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You’ll Never Walk Alone with Central Provident Fund

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For many football fans, the song “You’ll Never Walk Alone” is synonymous with English football club, Liverpool. The song is the anthem of Liverpool and has inspired many great comebacks for the football club. Although glory days are clearly over for Liverpool, many fans still adore the club because of its great tradition and core values.

Indeed, values define who we are and guide us through good times and bad times. The Central Provident Fund (CPF) was implemented in 1955 by the British authorities with the aim of abolishing the pension schemes in Singapore and introducing a national saving scheme. The scheme requires employers and employees to contribute a portion of the employee’s monthly salary into their CPF accounts.

The intent of the CPF scheme was to instill among Singaporeans the value of hard work and saving for retirement. Each of us is responsible for growing our wealth and save for rainy days.

Over the years, the CPF scheme had gone through significant changes, especially during the eighties, when the late Mr Lee Kuan Yew was at the peak of his power. These changes were needed to cater for the growing aspirations of Singaporeans. As a result, CPF was expanded to include healthcare, housing and investment purposes. Because of these changes, many Singaporeans tend to forget the main function of CPF, which is basically to provide for our retirement needs.

Perhaps a victim of its own success, the CPF scheme has become so entrenched and pervasive in our lives that many of us take it for granted. Some have even argued that because of CPF, many Singaporeans are not willing to take the entrepreneurship risks. If you think about it, this reasoning is not exactly flawed. After all, the monthly current employer’s contribution rate is 17% and employee’s contribution rate is 20%. This is quite a substantial amount of monthly saving and CPF interest rates are quite hard to beat, given that the interests are risk free.

As I look back at my wealth journey, the most memorable event should be buying my first matrimonial home. My wife and I were thrilled to be able to build our home using our CPF savings. Both of us grew up having to share rooms with family members and so to finally have a place to call our own was one of the happiest moments in our lives. I guess when we grow old, we will also need our CPF savings to pay for our children’s tertiary education and use the monies for our medical needs.

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There are many Singaporeans who feel frustrated over the CPF scheme and the amount of pay-outs from Retirement Account. To a certain extent, I can empathize with them but the root cause of their resentments should stem from their lack of financial intelligence. If you are one of those who depends solely on CPF savings to fund your retirement lifestyle, then it is critical to frame your mindset.

Although CPF is designed to be a national retirement fund, one should view it as an endowment scheme that offers both yield and protection. Thus, besides this endowment scheme, you must have other income streams and assets for your wealth portfolio. Income streams can come from rental, bond or dividends from stocks. Assets refer to things that have potential to grow in value, like properties or physical gold or silver.

In Singapore, you can choose to buy physical gold from BullionStar, one of the largest online bullion dealers with a store-front shop at 45 New Bridge Road. With BullionStar, you can choose to buy gold or silver bullion online and have them delivered to your home or put them into ‘My Vault’ storage in BullionStar’s secure vault storage facility. Alternatively, you can choose to walk in and buy gold and other precious metals at BullionStar shop and showroom premises.

Gold and Silver Bullion

Gold and Silver Bullion

Setting up an online account is pretty simple and you can choose to pay in different currencies, including Singapore dollar and Bitcoins. In addition, the price is very transparency as BullionStar’s website displays the price premium and spread for each bullion. This allows buyers to make price comparisons online before making the purchase.

BullionStar also offers customers their own minted gold and silver bars with zero spread. They have commissioned world-renowned LBMA-approved Swiss gold refiner Argor-Heraeus to produce these stylish and unique minted 100 gram 99.99 % purity gold bars.

Below are some gold bullion offered by BullionStar that are worth buying:

  1. PAMP Gold Bar – 1kg
  2. American Gold Buffalo Various Years
  3. BullionStar Mint Gold (No Spread)

Singaporeans who still think that they can win the stock market should wise up. The matter of fact is that the odds are stacked firmly against retail investors and those who did not diversify their portfolios are taking on big risks. Just one market correction and their wealth would be gone. Instead of risking your hard-earned money on speculative shares, start buying real physical gold from a trustworthy bullion dealer.

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Magically yours,

SG Wealth Builder

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Updated: June 24, 2016 — 4:04 am

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