Monday, February 4, 2019

Building My Second Pot Of Gold

Many Singaporeans earned their first 'pot of gold' from property investments, specifically HDB flats and private condominiums. An entire generation of Singaporean 'Baby Boomers' was lifted into middle-class status during the 1980s to 1990s as they entered the workforce and used their CPF savings to purchase government-subsidised flats. Suffice to say, the public housing eco-system has been a bedrock of Singapore's economy in recent decades. 

Climbing the property ladder has been a well-trodden path to building wealth in Singapore. A tried-and-tested method. That's how our grandparents and parents did it and it has worked out pretty well so far. The appetite for properties has been ingrained into our psyche for generations. We like the physicality of real estate - owning something tangible. In the Singapore market, real estate is a reliable store of wealth and has the potential for long-term capital appreciation.

Being a Singaporean myself, it seems unorthodox that I have 'neglected' this part of wealth-creation for so long. Since I have already built my first pot of gold in the form of a dividend portfolio, the time is ripe to switch my focus to owning a tangible stake on this tiny red dot.

Long-time followers of my blog would know that I rarely (if ever) write about CPF-related topics. To be honest, I did not bother much with CPF in the past. That's because when I first started working in my first full-time job years ago, buying a property was far from my mind and there was no point keeping track of the measly amount in my CPF account. I gave 100% focus on building my dividend portfolio over the last 9 years. I thought I would just treat whatever savings I have in my CPF as a nice retirement 'bonus' when I hit 65 years old. Let it run on auto-pilot. Well, not anymore.

Now, it is time to make good use of my CPF OA. Last year, 2 financial bloggers (Heartland Boy and Turtle-investor) opened my eyes to maximising benefits from the CPF system. I was convinced to do voluntary cash top-ups to my SA & MA. I have been keeping track of my CPF account ever since I made the decision to start my property investing journey this year. So, imagine the surprise when I saw more than $100k in my CPF OA! This would help me pay off a significant chunk of the down-payment.

Over years of navigating through online forums and the financial blogosphere, the eternal debate on 'Investing in REITs vs Owning properties' would re-surface periodically. Both camps present some compelling arguments, but I say, why not strive to achieve both!

Don't wait to buy real estate, buy real estate and wait
Dividend Warrior


TI said...

Hi DW!

Funny but come to think of it, I don't think I've ever commented on your blog despite following it for the longest time. Probably before your 2015 hiatus, and it was pretty inspirational for me! :P

Anyway, congrats for your huge CPF-OA stash! Time to put it to build your second pot of gold!

Dividend Tech Warrior said...

Hi TI,

Thanks for the support over the years :)
That 2015 hiatus did me lots of good. Allowed me to clear my mind and recharge my batteries.
If everything goes smoothly, I should be a home-owner pretty soon!

wenxin said...

i am curious about this as i am in the same situation myself. may i ask if you are single and that is why you have not bought your own property?


30YearOldInvestor said...

Congrats on the next step of Financial Independence!

just a quick question, How long did you accumulate to hit $100k in OA with the VC?

Newbie Investor said...

Congrats DW! Love reading your blog and your sharish at HWZ forum. Hope to learn more ffro yyo, and get achieve my finanfina indepindepen as well

Kenneth said...

DW, you finally see the fruits of your labour in your cpf after 9 years of slogging in the rat race! Congrats!

WTK said...

Hi DW,

You may want to consider all the factors when buying a property and taking up the loan (if necessary).

It may not be a foolproof avenue to make an absolute for property investment.


Dividend Tech Warrior said...

Hi 30YearOldInvestor,

Took around 9 years :)

Dividend Tech Warrior said...

Hi Newbie Investor,

Thanks! Wish u all the best in your journey towards financial independence!
Cheers! :)

Dividend Tech Warrior said...

Hi Unknown,

Yup, can see some fruits, but still stuck in the rat race though. Hahaha!
Hopefully, a few more years of slogging before I ease off.

Dividend Tech Warrior said...

Hi Ben,

Thanks for the advice. Yup, I am probably taking a loan from HDB.

Pipping Cafe said...

Hi dw will you be buying ur hdb to stay or to rent out?

Dividend Tech Warrior said...

Hi Pipping Cafe,
For own stay until the MOP is up :)
Afterwards, depending on my parents' health condition, I might stay with them and rent out my flat. Or my parents could move in with me and they rent out their old flat.

marrythaigirlsingapore said...

If you are single you can most probably pay in full for a 2-room BTO, no need to take any loan. By the time MOP can rent out and stay with parents. Single also have its benefit haha. All the best!

Dividend Tech Warrior said...

Hi marrythaigirlsingapore,

Thanks for the suggestion. Sounds good! :)

linger said...


Looking back, would you have change your investment "invest in property earlier" if time were to turn back ?

Dividend Tech Warrior said...

Hi linger,
If I can go back in time, yes I would have invested in property IF I intend to rent out my flat after MOP. With leverage, the yield would be quite attractive. Well, better late than never :)