Tag: The '5'

Poppet for U:

Question 1: What were you doing 5 years ago?
Anxiously waiting for the birth of my 1st child.

Question 2: What were the 5 things on your to do list today?
1. Check my emails
2. Check out the forums
3. Cook for buka puasa
4. Eat a lot for buka puasa
5. Updating investor's analysis (cheh!)

Question 3: What are 5 snacks that you enjoy?
1. Cake (last weekend I made choc cake, heavenly)
2. Kuih yg crispy, anything yg crispy
3. Fruit (but dalam pantang, fruit is no-no)
4. Nuts (Looove nuts)
5. Ice-cream

Question 4: What are 5 things that you would do if you were a billionaire?
1. Pay all my debts
2. Buy properties (and cars, and jets..and so many other stuff )
3. Travel with my family - vacation
4. Invest & saving for my old years and for my children's education and insurance
5. Give back to others in the need


Question 5: What are 5 jobs you've had?
1. Daughter
2. Wife
3. Mother (3 jobs above that I can't quit from)
4. Architect
5. Cyber couch potato

Aci ka ini..I think I put in more than 5 for each Q! Ala, what the heck..

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Hidden Riches From Your EPF Funds Part 3

Those who have read my previous entries on this series will know that some people have AT LEAST RM4000 in their EPF funds at their disposal for investment in EPF approved Unit Trust Funds per year, provided that they have already accumulated enough for the Basic Savings Amount, satisfy the few conditions & calculate a minimum withdrawal of RM1000 for each investment period of 3-months.

Essentially, we can equate that as regular quarterly investments of RM1000 (annual contribution adjustments shall be ignored to simplify things). Based 
on these assumptions, we can create two hypothetical  unit trust investment scenarios that shall reveal the total return of each investments versus the yield of the EPF annual dividend for same amount had these funds were left in the EPF accounts in the same period of time .

Scenario 1, quarterly investments of RM1000 into a moderate-risk unit trust fund X over a period of 6-years as shown below:

*Total return is calculated using real price (NAV) per unit as recorded by FP Advisor software & EPF annual dividend rates.

Here, that calculations revealed that, after the 6-year period, the total amount invested is RM24,000. The return from the quarterly investments of RM1000 is RM7,737.84 (32.24%). Suppose if this RM24,000 is left in the EPF funds for the same number of years, it would have gained only RM3,598.62 in total EPF dividends (14.99%). Simply put, by merely investing this amount of money into unit trust fund X, the total return gained in 6 years can easily be increased by RM4139.22 (17.25%)!

Scenario 2, quarterly investments of RM1000 into an aggressive unit trust fund Y over a period of 4-years as shown below:

*Total return is calculated using real price (NAV) per unit as recorded by FP Advisor software & EPF annual dividend rates.

After 4 years, a total of RM15,000 is invested into fund Y. 
The total return from this investment is RM3,364.58 (22.43%). 
The total EPF dividends of this invested sum is RM1,395.69 (9.3%)
for the same period. Hence, the opportunity cost of NOT investing is 
RM1968.89 (13.13%)!

Hidden Riches From Your EPF Funds Part 2

This year one of the best moves that EPF has taken yet is to restructure the limit of EPF account balances to enable contributors to withdraw their EPF funds and invest into the EPF Approved Unit Trust Funds at an earlier age. This simply means that the younger the contributor is, the less money that they have to retain in the EPF (this is the Basic Savings Amount or BSA) and 20% of any excess funds shall be eligible to be invested. Below is the BSA limit structure:

You are eligible if:-
+   Your balance in Account 1 is not less than the stipulated Basic Savings Amount
+   You are below 55 years old
+   You have not withdrawn from your Account 1 in the last three (3) months from the date of your last transaction.

Calculation for your investment:

Suppose that you are at age 25 and your EPF Account 1 balance is at RM16,000:
Your EPF fund you can withdraw for investment will be
= (16,000-BSA at age 25, see table above) x 20%
= (16,000-9,000) x 20%
= 5,000 x 20%
= RM1,000

Therefore, you are able to withdraw RM1000 from your EPF Account 1 for investment & your new Account 1 balance will be RM15,000.

Then, after 3 months you are allowed your second withdrawal after taking your current balance in Account 1 PLUS your additional 3 month's worth of contributions in your Account 1 since your last withdrawal. The calculations will be similar as above provided that you have not reached your birthday within that period (if this is the case then the BSA will change according to your new age). Withdrawal will be granted only if the calculation reveals that you can withdraw a minimum of RM1000.

Provided that you are able to withdraw at least RM1000 from your EPF funds for investment in a 3-month period, you actually have RM4000 worth of investable funds per year. That's not bad at all, considering the money does not come from your own pockets. Agree?

My next post will show you how much is the potential yield of this RM4000 investment!