I was doing some internet banking transactions today, saw the above advertisement from HLBB. The wording caught my attention in which it says "Now everyone can invest in shares!" and "NO CASH NEEDED". What d hack !?? no cash needed !!! oh, see beside "EPF's Members Investment Scheme" !!
For a moment i thought, no cash needed. wow fantastic !! deeper thought, still needed cash, just that it's from your EPF account 1. You need at least >10K in EPF account 1, see EPF Withdrawal Eligibility here for more details.
Now, something for you to ponder, let say average EPF yearly dividend is about 5%. If i make a withdrawal from EPF and park those money in REITs to get at least yearly dividend of 7% to 8%. In return, i still fetch back at least 2% higher or more assuming the shares price remain unchanged. Looks pretty much worthy right ? After all can't even take out those money until you reach 55 years of age. Assuming you have 20 years more to run till your retirement age, 2% a year will give you extra 40% when you reached your retirement age. ha ha ha ha !! Is it just simple as that ??? Do your math dude. !!
4 comments:
Investment Rule No. 1: Never lose money. Especially so, your Capital, let alone your retirement fund.
EPF is your retirement fund. I wouldn't touch it with a pole if I can. Unless I can be damn sure this investment is (1) a-zero risk one (2) the return is better than EPF's dividend and (3) Don't forget the compounding effect of EPF's return..how are you going to beat it? To move that fund out now at KLCI >1400 is either mad or suicidal.
Oh yes, there is a writeup from one blogger on London Biscuit at this site which is quite logical.
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http://malaysiafinance.blogspot.com/2010/08/good-deals-bad-deals-win-win-deals.html
my personal view of investment and finance management. be clear on objective and perform the needed study on your investment objective, return, horizon and risk profile.
by using lower return investment amount to park under higher return investment product is generally a good method to leverage.
though, considering weighted return of EPF of 5% and with lower end risk, it triumph on safety net investment level to many.
so, for those who plan to leverage, you may interested to draft down your goal, risk tolerancy and investment horizon.
i, personally will leave this a side. investment is investment, financial safety net is another card. the same goes to my insurance and ILP. no ILP in my insurance card. just my 2 cents
elmo,
I agree with you 100%. EPF is almost risk free and 5% is not bad a return. Reits may earn higher return but reits are also subject to market volatility. Do not forget the fees charged by the bank in withdrawing money from EPF for investment. Upfront and yearly management can be substantial and erode whatever excess return one can get from the share market, yet investors have to carry the extra risk. In the 1990s, Singapore government encouraged cpf depositors to withdraw money from cpf to invest in the share market. 90% of them lost huge amount of money and their old age survival is compromised.
Sold partial kfima at 1.17-1.19, realize marginal gain. Increase further stake of Pjdev at 71sen
Portfolio 1
1. PJD 180% (cost: 71.2sen)
2. kfima 20% (cost 1.163)
Portfolio 2
1. PJD 120% (cost: 70.8sen)
2. kfima 10% (cost 1.16)
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