I received a windfall from the proceeds of a Great Eastern Endowment Plan - Maxsave Enhanced Savings purchased 10 years ago.
Time really flies and this liquidity boost comes at a right time when cash is potentially the best performing asset in a high interest environment.
I wanted to find out the yield return of this endowment savings plan, plugged in the figures and derived an annualised return of 2.57% which is almost the same as CPF ordinary account and slightly better than the Straits Times Index which has been stagnant over the past 10 years. However such meagre return is definitely much lower than the average annual return of around 10% for S&P 50 over the past 10 years.
If I were to invest my $30k 10 years ago into Reits or local bank stocks, I could have generated a much higher returns albeit at a guaranteed yield of 2.5%.
Nonetheless, I am rather satisfied with these returns as I was a much weaker investor 10 years ago than now and could have potentially lost my capital.
Lesson learnt is to avoid committing a mid to long term savings endowment plan if we are savvy investors confident of generating more than 2 to 3% of meagre returns. However, if we are conservative or inexperienced investors with savings as priority in mind, then taking up a savings plan with the insurance companies beats the efforts and hazzle
Just some sharing on a lazy Fri afternoon. Thanks for reading.
With love & peace,
Qiongster
5 comments:
Conservative or inexperienced should simply do monthly DCA into S&P 500 with 20% to 40% of their monthly savings.
I agree that your strategy would easily generate decent returns in the long run. However, to each his or her own. Some conservative may not prefer exposure to US or foreign equities.
Without serious & compulsory effort on retirement portfolio planning, PAP can only continue to propagandise & exhort us to work longer, extend official retirement age, extend re-employment age, voluntarily delay CPF withdrawal, and eventually extend the official CPF payout start age to beyond 65.
Or else reduce or stagnate the healthcare budget & services to lower Singaporean life expectancy.
We ought to control and manage our own retirement plans and not let the government dictate our freedom or lifestyle. Work only when we want to and not because we have to.
Totally agree self reliance!
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