I edited that down trying to distil the parts that underpin the position being put forward. I don’t think invoking supposed ‘very smart, extremely savvy, very rich, [‘the type who spend $200 on a glass of whisky and don’t even think about it!!!’] people has merit. What is being suggested, ‘very smart, very rich blah blah’ do such and such so you should too?BBCWatcher wrote:some very smart investors -- much smarter than any of us ... Those extremely savvy investors are currently (as I write this) willing to lock in their after-tax money, in Singapore dollars, with the AAA rated Singapore government for 10 years...
....OK, so you're an ex-PR let's suppose, and you're holding CPF funds that pay a minimum of over 4%, Singapore tax free. You haven't locked up your money for 10 years(*)
... the global financial market locks up its money for 10 years. GREAT DEAL! By definition.
... But CPF SA is a tremendously excellent deal, as the global financial markets themselves loudly demonstrate every minute as they trade Singapore government debt.
(*) Yes, you can sell a Singapore Government Security on the secondary market before maturity. So your money is not truly "locked," but you are taking some risk that bond prices will fall/bond interest rates will increase, and thus you might not get back all your principle if you sell early. That's not like CPF -- you don't have that risk with CFP.
You don’t become rich by spending on $x00 whisky, never mind by not even thinking about it. That is entirely contrary to my experience of working amongst some people one might consider ‘rich’. In my experience that stuff is drunk by a) poor people pretending to be rich (the gold-Rolex brigade, incl SGn nouveau-riche) b) ‘rich people’ who are getting someone else to pay for it.
Then there seems to be a whole suggestion that these Rolexed-up people, who doubtless bathe in Crystal are locking up their money in SG for 10 years for ‘1/2 what little ol’ you and me can get in CPF. So therefore clearly CPF is a no-brainer, can’t you see, it’s so obvious!’. But then comes a p.s. that in fact buying a 10yr SGn government bond isn’t actually locking up money for 10 years, and that you can sell it. Ha – no kidding! So all the preceding ‘Rich people do, so you should too’ was based upon an entirely false construct. Amazing, just what is the point, and what is the thinking behind touting a solution when nothing relied upon as a basis makes any sense at all. Anyway, then the regurgitated but mashed class-room 1.0001 on how bond prices can rise as well as fall... ugh
If you buy a SGn govt bond it’s likely a small part of an investment portfolio, probably intended to reduce gross risk across all the investment assets. No one is going to enter the fabled Rolex la-la-land on the back of even a ‘super-tremendously-excellent’ 4% a year.