do you happen to be the same car salesman which comes here to pitch the COE is going to increase? seems like your writing pattern is the same.

Hi, sorry, who are you talking about?

40, earns a salary of $4k pm.
Wife, 35, earns a salary of $3k pm.
We are living in a 4 room flat now worth $450k.
Our home loan left is now $100k.
Is it advisable for us to upgrade to an EC which cost $650k?
If we sell our flat and after settling the loan we will have $350k.
We can downpayment $300k and loan $350k over 25 years.
Can the senior gurus here advise us?
Thank you.

If you are looking at a brand new EC, I would think that it is ok to upgrade to one. Because you can enjoy the subsidy provided by the government.

Here are the benefits:

1. After 5 years you could sell it in the open market or after 10 years, you could sell it to foreigners gaining the subsidy and open market prices. Very much like flipping your BTO flat. The gain you can derive from this is definitely going to be higher than if you continue to stay in your current HDB flat.

2. EC are actually condos, so you and your family get to enjoy the facilities like swimming pool, tennis and others in privacy and convenience.

3. Currently the private home loan interest is very low, below 1.5%. This is way lower than the 2.6% HDB is charging you for the HDB loan.

Other factors to consider:
1. How much is the mortgage payment per month for $350k loan over 25 years? Is this amount comfortable for both of you? Here you need to put some buffer for interest rate increase.

2. Are your children old enough to enjoy the condo facilities? If yes, it is a plus point to buy the EC.

3. Do you have a car? If so, it is another plus point because your conservancy and maintenance fee would cover the car park cost for 1 car. If you don't have a car, you are subsidizing your neighbors who have cars!

4. At 40, do you see upside in your career? There should be, so another plus point.

The ultimate question is: so, should you buy now? For own stay, the answer is yes!

As I reflect the 45 years of my life living in Singapore, I feel blessed that I was born here. I started out living in a small 3 bedroom HDB flat with 5 members. We shared our rooms. My brother, my grandma and I shared one small room.

The system has allowed me to progress in society. I studied hard and eventually got good jobs. Though not so high paying, they were fulfilling. I got married and started out in a 5 bedroom HDB flat and managed to upgrade over the years. Today, I am fortunate to be able to live in a comfortable luxury condo in a good neighborhood. I have a small loan on it left. I also own a decent car. Though our combined income is only about $180k (not so high for a mid 40s couple), it is decent enough for us to have a good life. We enjoy our twice a year holidays and enjoy eating at nice restaurants occasionally. We also manage to save and invest a decent amount for our retirement.

Life is good in Singapore if you work hard. The system works. We appreciate this country even more when we go traveling around the world. We hope to retire comfortably in our condo eventually.

Do you plan to change a new car? At your income level do you think the COE is affordable?

Not for the moment as my car is still new. COE affordable? Depends on the family's household income. Just look at the annual expense for the COE. $65,000 for a COE valid for 10 years means an annual expense of $6,500. For a family income of $180,000, that is 3.6%. If the family is willing to spend 3.6% of their annual income for an annual expense for COE, then they can buy a new car.

I think people are spending too much not on a COE but on the car's brand. Why should they spend $300,000 on a conti car (without COE) whereas they can spend only $60k (without COE) on a Jap car. What boggles my mind is the many conti cars at HDB car parks. Lower income families should not be throwing money. They should save for their retirement or an upgrade to a condo.

What do you think of a Jap car, but more luxurous type, ie Lexus? Is it worth buying if my annual income is $200k?

Difficult for me to comment without knowing your overall profile. Income alone is not sufficient info. Your nature of job, how stable it is, your age, your net worth, paying in cash or taking a loan, etc needs to be considered before I can say yes or no.

I would say yes to a more mature family with lower annual income but has a fully paid home, paying in cash (has cash savings of at least $1m) but no to a young couple working in an unstable sector and has a $1m mortgage.

I applaud you for the right mindset and attitude towards life. You chose to look at the positives and appreciated what you have over what you lacked. With this kind of attitude, you will do well in life. At 45, you are still young and have some way more to continue building up your wealth.

Many who were born in the 50s and 60s are from poor families reflecting the poor economic conditions and state of Singapore development during that time. Thanks to a forward looking government and international help, many ended up well. You are one such product.

Like you, I was also from a poor (and large) family living in a pig farm area. We turned out well with all my siblings completing our tertiary education (at either the University of Singapore or now NUS). Some of us even obtained scholarships to pursue advanced degrees at overseas universities.

While we enjoy our successes and progress in life, we should not forget those others who didn't do as well. Among my neighbours from that pig farm area, some did not do well having to prematurely stop their education to go out and eke a living to support their family finances. Hopefully their own children will do better.