In total, I received $509 in dividends for the third quarter. This amount is progressively getting larger as I switch towards dividend paying stocks instead of growth stocks. In the previous year, the amount received was only $107.
Breaking the $500 per quarter mark is a good sign that the portfolio is progressing. In time, I do hope that this will grow to $750 and hopefully $1000 per quarter.
The latest news that homeowners can elect to retain $20k in their CPF-OA when applying for a HDB housing loan, is to me a welcomed move.
Previously, homeowners had to completely use up their OA balances, before being able to take a loan with the HDB. This meant that not only are they left with minimal buffer space in their CPF, they also miss out on the additional 1% interest from the first $20k in the CPF-OA.
Some may ask, why bother to retain the money in the OA when you can be paying down the loan and avoiding the interest? I think that an immediate advantage is to let the first 20k sit in the OA garnering an additional 1% of interest, while funneling the rest into the SA, where it earns an additional 1.5%.
The new rules are a boon for soon-to-be homeowners like myself, who see the SA as a cornerstone to their retirement plans. In fact, if you continued to funnel everything above the first $20k into the SA. I’d reckon that the FRS would not be too difficult to achieve.
I pared down a small chunk of the amount outstanding on the CPF housing loan. While not as much as the previous amount in March, it is nonetheless a significant amount and would otherwise mean that the hitting the investment target of setting aside 50k for the year would likely be out of reach.
This was not an easy decision to arrive to, as it would thus make the following year’s target of 75k that much harder to achieve. Also, there is still another small sum required to fund the SA top up for the year. These two put together would mean the likely investment amount set aside for the year end would stand closer to the 40k mark instead of 50k.
On the flip side, this would mean I have repaid almost 2/3 of the amount borrowed on the house. If everything goes according to plan, I calculated that we stand to save more than 40k over the life of the loan. Also, the 5% in paid up home equity will allow more cash to be returned should we want to move or sell our place in future.
It’s never easy to make tradeoffs. But I know that a dollar saved is a dollar earned. Given the poor outlook for the year, valuations still look rich. I’ve narrowed my sights to a few counters which I think can bring genuine return over the long term and would be hoping to add more if the opportunity presents itself.
Unfortunately, it seems that the government is unlikely to hand out more free money. The overall interest rates for SSB is falling, with even the first year rates not being as high as the previous allocation of 1.78%. I doubt the increased allocation of S$50mil would be fully allocated.
Overall, if you already managed to grab a tranche of the SSB during the last August round, this current tranche would be unlikely excite you. Hopefully the next round would be better.
Here is an incomplete list of the past SSB issuances.