CPF Millionaire — Buying your first home
Besides planning for their wedding, Singapore couples are also faced with the tough decision of buying their own home. Fortunately, the Singapore government has made this easier but keeping HDB flats affordable through the use of ones’ CPF funds.
There is however one big misconception that young couples have is — all debts are bad. As such, young couples will use whatever extra cash and CPF they have to pay off as much of the purchase price as possible. While I agree that one should not be in debt, I however disagree that all debts are bad. Used correctly, debt is an effective way of making our money work for us.
Let me illustrate …
A young couple I know recently purchased their new HDB flat. As they were already working for several years before their wedding, they had a combined total of $100,000 in their CPF Ordinary Account. Like most young couples getting married in Singapore, they used up the entire $100,000 in their CPF Ordinary Account to reduce their mortgage. This left them with a small monthly payment which would easily be covered by their monthly CPF contributions.
Here is the problem. While taking a smaller mortgage is an intelligent thing to do, in the current low interest rate…
