Sunday, June 21, 2015

Two Newton’s laws you can apply now to create more wealth

Singapore Stocks Invest I read the news that a majority of CPF fund holders who make use of their special accounts for investments have not managed to obtain better returns than the interests paid by the special account. I am not surprised at this and I have always advocated investors to not utilize their CPF Special account monies for investing in the stocks markets as they will be “giving up” and almost investment-risk-free investment which earns around 4.5% dividends yearly to the vagaries of the stocks markets.

I believe investors who do the above aim higher returns. The statistics bear the fact that it is “hard to beat the stocks markets” and I really think that leaving your CPF monies, with the 4.5% dividend yields compounding is an excellent investment proposition. Newton has said that compounding is the eighth wonder of the world, so why should CPF investors defy Newton? With CPF special account funds earning a 4.5% annual dividends yield, and using Newton’s “Rule of 72”, a sum of $100,000 left in the CPF Special Accounts will become $200,000 in 16 years of compounding principal amount and dividends. That to me is a clever way for an investor to maximize his monies without needing to work on his portfolio regularly. Why should CPF investors defy Newton?

As we know equities always go up and down with the law of “gravity” but with CPF special accounts, the high interest rate is really attractive since it defies “gravity” and one is able to amass a good sum of monies by compounding the principal sum of monies with the interest. CPF special account is hence a great way to using Newton’s two laws: the rule of 72 and the “eighth wonder” to building up your wealth! Join the emailing list to receive regular Financial and Singapore stocks newsletters too! Like" me on Singapore Stocks Investing Facebook page to receive all posts on your Facebook as well as read more articles. Follow me on Twitter too.
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