How much are you earning per annum?

I'm your typical underperforming guy. Married with kids. Already 39 yo, earning only $4.3k pm. Wife earning $3k pm. Live in a 4 room HDB flat, luckily fully paid because we bought at very cheap price. No car, no maid. I wonder whether I can ever retire. I need at least $4k pm for me and my wife in retirement.

Originally Posted by Unregistered

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.

Why worry about them unless they are your relatives and you know their financial situation is not sound. They are all adults and I am sure they know what they are doing.

According to a recent news paper article, there are 34,000 HDB owners who also owned private properties. Many are believed to be staying in condos before and decided to stay in HDB so that they can earn rental from their condos. This was possible before the CM was implemented. I am one of them. Now only HDB people can buy condos and own both at the same time.

34,000 makes up about 4% of total HDB owners. It should not be surprising this 4% are able to afford to buy condos. You only have to see the number of big Mercs, BMs, Audis, and what have you in HDB car parks.

Another thing to think about. When young couples apply for new flats they may qualify based their salaries at the time of application. But by the time they receive their keys to their flat their pay would have exceeded the qualifying limit. This is especially true for those applying for ECs. My point is, many are using the Subsidy to step up. Many of these couples can pay off their heavily subsidized flat within 10 yrs, and within the next 5 yrs as they progressed in their careers they can easily commit to a private property withou having to sell their HDBs! Again we are talking about that few percent of HDB dwellers.

These are the greedy people who taking advantage of subsidy. Taking away money from the reserves. Very irresponsible.

Originally Posted by Unregistered

Why worry about them unless they are your relatives and you know their financial situation is not sound. They are all adults and I am sure they know what they are doing.

According to a recent news paper article, there are 34,000 HDB owners who also owned private properties. Many are believed to be staying in condos before and decided to stay in HDB so that they can earn rental from their condos. This was possible before the CM was implemented. I am one of them. Now only HDB people can buy condos and own both at the same time.

34,000 makes up about 4% of total HDB owners. It should not be surprising this 4% are able to afford to buy condos. You only have to see the number of big Mercs, BMs, Audis, and what have you in HDB car parks.

Another thing to think about. When young couples apply for new flats they may qualify based their salaries at the time of application. But by the time they receive their keys to their flat their pay would have exceeded the qualifying limit. This is especially true for those applying for ECs. My point is, many are using the Subsidy to step up. Many of these couples can pay off their heavily subsidized flat within 10 yrs, and within the next 5 yrs as they progressed in their careers they can easily commit to a private property withou having to sell their HDBs! Again we are talking about that few percent of HDB dwellers.

At the risk of sounding like an unapologetic capitalist, I think life is hard enough without having to think too much about precisely how fair my actions are, when all I'm doing is trying to make a better life for my family.

I would venture that it is every person's responsibility to think of every which way to maximise their station in life, so that their families have more choices in life.

It is the government's job to worry about policies which affect income redistribution.

Originally Posted by Unregistered

These are the greedy people who taking advantage of subsidy. Taking away money from the reserves. Very irresponsible.

Thanks Zhang,

I agree with your points on the factors which will cause the market to correct mainly

1. Interest Rates
2. Upcoming supply of properties (which in turn will impact rental rates)

If this happens you can expect the cooling measures to be reverted back pretty quickly to advert a fallout in the market. Personally I think this might happen in the next 2 years but who knows.

Unfortunately I'm not good with stocks so investment there is not ideal for me. I will likely play safe and wait at the sidelines. Lock my tenants in for a longer term and see how things play out, then I might deploy some capital if things go bad to get some choice property.

I agree with some of the forum members whereby some younger generations snap up expensive HDB in central areas and spend 30 years repaying it. A further location but more manageable loan would probably be a better planning for financial independence, I can't imagine what will happen to this class of people if the market falls and they find themselves in negative equity.

Originally Posted by Zhang

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 ...

We are a small family. My wife and I earns a decent salary, average by Singapore's standards. Our annual income combined is only about $140,000. We managed to flip our BTO flat, making a profit of $400,000. We use the profit as downpayment for our new condo in Jurong. The BTO scheme is excellent in helping middle income families like ours to live in our dream condo.

One must realise the dynamics in money management. "Money" can take various forms.
Physical cash, cash in bank, in gold, locked in asset classes like bond, stocks, property, collectibles what not or being depreciated in liabilities like cars etc.

One should actively manage money because we should at least ensure that the value of money can keep pace with inflation.

The next natural questions is then to ask:

1) what form should it take?
2) when should I switch it to the next form?
3) how long should it stay in the form of choice?

To answer (1), one must evaluate the risk/reward associated with each form objectively. Many people have certain level of 'comfort' bias and tend to shun asset class that he/she is not familiar with.

(2) & (3) is a timing and time horizon issue. Traders will attempt this at micro level. Investors will look it from macro perspective. The former requires higher precision than the latter. Value investors will almost ignore timing and focus only on longer time horizon.

Switching money from one form to another form incurs cost. One must factor this in and consider this carefully. Trade or invest. Property or stock. Make the choice wisely.

Liquidity is an important issue to consider. "Money" locked in asset like property is not as liquid as stocks.

There are other issues like market efficiency, leverage etc. The point here is that there is a string of factors at play and we need to assess each factor objectively before placing bets.

One of the common bias is people perceived property makes a better investment perpetually ignoring the cost, liquidity, timing, opportunity cost etc. When money is in one form. There could be another form that yields better returns. That will be opportunity cost. So the basis of comparison should be made against the safest rate of return, for instance, gov bond yield. In US, it will be the treasury.

There's so much to cover in money management. Many people live their whole life without thinking much about money management. But, I strongly believe that we should look at money management in totality and manage it actively. It is not about getting rich. It is about making sure that money will not become an obstacle obstructing us from doing something meaningful in life.

Being a sole breadwinner of a family of five is not easy. My annual pay is about $100,000. Expenditures add up to $90,000 per year, leaving not much for my retirement savings. Luckily my CPF pays for my HDB flat mortgage, at least I can eventually sell off the flat at $1m when I retire in 10 years time. The flat is worth $700,000 today.

26yo, female.
5yrs working experience in Maritime Industry, degree in Logistics and Supply Chain Management.

Just started my new job as Purchasing Executive in a shipping company, earning $2850 per month.

Now, I feel that I'm underpaid after going through some posts, haha!

Originally Posted by Unregistered

26yo, female.
5yrs working experience in Maritime Industry, degree in Logistics and Supply Chain Management.

Just started my new job as Purchasing Executive in a shipping company, earning $2850 per month.

Now, I feel that I'm underpaid after going through some posts, haha!

Are you pretty, single and avaialable?

I am looking for a wife, want to apply for BTO immediately and then flip after MOP. The only way to get rich in Singapore. I am quite good looking and currently have savings of $300k.