tag:blogger.com,1999:blog-2580989564838748562.post7166097383363453237..comments2023-09-03T20:21:47.133+08:00Comments on Financial Freedom SG: Early House Payment or Invest the Sum?Lemizeraqhttp://www.blogger.com/profile/14066758470866342603noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2580989564838748562.post-31069033476743357892009-10-27T00:32:05.878+08:002009-10-27T00:32:05.878+08:00Hi Musicwhiz,
Don't know why this comment sli...Hi Musicwhiz,<br /><br />Don't know why this comment slipped through, only saw it when I checked the blogger site. i usually publish using MS Live Writer.<br /><br />I pay off using cash for 1/3 of the installment and the rest is through CPF OA. Through investment in UT I have managed to get $20,000 in CPF which I leave it alone and use the rest of the accumulated CPF OA money for investment, dollar cost averaging each month the surplus.<br /><br />This 20k acts as my buffer in case of unemployment or unforeseen circumstances. So I can last a few years- touch wood.<br /><br />I used to subscribe to the notion that to pay off the housing loan ASAP is the way to go. But I rather have the equivalent in investments, money market funds, CPF OA etc.<br /><br />As my old colleague who advised me on this path said, it is better to have money in the pocket than a full paid up house with less money.<br /><br />To each their own level of risk tolerance :) I share your perspective on value investment, but on paying off the housing loan, I travel a different path.<br /><br />Cheers!Lemizeraqhttps://www.blogger.com/profile/14066758470866342603noreply@blogger.comtag:blogger.com,1999:blog-2580989564838748562.post-75224403494427213782009-10-16T06:48:23.795+08:002009-10-16T06:48:23.795+08:00HI Lemizeraq,
For me, I use CPF fully to pay off ...HI Lemizeraq,<br /><br />For me, I use CPF fully to pay off the housing loan which carries an interest rate of 2.6% per annum. This is because CPF OA funds are more inflexible and have limited usage to buy shares or Unit Trusts as compared to cash. Thus, I avoid using cash to pay down my loan as I can invest for returns better than 2.6% per annum.<br /><br />That said, I still feel debt is not a good thing to have, despite many books proclaiming "good debt" and "bad debt". Hence, I am working towards clearing my debt as soon as I can without touching my cash pile. There are reasons for this - it will enhance my quality of life significantly and is something intangible.<br /><br />Cheers,<br />MusicwhizMusicwhizhttps://www.blogger.com/profile/10950754156386935254noreply@blogger.com