Monday, December 5, 2022

Your Financial Portfolio Is Bigger Than You Think

Whenever we talk about portfolios, the most common thing that comes to our minds is the stocks, REITs, bonds and commodities that was bought with our cold hard cash. What some investors did not realise is their financial portfolio is bigger than they think it is. Addressing the elephant in the room (or stating the obvious) there is another big pool of monies that is generating yield passively, and most (if not all) Singaporeans have it: the Central Provident Fund (CPF) accounts. With a monthly contribution from one’s salary and at least 2.5% annual interest, the CPF preps one for eventual retirement and healthcare needs, and to fund property mortgages and kids’ education along the way.

The other pool of monies, though may not apply to everyone, is the Supplementary Retirement Scheme (SRS) account, which is a form of tax deferred plan. Contributions to it provide tax reliefs for the individual and 50% of the withdrawals after the official retirement age would invite taxation.


After a period of regular contributions, these two accounts would grow to substantial amounts, in particular CPF accounts due to the compounding of minimally 2.5%. For SRS, the compounding effect is not that pronounced as the returns are typically the prevailing savings interest rates (0.0x%). An alternative is to invest these two accounts, but that will be a topic for another day.


An additional source of funds which one might have is a savings or endowment plan with an insurer. During my younger days, my parents had initiated for me a couple of endowment funds, and I took over paying the premiums when I started working (and that was when I knew of their existence). Related to this are the investment-linked products which serve as an insurance-investment hybrid.


Finally is the region of potential monetization of one’s assets and if realised, would increase one’s financial portfolio further. Assets could mean time, where the domain of freelance side hustles come in. Assets could also mean something physical, such as a renting out a spare room in one’s home. Assets could mean both time and physical, and a fine example is using one’s vehicle for passenger rides or goods transport.


Regardless of if one has only CPF accounts in his/her portfolio, or having a multitude of stuff mentioned above, it is important to sit back and detail out all these portfolios and plan out where and how these different pools of funds will work out together, despite their differing objectives and regulations of their uses. This is where the concept of the Portfolio Multiverse comes in to try to make a coherent map. Hence the idea of differentiating the various portfolios, then integrate them as one to suit one’s overall financial objectives.


  1. It would be good to have a dashboard that can display the whole universe of financial assets. I guess SGFinDex's goal is to achieve this. They have made a good start but there's a long way to go.

    Until SGFindex becomes more complete, I will have to rely on my own google spreadsheet to track my financial assets.

    1. Hello World,

      Yes definitely, such dashboards are very helpful to have a one-look at our financial snapshots. SGFinDex is a good start, and I hope there would be someone out there developing a sort of all-in app to incorporate these features, though I guess there would be legal and administrative issues in getting the data of individuals.