(*Terms and conditions apply)
Only problem is that most of it is via capital appreciation i.e. must sell to get the income.
While our CPF ordinary account is getting a miserly 2.5% that is getting beat by inflation.
Although we can invest amounts above $20,000 in the CPF ordinary account into approved stocks and unit trust, this rule puts a damper on everyone’s CPF accounts, especially those who are starting to work, or those whose pay is low and those who are not investment inclined.
More important is the fact that just the average dividends given by the STI ETF alone will have beat the 2.5% given by the CPF.
The reply by our government that the interest rate is low because our currency is strong is pure hogwash. If you are using the CPF funds to invest all over the world and boasting that you are getting investment returns that is on par or beat that of Warren Buffett’s Berkshire Hathaway, that explanation is laughable.
So why not just put all the CPF funds into STI ETFs, get dividends higher than 2.5%, have a more than even chance of getting capital returns with dividend as high as the 8.4% achieve over the last 10 years?
This is one example of the nanny state trying to be too clever.