Do you know the recipe to be a CPF Millionaire?

Many people, unfortunately, have the recipe of undercooking which is essentially abusing one’s CPF funds, resulting in lacklustre performances or losses for monies invested via the CPF Investment Scheme, as we have come across in the news.

Why and how does that happen? This is because many think of their CPF monies as “untouchable” because they cannot access it anyway till they are at least 55 years old, and treat it negligently – the CPF monies are allowed to be invested in the hands of salespeople who have not been looking after them, or worse, churned.

As illustrated, the cash you hold on hand and the monies in your CPF accounts are on the same boat – they are BOTH your money. If you are sitting at one end of the boat, and there is a leak at the other end, wouldn’t you be concerned? You are also on the same boat!

For people who do not know how to invest their money well, or who do not have trusted professionals to look after their CPF monies, we encourage them to put their monies back into their CPF Ordinary Account (CPFOA) and earn the returns of 2.5% p.a.1

However, a better option is available for people who have the ability, or are assisted by professionals with the ability, to look after their CPF monies well.

The above charts show 3 groups of investors:

A: Monies deposited in the CPFOA account, earning returns of 2.5% p.a.

B: Actual results of people investing their CPF monies. Most made less than the 2.5% p.a. available on the CPFOA accounts.

C: Actual results of people investing their CPF monies, advised by professionals.

The results are significant and vastly different with proper care.

Consider this: We assume a contribution of $10,000 p.a. into the CPFOA, which we think is very realistic for most. Accumulating it over 30 or 40 years would generate the following:

The difference between achieving a return of 2.5% or 5% p.a. is very significant over time. A return of 5% p.a. is a realistic assumption as the long-term return of global equities is 5.11% p.a.4

If you have the ability to look after your CPF monies, or you have access to professionals with the ability to look after your CPF monies, the price to pay for choosing to be indifferent to your CPF monies could be $534,000 after 40 years!

Imagine: Increasing the return on investment to 5% p.a. would garner $1.2M in your CPFOA account in 40 years, and this is not even taking into account the deposits in your CPF Special Account! How would you feel when you have more than $1 million at the time you begin enjoying your golden years? It is entirely possible for almost everyone, if you treat your CPF monies with care and loyalty.

Start treasuring your CPF monies now, and a treasure shall await you at the door step of your golden years. You too can be a CPF millionaire!



1. CPF Board:

2. The Straits Times

3. A computation of returns of all clients from Unicorn Financial Solutions, less those who invested less than a year. Returns are over different periods.

4. MSCI All-World Index, since inception on 29th December 2000


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