2/10/2008
Myth 172
Saving that is not
Technically Singaporeans are among the greatest savers, saving at least 38% of their income directly into the CPF and more for those who can afford to in their private personal accounts. But Singaporeans will never have enough for their old age. How so? Because the saving is not savings. The savings will be spent along the way and by the time they retire, they will be shock to know that there is hardly anything left. Savings of Singaporeans is a myth.
Where would all these big savings go to?
Housing will take a huge proportion over 30 or 40 years. This is perhaps the biggest item to be taken out from the saving. Then there is the Medisave that will be spent in world class hospitals charging world class rates. And if this is not spent, it will be kept out of reach of the Singaporean till he passes away.
Then there will be the fees for education, the premiums to be paid for medical insurance and life long insurance. And Singaporeans can count on more schemes in the future to help them spend their savings in the CPF, and probably even compulsory spending.
So whatever the Singaporeans saved in the CPF, they will spent it, in one way or another, in advance.
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2 comments:
Well, they did tell Singaporeans to work until they drop because they know most Singaporeans will have no chance to touch the money. The CPF money will end up with the
Government one way or another when one needs to pay for a HDB flat, hospitalisation, education, insurance premiums (which will go up when hospital charges escalate and claims get bigger and bigger). But the famous last words are: hospitalisation charges will still be affordable compared to erh....you know who.
You can "save yourself poor" if what you put away does not increase in purchasing power (value) over time.
Because we live in an economic environment that is inflationary, savings alone—especially when interest rates are kept artificially low by the central banks—will ensure that you sacrifice all your life (by foregoing expenditure) only to be disappointed in your old age, when you will need the money because you're now an unproductive walking corpse.
Believing in the govt to look after you by providing this that and the other throughout your productive life when you should be providing for yourself is the FIRST and FUNDAMENTAL error of thinking.
Fancy trusting the govt to provide you with a home. What happens? They "lease" you a home at inflated prices and control your political freedom through the process.
Fancy trusting the govt to look after your savings for old age. They control your money, therefore you no longer "own" your money. It is SUNK money — gone from your control forever.
One thing no govt or even gods and goddesses can control is human stupidity. Very few humans can think LONG TERM because we are not "designed" that way and to think LONG TERM is counter-intuitive to basic human programming.
"Modern physics teaches us that there is more to truth than meets the eye; or than meets the all too limited human mind, evolved as it was to cope with medium-sized objects moving at medium speeds through medium distances in Africa." - 'The Selfish Gene' by Richard Dawkins
i.e. Our human nature operates on a "medium" level. We see sizes like a grain of sand to a mountain, time in terms of seconds, to decades, speeds from an ant crawling to jets and rockets screaming. However in the universe sizes range from sub-atomic to galactic (and beyond), time from nanoseconds to eons, and speeds from the rate of hair growing to light-speeds. In short, we are not designed to "perceive" concepts beyond our basic programming, although we can "understand" them because of our ability to flex and expand our INTELLECT.
It is for this design reason, human beings are conn-able - if you know how to do it. Their inherent short-range thinking means that you, as a politician or snake-oil salespoerson, can bullshit the masses if you have the right skills.
Thus the majority of humans will believe in bullshit and myths, and whether one agrees with me or not, all political processes and ideologies deliver one fundamental institution to The People:
The Government They Deserve - i.e. the group of people adept in promoting myths and superstitions, and of course HOPE.
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