CPF give u better return than US bonds
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CPF give you better return than u are holding US bonds!
US 10 years bonds is 4.673%pa,
But the inflation rate for past 3 years is 3.1% on average,
making the real return only 1.673%.
2.Now CPF give u 3.5 % for below S$60,000.
Spore inflation is around 1.4%,making real return 2.1%!!
added 20 aug
3.thanks for all the comments,just to add Medisave, Special & Retirement accounts 4% p.a. will be increased to 5 %pa.Ordinary account 2.5% p.a.will be increased to 3.5%pa.
Therefore,real return is 2.1 to 3.1 %pa,higher than US
treasury bonds 1.673%. -
wat is the basket of goods to measure inflation in sg?
1.4% is a joke! -
Originally posted by lionnoisy:
I don't agree, inflation just increase another 2% this july.
CPF give you better return than u are holding US bonds!
[b]US 10 years bonds is 4.673%pa,
But the inflation rate for past 3 years is 3.1% on average,
making the real return only 1.673%.
2.Now CPF give u 3.5 % for below S$60,000.
Spore inflation is around 1.4%,making real return 2.1%!![/b] -
Maybe the use of GDP deflators to measure inflation would be more appropriate.
In economics, the GDP deflator (implicit price deflator for GDP) is a measure of the change in prices of all new, domestically produced, final goods and services in an economy. GDP stands for gross domestic product, the total value of all final goods and services produced within that economy during a specified period.
The GDP deflator is not based on a fixed market basket of goods and services. The basket is allowed to change with people's consumption and investment patterns. Therefore, new expenditure patterns are allowed to show up in the deflator as people respond to changing prices.
The industry wide GDP deflators are circled in red.
Source: http://www.singstat.gov.sg/stats/themes/economy/ess/essa13.pdf -
What is the Difference between Inflation and the Consumer Price Index?
Many people are confused by the difference between Inflation and the Consumer Price Index. The Consumer Price Index is as its name implies an index, or “a number used to measure change”.
The Consumer Price Index (CPI-U)
The government chose an arbitrary date to be the base year and set that equal to 100. Currently that date is 1984. (Or more accurately the average of the years 1982-1984) previously the base year was 1967.
Every month the Bureau of Labor Statistics (BLS) surveys prices around the country for a basket of products and publishes the results as a number. Let us assume for the sake of simplicity that the basket consists of one item and that one item cost $1.00 in 1984. Then the BLS published the index in 1984 at 100. If today that same item costs $1.85 the index would stand at 185.0 of course a group of items would work the same way. If you have 100 items each would account for 1% of the total index.
By itself that does not tell us what the current Inflation rate is. We must do some calculations using that index to tell us the Percentage of increase or decrease in the level of prices.
What is Inflation / Deflation?
“Price Inflation” is the percentage increase in the price of the basket of products over a specific period of time.
“Price Deflation” is, of course, the percentage decrease in the price of the basket of products over a specific period of time.
For convenience Price Inflation has been shortened in common usage to simply “Inflation” and similarly Price Deflation has been shortened to “Deflation”.
(*Interestingly this is not Webster's definition of Inflation... More)
Source: http://inflationdata.com/inflation/Articles/Difference.asp
The Department of Statistics in Singapore provides Consumer Price Index NOT Inflation. -
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so?
its not like cpf and U.S. bonds are the only investments available. -
if we rely on CPF interest rate to 'earn' something, then our brains are all not working.
Don't become a horse with blinders with a tunnel vision.
If CPF earns alot of money, why don't all the elites throw all their billions into the CPF and make lots of money instead of soaking up the middle class money and raising the draw down age once again making the assumption all of us are going to live longer like the elites? -
In the long run, the average returns in a diversified portolio in the stock market will outperform savings rate returns. Unless those people participate in speculative trade, else if you hold it for long term, the returns are justified.Originally posted by mistyblue:if we rely on CPF interest rate to 'earn' something, then our brains are all not working.
Don't become a horse with blinders with a tunnel vision.
If CPF earns alot of money, why don't all the elites throw all their billions into the CPF and make lots of money instead of soaking up the middle class money and raising the draw down age once again making the assumption all of us are going to live longer like the elites? -
Some suckers like say things in SG are good on this or that. But... in reality, they know nuts about the actual situation over there as compared to SG.
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