Tuesday, September 29, 2009
What one could do with $160
Well. I've been bitching quite a bit about my impending net pay cut next year due to my workplace offering a new HR scheme to us. Basically we will have to pay full CPF once we move over and there will not be any adjustments to the gross pay. This means that our net pay will decrease.
I calculated and it's gonna be about $160 less a month.
Now what could I do with $160 a month??
64 plates of chicken rice (at $2.50 each) a month.
40 days of transport ($2 per trip, 2 trips a day)
Buy a PSP in 2 months.
Holiday in Japan in 12 months.
Go for 3 buffets a month (estimate $50 per buffet)
Buy 2 new DS games a month. (estimate $70 a game)
Buy a new phone in 2 months. (estimate $300 budget)
Buy 17 Threadless.com tees (at $9 each) a month.
Pay for my Japanese language lessons which currently averages about $140 a month.
Pay for 2 hours of vocal training. (my friend is learning at $70 an hour)
Buy a new PC every year and have money left over.
Top up $68 and buy a Nikon D90 in a year. (based on RRP of $1988)
Top up $48 and buy Nikon D700 in two years. (based on RRP of $3888)
Ok, I think that's enough of delinquency. After all, when I mentioned this, people go "Oh but it;s still your money..... it still goes to you....CPF is good for you.... you can buy house with it.. it saves for your retirement.... 4% interest where else can you get?" So I think we should discuss something a little bit more constructive.
Seriously, they really did tell me 4%. However, I think they have forgotten that Ordinary account only attracts 2.5% atm, although an additional 1% for the first $20k in the ordinary account will be credited to the Special Account.
4% is currently applicable for the Special, Medisave and Retirement Accounts (SMRA). However from 2008, the SMRA interest rate has become a floating rate pegged to the 12 month average yield of the 10 year Singapore Government Securities plus 1%. For the first 3 years , as an interim measure, there is a floor rate of 4%. After 2010 , the floor rate will be 2.5%. This means that the SMRA interest can drop to 2.5% interest. Same as ordinary account.
Next, I really don't see myself buying a home anytime soon. Anyway I don't think I can afford a home in these trying times. Half a million for a HDB?? You must be frigging crazy.
So what am I to do with the extra money in CPF? Invest? You can no longer invest the first 20k in each of your accounts. I have already invested what I can from my CPF but that's money I can't use now. I would love to have a little more 'now can use if I want' money.
While I agree that putting money into CPF to attract the minimum 2.5% interest is actually a good idea, I would personally like to aim for an investment goal of 5-10% growth. Of course, investment is no sure thing and you can certainly end up being worse off, but then that would have been a choice that I made and I would (probably) have had no one else to blame but myself. Besides that, it would be cash I can readily use on hand.
Or, if I were so inclined, I could use the $160 to buy an savings policy which gives me higher than bank interest rate and gives me a small amount of sum assured in case of contingencies.
At the end of the day, I know that this policy will not change and I will take up this new HR scheme anyway.... I just don't quite like the way that instead of addressing my query and telling me "well that's too bad but we really cannot do anything about it", they decided to go be a nanny and say "CPF is good for you. Shut it."
It even went so far as someone saying "If you are really that hard up that this amount of change in your take home pay constitutes a major financial issue, then you have a problem with your finances."
Yeah I would agree, but that would be MY problem wouldn't it? I certainly do not need other people to start creating financial problems for me when I can do that perfectly fine myself lol.
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Well. I've been bitching quite a bit about my impending net pay cut next year due to my workplace offering a new HR scheme to us. Basically we will have to pay full CPF once we move over and there will not be any adjustments to the gross pay. This means that our net pay will decrease.
I calculated and it's gonna be about $160 less a month.
Now what could I do with $160 a month??
64 plates of chicken rice (at $2.50 each) a month.
40 days of transport ($2 per trip, 2 trips a day)
Buy a PSP in 2 months.
Holiday in Japan in 12 months.
Go for 3 buffets a month (estimate $50 per buffet)
Buy 2 new DS games a month. (estimate $70 a game)
Buy a new phone in 2 months. (estimate $300 budget)
Buy 17 Threadless.com tees (at $9 each) a month.
Pay for my Japanese language lessons which currently averages about $140 a month.
Pay for 2 hours of vocal training. (my friend is learning at $70 an hour)
Buy a new PC every year and have money left over.
Top up $68 and buy a Nikon D90 in a year. (based on RRP of $1988)
Top up $48 and buy Nikon D700 in two years. (based on RRP of $3888)
Ok, I think that's enough of delinquency. After all, when I mentioned this, people go "Oh but it;s still your money..... it still goes to you....CPF is good for you.... you can buy house with it.. it saves for your retirement.... 4% interest where else can you get?" So I think we should discuss something a little bit more constructive.
Seriously, they really did tell me 4%. However, I think they have forgotten that Ordinary account only attracts 2.5% atm, although an additional 1% for the first $20k in the ordinary account will be credited to the Special Account.
4% is currently applicable for the Special, Medisave and Retirement Accounts (SMRA). However from 2008, the SMRA interest rate has become a floating rate pegged to the 12 month average yield of the 10 year Singapore Government Securities plus 1%. For the first 3 years , as an interim measure, there is a floor rate of 4%. After 2010 , the floor rate will be 2.5%. This means that the SMRA interest can drop to 2.5% interest. Same as ordinary account.
Next, I really don't see myself buying a home anytime soon. Anyway I don't think I can afford a home in these trying times. Half a million for a HDB?? You must be frigging crazy.
So what am I to do with the extra money in CPF? Invest? You can no longer invest the first 20k in each of your accounts. I have already invested what I can from my CPF but that's money I can't use now. I would love to have a little more 'now can use if I want' money.
While I agree that putting money into CPF to attract the minimum 2.5% interest is actually a good idea, I would personally like to aim for an investment goal of 5-10% growth. Of course, investment is no sure thing and you can certainly end up being worse off, but then that would have been a choice that I made and I would (probably) have had no one else to blame but myself. Besides that, it would be cash I can readily use on hand.
Or, if I were so inclined, I could use the $160 to buy an savings policy which gives me higher than bank interest rate and gives me a small amount of sum assured in case of contingencies.
At the end of the day, I know that this policy will not change and I will take up this new HR scheme anyway.... I just don't quite like the way that instead of addressing my query and telling me "well that's too bad but we really cannot do anything about it", they decided to go be a nanny and say "CPF is good for you. Shut it."
It even went so far as someone saying "If you are really that hard up that this amount of change in your take home pay constitutes a major financial issue, then you have a problem with your finances."
Yeah I would agree, but that would be MY problem wouldn't it? I certainly do not need other people to start creating financial problems for me when I can do that perfectly fine myself lol.
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