Mr Wang Muses on Money Matters

A few days ago, Manpower Minister Ng Eng Hen spoke about CPF investments. Apparently many Singaporeans who invested their CPF money in the past eight years have done badly. They would have been better off simply leaving their money in the CPF OA account to collect interest at 2.5% per annum.

Ng Eng Hen tentatively indicated that the Singapore government is thinking of retweaking the CPF investment rules. It sounds as if the Singapore government is thinking of cutting down the range of investments that one is permitted to make using one's CPF money. The government has also indicated that it's going to make further efforts to educate the public about investing.

Mr Wang, a self-taught guru in personal financial planning, has many thoughts on this matter. Unfortunately the issues are so multi-faceted that Mr Wang doesn't know what he wants to say.

What is the problem? You see, in the end there can only be one set of CPF rules. However, there are many, many different kinds of CPF members. Some are young, some are middle-aged and some are old. Some are poor, some are well-off, and some are filthy rich. Some understand money very well, and some do not. Some are single, some are married, some are married with kids, some have a mortgage, some do not. Some are highly employable, some are retrenched. Some people like to hide their money under the bed, others enjoy flinging it all away at the integrated resorts.

All these kinds of factors influence how a person's money should be managed. Thus it is difficult to envisage how there can ever be a single set of CPF rules that really serves everyone well.

In the end, Mr Wang can only hope that all the readers of Commentary Singapore understand and appreciate the importance of personal financial planning. If you are an ignoramus on the subject, Mr Wang urges you to invest $100 in a few good books and start educating yourself. The time and effort will be well spent, for the key principles, once mastered, will serve you well for years and years to come.

As you travel through life, your personal circumstances will change. You may earn less, earn more, get married, buy a house, strike lottery, get cancer, have children, get retrenched, support your aged parents, receive an inheritance, live lavishly or live thriftily etc. As your personal circumstances change, so do your financial profile and circumstances. Since you will always know your personal circumstances better than anyone else, you are always potentially the best financial adviser to yourself. But first you do have to educate yourself about how to handle money.

That's a basic responsibility. To yourself.

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Mr Wang invites his readers to leave comments on this post and submit questions on personal financial planning. Mr Wang will take questions on subject matter as diverse as insurance, equities, bonds, unit trusts, credit cards, mortgages, savings, properties, retirement planning, banks, insurance agents etc.

Please note that Mr Wang does not hold any formal qualifications as a personal financial adviser or the like. Therefore all his replies will just be food for your thought and for discussion purposes only. You shouldn't rely or act on anything Mr Wang says (well you can, if you want to, but what I'm saying is, you lose money you don't sue me hor).

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Some of Mr Wang's financial books. He has more,
but the rest are stored at his mother's house together with his old clothes,
unwanted suitcases, comics collection and miscellanous other old junk.