Why I Ditched Local ETFs for US ETFs

In 2018, inspired by the book Get Rich By Retirement, I embarked on my investment journey with high hopes. I set up a regular savings plan (RSP), diligently investing $300 per month into each of two local ETFs: the ABF Singapore Bond Index Fund (A35) and the Nikko AM Singapore STI ETF (G3B).

My Experience with Local ETFs From August 2018 to January 2024, I invested a total of $19,800 in each ETF ($300 × 66 months), excluding brokerage fees. The ABF Singapore Bond Index Fund, which tracks high-quality Singapore government and quasi-government bonds, was meant to provide stability. The Nikko AM Singapore STI ETF, tracking the Straits Times Index (STI) of Singapore’s top 30 companies, aimed for long-term growth. After 5.5 years, my portfolio looked like this:

• ABF Singapore Bond Index Fund (A35): Sold for ~$17,800, resulting in a $2,000 loss (after fees). Rising interest rates from 2022–2023 hit bond prices hard, and the ETF’s low yield (~2–3% annually) couldn’t offset the decline.
  
  
• Nikko AM Singapore STI ETF (G3B): Sold for ~$22,000, yielding a $2,000+ gain (after fees). The STI’s recovery post-COVID and reinvested dividends helped, but the growth felt sluggish compared to global markets.
  
  

Overall, my net return was close to zero. While the STI ETF’s gain was a silver lining, the bond ETF’s loss and the slow pace of both left me frustrated. Local ETFs seemed too conservative for my risk appetite and growth ambitions.

Why Local ETFs Didn’t Work for Me

1. Too Slow for My Goals:
   
   
   • The ABF Bond ETF’s focus on stability meant low returns, especially in a rising-rate environment. Its historical annualized return (~2.79% from 2005–2021) felt like treading water, barely keeping up with inflation.
     
     
   • The Nikko STI ETF, while better, was tied to the STI, which is heavily weighted toward banks and REITs. Singapore’s small market limited its growth potential, with annualized returns (~8.8% with dividends) paling compared to global indices.
     
     
2. Too Passive for My Style
   
   
   • Both ETFs are passively managed, tracking indices without active intervention. While this keeps fees low (0.24% for A35, 0.20% for G3B), it also means no chance to outperform the market. I craved investments with more dynamic growth potential.
     
     
   • The STI’s narrow focus and the bond index’s sensitivity to rates felt like a drag, especially when US markets were booming.
     
     
3. Limited Exposure:
   
   
• Local ETFs are heavily tied to Singapore’s economy, which is stable but lacks the scale and diversity of the US market. I wanted exposure to global leaders in tech, healthcare, and consumer goods—sectors underrepresented in the STI.
  
  

After my lackluster experience, I’m ready to explore US ETFs, which offer broader market exposure, higher growth potential, and alignment with my preference for faster-paced investing. I’m now researching US ETFs like VOO, QQQ, and IWDA, which offer exposure to dynamic markets and higher returns. My top pick is the Vanguard S&P 500 ETF (VOO), which tracks the S&P 500, representing 500 leading US companies like Apple, Microsoft, and Amazon.

Disclaimer: This is my personal experience, and investing carries risks. Always conduct your own research before making investment decisions.

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Why I Kept My Money with Chocolate Finance Amid the Saga

Let's talk about the elephant in the room. I have some investment with Chocolate Finance (CF), and nope, I didn't withdraw despite the saga.

If you’ve been following the news, you know that CF hit a rough patch in March 2025, with a wave of withdrawals triggered by the suspension of instant withdrawals and some finfluencer-fueled panic.

But here’s my take: I’m staying put, and I’ll explain why.

Understanding the Chocolate Finance Saga
For those who missed it, the drama kicked off when CF paused its instant withdrawal feature on March 10, 2025, citing “high demand.” This followed the removal of a popular miles-earning promotion tied to AXS payments, which upset some users.

Prominent finfluencers, like those from Sethisfy and Kelvin Learns Investing, posted videos announcing their withdrawals, sparking fears of a “bank run.”

The result? A staggering S$500 million in net withdrawals, slashing CF’s assets under management by 40%. Social media and forums like Reddit buzzed with speculation, with some users worried their funds were at risk.

Unlike banks, CF isn’t covered by the Singapore Deposit Insurance Corporation (SDIC), which insures up to S$100,000 in deposits.

This added fuel to the panic, as people questioned the safety of their money. But here’s the thing: CF isn’t a bank.

It’s a fund management platform licensed by the Monetary Authority of Singapore (MAS), investing your money in short-term bond funds and money market funds.

These investments take time to liquidate, typically 3-10 business days, which is standard for such platforms.

Why I Wasn’t Worried
I don’t have a Chocolate Finance debit card, so the AXS promotion drama didn’t affect me.

My investment with CF is straightforward: I park my money, it gets invested in a diversified portfolio of low-risk, short-term bond funds, and I earn a target return (3.3% p.a. on the first S$20,000 and 3% p.a. on the next S$30,000).

The recent saga didn’t shake my confidence because I understand how CF operates.

First, CF’s funds are held in segregated, custodied accounts with institutions like Allfunds Singapore, regulated by MAS. This means my money is separate from CF’s own finances.

Even if CF were to go under (which I don’t believe is likely), my funds wouldn’t just vanish—they’d be protected, though access might be delayed during legal proceedings. Second, the withdrawal delays were expected.

When you invest in bond funds, redeeming units isn’t instant like withdrawing cash from a savings account. CF’s instant withdrawal feature was a perk, funded by their own capital, not a guarantee. When demand surged, they paused it to manage the volume, which makes sense.

I trusted that my funds would be refunded, even if it took time. Reports from users on Reddit and news outlets like The Business Times confirmed that withdrawals were processed within the promised 3-6 business days, with many receiving funds by March 13-19.

The Bigger Picture: Risk and Reward
Investing with CF isn’t risk-free. The funds they invest in are low-risk but not capital-guaranteed. If interest rates rise or markets tank, you could face losses, especially on amounts above S$50k, where CF’s top-up program doesn’t apply.

I minimise this risk by only investing below S$20k. The bonds CF invests in are mostly AAA- to BBB-rated, with short maturities (often under a year), making them less volatile than equities.

Plus, with interest rates trending downward, bond prices are more likely to stabilize or rise, which bodes well for CF’s portfolio.

The saga highlighted a key lesson: many investors didn’t fully understand what they were signing up for. CF’s marketing leaned heavily on “instant withdrawals” and “high returns,” which attracted users chasing yields without reading the fine print.

When the instant withdrawal perk vanished, panic ensued. I don’t blame CF entirely—CEO Walter de Oude admitted they could’ve communicated better—but I also think investors need to do their homework.

I knew my money was invested, not sitting in a bank, so I wasn’t surprised by the 3-10 day withdrawal timeline.

Why I’m Staying with CF
Despite the bad press, I believe CF is solid. They’re MAS-licensed, transparent about their fund allocations (visible in the app), and have a track record of delivering on their target returns through their top-up program.

The fact that they processed most withdrawals within the standard redemption cycle, even under pressure, shows resilience. By March 25, CF reported net inflows, suggesting others share my confidence.

Final Thoughts
The Chocolate Finance saga was a wake-up call for many, but it didn’t change my perspective. I stayed because I understood the risks, trusted the process, and believed in CF’s ability to weather the storm.

If you’re considering investing with CF or similar platforms, read the terms, know what you’re investing in, and don’t expect bank-like liquidity.

For me, the saga was just noise—my money’s still with CF, and I’m sleeping just fine.

Disclaimer: This is my personal take and not financial advice. Do your own research before investing.

===================================
Sources:

• The Business Times, “Chocolate Finance takes S$500 million hit from 2 weeks’ run of redemptions”
• The Straits Times, “Chocolate Finance to process withdrawals in ‘orderly’ manner”
• CNA, “CNA Explains: What happens if a Singapore-licensed investment platform goes under?”
• Reddit, r/singaporefi discussions

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Unit Trusts vs ETFs

I had a disappointing experience with unit trusts. On the advice of a financial advisor, I invested in them when I knew little about investing.

Unbeknownst to me, the commissions were exorbitantly high, and after two years, I ended up with a loss. This left me wary of unit trusts. Then I discovered ETFs (Exchange-Traded Funds), and I regret not learning about them sooner.

Recently, I watched a YouTube video by My Money TV on this topic, and I couldn’t agree more with the guests’ insights. 

Here’s a quick breakdown of how unit trusts and ETFs compare:

Factor	ETFs	Unit Trusts
Learning Curve	Great for learning; transparent, exposes investors to market dynamics.	Easier for beginners with limited knowledge; less focus on market mechanics.
Time Commitment	Requires some time to research and monitor; suits hands-on investors.	Minimal effort needed; ideal for hands-off investors.
Minimum Investment	Often as low as $10 via digital platforms; lower barrier to entry.	Typically $500-$1,000; higher entry point.
Fees	Lower fees (0.1%-0.5% expense ratio); cost-efficient.	Higher fees (1%-2% expense ratio) plus sales charges; less cost-efficient.
Fund Manager Performance	Tracks indices; consistent with market returns, outperforms after fees.	Actively managed; most underperform indices after fees.
Service Quality	Less human interaction; relies on brokers or robo-advisors.	Access to advisors; quality varies, some prioritize commissions.
Switching Funds	May incur brokerage fees; some platforms offer commission-free trading.	Often free within the same provider; more flexible for switching.
Seeking Advice	Less reliance on advisors; requires self-research on funds.	Advisors available; ask about their track record and fund investments.
Investor Mindset	Suits those comfortable with market fluctuations; focus on diversification.	Appeals to those prioritizing perceived safety; less market exposure.
Best For	Cost-conscious, hands-on investors who want to learn and control investments.	Beginners seeking simplicity, professional management, and human guidance.

ETFs offer significant advantages over unit trusts, making them a better choice for most investors.

Their lower costs mean more of your money stays invested, compounding over time.

The transparency and flexibility of trading ETFs like stocks provide greater control and ease of access.

Additionally, their passive management often results in performance that matches or exceeds actively managed unit trusts, which rarely justify their higher fees.

For cost-conscious investors seeking simplicity and efficiency, ETFs are a clear winner.

Disclaimer: This post is for informational purposes only and does not constitute financial advice. Please consult a qualified financial advisor before making any investment decisions.

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Investment Risk Pyramid

I've been following AK71 on YouTube throughout 2024 and was thrilled to hear about his "Evening with AK and Friends 2025" in Jan. Of course I have to attend. During the session, he shared his pyramid framework, which he uses to ensure portfolio stability.

I cannot remember exactly everything so I did some research on this topic:

Cash (Base Layer)

• Purpose: Provides liquidity and safety. This layer ensures you have immediate access to funds for emergencies, daily expenses, or unexpected needs without market risk.
• Examples: Savings accounts, fixed deposits, SSB, T-bills
• Characteristics: High liquidity, low or no risk, but minimal returns (often below inflation). Acts as a financial cushion, typically recommended to cover 6-12 months of living expenses.
• Role in Stability: Forms the foundation, ensuring you’re not forced to sell other investments during market downturns or personal emergencies.
  
  

Income

• Purpose: Generates steady, reliable cash flow to cover regular expenses or reinvest. Focuses on assets that produce consistent income with relatively low risk.
• Examples: Dividend-paying stocks, CPF*, SRS, Corporate Bonds, REITs, or rental properties.
• Characteristics: Moderate risk, predictable returns (e.g., dividends or interest), less volatile than growth assets. Prioritizes income over capital appreciation.
• Role in Stability: Provides financial security by replacing or supplementing earned income, reducing reliance on selling assets.
  
  *CPF’s restricted access excludes it from Cash, as it doesn’t serve short-term liquidity needs.
  
  

Income and Growth

• Purpose: Balances income generation with moderate capital appreciation. This layer aims to grow wealth while still providing some cash flow.
• Examples: Blue-chip stocks with dividends (e.g. DBS), balanced mutual funds, or ETFs that invest in both bonds and equities.
• Characteristics: Moderate risk and volatility, with a mix of stable income (e.g., dividends) and potential for price appreciation. Suitable for medium-term goals.
• Role in Stability: Diversifies the portfolio by combining income stability with growth potential, cushioning against inflation.
  
  

Growth

• Purpose: Focuses on capital appreciation to build wealth over the long term, typically for goals like retirement or major future expenses.
• Examples: Growth stocks, equity ETFs (e.g. S&P500), index funds, or real estate (non-income producing, like development land).
• Characteristics: Higher risk and volatility, with returns driven by price increases rather than income. Less predictable but higher potential returns.
• Role in Stability: Drives wealth accumulation but requires a longer time horizon to weather market fluctuations. Relies on the stability of lower layers.
  
  

Speculative (Top Layer)

• Purpose: Seeks high returns through high-risk investments, often with a chance of significant loss. This is the smallest portion of the portfolio.
• Examples: Individual small-cap or penny stocks, cryptocurrencies, options, futures, or startup investments.
• Characteristics: Very high risk, highly volatile, and often illiquid. Returns are uncertain, with a high chance of losing the entire investment.
• Role in Stability: Adds potential for outsized gains but is limited to a small allocation to avoid destabilizing the portfolio.
  
  

The pyramid is widest at the base (Cash), emphasizing a strong foundation, and narrows toward the top (Speculative), indicating smaller allocations to riskier investments.

A common approach is to allocate the most capital to Cash and Income layers (e.g., 50-70% combined), a moderate amount to Income and Growth and Growth (e.g., 20-40%), and a small fraction to Speculative (e.g., 0-10%), depending on risk tolerance and financial goals.

The lower layers protect against financial shocks, while the upper layers aim to grow wealth. The pyramid ensures you only take risks with money you can afford to lose.

Currently, my portfolio is unbalanced: 🤣

• Speculative: No plan to add on to my trading account at the moment.
• Growth: This portfolio dominates primarily because my fully-paid HDB is classified as a Growth asset. May want to remove or re-classify in the future.
• Income and Growth: Nearly non-existent due to my micro allocation in bank stocks.I don't have too much spare cash now to invest in banks and I am pulling away from REITS. I have sold 90% of my REITS.
• Income: Mostly in CPF and SRS. I will continue to invest spare cash here to hit FRS. I've also placed my investment in Chocolate Finance here too.
• Cash: I am satisfied with my allocation even though it is a bit lesser than Income.

I'm not very sure if the pyramid make sense for everyone since all our circumstances are different. I will revisit this again in another 6 months time!

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Personal Finance Ratio

Source: DBS 

This table has been useful for me to do a check on my financial health. I try to update every 6 months or before I plan to make a big investment.

Liquidity

• Basic Liquidity Ratio: Indicates how robust a person's finances are to handle an emergency. (Me: ~30 months)
• Liquid Assets to Net Worth Ratio: Determines how much of an individual’s net worth is in the form of cash or cash equivalents. (Me: ~22.5%)

Liquid assets: cash, bank deposits, and other assets easily convertible to cash without significant value loss.

Net worth: Net worth is calculated by subtracting total liabilities from total assets. Assets include everything you own, while liabilities include what you owe (e.g., loans, credit card debt).

AI review: 30-month Basic Liquidity Ratio ensures you can handle emergencies or income disruptions without stress. While 22.5% liquid assets is healthy, the remaining 77.5% (likely HDB and CPF) is less accessible, which could limit flexibility for certain goals (e.g., overseas investment, large discretionary purchases).

Savings

• Savings Ratio: Calculates the amount of income a person sets aside as saving. (Me: ~60%)

AI review: Your Basic Liquidity Ratio of 30 months and Savings Ratio of 60% further indicate robust liquidity and disciplined saving habits.

Debt

• Debt to Asset Ratio: Assesses whether a person’s debt level is high. (Me: 0%)
• Total Debt Servicing Ratio: Calculates the amount of net income that is used to make regular debt repayments. (Me: 0%)

AI review: 0% Debt to Asset and TDSR show you have no financial obligations, a rare and powerful position. You have no liabilities, which is exceptional and provides immense financial stability.

Investment

• Net Investment Assets to Net Worth Ratio: Reveals how much of an individual’s assets are used to accumulate capital for the long-term, excluding the place of residence. (Me: 38%)

I've included my CPF SA and high-yield saving account as "invested assets" since they generate returns.

AI review: A 38% Net Investment Assets to Net Worth ratio suggests a conservative allocation, with a significant portion of your wealth likely in your HDB flat (a non-income-generating asset) and CPF balances (partially illiquid). In Singapore, where HDB flats often dominate net worth, a lower investment ratio is common, but 38% may be on the lower side for wealth growth.

There is room to increase exposure to growth-oriented investments, especially if you’re aiming for long-term wealth or early retirement.

Solvency

• Solvency Ratio: Offers clarity as to whether you have sufficient assets in your portfolio to service your debts. (Me: 100%)

I have no liability - no mortage, car loan, student loan or other debts.

AI review: Strong financial position, particularly in the Singapore context, where factors like CPF balances, HDB ownership, and high savings rates are significant.

I’m cautious about increasing my investment risk due to the potential for capital loss, especially since I have some major life-changing plans in April/May.

For now, I’m sticking to low-risk options like Singapore Savings Bonds (SSBs), T-bills, SRS, and Chocolate Finance, targeting steady 3–4% returns. I have a small allocation to high-risk equities, but I’m prepared for potential losses if the global economy slows.

To review again in 6 months time!

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Living Free as an ESFP-A

I’m an ESFP-A—Extraverted, Sensing, Feeling, Perceiving, with a dash of assertiveness. Also also known as the "Entertainer" or "Performer" in the world of MBTI. I have took this test a few times and I keep getting the same results so must be true right?  

ESFPs are vibrant, energetic individuals who live in the moment and bring enthusiasm to everything they do. Known for their spontaneity, warmth, and ability to connect with others, they thrive in social settings and love creating memorable experiences. The Assertive (-A) variant adds a layer of confidence and resilience, making ESFP-As bold in their pursuit of joy and less likely to be swayed by stress or self-doubt.

Mostly is true but but these days I feel my energy drained out from too much socialising. 

Key Characteristics:

• Extraverted (E): ESFPs gain energy from interacting with people and their environment. They are outgoing, approachable, and often the life of the party, effortlessly drawing others into their orbit with their charm and enthusiasm.
  
  
  I'm not sure if I am the life of the party but definitely approachable!
  
  
• Sensing (S): Grounded in the present, ESFPs are highly attuned to sensory details—sights, sounds, and textures. They prefer tangible experiences over abstract theories and excel at noticing and appreciating the world around them.
  
  
  This is very true, I love concerts, musical and anything visually pleasing. I prefer going to a foreign country to trek then shopping in the malls or dining in a fancy restaurant.
  
  
• Feeling (F): Guided by their values and emotions, ESFPs prioritize harmony and empathy. They make decisions based on how they and others feel, striving to create positive, uplifting environments.
  
  
  These days as I grow older, I have less empathy and patience with people. Especially at work! But I do strive for a politic free working environment. 
  
  
• Perceiving (P): ESFPs are flexible and spontaneous, preferring to keep their options open rather than adhering to strict plans. They adapt quickly to new situations and embrace change with excitement.
  
  
  Yes this is why i cannot work in government sector which has rigid, rule-bound environment. Government roles often involve strict adherence to established protocols, policies, and hierarchical decision-making processes.
  
  
• Assertive (-A): Unlike their Turbulent (-T) counterparts, Assertive ESFPs are self-assured and less prone to second-guessing themselves. They approach challenges with optimism and confidence, trusting their ability to handle whatever comes their way.
  
  I'm naturally optimistic, especially when my shares drop—I still believe they'll bounce back! 😄 This optimism helps me stay calm, as I see worrying as pointless. I also don't believe in regrets. Every experience is a lesson; you can't change the past, so just learn from it and move forward!

Potential Challenges and How to Leverage Them

Distraction or Lack of Long-Term Focus: ESFPs can sometimes struggle with routine or long-term planning. To counter this, pair your spontaneity with tools like task lists or project management apps to stay organized.

This is true. I struggle with maintaining my enthusiasm with a long-term project.

Over-Optimism: As you noted, your optimism (e.g., expecting shares to rise) can sometimes overlook risks. In your job, balance this by seeking input from analytical colleagues or double-checking data before decisions.

Sure that is why AI Chats are my best friend now.

Emotional Sensitivity: Your feeling nature might make criticism sting. Use your assertiveness to view feedback as a growth opportunity, aligning with your "no regrets, just lessons" mindset.

I am open to this in general. Afterall if I think you are saying rubbish I won't even remember the conversation ;) 

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The Fisherman and the Industrialist: A Lesson in Wealth

The Story by John Lane

The industrialist was horrified to find the fisherman lying beside his boat, smoking a pipe.

“Why aren’t you fishing?” asked the industrialist.

“Because I’ve caught enough fish for the day.”

“Why don’t you catch some more?”

“What would I do with them?”

“Earn more money. Then you could have a motor fixed to your boat and go into deeper waters and catch more fish. That would bring you money to buy nylon nets, so more fish, more money. Soon you would have enough to buy two boats, even a fleet of boats, then you could be rich like me.”

“What would I do then?”

“Then you could sit back and enjoy life.”

“What do you think I’m doing now?”

The Lesson

This parable cuts to the heart of a timeless question: What is wealth? The industrialist sees it as a destination—a future reward earned through years of hustle and expansion. The fisherman, however, lives it in the present, finding richness in simplicity, balance, and time well-spent.

The story doesn’t dismiss ambition or hard work. Instead, it asks us to define success on our own terms. The industrialist’s vision of wealth requires endless striving, while the fisherman’s wealth lies in having enough—enough to live, love, and enjoy the moment.

Here’s my twist on the fisherman’s story: I’m not fishing every day like he does. Instead, I’m waiting for my fishes to grow bigger. By that, I mean I’m letting my investments mature over time. I’ve planted seeds in the form of careful planning, thoughtful choices, and patient effort. Now, I’m giving them time to grow before I “reel them in” to enjoy the rewards.

The fisherman in the story didn’t need an empire to be rich. He had enough fish, enough time, and enough joy. I’m not quite there yet—I’m still letting my fishes grow—but I’m closer to his mindset than ever before. I’ve learned that wealth isn’t just about what you have; it’s about what you need to feel whole. For me, that means a life where I can enjoy the fruits of my labor without sacrificing the peace of today.

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The Fifth Person’s Alpha Quadrant Course

In 2024, I decided to take my investment knowledge to the next level by enrolling in The Fifth Person’s Alpha Quadrant course. Priced at S$597, this course identify high-growth stocks through a disciplined value-growth investing approach. 

Why I Chose Alpha Quadrant

As someone with a basic understanding of investing, I was looking for a course that could bridge the gap between beginner strategies and advanced stock analysis. The Fifth Person had a strong reputation in Singapore for its practical and structured investment education. After researching other courses, I found Alpha Quadrant’s pricing reasonable at S$597, especially compared to other Singapore-based programs that often charge upwards of S$1,000 for similar content. The promise of lifetime access to online resources and a focus on fundamental analysis sealed the deal for me.

The Learning Experience: A Deep Dive into Financial Analysis

The Alpha Quadrant course is built around a 4-step Investment Quadrant methodology—Business, Financials, Management, and Valuation. The course is delivered through a combination of online video lessons, case studies, and live webinars.

1. Comprehensive but Demanding Financial Analysis

The course dives deep into reviewing financial reports, including cash flow statements, balance sheets, and income statements. For someone like me, who had only a surface-level understanding of these documents, this was both a strength and a challenge. The instructors broke down complex concepts—like operating cash flow, debt-to-equity ratios, and return on equity—into digestible lessons. However, it required significant effort to grasp how to interpret these metrics and apply them to real companies.

The course provided checklists and templates, which were incredibly helpful, but it wasn’t a quick process. It took me months to work through the online modules, and even now, I find myself revisiting the lessons to refresh my understanding.

2. Researching Business Models and Management

One of the most valuable aspects of Alpha Quadrant was learning how to evaluate a company’s business model and management quality. The course taught me to ask critical questions: Does the company have a sustainable competitive advantage? Is the management team aligned with shareholders’ interests? They also taught us how to analyse companies’ revenue streams, market positioning, and leadership track records through real-world case studies.

Researching a single company could take days to weeks to dig into annual reports, industry trends, and even news about the CEO’s past decisions. The instructors emphasized that this rigor is what separates successful investors from the crowd.

3. Frequent Updates via Webinars

One standout feature was the frequent webinars included with the course. These sessions, hosted by Victor and Rusmin, provided updates on market trends, new case studies, and answers to student questions. I found them incredibly valuable for staying current and applying the course principles to real-time market conditions. 

Things to note:

• Steep Learning Curve: The financial analysis component was rigorous. If you’re new to reading balance sheets or cash flow statements, be prepared to invest significant time and effort.
  
  
• Time-Intensive: The course isn’t a quick fix. It demands dedication, both to complete the modules and to apply the research process to real investments.
  
  
• No Free Trial: While the price is reasonable, there’s no free preview of the course content, which might make some hesitant to commit upfront.

Final Thoughts

The Fifth Person’s Alpha Quadrant course was a challenging but rewarding journey. For S$597, I gained a robust framework for stock analysis, access to ongoing webinars and resources. I’d recommend Alpha Quadrant to intermediate or advanced investors who are serious about mastering fundamental analysis and value-growth investing. If you’re a beginner, you might find it overwhelming unless you’re willing to put in the work to learn financial concepts from scratch. It’s also ideal for those who thrive in structured, self-paced learning environments and are committed to long-term wealth-building.

Disclaimer: This is my personal experience, and investing carries risks. Always do your own research before making financial decisions.

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Top Up Your CPF on Jan 1st?

The CPF Interest Game: It’s All About Timing

Interest is calculated monthly based on the lowest balance in our account each month but credited annually in January of the next year. The theory of topping up our CPF early in the year ensures our extra funds earn interest for all 12 months, rather than just one.

Topping up on January 1st means our additional funds are included in the lowest balance for every month of the year, maximising the interest. A December top-up, however, only earns interest for December before the annual crediting, missing out on 11 months of potential earnings.

Example
Let’s say we have $50,000 in Special Account (4% interest) and want to top up $10,000:

January 1st Top-Up:

• New balance: $60,000.
• Monthly interest: $60,000 × (4% ÷ 12) = $200.
• Annual interest: $200 × 12 = $2,400.
• Year-end balance: $62,400.

December 1st Top-Up

• Balance (Jan–Nov): $50,000, earning $1,833.33 interest.
• December balance: $60,000, earning $200.
• Annual interest: $1,833.33 + $200 = $2,033.33.
• ear-end balance: $62,033.33.

Difference: Topping up on January 1st earns us an extra $366.67 in interest for just one year. Over time, this compounds, making the gap even larger.

Why This is Irrelevant To Me
However I feel this is quite irrelevant to my context as I am focusing on hitting the FRS ($213,000 in 2025) versus waiting until January 2026 (when the FRS rises to $220,200).

Example: If I top-up in June 2025, I will meet the 2025 FRS ($213,000) immediately and exceed the 2026 FRS ($220,200) by December 2025 ($221,620). This positions me for higher CPF LIFE payouts.

In this case, the goal of hitting the FRS in 2025 shifts the focus to timing the top-up to meet the FRS before it increases in 2026, making June 2025 more advantageous than waiting until January 2026.

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S$600k for retirement?

When I read that some Singaporeans believe S$600,000 is enough to retire, I did a double-take. Really? In one of the world’s most expensive cities, with inflation creeping up and healthcare costs soaring, how does that add up?

As someone with no debt or mortgage, I still find S$600,000 a risky bet for retirement. For me, a monthly withdrawal of S$3,000–S$4,000 feels safer to sustain a decent lifestyle. So, let’s unpack this: Is S$600,000 truly enough, and why do some people think it is? Spoiler: It’s not as simple as it seems.

At first glance, S$600,000 sounds like a hefty sum. If you’re 65 and plan for a 20-year retirement, that’s S$2,500/month (S$600,000 ÷ 20 years ÷ 12 months).

According to a 2019 study by the Lee Kuan Yew School of Public Policy, a single retiree needs about S$1,379/month for basic needs—think hawker meals, public transport, and a modest HDB flat. A couple needs S$2,351.

On paper, S$2,500/month seems to cover this with a bit of wiggle room. But here’s where I get nervous:

• Inflation is a silent killer. At a conservative 2% annual inflation rate, S$2,500 today could be worth only ~S$1,600 in 20 years. If inflation spikes (like the 4.2% we saw in 2023), your purchasing power erodes even faster. That hawker chicken rice might cost S$8 instead of S$4 by 2045.
  
  
• Healthcare costs creep up with age. Life expectancy in Singapore is 83 for men and 87 for women. If you’re retiring at 65, your savings need to last 20–30 years. Healthcare expenses for those over 70 can easily hit S$4,000/year or more, even with MediShield Life. A single hospital stay could wipe out your buffer.
  
  
• Life isn’t just about “basic needs.” I don’t know about you, but I want to enjoy retirement—maybe take a budget trip to Japan, treat my family to a nice meal, or join a bouldering class. S$2,500/month leaves little room for these joys, especially if unexpected costs pop up.

For me, a monthly withdrawal of S$3,000–S$4,000 feels more comfortable. It’s not lavish, but it covers essentials, some leisure, and a cushion for surprises like medical bills or helping out family.

Here’s the thing: Keeping S$600,000 in cash or a low-yield savings account is a recipe for trouble. Inflation will eat away at it, and you’ll be left scrambling. To make that money last, you have to invest it to generate passive income.

Here’s how I think about it:

• CPF LIFE as a foundation. If you set aside the Full Retirement Sum (S$213,000 in 2025) in your CPF by age 55, you could get ~S$1,600/month from age 65 for life under CPF LIFE’s Standard Plan.
  
  
  That’s a decent start, but it’s far from enough for my target of S$3,000–S$4,000/month, especially if you want more than a bare-bones lifestyle or retire early.
  
  
• Invest the rest for passive income. After setting aside the FRS, you’re left with ~S$394,200 to invest. This chunk needs to generate S$1,400–S$2,400/month to hit my target.
  
  
  For example: 
• REITs or dividend stocks: A portfolio yielding 5–6% annually could generate S$19,710–S$23,652/year (S$1,642–S$1,971/month). Think Mapletree Logistics Trust or DBS shares.
  
  
• Balanced ETFs: A mix of stocks and bonds (e.g., Vanguard’s VWRA) might yield 5–6% long-term, adding S$19,710–S$23,652/year while balancing growth and stability.
  
  
• Bonds or fixed-income funds: Safer options like Singapore Savings Bonds offer ~2–3% returns, adding S$7,884–S$11,826/year, but you’d need to mix with higher-yield assets to reach your goal.
  
  

By combining CPF LIFE (~S$1,600/month) with investment income (~S$1,642–S$2,000/month), I could hit S$3,242–S$3,600/month, just shy of or within my target range. But this assumes I invest wisely, diversify, and accept some market risk. Keeping S$600,000 in cash? That’s a hard pass.

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