Should I pay off my loan?

Dear Mr Tan,

I have been reading your blog for quite sometimes. Very interesting and I really admire, person on high position like you still want to share and actively update your blog... I hope you will still do it although you have left Income.

I have one case study, on how do you going to invest your money. If you have 100K on hand now, base on current market condition. What would you do? How are you going to invest that money?

You are employed and your salary is more then enough to cover your expense. You have remaining liability which is your housing loan. Would you pay off some of your housing loan? Would you buy blue chip stock? Would you invest in Growth Fund or Fixed Deposit?

RK

--------------------

Dear RK

Recently, I withdrew $500,000 from my CPF. I decided to invest it in the Money Market Fund to earn about 3% interest. The interest rate varies with the market.

I did not want to invest in the stock market, as I felt that it was rather high. Actually, the stock market went up another 5% since, so I missed this part of the appreciation.

My intention is to wait for the market to correct within the next 1 or 2 years, before I invest in the market.

I have passed investments which I am still keeping in the funds, i.e. I am not withdrawing them now. So, I am partly invested and partly in cash.

In your case, if you are paying interest at 4% or more from your housing loan, it may be better to repay your housing loan. If it is lower than 4%, then you can keep the loan and invest in the money market fund (to wait for a better time to invest in the stock market.

I hope that this suggesion is useful to you.

Tan Kin Lian

-------------

Dear Mr Tan

Thanks for your suggestion. Really realy usefull...

RK