.... For him to travel to CBD or Kowloon easily more than 1 hr by train. I am also a home owner in SG and to make worst bought my flat from resale market I know the pain others are feeling now but I am still thankful as I am in much better than my HK friend.

I even heard Beijing and Shanghai property process specially near the city proper are much more expensive than Singapore. And right now middle class cant even afford to buy flat there you can get but outskirt of the city area.

This means we have room to fall further, right? :bsmilie::bsmilie:
Frankly, like most sgreans, i also hope for $1mil hdb. I want to observe what this does to the economic dynamics. :bsmilie:

PS I also have 30yr loan so I will be darn old hopefully with grand children even before I can pay off my flat lolz... Oh well let see how it goes for now just work and earn money save a bit and enjoy life when you can...

PS. very good stress reliever is shopping! so let's go buy more Camera Gears! :bsmilie:

So glad you are paying off your debts with a positive attitude. I just had tea with a banker friend. I told him the debt burden is still ok, so i told him to raise the non-sibor part of home loans. When fed raise interest rates, they can then raise the sibor part. That way, they can squeeze their debtors twice and make more money.

 

[ArchRival]

Just remember that Singapore will never be a welfare state, so CPF will stay firm.

Good thing you pointed out welfare state.
In a meritocratic state where welfare is abhorred, the ones with merit are rewarded handsomely. They will use that reward to grab opportunities and infuse their own offspring with merit, leaving very little for the rest.

Then you have groups of people left behind. Your income inequality will be among the worst in the developed world. Opportunities will be denied to the less privileged. Then finally, to prevent further social problems, you have no choice but to dole out welfare.

In the quest to implement a meritocratic state, you instead caused a welfare state. Now isn't that ironic? :bsmilie:

 

[UncleFai]

Good thing you pointed out welfare state. In a meritocratic state where welfare is abhorred, the ones with merit are rewarded handsomely. They will use that reward to grab opportunities and infuse their own offspring with merit, leaving very little for the rest. Then you have groups of people left behind. Your income inequality will be among the worst in the developed world. Opportunities will be denied to the less privileged. Then finally, to prevent further social problems, you have no choice but to dole out welfare. In the quest to implement a meritocratic state, you instead caused a welfare state. Now isn't that ironic? :bsmilie:

Once the "one man, one vote" system is also made meritocratic, the pressure will go away.