@lichtoefur 70/30 would be best, because epf has some equities as well, and you don’t get crushed when myr appreciates
Path to FIRE FUND
- Thread starter lichtoefur
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johndoe119
New member
@lichtoefur assume epf assets as a bond and some s&p etf as equity:
there are a few ways people split their equity/bonds asset allocation, among them are 60/40 and 100 - age. the first is straightforward, the 2nd is more dynamic where you gradually shift your holdings from equity to fixed income as you get older. so when youre 30 you would have 70% equity exposure, when youre 40 you would have 60% equity exposure etc to preserve capital as you near retirement age at 60.
there are a few ways people split their equity/bonds asset allocation, among them are 60/40 and 100 - age. the first is straightforward, the 2nd is more dynamic where you gradually shift your holdings from equity to fixed income as you get older. so when youre 30 you would have 70% equity exposure, when youre 40 you would have 60% equity exposure etc to preserve capital as you near retirement age at 60.
psalm51mercy
New member
@lichtoefur Have you factored in compounding interest? I ask because I am on track to hit 4m by 55 and I don't save close to 100k per year.
Check out my retirement calculator. Make a copy.
Check out my retirement calculator. Make a copy.
lichtoefur
New member
@psalm51mercy Yeah compounding is included, the differences may be due to our different assumptions in interest rate and years to 55? 
psalm51mercy
New member
@lichtoefur ah yes you're right. I set my retirement for 60 years old!
Otherwise your maths look good. 4M by 55, factor in 26 years of inflation, you are looking at about 2M purchasing power (in today's terms)
Otherwise your maths look good. 4M by 55, factor in 26 years of inflation, you are looking at about 2M purchasing power (in today's terms)
lichtoefur
New member
@psalm51mercy Yeah, that today’s term really got me thinking
4M now and 4M 20 years later, there gon be huge differences. But hopefully keeping investment will dampen the effect
4M now and 4M 20 years later, there gon be huge differences. But hopefully keeping investment will dampen the effect
psalm51mercy
New member
@lichtoefur Hey 2M in purchasing power in the future is better than none 
@lichtoefur Btw i am totally not familiar with SG rules but since you say you have CPF deduction, can you increase your contribution to CPF? But i do understand the withdrawal for CPF is probably more complicated and stricter than EPF.
The thing about putting it into EPF is provided you see yourself retiring in malaysia. And you can only withdraw after age 55 unless you hit the RM1mil. And RM is really not giving much confidence at this point. Even though myself (married) we are putting alot of money in EPF, use up the 100k voluntary contribution per year, we also ensure we put our foreign money into ETFs...
I guess this one you gotta figure out the balance.
I would say dont just rely on EPF, do put your money into ETFs as you have mentioned. VOO is definitely a no for non US citizen like us. Go for irish domicile. But if you are truly into ETFs, then i think the focus should be on something broader base like VWRA equivalent. But this is really because of us being sort of following the boggleheads.
The thing about putting it into EPF is provided you see yourself retiring in malaysia. And you can only withdraw after age 55 unless you hit the RM1mil. And RM is really not giving much confidence at this point. Even though myself (married) we are putting alot of money in EPF, use up the 100k voluntary contribution per year, we also ensure we put our foreign money into ETFs...
I guess this one you gotta figure out the balance.
I would say dont just rely on EPF, do put your money into ETFs as you have mentioned. VOO is definitely a no for non US citizen like us. Go for irish domicile. But if you are truly into ETFs, then i think the focus should be on something broader base like VWRA equivalent. But this is really because of us being sort of following the boggleheads.
lichtoefur
New member
@lichtoefur Hold Singapore reits and banks.
Hold usd etf. I personally dca into VWRA and VOO. Yeah I started 20 years ago when CSPX does not exist
If you plan to retire in malaysia. I suggest you purchase a landed property. You will never know what the price will be 30 years down the road. Many young people would disagree with me though. I'm retired so I see things differently.
Hold usd etf. I personally dca into VWRA and VOO. Yeah I started 20 years ago when CSPX does not exist
If you plan to retire in malaysia. I suggest you purchase a landed property. You will never know what the price will be 30 years down the road. Many young people would disagree with me though. I'm retired so I see things differently.
lichtoefur
New member
@riet I do agree! once fear i always have is that the purchasing power changes over time. I figured to over come this, money has to be invested. Buying a house now will be good! Though, try getting a highrise in good location so that you can earn rental income for the next 30 years. All the best !
mattmanticus
New member
@lichtoefur VOO dont forget there is 30% witholding tax, transaction fee and forex spread. No one has a crystal ball, trump could win in Nov and plunge US into 10 year recession, who knows...thats why you diversify.
If i were you, i wouldnt look at EPF at all. just invest in SGX/SREITS with your sgd earnings. imo you cannot go wrong betting that sgd > myr
If i were you, i wouldnt look at EPF at all. just invest in SGX/SREITS with your sgd earnings. imo you cannot go wrong betting that sgd > myr
lichtoefur
New member
@mattmanticus Thanks man, IIRC the withholding tax only apply to dividend payout and not the capital gain. However if go for Ireland domicile fund it is reduced to 15%, but yeah there’s some fees and spread
Any good suggestion for SGX/SGREIT? I haven’t study before, some suggestions would be a good head start !
Any good suggestion for SGX/SGREIT? I haven’t study before, some suggestions would be a good head start !
believer86
New member
@lichtoefur Go for Irish-domiciled funds, at least that way you can opt in for accumulating funds where the dividends are automatically reinvested. For funds domiciled in US, they are required by law to pay out dividends (distributing fund).
Being in SG, you can easily gain access to LSE or other european stock market. For SG REITs, I would suggest looking into CapitaLand Ascendas REIT. They've been acquiring data centres nowadays. Mapletree Industrial Trust may be a good option too.
Being in SG, you can easily gain access to LSE or other european stock market. For SG REITs, I would suggest looking into CapitaLand Ascendas REIT. They've been acquiring data centres nowadays. Mapletree Industrial Trust may be a good option too.
@believer86
+1, OP, we did all the homework. For evidence, you can search through this sub or the Singapore one, you will get the same answer.
+1, OP, we did all the homework. For evidence, you can search through this sub or the Singapore one, you will get the same answer.
lichtoefur
New member
@gabrielod Thanks mate, I do still hope to hear some downside. There can’t be any investment with no downside, can there ?
@lichtoefur I would suggest to think in terms of risk when it comes to investment. The "downsides" usually happen when we handle the risk sub-optimally without a proper strategy. Downside is absolute whereas risk is relative.
If you are into passive investing, you choose an index fund because the risk is higher than most bonds but lesser than individual stock-picking. This moderate level of risk may result in a 20% - 30% loss when the market crashes. However, you could mitigate the risk by investing long-term. For a short-term investor, this could be a liquidity problem, and thus a "downside".
You pick Irish-domiciled funds over US-domiciled funds, because as non-US investors, you should navigate US tax traps including estate-tax and withholding tax on dividends. In my opinion, the withholding tax on dividends is a cost issue because if you were to invest long-term, then you must minimize the cost. The US estate tax, however, is a serious risk issue if you care about inheritance.
If you are into passive investing, you choose an index fund because the risk is higher than most bonds but lesser than individual stock-picking. This moderate level of risk may result in a 20% - 30% loss when the market crashes. However, you could mitigate the risk by investing long-term. For a short-term investor, this could be a liquidity problem, and thus a "downside".
You pick Irish-domiciled funds over US-domiciled funds, because as non-US investors, you should navigate US tax traps including estate-tax and withholding tax on dividends. In my opinion, the withholding tax on dividends is a cost issue because if you were to invest long-term, then you must minimize the cost. The US estate tax, however, is a serious risk issue if you care about inheritance.
lichtoefur
New member
@gabrielod Yo, that’s a great analysis. Yes, definite CSPX over VOO, but all in all, I guess liquidity should not be one of the point of consideration for long term investment as it will spoil the compounding impact, emergency funds need to be prepared elsewhere in easy withdrawal but lower interest portions
johndoe119
New member
@mattmanticus when republicans win its generally seen as positive for markets due to tax cuts which boost earnings and markets
mattmanticus
New member
@johndoe119 lol no. not under MAGA GOP + Trump. The world has experienced the first time, they know what will happen if there is a 2nd time