$1MM in CPF before 50. AK reveals how he did it...

We reinvite AK, this time to chat about CPF. As of January 2023, AK has S$1.1 million in his CPF accounts, which continues to grow year after year. How did he amass a seven-figure amount in his CPF before he turned 50 years old? Why is CPF his single largest investment? Does he invest his CPF monies in the stock market for higher returns? And the big question: Will he cash out when he turns 55? We ask him all these questions and more in our latest episode!
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[@netviper]

I used to not believe in CPF until i read AK blog. Then i know i actually know nothing abt CPF and quickly worked towards hitting MA and SA caps. And now i am enjoying great returns from CPF every year and will continue to ensure CPF is my Plan B. Plan A will be my investment and dividends portfolio.

[@ChinYF]

Agreed with AK. The same goes for Malaysia EPF which has been distributing 5-6% pa, voluntary contribution is strongly encouraged. Make voluntary contribution regularly, this can increase as one’s salary increases. With the power of compounding, by the time reaches 60, the account will be huge. Best part is the money is professionally managed and is free. Voluntary contribution limit has now increased from RM60K to RM100K per annum.

[@CeriseValkyrie]

5-6% pa?! That’s insane

[@ChinYF]

@@CeriseValkyrie www.kwsp.gov.my/dividend . Is real, hence is tough to sell me UT where I've to pay sales charge, whereas EPF is free :).

[@lovelyday20121]

Wah, Malaysia EPF reached 6.9% in 2017! 够力！ 😲👊💪 5.35% dividend rate in 2022! 👍

[@Sminsky]

But isn’t it rather foolish when the Ringgit seemed to go downward through the years? The higher interest rates may not compensate for the weakening Ringgit.

[@zyan3131]

​@@Sminskycan't say you are wrong but if you have no confident in ringgit then I think is best to avoid keeping any myr or not stay in the country. If you stay and earn in myr, then there's no safer place with high return to place your myr than in EPF. Good luck 🤞

[@scbchong6964]

The basic principle which many young singaporeans cannot catch is that one has to get full-time work, learn to save, and be patient to allow compounding to work. I started work in 1990 and salary was SGD900 per month. Now past 55, my CPF pays annual interest of more than SGD$20k each year. It's not how much you make but what you spend on and how much you choose to save. Get it?

[@tanpingyi4771]

all wanna yolo then complain no cash savings. no cash savings how to top up cpf lol.

[@pathfinder1672]

Totally agreed. My story is similar. Have been working since 1990's and reaching 55 yo next year. I am glad there is CPF scheme to 'encourage' me to save and I did receive $20k in interest.

[@Hs5687]

Basics don’t Apply if Politically Targeted bcz Our Malfunctioning PAP has a well documented bad habit of Weaponising Finances of Not Only Political Targets but also Family 😊

[@stephenwang9567]

Nobody owe us a job till 68. When employment cease due to adverse economic conditions that ,monthly 45% Cpf contributions immediate ends.

[@BeachBoi1000]

It’s good to bring in different speaker to see their thought process, their decision making process. I would say AK has mature thinking very early in his life.

[@TapAVoider]

CPF is like a "religion" to me. By the year 2027, our CPF interest earned will be estimate $100k per year for a family of 5. It will keep compounding like a snowball as year goes by.

[@TheFifthPersonChannel]

Nicely done!

[@tanpingyi4771]

well done

[@FoodieWarrior]

AK inspired me to top up my CPF to FRS years ago. Juicy low-hanging fruit.👍

[@xiaocai7]

Very useful videos, full of insights and real experiences.

[@TheFifthPersonChannel]

Thank you!!

[@frederickho348]

Thanks AK. You are spouting pearls of wisdom

[@samueltay9016]

Thanks AK for coming back with another great episode on CPF! I personally also try to top up my MA to BHS in January so that my SA can be supercharged for the rest of the year :D

[@TheFifthPersonChannel]

Thanks for watching, Samuel!

[@chewkiatyong]

yes totally. max out MA, then max out yearly contributions. over the years, the effects of 'free govt money' shows.

[@lilsaint91]

Why didn't you just top up your SA to begin with if you wanted your SA to be "supercharged"

[@chunchun-maru]

​@@lilsaint91BHS has a lower ceiling, once reach the Monthly MA will flow into SA, and nothing else needs to be done to reach FRS faster.

[@inamotassa1126]

This was an incredibly insightful and generous session. Thank you for sharing your(s) knowledge, which will undoubtedly inspire numerous young individuals to achieve seven-figure success in their lifetime.

[@TheFifthPersonChannel]

You're most welcome! Glad you enjoyed the session!

[@laykhoontan2237]

AK is a very good calculator and I enjoy this episode lots of laughter good job to all

[@TheFifthPersonChannel]

Glad you enjoyed it!

[@ahchoon9067]

I drink I party I ktv all my salaries and when I reach 35 i wanted to buy a resale flat and heng i have CPF to pay for the downpayment. So CPF is good.

[@earthtrippersuz]

Nice analysis and explainations even though I've already heard most of it from the other Ytubers. And Adam does a great job to clarify and re-verbalise when the discussion gets a little complex! Your voice is so soothing like those in-flight announcements (in a good way!;) Keep it up!

[@TheFifthPersonChannel]

Thanks Susanna! Will do!

[@nickdoggett6443]

Fully agree with AK in this great video. CPF is great and those who complain should listen to this video. It's easy to listen to and humorous too.

[@TheFifthPersonChannel]

Glad you enjoyed it, Nick!

[@priscillaDLCZ]

This video is very useful ak will help many people because of this tips!😊

[@poorpotato7623]

OA at 2.5% might not necessarily be better than home equity tbh

[@seeker9912]

You only realise whether you know what you are doing....after the fact. After reading 20 books everyone thinks they understand jnvesting ...but the curve ball always comes. So the safer assumption is that you can be wrong and how to you manage when things goes wrong. Always have a few different class of assets. Only when you build safety then you take risks.

[@jalanjalan7099]

The issue about cpf topups is u never know when the rules will change. If rules are changed, then whatever we put in might be affected.

[@TheFifthPersonChannel]

Yes, there is policy risk.

[@Lucas-wn5wm]

Those who kp about cpf have no control of their finances

[@leonardkim8631]

Those losers at Hong Lim Park many years back.

[@MrBoliao98]

CPF not really good. But better you have CPF than have to pay more tax and feed people who cannot handle CPF.

[@thomaslim9083]

I am 32yo currently looking to use my cpf to downpayment on my future house. I am thinking why save the money in cpf (for 40% of the property price) and not put all in for a $1 million housing asset. Housing you are living in it and Cpf only allows you to collect monthly payment after you are 65

[@howankam5430]

That was a good session. Appreciate if the team consider doing a session of bond ETF as a tool for low risk income investment.

[@MrBoliao98]

Why should I deal with CPF meagre 2.5% with my spare cash when I can buy good dividend buys and easily get 3.5% based on a worse case scenario, I also multiply and compound. And thanks for the interesting sharing on your Govt Bonds. PS: I like CPF. There are prudent people like AK and Fifth person, but there are those irresponsible people who I've seen CPF protect these people from their reckless expenditure. It is the "ultimate safety net".

[@TheFifthPersonChannel]

Thanks! Because you may want a higher fixed income allocation in your portfolio; not everything has to go to equities. The exact allocation is up to you.

[@stanicng]

Adam might consider invite Mr. Loo to your channel.

[@BoonTee]

Please bring AK back frequently!

[@TheFifthPersonChannel]

We'll try!

[@tingxuan9337]

Yayyy AK IS BACK!🎉

[@eddietang8467]

A small step a time, many small steps overtime, is a leap in the time, huge steps when is time. Patience seeing it grows but needs discipline.

[@TheFifthPersonChannel]

"The journey of a thousand miles begins with a single step."

[@thegreenbaby9365]

Hilarious, turns out this AK asked back, what a funny devil’s advocate 😂👍

[@meloon5876]

Good saver is the 1st key

[@Dieselyk888]

Victor, have you explore etf (eg CFA, STI ETF) to overcome the rights issue when investing using CPF ?

[@richemon2524]

Sometimes i think, how much $ is enough? Is it too much , is it too little? Those who play RPG games will always try to level up until max level99 with 100 potions, 100 revives and upgrade whatever armour and weapons u can, everything maxed out But in the end, u realised when u completed the game and defeat the final boss, u probably still have 99 potions left! 😂 Most important is to do within your means, be stress free, don't over stretch everything. You will never going to know how much u ever need.

[@TheFifthPersonChannel]

Haha! Spoken like a true gamer!

[@adamsmith4301]

AK can talk a lot but what if there are policies change made to CPF? CPF also carries policy risk. Just saying.

[@TheFifthPersonChannel]

Yes, that is a risk. But no one is saying to put all off your money into CPF.

[@user-jkwx]

Ya lor he so many what if scenarios but nvr what if about CPF

[@scbchong6964]

Young adult singaporeans live rent-free under their parents' roof until they get married. Most do not contribute to any household expenses and most do not need to get part-time job during high school or university. Most start full-time work at 22 and don't get married till 31: that is almost a decade to learn to save and invest using CPF and personal savings. No excuses to screw up your life. But the truth is singaporeans now have too much cash and too little common sense. Too much arrogance, self-importance and entitlement/complacency.

[@tengenemenmewegmele1222]

The converswtion is for local and I think it is different approach for PR.

[@TheFifthPersonChannel]

PRs contribute to CPF too

[@tnyshare2938]

Cpf $1M so what? It’s overall net worth that matters. AK is simply transferring all funds into the cpf basket while others have a better spread between housing, investment, bank savings, etc.

[@panamood7455]

Great personal finance management lessons today

[@TheFifthPersonChannel]

Glad it was helpful!

[@jonathanedward1987]

So much thinking gone into earning 3-4% when throwing monies into SPY would give you 8-12%. SPY is consistent and downside is just value is lower during market downturn but if you're long term, its not an issue. I dont get this video.

[@TheFifthPersonChannel]

Why not both? Not everything has to be 100% equities. Your CPF can treated as a bond component of your portfolio.

[@jonathanedward1987]

@@TheFifthPersonChannel Because S&P500 (I wont lump all ETFs in one boat as not all ETFs are built the same) is diversified enough to be considered low risk and US is a strong market. I would say stock picking provides for a higher risk component in one's portfolio. The differential of 6% CAGR between both the S&P ETF and CPF is an opportunity cost to the investor. Investing 100k for 20 years separately in these investment vehicles would give the CPF investor an opportunity cost of 320k. The math doesn't add up to me. I don't want to follow 60/40 portfolio (or permutations of it) if it doesn't make sense financially. The idea of 60/40 (1952 with MPT) came before the creation of ETFs (1990). Any old person that has saved and invested somehow over a long period of time can throw up a total net worth figure with a million at the back and give out advice but its not necessarily the best way to go about making one's monies productive. Anyways, its just my personal opinion, thanks for the opportunity to share my viewpoint here.

[@TheFifthPersonChannel]

Thank you for sharing your views! It sounds like you know your risk tolerance which is 100% in equities, and that works for you.

[@tintank8620]

I transferred a bit of my OA to my SA today 😢

[@TheFifthPersonChannel]

Haha. Why the sad face?

[@Humorousguy64]

Gov forcing us to save is correct ...

[@wendyshoowaiching4161]

No use. Financial being withhold for advancement for life. What's the use? Your money are being Reinvestment many times by others and return with peanut return. Stupidity

[@yeoksicacuk]

Thanks Victor for sharing why you won’t use CPF for reits. Would that be the same principle for using SRS for reits?

[@TheFifthPersonChannel]

You're most welcome! Yes, same thing.

[@koongchenwei8064]

Hi can I know what are your views on current MPACT?

[@stephenwang9567]

If my bank balance is a million $ my withdrawal limit is restricted to compulsory $2000/ mth the it's just a futile statement. What's not in our hands don't belong to us. Does it makes sense?

[@TheFifthPersonChannel]

You can withdraw your CPF balances less the FRS at age 55. So AK can withdraw around a million dollars if he chooses to by then.

[@ronghelai8614]

I disagree that you should delay buying a property

[@TheFifthPersonChannel]

Yes, if you need a home, you need a home.

[@mahandranparamasivam73]

Will you be alive able to enjoy your CPF savings.please give us a answer.thank you.

[@kennethlim886]

Why not ? Average life expectancy is 80 for male and 85 for female. You can touch 5000 at 55 and receive monthly payment from 65 onwards. So less unfortunate events, more than 50% of Singaporeans can enjoy their CPF monies. You can also receive your CPF monies if you choose to migrate immediately.

[@leongyet9896]

Yes,my father is one of them and benefits from it

[@hongfooshen]

If I have the extra cash to either do voluntary housing refund or top up to SA, is it always a no brainer choice to do voluntary housing refund then transfer from OA to SA?

[@TheFifthPersonChannel]

Yes, you could do that!

[@lovelyday20121]

@hongfooshen Voluntary Housing Refund doesn't enjoy $8,000 tax relief, ❌ unlike top up to SA or MA!

[@rickylah69]

can i ask, if your SA already hit FRS, will it still earn its 4% and keep growing itself?

[@TheFifthPersonChannel]

Yes it will. And the 4% interest will outpace the yearly FRS increment as well.

[@snowangela1303]

Hi, how did he overcome the cap to CPF SA account?

[@TheFifthPersonChannel]

Hi snowangela, First, the interest earned by your SA balances and second, your salary. and in AK's case, he does VC which adds to his SA balances.

[@cac1504]

In Singapore do not waste your money on COE, taje public transportation. Lead a minimalist lifestyle. Eat at hawker centre. Buy you medicine or vitamins at JB. Watch movies in JB....

[@ViolentCabbage-ym7ko]

If you are not a doctor, don't buy over the counter medicine and see a doctor. No point living a minimalist lifestyle just to be diagnose with a terrible disease that could be prevented if you had seen a doctor early

[@anailian8217]

Go JB, waste time

[@watever1378]

Spore GDP 466billion,msia gdp is lesser,msia govt is able to offer 5-6%.. Regardless,not an easy feat for homeless couples to transfer OA to SA..u will nid to fork out more cash or take on higher loan when buying property..do ur own math..and regulations may change over time so i still prefer liquidity n cash plus fixed assets..just sharing opinion..peace

[@scbchong6964]

Kid, you forgot young adults live rent-free with parents until they get married. You start work at 23 and likely won't get married till 30+. That is a long time to develop a great savings habit using CPF and personal savings, right? Unless you intend to spend all that you make in those years, and then kpkb and blame govt when the storms hit.

[@Sminsky]

Malaysia’s 5-6% is meaningless when the Ringgit keeps falling year by year. Inflation and weak Ringgit would probably wipe out the gain.

[@panamood7455]

He is baaaack 😂

[@bernardlim128]

So funny with all the politically correct statement.......Yes, looking back now, I am so thankful that the government force me to save my own money in CPF, else it would have foolishly left me in one way or the other....... And the returned is respectable too!

[@TheFifthPersonChannel]

What if POFMA?? 😂

[@lovelyday20121]

The discussion sounded a bit confusing initially, on whether the top up to MA vs retirement sum topping-up (RSTU) to SA! Just a suggestion, perhaps can consider is writing on the board (or indicated on the screen) will be clearer! Crystal clear clarification afterwards though.

[@TheFifthPersonChannel]

Thanks for the feedback! Will keep that in mind!

[@bennylim9302]

Money were be getting smaller and smaller. young to hold back to buy house they were be paying more in future..

[@TheFifthPersonChannel]

Yes, if you need a home first, then save up for that! It all depends on the individual financial goals.

[@GodTell7]

i wonder is AK married & got child? ..not easy to invest all the sum in a shot at age 29,30

[@EZJRVCXY]

How come this feels like promoting for CPF? after 55, able to just leave BRS (96,000) and withdraw the remaining right? Feels like GOVT use your CPF to make more than 2.5 / 4%, but pay you that less. Where does the CPF monies go to? Anyone can answer? or is there private auditor to audit?

[@TheFifthPersonChannel]

www.mof.gov.sg/policies/reserves/is-our-cpf-money-safe-can-the-government-pay-all-its-debt-obligations

[@replyguy1965]

Can anyone suggest what I should do with my monies that make more sense. I am 40 years old and currently owe CPF about 200k, inclusive of accrued interest for the down payment of my HDB as well as using cpf dor monthly mortgage. Also, i am about 34k from hitting FRS in my SA. i have met my BHS. Assuming I have spare 34k fresh funds in cash. Should I refund HDB for CPF OA used? Or should I top up my SA and hit FRS?

[@TheFifthPersonChannel]

Refunding to your OA earns you 2.5% interest. You can then choose to transfer it to SA to earn 4% interest. But if you top up your SA directly, you get a tax relief (up to $8k annually).

[@ViolentCabbage-ym7ko]

What's the point of having $1 million in CPF? How much can he get monthly? I would rather renounce my citizenship, get a permanent resident status and start a new life elsewhere in Southeast Asia

[@TheFifthPersonChannel]

Yes, if that makes you happy, you should do it!

[@ViolentCabbage-ym7ko]

@@TheFifthPersonChannel Yes, I would gladly do if you transfer $1M in my account first :D

[@Sminsky]

He can withdraw all the money in his OA when he reach 55 yrs old. His RA should have hit the Minimum Sum requirement. So why the need to renounce his citizenship when he can withdraw $1m when he reaches 55 yrs old , and enjoy the monthly payout till he passes on from his RA Minimum Sum when he reaches 65 yrs old.

[@TheFifthPersonChannel]

@ViolentCabbage-ym7ko You just said what's the point of having $1 million in CPF? But you also want $1 million in your account first. Nice. 😂

[@GeokHongLim-b9l]

Why did he transfer funds from his Ordinary Account to his Special Account just to gain an extra 1.5% in interest, instead of buying property and benefiting from Singapore huge property appreciation over these years??? I think I understand; he prefers solitude and is content living in a one-room rental flat.

[@TheFifthPersonChannel]

If you go through the whole interview, he made his transfers early in his career, then bought his property after.

[@GeokHongLim-b9l]

@TheFifthPersonChannel .. and he DOWNgrade to a smaller property. And Adam is right to ask him: so much cash in OA for what?? Can live in? Can eat?

[@GeokHongLim-b9l]

Money is just a tool. Money is only yours when you spend it with your love ones. He does not understand the meaning of life. He is a lost soul behind the mask and shade

[@TheFifthPersonChannel]

Fair play, mate. Glad to know you've discovered the meaning of life!

[@netviper]

Everyone has their own preference in managing their own finances. Some prefer to spend, so prefer to save. CPF is a risk-free component that helps in ya retirement. If u know how to make money elsewhere, why not. I dun think it is right for us to comment on AK though.

[@Humorousguy64]

Only 5% can be like him ...talk abt cpf for lower income and struggle man cannot do it . Unless hes alone

[@chengjm7696]

I am 68 and have set aside enough for my RA which I will draw down in 2 years’ time. Meanwhile can I use the money in my OA to buy T bills? Thank you

[@TheFifthPersonChannel]

This is up to you. Singapore T-bills are paying around 3.7% right now.

[@chengjm7696]

Thanks

[@Ymusputhandle]

Can see, can smell but cannot touch. When age 55 comes, Enhanced Minimum Sum kicks in and it will be absorbed into CPF Life where one loses the compounding interest of 4.04% if this sum remained in the RA.

[@TheFifthPersonChannel]

Doesn't the Retirement Account also earn a 4% interest?

[@jtanjw]

You clearly have no idea how CPF works and should read up more to also make better returns

[@kennethlim886]

Can see sum increasing 4% in SA yearly. Cannot smell though Can touch the floor of my apartment paid with CPF OA

[@Ymusputhandle]

​@@TheFifthPersonChannel Yes RA earns 4.04% but i am talking about CPF Life. CPF Life doesnt. The Enhanced Minimum Sum will be transferred from RA to CPF Life.

[@Ymusputhandle]

​@@jtanjw CPF Life is a pool risked fund which belongs to nobody and everyone. RA is to your name. Whatever interest earned in RA belongs to you only. However, whatever interest earned in CPF Life goes into the fund, which is not to your name alone. Thus, it is as good as not yours.

[@takanna]

after 30:20 is the CRUX of this video 😮😮

[@isakeng007]

Is not your job to invest your CPF money. But, should just dump as much as possible into SA from OA.

[@theteam3295]

Topping up my MA nowww...

[@ahchoon9067]

From experience those low low risk investments sure loss $

[@walcotttang6946]

Only 1 million in cpf also need to wear mask😂 Millionaire so common in Singapore😅

[@JN_OverTheMoon]

Clearly you don't know that he's a very successful dividend investor, go self learn from his ASSI blog

[@scteoh4855]

Ok only la lol, 1mil at 50, well...

[@isolecad5152]

looks 80