Do you want to put your money into OCBC 360 or Dividends?
You have $10,000 at the start and you will be increasing your savings by $20,000 in the next 3 years.
Let’s talk about opportunity cost in the 3 scenarios:
- Scenario 1: Put into OCBC 360 gearing at 2.75% per annum [1.2% salary + 0.5% 3 bills + 1% increment balance + 0.05% base balance]
- Scenario 2: Invest $30,000 at 5% per annum
- Scenario 3: Invest $30,000 at 5% per annum AND re-invest dividends
|
Scenario 1
|
3-Year
|
Initial Balance each year
|
Add $20,000
per year
|
Total Interests
|
|
1
|
$10,000
|
$20,000
|
$825
|
|
|
2
|
$30,825
|
$20,000
|
$1,398
|
|
|
3
|
$52,223
|
$20,000
|
$1,986
|
|
|
70,000
|
$4,209
|
|||
|
Scenario 2
|
3-Year
|
Initial Balance each year
|
Add $20,000
per year
|
Total Interests
|
|
1
|
$10,000
|
$20,000
|
$1,500
|
|
|
2
|
$31,500
|
$20,000
|
$2,575
|
|
|
3
|
$54,075
|
$20,000
|
$3,704
|
|
|
70,000
|
$7,779
|
|||
|
Scenario 3
|
3-Year
|
Initial Balance each year
|
Add $20,000 per year
|
Total Interests
|
|
1
|
$10,000
|
$20,000
|
$1,500
|
|
|
2
|
$30,000
|
$20,000
|
$2,500
|
|
|
3
|
$50,000
|
$20,000
|
$3,500
|
|
|
70,000
|
$7,500
|
|
Total Cash
|
Total Interests
|
||
|
Scenario 1
|
70,000
|
$4,209
|
|
|
Scenario 2
|
70,000
|
$7,779
|
|
|
Scenario 3
|
70,000
|
$7,500
|
