Quote:
Originally Posted by tchen003
Hi, thanks for your feedback.
In Chinese, there is a saying: you can get fish and bear pawn at the same time. (Forgive my noob translation haha).
Reason I VC to MA and SA is that:
1. The first 60k balance, these two accounts produce 5% risk free return.
2. These VC cash, can reduce my income tax which can equal to first year return of 7%+5%!
Above is my understanding and reason to do VC. But again, if thats the case, I may have hard time paying down new condo downpayment with my future wife.
One possible solution, just possible, is to utilize home equity loan. Say my small condo appreciate to 900k sgd after 6 years and I have 500k sgd home loan remains. I can cash out 900k*80%-500=220k sgd as my contribution to downpayment.
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My reason for not doing the VC is because the tax relief end result only saved me a few hundred dollars of tax. I took 5 years of working to get a 900k condo, amid paying off my 2 education loans.
My main funding was derived from cash, OA and small portion from accumulated dividend income from stocks.
If you have not much cash, make sure your OA is well sufficient and vice versa.
Home equity loan is an option for mainly for emergency funding, not advisable for it to fund another house.