Basically, we forced ourselves to put aside a sum of money so that at the end of duration, we got some money saved up.
Buying university insurance plan is one of the most commonly utilized "forced saving" which is through an endowment plan.
Recently, my wife ask my sis for endowment plan, I ask her why is there a need to do that, since she is investing under my advice. I told her I am confident of beating the 2% guaranteed rate and the project rate is 4%, which is not a tall order for me too.
She thinks it is more secure and it is a form of risk spreading. I am fine with that, and she ended off with saying "forced saving" ma.
Case number 3, I had a close friendwho stayed with in-laws, rented out their HDB, and hoot a 1.5 mio private property at a prime place.
He is very capable, and already communicated with her wife that the unit will be sold in 10-15 years time (depending on market) and they will downgrade to HDB resale again to free up the cash. This is their mid-life crisis plan, an option to downgrade, and having lived in a nice private property in their lifetime.
He believed the odds for capital appreciation in 10-15 years time is very high, but if the sale value just break even, so be it, take it as forced saving lor. I do think he is plan is rather sound, but I have issue with the loose use of "forced savings"
It seems "forced savings" is becoming more and more like an koyo to sell something ... And people actually buy that.
Hmm... For my wife case, if she is so afraid of risk, just do VC to CPF and transfer it to SA. Same same what, paid 10, roll over 10 years. Almost 55. The excess of MS can be taken out. 4% guaranteed some more, no need projection.
Wonder why dun believe me... LOL
In case no 3, how can they stay in a hdb, buy a prime condo, and then sell the condo to have another resale. wouldn't that be like 2 hdb flats?
ReplyDeleteWas surprised the wifey doesn't trust your skills. You ought to remind her what backs up the stuff in the policy is actually the same stuff you put your money in
Hi Kyith,
ReplyDeleteFor case no.3 he is staying with in law, I am not too sure if he is selling the HDB to buy condo or not, (have not TOP but soon), if he doesn't sell HDB, he will just love back to his HDB. Yeah, cannot have 2 HDB.
As for wifey, u see, recently her portfolio are all red except for CMPH and gold Etf. She ask me why like that. I say no worry, plus dividends all the reds are in blue.
I think I need to do "annual report" for her to see end of year
Hi mike
ReplyDeleteMe and my Husband also do 'force saving' maybe he scared I lost too much in share gua. Haha
Hi Yeh,
DeleteForced saving is good. But cannot anyhow buy property also say forced saving lei....
That is the crux of my message
well
Deletebuy property sure huat？ better than we anyhow tikam at shares?
All these depends on individuals, there are people who sign up for endowment plan just to force themselves to save a portion of their income in order to built their retirement funds. Of course, the returns are not that fantastic as compare to purchase blue chips and stable shares, but some of the people just don't have the time and trust to put their money in shares.
ReplyDeleteJames,
DeleteIndeed, I believe there is a time and place for everything, including endowement plan. Just "cow bei" about my wife thinking so little about my investing skills. Make money never think I good, LOL
Hi SI,
ReplyDeleteFor VC, there is no tax rebate. Only Retirement Sum Top Up scheme will get tax rebate.
betta man,
DeleteThanks for the update man... I will change and edit the post...
Retirement sum top up for love ones also count right?
Yes, also count but up to $7K top up got tax rebate only.
DeleteOh ok... Thanks thanks
DeleteI recall an agent trying to sell me these "forced savings" plans too. We sat down in Mac and she lay out the long-term plan. She was very insistent that I sign on the spot, and if I don't like it, I can just cancel later. I was quite annoyed that I had to sign on the spot. So I politely said I will go home and see how. That kicked me to learn more about insurance and do my homework. But still, I look back and wonder if my POSB Invest-Saver Plan is any different from the "forced savings" plans they promote.
ReplyDeleteI recall an agent trying to sell me these "forced savings" plans too. We sat down in Mac and she lay out the long-term plan. She was very insistent that I sign on the spot, and if I don't like it, I can just cancel later. I was quite annoyed that I had to sign on the spot. So I politely said I will go home and see how. That kicked me to learn more about insurance and do my homework. But still, I look back and wonder if my POSB Invest-Saver Plan is any different from the "forced savings" plans they promote.
ReplyDeleteak also got regular savings plan. he took up a uob silver savings account. :)
DeletePressure selling is a big red flag to me.
DeleteUnless I have a specific product I want and quotation/ benefit illustration is already send to me, I would not buy..
I ask my sis to generate about 8 different types of CI protection, term and tag to life, when I decided, I meet her and sign... No need to talk male chickem
si, so adorable.
ReplyDeleteSMK... hmm I think that as a compliment!
DeleteI know! many also say... Muhahahahaha
it is a compliment. lol
DeleteIt's a great blog about savings thanks for sharing the blog to know more about savings account..
ReplyDeleteSaving account