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  #2421 (permalink)  
Old 27-05-2013, 04:34 PM
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I have a friend who is a sore loser, a MTB. In 2009 when prices corrected, I told him to buy but he keep on insisting to wait for prices to fall further by another 30%. I said don't be greedy as that won't happen but he was stubborn. Now the stupid guy finally gave up and bought a 3 room HDB flat. He could have bought a 4 room HDB flat had he not be arrogant and stupid. Many people is this forum are still displaying that stupidity, thinking they are so smart.


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Originally Posted by Unregistered View Post
All these views are but two sides to the same coin. I believe all have desire to grow our wealth, but differ in the approach.

Without a doubt there are many still on the sideline hoping, arguing for a correction. The million $ question is when is it going to happen? I belong to this group, anxiously waiting for some correction to deploy my war chest. Anxious because I cannot find any good investment to put the cash that would give me a decent return, while helplessly seeing that the property I aim for slipping away.... It was not too many years ago (4? maybe 5yrs?) that I could have bought a 3 rm HDB with my savings of $200K including some renovation, but I waited thinking a crash was imminent. I was aghast when I found out that the same flat was going for $350 to $400K! Now I asked myself will it ever go back to $200K, maybe not $200K but $250K? I feel that time is also not on my side. I dont know if I can wait for another cycle. I am already resigned to continue to stay with my parents.

The other group who have committed to properties believe that our government has stepped in to prevent a bubble from forming or if formed already from growing too big. Flippers / Speculators are removed from the system. They also believe rightly or wrongly that the government would not allow the prices to crash deeply. The government does have a lot of instruments at their disposal to soften any crash such as removing the CM and liberalise the CPF use to shore up the prices to reduce the pain.

At the end of the day, it is your money. You should not let anyone influence what you use it for. For me, I dont blame anyone for the missed chance of owning a place of my own.

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  #2422 (permalink)  
Old 27-05-2013, 04:39 PM
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Wow! Another heated argument on property prices!

My simple advice is to just buy within your means. Don't fantasize prices crashing down by 70%!

If you can afford a 2 room HDB flat, just go for it. If you can afford a GCB, just go for it, as long as you have a roof over your head. There are many choices in the market.

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  #2423 (permalink)  
Old 27-05-2013, 04:42 PM
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Property is the one true way to make it big in Singapore. A lot of people waste time of arguing about small things in their jobs and miss the big things like property.

For eg buying a HDB/condo 1 year earlier can easily save up to $100k, yet many young people sit around praying for price to come down and concern over the few hundred dollars pay increase or few thousand bonus.

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  #2424 (permalink)  
Old 27-05-2013, 05:27 PM
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Quote:
Originally Posted by Unregistered View Post
I have a friend who is a sore loser, a MTB. In 2009 when prices corrected, I told him to buy but he keep on insisting to wait for prices to fall further by another 30%. I said don't be greedy as that won't happen but he was stubborn. Now the stupid guy finally gave up and bought a 3 room HDB flat. He could have bought a 4 room HDB flat had he not be arrogant and stupid. Many people is this forum are still displaying that stupidity, thinking they are so smart.
The stupidity is more for people who think that property price will ALWAYS goes up.

Of course, the fact is that nobody knows for sure. Being cautious is not stupidity. If you need a home and can well afford it, then there is no need to wait. But if you already have a home and only think that it is AN INVESTMENT that NEVER goes wrong and want to stretch yourselves for maximum exposure in property investment, then it is stupidity. Talking about investment, the US stocks market is rising big at the moment while even Singapore porperty is at most treading water. You can even make some money shorting treasury bond because interest rate is already at base level and the next move is only up, cannot be down.
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  #2425 (permalink)  
Old 27-05-2013, 07:36 PM
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I totally agree that if you are buying for self stay, just buy now. Buy a house that you can afford. Many stupid young couple with atas attitude want to buy a condo as their first home. This is unreasonable and they spend hours in forum like this shouting crash all day long, hoping for prices to crash. These stupid youngsters should realize that prices will not likely to fall any time soon. Prices may correct by 5% or so but not by 50%. With low interest rates and rising dual income of families, many can afford to buy condos, especially those who have upgraded from selling their HDB BTO. They use the $400k profit from selling their BTO flat after MOP and then buy a condo.

Quote:
Originally Posted by Unregistered View Post
The stupidity is more for people who think that property price will ALWAYS goes up.

Of course, the fact is that nobody knows for sure. Being cautious is not stupidity. If you need a home and can well afford it, then there is no need to wait. But if you already have a home and only think that it is AN INVESTMENT that NEVER goes wrong and want to stretch yourselves for maximum exposure in property investment, then it is stupidity. Talking about investment, the US stocks market is rising big at the moment while even Singapore porperty is at most treading water. You can even make some money shorting treasury bond because interest rate is already at base level and the next move is only up, cannot be down.
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  #2426 (permalink)  
Old 27-05-2013, 10:49 PM
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I find all this recommendations from these online experts quite funny, I consider myself an average property investor having 3 investment properties (meaning bought for rent and not self-stay) and I can’t even tell 100% where the market is going though I feel that things are somewhat bubbly and this is not the right time to go in.

However we now here we have 100% confirmed or very sure recommendations from these experts who I am pretty sure own either 1 property which they are residing in themselves or perhaps 1 investment property. Not meaning to cause offence to anyone but if I am going to take their post seriously then at least they should bother writing out properly why they feel this way and back it up with some sound articles. I won’t take advice in stocks investments from someone who just dabbles in shares every now and again and same goes for property, I mean would you do that? The fact that this is an online forum makes its all the more the person should justify their point’s otherwise just end up looking like a buffoon.

Property as an investment is like any other tool be it stocks, gold or commodities. Every instrument has it positives and negatives and like any investments one should read up carefully on the trends, location developments, condo details etc calculate their ability to hold and use the leverage to their advantage. Everything can serve to ones benefit but they can also become double edge sword if used unwisely.

Also when I say government will prop up the market I really mean the HDB market, from my perspective (I may be wrong) but for example if market took a 30% hit in pricing since most of the HDB loans are from HDB themselves just by not asking the borrowers to top up on their loans or not foreclosing on properties would do it, even allowing buyers to pay only interest until the economy recovers will do so as well. Ultimately HDB owns the properties and the units they “sell” to consumers are repaid with funds borrowed from HDB anyway. HDB does not need to foreclose on anyone to force out funds since they don’t have shareholders or investors to answer to hence just thru policy they can stabilize the HDB market without spending a dime. And HDB acts as a buffer for private as we know private housing price > HDB price. If one really lacks so much confidence in our government I would simply ask why do they continue staying here anyway?

Just remember in property you need an entry and exit criteria and you need to think it thru taking advice from those who know the market well on what to lookout for and make your own decision. Anyone making predictions but has little exposure to the market themselves is a just a fool waiting to pat themselves in the back when their prediction unfold.

Don’t get caught up with the herd but don’t get put down by the naysayers either because both sides want to be proven that their correct but have no real substance of their own.
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  #2427 (permalink)  
Old 28-05-2013, 12:07 AM
Zhang
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Default !

Quote:
Originally Posted by dives View Post
I find all this recommendations from these online experts quite funny, I consider myself an average property investor having 3 investment properties (meaning bought for rent and not self-stay) and I can’t even tell 100% where the market is going though I feel that things are somewhat bubbly and this is not the right time to go in.

However we now here we have 100% confirmed or very sure recommendations from these experts who I am pretty sure own either 1 property which they are residing in themselves or perhaps 1 investment property. Not meaning to cause offence to anyone but if I am going to take their post seriously then at least they should bother writing out properly why they feel this way and back it up with some sound articles. I won’t take advice in stocks investments from someone who just dabbles in shares every now and again and same goes for property, I mean would you do that? The fact that this is an online forum makes its all the more the person should justify their point’s otherwise just end up looking like a buffoon.

Property as an investment is like any other tool be it stocks, gold or commodities. Every instrument has it positives and negatives and like any investments one should read up carefully on the trends, location developments, condo details etc calculate their ability to hold and use the leverage to their advantage. Everything can serve to ones benefit but they can also become double edge sword if used unwisely.

Also when I say government will prop up the market I really mean the HDB market, from my perspective (I may be wrong) but for example if market took a 30% hit in pricing since most of the HDB loans are from HDB themselves just by not asking the borrowers to top up on their loans or not foreclosing on properties would do it, even allowing buyers to pay only interest until the economy recovers will do so as well. Ultimately HDB owns the properties and the units they “sell” to consumers are repaid with funds borrowed from HDB anyway. HDB does not need to foreclose on anyone to force out funds since they don’t have shareholders or investors to answer to hence just thru policy they can stabilize the HDB market without spending a dime. And HDB acts as a buffer for private as we know private housing price > HDB price. If one really lacks so much confidence in our government I would simply ask why do they continue staying here anyway?

Just remember in property you need an entry and exit criteria and you need to think it thru taking advice from those who know the market well on what to lookout for and make your own decision. Anyone making predictions but has little exposure to the market themselves is a just a fool waiting to pat themselves in the back when their prediction unfold.

Don’t get caught up with the herd but don’t get put down by the naysayers either because both sides want to be proven that their correct but have no real substance of their own.
Good post with reasonable and fair arguments.

On the HDB front, I would agree that just by not calling on the loan, the government is in fact propping up the market. However, I think the last elections have also opened PAP's eyes on the political cost of high housing prices and they are slowly but surely putting in policies that will lead to the reduction in HDB prices over time.

Firstly, Mr Khaw is increasing supply dramatically by building far in advance of demand. Currently, there is still some backlog of demand left over from the strong population growth and from years of under building, but this will disappear over time. At the end of the day, property prices will still come down to demand vs supply - dramatically increase supply and prices will fall over time.

Secondly, the govt has done away with the discount to market pricing model and is now adopting a clear price to income pegging model. Currently, the average HDB is 6x and they are bringing it down to 4x over time. This means prices have to come down (as salaries will not increase so quickly), and this has already come into play in my estate. Resale HDB flats in my place is selling for $520k for a 4 room. For new HDB flats, buying BTO from the govt will cost $320 to 350k after all the govt rebates. Potentially a $200k discount ! For a normal couple earning $5k to 6k a month, and saving $1 to 2k per month, this is equivalent to 8 to 17 years of savings ! Why would I ever buy resale at $520k then? So prices have to fall over time.

The key qualifier : Over time. Especially when you couple this with reversion to mean on interest rates.

Contrary to what most people think, interest rates can move up very quickly. SG interest rates are heavily dependent on US interest rates (rightly or wrongly is a discussion for a different day), and once the US recovers, the Feds can (and have in the past) raised rates 3 to 4% within a year.

Hence, if I had a million bucks, and I had a choice of assets to invest in, I don't think I would go into SG property at this time (where the only justification seems to be the greater fool theory). I may go into stocks (S&P is at an all time high, but its about the same level as it was in 2000 - truly a lost 13 years!) or into Malaysian or US properties, where I think the overall investment climate is quite positive (both from a technical and from a fundamental perspective).

After all, why row against the tide, when you can row with the tide ...


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  #2428 (permalink)  
Old 28-05-2013, 07:21 AM
Zhang
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In case anyone is wondering about US-SG SOR interest rates + proof of rates increasing in a short time (look at 2005 to 2006 for last example where US fed funds rates increased 3 to 4% within a year).

US rates:
Federal funds rate - Wikipedia, the free encyclopedia

SG SOR:
Singapore Interest Rate | Data | Chart | Forecast | News

Quote:
Originally Posted by Zhang View Post
Good post with reasonable and fair arguments.

On the HDB front, I would agree that just by not calling on the loan, the government is in fact propping up the market. However, I think the last elections have also opened PAP's eyes on the political cost of high housing prices and they are slowly but surely putting in policies that will lead to the reduction in HDB prices over time.

Firstly, Mr Khaw is increasing supply dramatically by building far in advance of demand. Currently, there is still some backlog of demand left over from the strong population growth and from years of under building, but this will disappear over time. At the end of the day, property prices will still come down to demand vs supply - dramatically increase supply and prices will fall over time.

Secondly, the govt has done away with the discount to market pricing model and is now adopting a clear price to income pegging model. Currently, the average HDB is 6x and they are bringing it down to 4x over time. This means prices have to come down (as salaries will not increase so quickly), and this has already come into play in my estate. Resale HDB flats in my place is selling for $520k for a 4 room. For new HDB flats, buying BTO from the govt will cost $320 to 350k after all the govt rebates. Potentially a $200k discount ! For a normal couple earning $5k to 6k a month, and saving $1 to 2k per month, this is equivalent to 8 to 17 years of savings ! Why would I ever buy resale at $520k then? So prices have to fall over time.

The key qualifier : Over time. Especially when you couple this with reversion to mean on interest rates.

Contrary to what most people think, interest rates can move up very quickly. SG interest rates are heavily dependent on US interest rates (rightly or wrongly is a discussion for a different day), and once the US recovers, the Feds can (and have in the past) raised rates 3 to 4% within a year.

Hence, if I had a million bucks, and I had a choice of assets to invest in, I don't think I would go into SG property at this time (where the only justification seems to be the greater fool theory). I may go into stocks (S&P is at an all time high, but its about the same level as it was in 2000 - truly a lost 13 years!) or into Malaysian or US properties, where I think the overall investment climate is quite positive (both from a technical and from a fundamental perspective).

After all, why row against the tide, when you can row with the tide ...
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  #2429 (permalink)  
Old 28-05-2013, 08:58 AM
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What worries me are the various property investment seminars you see being advertised in the newspapers. One ad even claim a HDB flat owner can own two condos. I don't know how is this possible if second and third properties require downpayment of 40% and you need to pay SSD. Also HDB flat owners typically don't earn that much, perhaps a combined income of $8,000 per household (dual income). The authorities should investigate what these seminars are telling people. Are they asking people to lever up that debt to unhealthy levels? Recently you read in ST, a 27 year old guy owning two condos and some more looking at a landed property. I think he is over leveraged. If he loses his job, then gone case.
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  #2430 (permalink)  
Old 28-05-2013, 09:22 AM
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Quote:
Originally Posted by Unregistered View Post
What worries me are the various property investment seminars you see being advertised in the newspapers. One ad even claim a HDB flat owner can own two condos. I don't know how is this possible if second and third properties require downpayment of 40% and you need to pay SSD. Also HDB flat owners typically don't earn that much, perhaps a combined income of $8,000 per household (dual income). The authorities should investigate what these seminars are telling people. Are they asking people to lever up that debt to unhealthy levels? Recently you read in ST, a 27 year old guy owning two condos and some more looking at a landed property. I think he is over leveraged. If he loses his job, then gone case.
Yes, I think we should have new policies to ban HDB flat owners from buying condos for investment. If they want to buy condo, they should sell their HDB flat and then buy a condo. In this way, they will not be overleveraged.
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