SHOULD I USE CPF TO PAY FOR HOUSE OR USE CASH?

[@andrewchan4264]

Hmm, I beg to differ in your presentation. About the accrued interest part, most of the time, there is no issue for most. But I have heard of genuine cases where people are financially desperate and needed to sell their HDB flats to get cash. However, the amount of cash they needed to pump back into their own CPF accounts as accrued interest is more than cash proceed from the sale of their flat! Ironically, they cannot cash out anything but must put in more money instead. So it's not a "moot point" that some people are complaining why we are forced to put the accrued interest portion back into our own CPF accounts. On your second example of using cash instead of CPF money to pay for a $1 million condo at age 40, ermm 😁 are you referring to an unmarried, single person? For a couple, and especially those with kids, do tell where is it reasonable to get a condo for that "low price"? Even EC today typically cost $1.2 million and above already. Private condos of reasonable family size would cost $1.4 to $1.6 million! If one does not use CPF money any more to purchase the condo, then they may indeed fall into the proverbial "cash poor" category. At 40 years old and earning a relatively modest, small amount of $8k salary a month, I can't imagine that the person will have a lot of savings to splurge most of it on a condo. So you should really consider if selling your HDB flat and buying a condo is even the right choice. What are you really trying to aim for? Is it an upgrade or really a downgrade in lifestyle and financial health? Many in SG seem not to think through this carefully and are pushed blindly by property agents to sell their flats and "upgrade" to a condo. Although reserving more money in the CPF can get you 2.5% interest, what's the assumption that the person, at age 40, still cannot invest the money wisely in other areas that can easily reap more than 2.5%? It's not necessarily wise to rely on just cash to purchase a property at an older age. Hence, I don't think age is a differentiating factor to decide whether one should use CPF money or cash to buy a property. It's not so simplistic. There are many other essential factors to consider -- very much on a case-by-case basis.

[@joshconsultancy]

Hi Andrew, dont mind, id pin this comment up. I’d give a good detailed reply. Think there are good points to explain on. Theres some misconceptions. “Geniune cases where people are financially desperate and needed to sell their HDB flats to get cash." "Ironically, they cannot cash out anything but must put in more money instead." - I believe this is a situation of negative sale. Which means selling at a loss. The sellers are not educated sufficiently and become disgruntled when they expected a cash out from the sale only to see the cpf being paid back first. If the negative sale is very severe and the sale is NOT enough to pay off even remaining loan, then YES sellers have to pay back the cover the remaining bank loan with their own cash *Note: In event negative loan is NOT severe and sale enough to cover remaining loan firstly but not enough to return the FULL CPF and ACCRUED INTEREST back to CPF, there is NO need to compensate your CPF with further cash in this situation. It is correct. We used CPF funds to purchase. For a sale, the flow is always #1 loan repayment #2 CPF +accrued interest #3 cash. Because if it were #1 loan #2 cash then #3 CPF, people can effectively siphon money out from their CPF. Hope it clarifies. The key learning points are #1 property purchase homestay or investments can get into losses, be prudent #2 avoid getting into a financial situation when your finances require you to sell house to cash out. That is sad place to be #3 be educated. If you need cash, know your sources well.

[@DonYang73]

Age is definitely a differentiating factor. Becos CPF in itself is designed purposefully that way. Say i give you $2bil but the condition is you can only use it when you are 90 yrs old Or the second option, i give you $20mil when you are 65 yrs old Or the third option , i give you $2mil at age 25. Which would you choose? Tell me now, age makes no difference in your financial decisions? CPF being one of them.

[@wonglienfeng]

I have to back Andrew up on his last point. It seems that the underlying premise in the video is to use cash (which returns very little admittedly) cos it would generate less return than CPF OA and hence was the preferred option, as if these were the only options? While CPF OA can earn you 2.5% PA, this is dependent on prevailing government policies and rates, which Josh has also pointed out before. While it is unlikely that we will see this floor disrupted for a variety of reasons, the decision on whether to deploy CPF or cash to service mortgages wholly depends on investment opportunities available for either scenario. To be honest, while subject to market forces, a hurdle rate equivalent to CPF OA at 2.5% is not difficult to exceed and if so, why would you not instead use the lower yielding instrument i.e. CPF OA to pay down your property loan while you invest your cash in instruments yielding higher than CPF? Is this not the more prudent way to manage your finances? This consideration is more relevant than age IMO and tbh CPF is only good for CPF Life in the end so you should plan sufficiently for this purpose cos otherwise it's really just 2.5%.

[@joshconsultancy]

@@wonglienfeng Hi, thats a scenario roughly described in case study of someone 30. For someone 40s that case study is more from a perspective of someone flushed with cash. If there are investment opportunities more than the 2.5% and cash has been deployed then certainly go ahead and use OA to pay house and invest cash. Think a comment below is on someone who shared he did that to acquire overseas property. No right no wrong. Just the part misconception on "negative sale" hence I pinned the comment and took time to share further...

[@user-uh6bs7tp7e]

part4: I know what you trying to help others to improve or generate more cash flows, but dont forget these average wage earners will be generating tonnes of loans albeit debts. Forget about the low interest bank mortgage for many yrs and the rental income of renting out HDB to stay in condo. I did ask my financial advisor frens they said many couples ended in divorce when just either 1 of the loses his/her job.

[@user-uh6bs7tp7e]

In 2006, I was already 4th year in paying for my 5Room BTO....every month s$866 was deducted from my OA. Same amount also for my wife. One day, I take a look into the Repayment Letter from HDB....I was so shocked that $866 does NOT go directly into Repaying my Principal Loan.

[@damyeuful]

As usual, pertinent and prudent advise. Thanks so much. Don’t be sucked into the rosy projections by property agents.

[@joshconsultancy]

Thanks DG

[@andrewkwek6160]

Property agents are good and know more about investing in property. They know much less about investing in the stock/crypto market. Property is essentially a good investment but there are far better instruments out there.

[@user-uh6bs7tp7e]

part2...instead, over $450 is used to pay the Principal Loan sum. The rest 300 plus is paid to HdB as Interest....if i continue paying like this for the next 25 years ....HDB will be all the more Happier....end of the 25th year, i am actually not paying $200,000 for my flat. in fact i would have paid close to $300,000++...

[@malc80]

Good sharing and thanks for giving your perspective. So cute of your son appearing in the background 😂

[@joshconsultancy]

No probs Malcolm. Haha ya, thats what always happens when Im at work =P

[@jayden8963]

First of all 500K for a four walls is a rip off. Secondly CPF is your own monet and you can use it the way you deem fit. Esp for PRs. You can sell the house and get 2.5 interest and move out.

[@zzy341]

I have been utilising my full CPF to pay for housing. Many years now and no regret. I have never topped up with cash. All my cash are safely with me. My CPF OA almost empty. So no issues like those old people keep saying Govt cheat their money… no money inside for them to cheat.

[@joshconsultancy]

If ur cash in bank accounts then it might be better off deployed. At least into cpf because of interest. But would that be contrary to ur strategy all along?

[@zzy341]

@@joshconsultancy CPF cannot take out leh. I put in stocks, etc although been losing lots of money but still better cuz can take out anytime.

[@yotng]

Thank you for providing the prespective and views! It was really helpful to me a young 30 year old looking to buy a house soon.

[@yotng]

May I ask if I should limit the amount of HDB loan I take to manage the monthly mortgage? Or should I just go for the Full Loan amount that HDB is offering?

[@peterc6083]

@@yotng i'm 33, all i can say is take full amount of hdb loan if possible, i personally feel the loan is cheap and of course take as long as possible. 2 points to take note would be to invest your free money as much as possible, and 2ndly take the max amount of tenure for the loan and do make extra repayment to the loan if possible. The extra repayment i recommend comes from cpf contribution from bonuses at the end of year ( prob abt 5k or such?) and my last advice is if you can afford to get an EC, go for it.

[@joshconsultancy]

@@yotng , agree with Peter, take max loan first. Along way u can repay as n when you like

[@lewissim5332]

Stamp duty isn’t 3% - $5400 as a simple calculation It is first of value $180,000 = 1% Next $180,000 is 2% And next $180,000 is 3% Therefore only any property above $540,000 will be the formulated as 3% of property price (or valuation which ever is lower) -$5,400

[@joshconsultancy]

correct and noted

[@sibeiho]

The Equation is very simple and straightforward.... If your CASH can generate more than 2.5per annum, then you use CPF to pay. If not(means you can even lose money holding/investing that cash in whatever nonsense you wanna do in life), pls use your CASH to pay for the HDB. The difference in yield between your CASH and CPF rate if your cost/benefit for flexibility. Means if you put your CASH underneath your mattress, you will get 0%per annum. 2.5% - 0% = 2.5% per annum. You will be paying 2.5% per annum for flexibility. You use that cash to do business maybe you earn 20% per annum. Use that cash to buy bitcoin maybe 2000% per annum. Use that cash to pay for your mistress, -1000% per annum.

[@joshconsultancy]

Agree on flexibility

[@vivian6519]

pay mistress 🤣🤣🤣🤣🤣🤣

[@vivian6519]

pay mistress 🤣🤣🤣🤣🤣🤣

[@fez877]

To me, no matter what be it your have cash or no cash on hand, ALWAYS MAX out your CPF. Which idiot leave the money in there for the pathetic 2.5% interest? Whatever accrued interest you accumulate will go back to CPF and it also can be use for the next property purchase. The cash on hand is better invested something like SPY which generates 8%+\- annually on average for the past 10 years. 2.5% vs 8%, which one to choose? It’s a no brainer.

[@joshconsultancy]

Last 10y the curve for SPY has been parabolic up. Next 5y is 2001-2006 shape. Accrued interest ya agree can use for next purchase.

[@kengleetan63]

The problem wasn't so much in the earlier yrs when HDB were cheaper and folks could pay off their HDB before they reach 55. When folks were paying more and more thru the yrs when their HDB cost more and more and some even paying over million for a older HDB, compounded worse when these buyers are older, this is where problems arise. Another big problem kicks in, becos alot alot of all these HDB were built from 1980 to 1995 and once pass 2023 to 2030, substantial lease decay start to kick in for many of these HDB owners. Coupled with the sheer number of such lease decaying HDB coming in, substantial price decay would start. This also applies to pte older 99 yrs lease decaying properties. Many of these owners had not even paid off their mortgage by 55. The gov asset enhancement scheme ( adding a small balcony area, HIP etc etc)touted thru the 1990s right thru 2000 was but a scam for votes. A checkmate for these HDB owners, came when Lawrence Wong reminded these HDB owners that SERS would be unlikely be a saving route for the rest of these HDB folks and lease renewnal is not possible. So with all the above, now you can see how many of these HDB folks would be left with lease decaying, price depreciating properties, failure to satisfy their FRS of their age group and if these property they have now ( which many HDB owners are) is the only roof over their heads, they are in big trouble in their silver yrs unless they had somehow stashed away substantial cash saving over what CPF can offer them.

[@joshconsultancy]

Ya its true less are able to finish paying off loans early

[@bene123photographer]

Recently I been thinking of punching OA into SA . Your vid makes me think twice again . Good points to think . Early thirties right now . I probably will let OA cash sit unless opportunity to use it tactically happens .

[@joshconsultancy]

Yes. Use rstu to top up sa to get tax relief esp if you’re looking to trim your tax bill. Cya around benedict

[@raymondtay5184]

Couple of comments, if I m not wrong: 1) I think HDB will take all your OA if you take a HDB loan. 2) if you transfer OA to SA, the sum you transfer will automatically transfer to RA , on top of the BRS or FRS that you intend to transfer to RA.

[@joshconsultancy]

Hi Raymond, 1) has been changed. A home buyer can opt to keep 20k in CPFOA now. 2) Its hard to explain, Theres some misconceptions

[@James-kt5sk]

Hello thanks for the video. Somehow I feel that the HDB and condo prices quoted in the video are on the low side, not sure if they are just for illustration purposes. For HDB it is getting much harder to get bto due to the oversubscription (incl. non mature sites) so many are heading for resale which are easily $500k to $800k. So in this case young couples have no choice but to use their CPF to fund the downpayment (yes sadly downlayment only). I'm aware of the bank & HDB loan downpayment but most would still go on the bank loan to save interest which makes perfect sense. Hence, 25% on a 500k to 800k flat will mean that CPF is very much needed.

[@joshconsultancy]

Hi James, numbers ya for illustration. For learning and discussion purposes. I hear your concerns. All the best in your home search :)

[@junyaohan7895]

Well, you can actually use CPF, the take the cash and invest in S&P 500. Furthermore, can rent out the house for potential passive income too to pay bank loan.

[@joshconsultancy]

CPFOA can buy funds to access US equity too

[@futurederrick]

Incredible. Very professional advice.

[@joshconsultancy]

Thanks Derrick

[@jaclee3594]

Thanks for the excellent advice! Very wise

[@joshconsultancy]

Thanks for the high praise Jaclyn

[@goldwu2470]

Jobs, Jobs, More high paying jobs needs to be created in this country. Enuff said.

[@tuixui3878]

Thanks for the info, Josh. I have a different view on using CFP for housing loan installment. I am 47 now, and my wife and me are using CFP to pay for our condo mortgage loan. The reason why we do that is we can have more fluid cash for investment. Also we dont plan to sell our unit, maybe when my wife reach 55. Currently, each of our cpf OA + SA with MA max up already meet FRS. So at 55, even we pay back to cpf our OA plus accured interest, we still able to withdraw them and leave the FRS into RA. During these few years, our spare cash can be used for other asset class or even used to buy overseas properties. P.S we should be able to paid up our loan in 2 years time, while we are renting out our fully paid hdb as one of our passive incomes. Would like to know your view about our situation, thanks.

[@joshconsultancy]

HI Tui Xui, I provide personalised advice with fee engagement and with knowing full details. But on first glance you seem to be on track. If the cash is being deployed then thats definitely good

[@vincentloo9209]

Hello, i watched your whole video and I still dont really understand why you would suggest to deplete more cash as you aged before your utilising your CPF. Since a Singaporean can never fully withdraw out their CPF/ withdrawal age keeps on raising. Wont it be better to rely on your cash on retirement rather then CPF? Since you can have more control on your personal cash assets then something the government has more control? Not sure if you explained it in your video.

[@joshconsultancy]

Youve access to the CPF when its above FRS. Clarifies?

[@etherial9000]

Those singles who want cohabitation, want a more mobile "base" & flexible traveling lifestyle + FIRE (or retire well), from young have a different strategy. Punch down major cost house (rent or live w parents) and car (don't buy). Max SA very early. Semi retired at 40. 1.6mil in CPF at 55. 2+mil in CPF at 65.

[@joshconsultancy]

Wa haha okok. Possible

[@andrewkwek6160]

Thanks for sharing Josh! We should definitely use your CPF to pay for property. The cash saved should be used to invest in stocks. The S&P easily gives 8-10% per year. For those who doesn't want to invest or has no idea how to invest, they should definitely use cash. Simply put, the smart money should use CPF while the not so smart money should use cash to pay for mortgage.

[@joshconsultancy]

Hi Andrew, S&P gives 8-10%pa is dangerous to state. Past performance does not indicate future and while on paper it has done so, it may our investment results as our own actions can drastically outcome. Thanks for being around and sharing your thoughts still, appreciated

[@lendleasereit6797]

My take. Use entire CPF to pay for house. Then use entire cash in hand to invest in Lendlease Reit. Can collect dividends plus have access to principle amount anytime. HUAT AH!!! 😃😃☺️

[@lendleasereit6797]

My personal opinion. I do not represent LL hehe

[@joshconsultancy]

@@lendleasereit6797 haha

[@joshconsultancy]

@LENDLEASE REIT good results recently. Rental revision for 313 upwards

[@Jessieheng19]

Very good content. Thank you

[@joshconsultancy]

You are welcome Jessie!

[@DonYang73]

The answer is simple, if you got money dont use cpf, if you dont have money, you hv no choice. Simple, no need to complicate matters

[@rocky111088]

Buyer Stamp Duty

[@joshconsultancy]

Oops, thanks ryan

[@rocky111088]

Np buddy. Great work BTW. Enjoy all your videos.

[@DonYang73]

Its about a balance and the situation one faces. There really isnt a right or wrong. However, always consider the fact that you lose the 2.5% that cpf OA pays. So you are already “down” Therefore use it wisely. I used my CPF early but by my early 40s returned every dollar to CPF. While the concept of living in the same place for the rest of your life may work, in reality no young person will do that. I estimate 10yrs is about it. It is absolutely wrong to say that the accrued interest makes no difference whether in CPF or in a property. The difference is great between certainty and uncertainty.

[@joshconsultancy]

Hi DY, Part 1 " you lose the 2.5% that cpf OA pays. So you are already “down” - addressed in accrued interest which portion already. Part 3 "accrued interest makes no difference whether in CPF or in a property" it doesnt as also explained in accrued interest on why its like that. Could elaborate your POV on certainty?

[@DonYang73]

@@joshconsultancy yes they were addressed , but incomplete and without the background. Very simply, the source of the accrued interest is different. If it is left in CPF, you are guaranteed to receive the 2.5% from the State. If you put it in a property, you are assuming that the property is guaranteed to make you money. Even if so, you end up paying the 2.5% out of your own pocket. On the concept of certainty and uncertainty, it is about the ill comparison of returns without considering risk. To explain better, i exxagerate the figures a bit. Which is better,? 3%pa guaranteed on your networth over next 50 yrs versus $3mil return or Total loss with a roll of the dice within 2secs. Neither is better, it just depends on the decision makers , stage in life, horizon, perspectives and risk tolerance etc….. but If you are already a multi millionaire, how likely would you choose option B? And If you are a total down and out wreck, how likely would you choose Option A? This is also the reason why the “Losers” may go further and start thinking themselves as winners. When actually there are no winners nor losers. Deep? I could have a “masterclass” to talk about this but no lah, thats all i am going to say. 😂🤣Enjoy your weekend.

[@joshconsultancy]

@@DonYang73 oh ok I get ur point now on the “accrued interest” not guaranteed to be earned outside

[@Syedsai]

Thankfully I found your channel now. Oh gosh, I have been in the dark all these donkey years.

[@joshconsultancy]

Smash the subs, cya around and share with someone who can benefit from the sharing too =)

[@kevinlim7974]

My observation is that many in their 30s don't have much financial prudence. They're treating their CPF balance as an additional tap to draw from, and spending their cash on things that don't generate any returns, e.g. cars, expensive electronic gadgets, holidays etc. This is just my observation, of course.

[@joshconsultancy]

Ahya not fair to sweeping statement. They make their financial choices. There are some who will heed our suggestions to be prudent and do better than us eventually

[@alipromo53]

If u bought old flat u wont be able to cover the accured interest recommend buy bto flat or flat age 10yrs or younger

[@joshconsultancy]

Think theres a misconception on accrued interest. Its nothing to do with old or new flat but rather how much opportunity cost is incurred that missed getting 2.5%pa.

[@lohdanwee474]

CPF pays average interest of 3%. Bank mortgage rate is now 1.5%. Simple math tells one that it is only worth using CPF to pay loan when mortgage rate exceeds 3%

[@joshconsultancy]

CPFOA is 2.5%. Discussion points are between using cash or CPF for house.

[@lohdanwee474]

@@joshconsultancy Certainly use cash to pay off mortgage. Cash only get 0.6% interest rate. Pay off 1.6% mortgage. Leave CPF compound at 2.5%.

[@tuixui3878]

@@lohdanwee474 If u use those cash for other asset class, u can get more than 2.5%, also once u gain enough cash appreciation, u could use to buy your second properties. Just another way to leverage the spare cash to work harder.

[@lohdanwee474]

@@tuixui3878 That is provided the return is guaranteed above 2.5%!

[@tuixui3878]

@@lohdanwee474 Its not difficult to find, to be honest. :)

[@sohsongmeng]

I don't think you have answer the reason why we use cash to purchase a property.

[@joshconsultancy]

There isnt a best reason. Im explaining for some who need the cpf to help when younger, its actually ok to use. When older, perhaps the affordability part needs to be carefully reflected

[@joshconsultancy]

There isnt a best reason. Im explaining for some who need the cpf to help when younger, its actually ok to use. When older, perhaps the affordability part needs to be carefully reflected

[@cpneo]

Very difficult topic. When u are older, u might think otherwise like why u did not transfer oa to sa when u were young (worst thing is invest in some loser fund with insurance or something), etc.

[@joshconsultancy]

Addressed in the video Alex. If Sa is far from frs and income tax rate is not high then it’s good to transfer

[@JS-ev4xc]

Actually to have a million dollars or big house and cash poor is lame. This is a rich man that chose to live poor, which is not necessary.

[@kahmengsee1500]

How about the monthly installment of the bank loan? Should it be funded by cash or cpf? Let’s assume the installment is 1000 sgd monthly and funded by cpf; I invest 1000 sgd cash monthly in equity market for long term.

[@joshconsultancy]

As long as the $1k is not becoming idling cash. Stick with your dollar cost averaging amidst this equity downturn and check out some recent tutorials on it. Cya around

[@Msiaboleh]

Hi Josh, what do u advise for borrowing a bank loan for 11yrs at 1.5% to pay for housing or using OA? OR if using my OA & gradually do a VHR ( volunteer housing refund) to earn back 2.5% interest? Which will make better financial sense.? I am alrdy 54 & risk averse.Thks.

[@joshconsultancy]

I cannot give personalized advice on a public domain. Main thing is if theres an ability to repay, there is less worry taking a bank loan?

[@bernardkoh1650]

Very dumb to use CPF to pay for flat.. Muz hustle hard to use cash to pay..

[@nigel155]

Wow thanks Josh!!! Very comprehensive (covers various scenarios) and educational !! Subscribed

[@joshconsultancy]

Welcome in Nigel

[@petertay12]

Hi Josh, should i now repay fully my housing loan using CPF if my reprising interest rate is 2.9%? Or must I retain $20K in OA?

[@joshconsultancy]

Retain rule is only for investment 👌🏻

[@Kalimatullah_Yoh1-1.14]

any suggestion on how to pay house for someone with little or no cash but has enough in CPF OA to settle for the home unit at one go?

[@joshconsultancy]

Depends on whether you are on HDB loan 2.6% or bank floating which is more than 4% now. If yes for either, it benefits you to use cpfoa to pay down the loan Hope it clarifies =)

[@janepang99]

May not be so now in 2023, Cpf OA is 2.5%, but now bank loan is 4%. So paying housing loan by CPF I tot is a better choice?

[@joshconsultancy]

Cpf loan taken above at 2.6% ^

[@thsim88]

now bank interest rate lower than 2 5% or 2.6%. use bank fixed rate to pay for house especially those 5yr fixed rate type. n use cpf to invest stock(35%).rent out if use for investment. Next Yr interest rate probably will rise if using bank floating rate

[@joshconsultancy]

Bank loan rates are between 0.9-1.5% depending on size and fix for how long

[@thsim88]

@@joshconsultancy for now , next ur US going to raise interest rate n here will follow. property sector n reits will be affected

[@joshconsultancy]

@@thsim88 interest rate news is fickle. But sooner or later will have to inch up I guess?

[@thsim88]

@@joshconsultancy now inflation is coming up is a matter of time fed will up the interest rate

[@kennethho9767]

Thanks for the insightful vid. Hmmm ps no offence but I thought BSD is buyer stamp duty ?

[@joshconsultancy]

Buyer stamp duty youre right. I slipped with CPF terms which have "basic" in them

[@johnnyexplorestheworld4729]

Good video!

[@joshconsultancy]

Thanks Johnny!

[@thaddddeee5355]

Thanks Josh for the video. I am commenting a bit late but still would like to seek some sound advice from you. I am in 30s nd have healthy proceeds from selling private property and am on my way to purchasing a resale HDB on a hypothetical situation with successful appeal against the 15 months ruling. I have the ability to pay full using cash and CPF but would that be sound? Alternatively, would I be better off to use cash which covers half the property purchase price while letting CPF accrue interest, and I service the monthly loan using cash? TIA!

[@joshconsultancy]

No probs. Paying off is definitely not a terrible option. There are merits being loan free As to pros and cons of alternatives, I may be only able to address it after a full retirement planning is conducted www.theastuteparent.com/josh-tan

[@alee4141]

Do taking a personal loan to pay off hdb loan make sense? Eg take a personal loan 60k pay over 3 year total up to be 66.2k fir a local bank... Use this 60k paid off capitial of a 200k hdb loan saved a interest of 27.5k or 21k after accounting for the personal loan interest.. or should just return to cpf and max out SA

[@joshconsultancy]

Not likely a good idea. Safer route is to REFI with bank loan if you want to save interest cost. CPFSA can be topped up to FRS of $186k BUT use it correctly as shared in this video. Hope it helps answer

[@JJ-iu6sr]

Hi Josh, is it advisable to make voluntary housing refund and let it earns interest in OA?

[@joshconsultancy]

Hi JJ use this option wisely. Ensure its spare cash you really have and it will help you well

[@AliveBread]

Is $2000 - $2500 income possible to buy HDB flat in Singapore ?

[@joshconsultancy]

Yes possible for smaller sizes. How old are you?

[@malita354]

Super expensive flats for young singaporeans? I have the Solution!!! Sell your parents old flats which was bought at between 40k to 100k. If they sell at 1million, this amount can be used to pay for the son's overpriced flat. Zero Sum Game

[@mtlee3366]

thanks for sharing

[@joshconsultancy]

Sure MT =)

[@ngchongsin2009]

Thank you, this is a very good video for most folks

[@joshconsultancy]

no probs martin =)

[@keefewong2551]

just curious, what was your ice-cream store called and when was that? haha

[@joshconsultancy]

SHown there haha. Munchymoo ice cream at bishan. Think it was 2010. WOW

[@Omisimon]

Hi Josh, what about the idea of use both CPF and cash for housing loan. Ratio 50/50 or tweak accordingly depending on individual cash needs and financial goals. A balance approach rather all in CPF or all in cash. This way u will have balance in your CPF OA to compound 2.5% p.a incurring less AI in future. When times are bad e.g lose of income u still have balance in OA to continue pay housing loan. POV from a middle class income earner.

[@joshconsultancy]

Sure Simon. I was suggesting in the video that its ok to use CPF if you dont have enough going full cash. At an older age, its especially important to be prudent in purchases. Any formula around like the 50/50 will work. Hope it answers

[@ambengfan]

If someone has reached frs at 40, does one still have to return accrued interest?

[@joshconsultancy]

Accrued interest is opportunity cost. RETURNED is the right word. This return happens when you SELL the flat only

[@Notsosmartyetnotsostupid]

I am in my 40s, i earn more hence I bought a $1mil condo. Instead of selling my flat, I use my savings to pay the Downpayment, renovation & took up housing Loan. I rented out my HDB flat for $2.5k/mth and use CPF to pay the remaining loan repayment monthly. Now I am rebuilding my cash monthly without being bothered my housing loan.

[@joshconsultancy]

Good sharing DL

[@jasonlim4512]

For very long time i dun agree with other advisors who advise against using OA becos of accured interests and SA opportunity costs. i also think there are situations like your example of a young person who needs cash on hand. finally found you, an advisor who says it is ok to use cpf (but depends individual situation).

[@joshconsultancy]

Thanks. Hope it has useful points for anyone who needs to hear more point of views

[@ojh224200]

Should I pay off my HDB loan early?b4 I reached 55 next year?

[@joshconsultancy]

As of this moment of low interest rates if you’re on bank loan, Likelihood it’s better not too. Keeping inside cpf already yield more. If on hdb loan then maybe refi if size is more than $200k left 👌🏻

[@andrewkwek6160]

Agree with you Josh, I definitely wouldn't recommend paying off HDB loan regardless of your loan amount, we should diversify and put them into the stock market, that will help you provide better return on your money. Mortgage is a good debt, it's okay to keep it.

[@ojh224200]

@@joshconsultancy I currently on HDB loan. Left about 72 k loan. Can I request from cpf not to combin my OA to SA when I reached 55 next year. So that I can use it to repay my loan? Thank.

[@joshconsultancy]

@@ojh224200 it combines to RA. But yes do contact cpf to get advice how to hold back money in OA for mortgage reasons

[@ojh224200]

@@joshconsultancy note ,thank for your advice.

[@faizsabudin8520]

hi Josh, I'm 30 this year and aiming to FIRE by 36/37 with my investments thus no further CPF contributions if I stopped working. By then, I would have sufficient CPF OA to fully pay for a house (not intending to sell). Do you think this is a good idea or should I still take up a loan if I have not yet hit my BRS/FRS which can act as a safety net/supplementary income (on top of my investments) after the age of 65?

[@joshconsultancy]

Hi faiz we don’t know the interest rate environment then. As always good debt can be taken if it’s cheap and deployed to buy assets. If not avoid debt I guess? The FIRE level sounds quite thin, plan in some buffer or continue to work and not RE?

[@faizsabudin8520]

@@joshconsultancy that's true, shall keep a watch on the interest rates for the next few years. Reaching FI is the main goal and will be exploring side hustles during semi-RE. In the meantime, will just focus on building up my equities portfolio. Thanks for the reply Josh!

[@1Co8]

Thanks for sharing all these insights! Wanted to check in - for the BSD, is it something that can be offset with housing grants? *Suggestion for audio - it'll help to have a pop filter in front of the mic/have it placed outside the line of the bursts of air when talking (but still pointing to your mouth) so the mic's diaphragm doesn't pop when there are plosives

[@joshconsultancy]

I think can. Double confirm with HDB. Ya Ive been thinking of attaching my pop filter back.

[@1Co8]

@@joshconsultancy Thanks for the reply!

[@ypf7717]

Thanks for your analysis. But I felt that investment with cash is not so easy to get returns better than CPF.

[@joshconsultancy]

More than 2.5%pa is really doable. Subs and stay tuned on this channel as we explore it along the journey

[@mytwocents4768]

Do you think singaporean young generation other than CPF can they buy house?

[@joshconsultancy]

Can. Not fair to generalize. There are some who will struggle and some who can comfortably afford

[@nikn2804]

5:28 11:11

[@etjan555]

It’s all depend.......half full Half empty perspective.....

[@alvinyeojiaqin]

If you can make good use of CASH then its worth it. CPF is like a non-liquid asset, you cannot start to use it as cash payout until you reach certain age. Ultimately, it is something we could not touch in theory (what if you dont live up to 55yrs old X_X). My scenario - I use CPF to pay off the mortgage and downpayment (take it as a forced savings for retirement if I sell it in the future) - but the trick is I do not stay in it, I rent it out as an Income Generating Asset, thus I get monthly cash flow of pure RENTAL CASH. If you make good use of these cash, for example like you mentioned, starting a biz, buying stocks/equities, buying another investment property. I think this is making money working harder for you. This is just my 2nd Thought.

[@joshconsultancy]

Agree. Interesting POV

[@louislim4033]

hi stj, i agree with you on the pure rental cash, but the thing is where will you stay then? thanks in advance

[@alvinyeojiaqin]

Filial son with parents 😆🤣

[@louislim4033]

@@alvinyeojiaqin hahahahahhaha good one 😅

[@wilfredteo2899]

Everyone in the rest of the world is using cash or rental income to pay for their mortgage, not take from their retirement fund and then return the interest from their own pocket after 30years of servicing it.

[@dakapil8398]

wahh out of the blue i earn 4k a month. wait long2 bro

[@user-uh6bs7tp7e]

Many people who follow your advice not to fully use CPF to pay for HDB, would have lose out ON the COMPOUNDING effect of CPF Interest over the span of 20+ Years. I beg to differ on your advice and think your advice is rubbish.

[@joshconsultancy]

The tone is uncalled for. There are pros and cons to the various methods

[@saleemrahman785]

Reality - age 30, we still earning $4000.