The Underrated Investment

All working Singaporeans should know that our CPF account is split into "ordinary" and "special". The ordinary accounts (OA) pays 2.5% interest p.a., while the special account (SA) pays 4%. For both accounts, you can only start drawing down on them when you hit 55 years old.

Why does the SA pay you 4%? Because the government is trying to encourage long term savings. While the savings in the OA can be used to buy a home, pay for CPF insurance or for investment and education, the savings in the SA are for old age, contingency purposes and investment in retirement-related financial products. In other words, once you put money in the SA, it's pretty much stuck there till you're 55 (Note that the transfer from OA to SA is irreversible).

Many people view this as a bad thing, especially since many of us use CPF money to purchase property. However, let us consider the following:

1. It is probably not prudent to liquidate all your worldly possessions to pay for a house, hence it is likely that you're gonna have some savings left over even after purchasing a property
   
2. It is a good idea to start saving for retirement as early as possible so that you can experience the power of compound interest
3. Your bank account gives you a pretty crap interest on your savings
4. Stocks will give you 7-8% pa in the long run, but they are not without risks
5. The current yield on Singapore Government Bonds is around 3+% on the top end, but carries significantly lower risk compared to stocks.
   
6. A sensible asset allocation for your investment portfolio would have to involve some diversification across different asset classes, be they equities, bonds, commodities, etc.

So if we think of the CPF SA as a long term government bond with a practically risk-free 4% yield, that sounds like a pretty sweet deal to me. So instead of buying bonds, transfer more funds into your SA! A strong case can be made for starting these transfers early when one looks at the power of compounding in action.

Why we Pray

The question regarding what's the point of prayer was something I struggled with back in my 2nd year of college. That summer, I had embarked on a bid to pen my thoughts down but I kind've got stuck half way and my computer subsequently crashed anyway.

Recently, a friend of mine sent out an e-mail with a couple of questions on prayer and how to approach it. This was my reply, albeit some 2 years in the making...

I think the very basic question we have to tackle first is whether prayer changes the way things play out. For example, if we're planning a picnic, can we somehow ensure that it doesn't rain if we pray and fast for the whole week before that? Several passages in the Bible seem to support this concept that prayer can somehow influence God's decisions. Examples would include Jacob wrestling with God (Genesis 32), Abraham pleading of for Sodom (Genesis 18:16-33) and the Persistent Widow (Luke 18:1-8). Going along these lines, it would appear that "persistent prayer" would be equivalent to beating God into submission. So events like prayer retreats would be seen as concerted efforts to somehow change God's mind since we somehow know better than Him. To me, this does not paint a picture of a omnipotent and omniscient God. If we expected certain results every time we went through a series of rituals like prayer and fasting, we would be equating God to some kinds of scientific phenomenon where x + y = desired outcome. I believe that God is so much more than that.

Based on my understanding of the Bible, I believe that we can make the following statements about God:

1) God has our best interests at heart
2) God knows our desires and needs before we even utter a word

So how are we to understand prayer in that case? I believe that prayer is meant to change us rather than to change God. When we pray to God, we are essentially seeking to communicate with Him so as to build up our relationship. Why would we want to build up our relationship? So that we can be on the same page as God, discerning where He is at work and joining Him in that work. I believe prayer is more about aligning our interests and our direction with those of God, rather than trying to sway Him to see things our way. Why then do we say that "the prayer of a righteous man is powerful and effective" (James 5:16b)? Because a righteous man's prayer would be in line with God's purposes and desires, and hence apparently more effective.

What I'm saying is not just "oh, it didn't happen coz God said no", but instead I'm taking it one step further to see prayer not as a vehicle for our desires to be fulfilled, but an opportunity to have them transformed into those of God.

So how does this play out when one is looking for a job or hoping for physical healing? I believe that we shouldn't box God in and expect Him to meet us the way we see fit. If we believe God is sovereign in all circumstances, even in the face of great uncertainty or adversity, then we shouldn't worry about not chalking up that 5 hrs of prayer a day coz God's going to be pissed off and therefore not answer our prayer positively. While we should certainly feel free to voice the desires of our heart, our focus should be on God and not ourselves. Easy to say, but hard to execute. Think about Paul who wrote a bunch of letters encouraging believers while he himself was in prison. If we take Colossians for example, Paul spends the bulk of the letter refuting Colossian heresy and trying to bring the church back on track. It is only at the end where he asks for the church to "pray for us too, that God may open a door for our message, so that we may proclaim the mystery of Christ, for which I am in chains." (Colossians 4:3) This is very different from saying "please pray that I get out of prison 'coz I'm having a hard time here."

Hence I believe that in times of adversity, we should seek God's wisdom through prayer, so that we can have the peace that transcends all understanding in the face of trials. If we believe that God is sovereign and good, I see no reason for us to have to do a bunch of somersaults to catch his attention and have Him accede to our requests.

If any of the above is heresy, someone please let me know.