Wednesday, November 17, 2021

The Financial Jackass of the Year


One of my favourite movie franchises was Jackass. In this movie, a bunch of clowns basically do crazy stunts and someone records the reaction of the crowds who get to witness it. Some of the stuff they do is tremendously anti-social. In one episode, the team actually visited a contractor and took a crap in the toilet bowl that was in the showroom. In another scene, someone urinated on a snowball and then tried licking it like ice cream. 

I am ending 2021 like a Financial Jackass. 

As I've just gotten my final paycheck, I was able to close the books in 2021. 

2021 cannot be a worse year for business as the release from lockdowns reduced demand for financial courses. It does not help that other areas of the economy are forcing more people into this field creating excess supply. I was mentally prepared to lose 50% of my revenue from 2020, but since I did not expect to have much use for my earnings in 2021, I decided to be a financial jackass for the year and see how much pain I can endure, so I did two things :

  • Maxed out the $15,300 into SRS and poured it into stocks very similar to what's taught in my programmes.
  • Recorded all my revenues and pumped 37% into CPF, making voluntary contributions across all accounts. 
Both moves are tax-deductible and I expect my tax bill to be really tiny in 2022.

The final result was extremely painful. Imagine compounding a bad year by taxing all revenues by 37% and then deducting $15,300 from what remains. I ended up digging into my dividends to make contributions a couple of times. Do note that I maintained my promise of farming a significant portion of my trainer fees into my student-built portfolio as well. 

But with great pain comes great wisdom. 

I wanted to do this in response to 15WW's suggestion that someone my age should do CPF voluntary contribution ahead of SRS. After a year of doing both, we can compare the results of both approaches. 

If you are 47 years old, a voluntary contribution provides 3.3% returns because it is a blended mix of CPF-OA, SA and MA contributions. On the other hand, my SRS was invested prior to the pandemic still returned an overall XIRR of 13.22% on a beta of 0.84. 

Overall, my feeling is that I would still prioritise SRS over the CPF voluntary contribution. 

While the risk is much higher, equity returns are more attractive if I can stretch to age 62. The only advantage to CPF is that I can actually my money much earlier at 55 instead of 62 for SRS. You should also not forget that you can make an emergency withdrawal from SRS, just pay a 5% penalty and withdrawals are taxed as personal income tax. 

There are, of course, some mild regrets in hindsight. All this money into CPF could have been put into a stable coin and staked at 12%. I doubt nothing could stop me from getting more substantively into the crypto game in 2022 and don't mind falling behind younger guys in making crypto profits.

Finally, kudos to other sole proprietors or business owners who can do both CPF VC and SRS at the same time, it feels like a huge struggle over the short term but your future self will thank you for it.

Likely my next Jackass stunt would probably be inspired by 1M65 Mr. Loo Cheng Chuan. 

Right now, I am still quite butthurt from all this CPF contribution in 2021, maybe I'll start in 2023.  



  1. Hi Chris, do you see depositing your money into your CPF accounts to be like investing in SG bonds?

    1. Yes I do. Returns are far superior to a SG bond ETF.

    2. Thks for sharing.

  2. Wont the returns be higher if you instead your CPF money instead?