1M38: The Amazing Feat of Becoming a CPF Millionaire Couple at 38

What if I told you that you & your spouse could save a million dollars well before you hit your 60s? Even if you are just an ordinary citizen living in the world’s most expensive city. Just like my dear friends, Caleb and Tabby, who recently became 1M38 —  an incredible feat!

Both of them come from humble backgrounds. They were raised by ordinary families, studied in local universities, paid off their student debt, and worked normal jobs. But with some smart financial decisions and a healthy dose of frugality, the couple are now well-to-do in their 30s.

So how did they do it? This was my interview with them. (You can also watch the full interview)

What Pushed You To Become A 1M38?

“It started when we were in our early 30s. I attended one of Mr Loo’s 1M65 talks 8 years ago and we were inspired to follow his strategy, as we wanted to have a solid foundation for our long-term financial security. So we saved and invested as much as we could, we made short-term sacrifices for long-term financial goals, and before we knew it — we had saved a million.”

Loo: I recall my first encounter with Caleb. There were over a hundred attendees, but I distinctly remember that he had a strong desire to be financially free. They followed the 1M65 strategy, trusted the process, and now they are chasing their dreams!

Read Also: 1 Million at 65 Using CPF? Here’s The Math Behind The 1M65 Concept

What Strategies Did You Use?

“First, top up your Special Account to save on taxes. We were shaving off $7,000 from our monthly accessible income to meet our Full Retirement Sum. Doing so rewarded us with tax savings and 4% returns in that year alone; you will never find anything on the market with this type of return. Essentially, time in the ‘CPF Market’ is more important than timing the market.

Second, buy an affordable home and refund your HDB housing grant with cash. Our family lives in a simple 3-room resale flat, which meant that we were able to claim the maximum government grant ($160,000). But instead of accruing interest on these grants, we paid it off progressively and let the government grow our retirement savings for us. Eventually, the interest income from this strategy was enough to pay for 2.5X our monthly mortgage.

Third, optimise your CPF accounts. We maxed out our CPF Medisave Account (MA) to our Basic Healthcare Sum (BHS), transferred our Ordinary Account (OA) to our Special Account (SA), and paid off our monthly mortgage with cash. During this period, we had zero dollars in both of our CPF OAs, which was slightly concerning. Eventually, our OA account grew powerfully thereafter and within 18 months, we had enough in our CPF OAs to pay off our entire mortgage.

Do note, we only decided to optimise our CPF accounts after deciding on our housing. So we do not advise anyone to follow this strategy without first considering your own financial situation.”

The beauty of Caleb and Tabby’s strategy is that you can set-and-forget it. After building up your income and topping up our investments annually, you get to sit back and let compound interest do the rest of the work.

Read Also: Singaporeans’ Roadmap For Accumulating $4 Million As A Couple Using CPF By Age 65 (4M65)

What Sacrifices Did Both Of You Have To Make?

Tabby: “For me, it was deciding to live in a 3-room flat instead of a larger flat. This was especially taxing because of the pandemic and the various ‘work from home’ arrangements. Having more room at home would have been very helpful, but this is a sacrifice I am willing to make for financial stability. But on the bright side, as a proud 3-room dweller, we get access to the best U save and CDC vouchers.”

Caleb: “I had to hold myself back from investing in any ‘quick-wins’ to preserve capital and cash for the 1M65 journey. So while people on social media were raving about their ‘quick-wins’ with Tesla stock and crypto, I had to remain disciplined and hunker down with boring index funds. But it worked out, this move brought us one step closer to 1M65 and helped us to avoid the crypto market crash.”

Their sacrifices are truly commendable. While their peers were chasing jumbo flats, condominiums and quick-wins; they chose to settle down in a humble 3-room flat and grow their nest egg.  To them, it is a worthwhile price to pay for long-term happiness.

Read Also: Are Condos Really A Good Investment & Are Private Properties A Sign Of Riches In Singapore?

What Are The Biggest Takeaways From Your 1M38 Journey?

“You do not need to be a big-shot CEO to achieve 1M65. The CPF system is designed for ordinary Singaporeans to accumulate wealth. It will take time to save up a million dollars, but what is important is that you start now — time is on your side. Caleb was an accounting tutor and Tabby was a primary school teacher, plus we only started optimising our CPF over the last 8 years. Now, we are a 1M38 couple!

It is important to start early too! A key factor to our success was Tabby’s proactiveness and tenacity. She started working and building up her CPF in her early 20s, and hit her FRS at just age 33!

If you are a parent, we suggest starting your child’s 1M65 journey early. Start by contributing some seed money to their CPF SA, so that your child can witness the effects of compound interest. Also, we suggest teaching them about the 1M65 strategy early, so that they can get a head start on their peers.

Lastly, once you have set your financial goals. It is important to focus on other aspects of your life. Spend time with your family, build relationships, explore the world — there’s more to life than just 1M65.”

Very well said by the couple. I too believe that you should reward yourself after meeting such a large financial milestone. Perhaps consider getting that bigger house you always wanted or be free to pursue your entrepreneurial passions (which was what Caleb did).

Read Also: 1M45: Reaching $1 Million In Our CPF By Age 45 – This Is How We Did It

How Does It Feel To Be 1M38?

“We feel light and free because we have a low monthly mortgage and funds set aside for a rainy day. Knowing that our CPF provides a cornerstone for our retirement also gives us tremendous peace of mind to experiment with working remotely as digital nomads.

In fact, Tabby was able to quit her job and join me in pursuing an entrepreneurial venture last year. Now we are travelling the world, pursuing our dreams of being digital nomads, and most importantly, spending more time together.”

Caleb and Tabby now run Master Principles of Accounts, an online accounting school that teaches financial literacy and helps students master accounting principles. They are dedicated to providing high-quality education and resources to their students and empowering them with financial management skills.

Special Note: While Caleb is 38 years old, Tabby is 36 years now! And Tabby has the larger share of CPF compared to Caleb because she started early!

Loo Cheng Chuan, is the Founder of the 1M65 Movement. He developed the 1M65 & 4M65 CPF investment strategy that is helping many Singaporean couples to become millionaires at retirement. He runs a 1M65 Telegram Group where he regularly coaches passionate 1M65 enthusiasts on good personal finance virtues and financial market analysis. Loo also have an entertaining 1M65 Youtube video channel where he regularly shares financial topics and update financial market events.

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