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How much are you earning per annum?

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  #6801 (permalink)  
Old 20-02-2015, 10:33 AM
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Do you still have loans for all your 3 properties? If you have, you are highly leveraged. What you should do is to sell away one of your condos and use whatever balance cash to clear the loans for the remaining two properties. You can also use any spare cash to pay in full a new car. If you cant afford, then better be prudent and take the bus. Don't depend on your salaries as you may lose your job any time. Your wife's annual income of $80k would not be enough for you as a family. Your job in the private sector is not guaranteed. Take care.


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What car do I deserve?

Total household income (my salary, spouse salary, rental income):$260K
Total HH income excluding rental income: 200K
No kids
Stay in condo
2 other investment properties rented out (spouse and me)
My CPF 160K
My cash 100K
No credit card debt, no loans other than housing and investment property loans.

a) no car. Be frugal and Bus Walk, MRT. Which is what I am doing now
b) jap car. Can get brand new jap car for 80K which I can pay by 100% cash
c) moderate conti car. Can get new volvo saloon for 137K
d) entry luxury conti car. Can get new Audi saloon for 160K

Consequences:
If I buy any car, will have a lot less cash to invest in 3rd property or shares when the downturn hits. Could set me back my hundreds of thousands in the long run.

If I don't buy car, just carry on with current situation loh. But family and friends all think I am xiao for not buying car.

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  #6802 (permalink)  
Old 20-02-2015, 12:50 PM
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I see many people intending to pay in full for their car purchases. In this way, they will save on interest for their car loan. Let's see what the total cost of owning a regular jap car (eg Altis) currently.

One time cost of car : $120k
Car road tax & insurance (with 50% NCD) : $2k x 10 = $20k
Gas: $300 pm x 12 x 10 = $36k
Maintenance (twice yearly) : $350 x 2 x 9 (first year maint free) = $6.3k
Car park : $100 x 12 x 10 = $12000 (free if staying in landed or condo)
ERP : $5x22x12 = $1320
Parf rebate on 10 years = $9000

Total outlay over 10 years = $120k - $9k + $20k + $36k + $6.3k + $12k + $1.32k = $186.6k
It will be $12k lower if staying in private property, ie $ $174.6k.

And this is at a time when the Altis is at the highest price. So when COE price falls, the cost of car ownership will be more affordable. Like my current 4 yr+ Altis was only $60k brand new.

Compared to a household income of $150k - $200k pa ($1.5m - $2m over 10 years), the cost of car ownership is very affordable indeed. It is no surprise then that many mature families have 2 cars or more.


Quote:
Originally Posted by Unregistered View Post
Do you still have loans for all your 3 properties? If you have, you are highly leveraged. What you should do is to sell away one of your condos and use whatever balance cash to clear the loans for the remaining two properties. You can also use any spare cash to pay in full a new car. If you cant afford, then better be prudent and take the bus. Don't depend on your salaries as you may lose your job any time. Your wife's annual income of $80k would not be enough for you as a family. Your job in the private sector is not guaranteed. Take care.


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  #6803 (permalink)  
Old 20-02-2015, 01:21 PM
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"What car do I deserve?" is the weirdest question I have come across. It showed a very warped sense of entitlement mentality.

More appropriate questions would be "do I need a car?" Or "can we afford a car?"

In fact, you can arrive at the answer yourself if you have phrased the questions that way.

And in case you think you are entitled to owning some conti car, many high earners are happy owners of jap cars.

Although our annual savings hit $400k last year, we see no need, no point in upgrading our functional and reliable jap cars. Jap cars (mainly Hondas, Nissans and Toyotas)have served us well over a span of 30 years and we see no compelling reason to change them. Our current Camry and Accord are fantastic cars.

Quote:
Originally Posted by Unregistered View Post
What car do I deserve?

Total household income (my salary, spouse salary, rental income):$260K
Total HH income excluding rental income: 200K
No kids
Stay in condo
2 other investment properties rented out (spouse and me)
My CPF 160K
My cash 100K
No credit card debt, no loans other than housing and investment property loans.

a) no car. Be frugal and Bus Walk, MRT. Which is what I am doing now
b) jap car. Can get brand new jap car for 80K which I can pay by 100% cash
c) moderate conti car. Can get new volvo saloon for 137K
d) entry luxury conti car. Can get new Audi saloon for 160K

Consequences:
If I buy any car, will have a lot less cash to invest in 3rd property or shares when the downturn hits. Could set me back my hundreds of thousands in the long run.

If I don't buy car, just carry on with current situation loh. But family and friends all think I am xiao for not buying car.

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  #6804 (permalink)  
Old 20-02-2015, 01:24 PM
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Quote:
Originally Posted by Unregistered View Post
"What car do I deserve?" is the weirdest question I have come across. It showed a very warped sense of entitlement mentality.

More appropriate questions would be "do I need a car?" Or "can we afford a car?"

In fact, you can arrive at the answer yourself if you have phrased the questions that way.

And in case you think you are entitled to owning some conti car, many high earners are happy owners of jap cars.

Although our annual savings hit $400k last year, we see no need, no point in upgrading our functional and reliable jap cars. Jap cars (mainly Hondas, Nissans and Toyotas)have served us well over a span of 30 years and we see no compelling reason to change them. Our current Camry and Accord are fantastic cars.
some people make <$100k/pa, but aspire to drive big conti cars.
some people make >$500k/pa, but quietly drive Jap cars.

No right or wrong answers. Anyway government is laughing to the bank with the COE revenue collected.
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  #6805 (permalink)  
Old 20-02-2015, 02:55 PM
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Our combined household income is $235k pa. We live in a 3 bedroom condo, fully paid up. Our savings is now $1m. We are debt free. Our car is a Korean car, fully paid up. Very solid and reliable car. We lead a humble, simple life. We are in our early 40s.
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  #6806 (permalink)  
Old 20-02-2015, 05:32 PM
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Quote:
Originally Posted by Unregistered View Post
What car do I deserve?

Total household income (my salary, spouse salary, rental income):$260K
Total HH income excluding rental income: 200K
No kids
Stay in condo
2 other investment properties rented out (spouse and me)
My CPF 160K
My cash 100K
No credit card debt, no loans other than housing and investment property loans.

a) no car. Be frugal and Bus Walk, MRT. Which is what I am doing now
b) jap car. Can get brand new jap car for 80K which I can pay by 100% cash
c) moderate conti car. Can get new volvo saloon for 137K
d) entry luxury conti car. Can get new Audi saloon for 160K

Consequences:
If I buy any car, will have a lot less cash to invest in 3rd property or shares when the downturn hits. Could set me back my hundreds of thousands in the long run.

If I don't buy car, just carry on with current situation loh. But family and friends all think I am xiao for not buying car.
Your cash and cpf is on the low side for your age. What is the net asset value and loan on the properties? With the oversupply, interest rate increase and falling prices your equity may be wiped out and rental not enough to cover the repayment.


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  #6807 (permalink)  
Old 20-02-2015, 05:43 PM
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The condo I am staying in - fully paid up
The other two investment properties: combined value $1.6M, combined loan remaining $0.8M
Not worried about interest rates rising at all. The income from the rent already covers the loan repayment+tax+maintenance+agent fee etc etc for both properties. Even if one or both of the properties have a tenancy problem, my monthly cpf contribution more than covers one monthly payment, and my salary is more than double of the other loan.

I have not much cash because - I invested it in the properties lah !

My question is - in the eyes of other people, what type of car does someone with my financial profile ought to drive?

Admittedly its a very personal question, with no right or wrong answer. But I am curious to see the views of other people.
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  #6808 (permalink)  
Old 20-02-2015, 06:13 PM
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Your profile can be categorised as mid middle income, a typical average grad couple profile. Owning a fully paid property and two not paid up properties (are they both condos or one is a hdb flat?) is no big deal in today's environment. Only if you fully own 3 fully paid condos, then you are considered upper middle class.

Given you mid middle income social status, it would be appropriate that you get either a Japanese or Korean car costing about $120k - $150k.

In your situation, if your condos have no tenants (given the massive oversupply of condos) and if you lose your job (since your private sector job is not guaranteed), you will be in big trouble. Worse, your condo value could drop so much that it wipes out the equity you have on your condos (i.e. the value drops from $1.6m to $0.8m).

I suggest you save up your cash from the current $100k to $300k before you buy a car and then use cash to pay in full for the car.


Quote:
Originally Posted by Unregistered View Post
The condo I am staying in - fully paid up
The other two investment properties: combined value $1.6M, combined loan remaining $0.8M
Not worried about interest rates rising at all. The income from the rent already covers the loan repayment+tax+maintenance+agent fee etc etc for both properties. Even if one or both of the properties have a tenancy problem, my monthly cpf contribution more than covers one monthly payment, and my salary is more than double of the other loan.

I have not much cash because - I invested it in the properties lah !

My question is - in the eyes of other people, what type of car does someone with my financial profile ought to drive?

Admittedly its a very personal question, with no right or wrong answer. But I am curious to see the views of other people.
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  #6809 (permalink)  
Old 20-02-2015, 06:22 PM
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Quote:
Originally Posted by Unregistered View Post
Your profile can be categorised as mid middle income, a typical average grad couple profile. Owning a fully paid property and two not paid up properties (are they both condos or one is a hdb flat?) is no big deal in today's environment. Only if you fully own 3 fully paid condos, then you are considered upper middle class.

Given you mid middle income social status, it would be appropriate that you get either a Japanese or Korean car costing about $120k - $150k.

In your situation, if your condos have no tenants (given the massive oversupply of condos) and if you lose your job (since your private sector job is not guaranteed), you will be in big trouble. Worse, your condo value could drop so much that it wipes out the equity you have on your condos (i.e. the value drops from $1.6m to $0.8m).

I suggest you save up your cash from the current $100k to $300k before you buy a car and then use cash to pay in full for the car.

Should be around there. We make $400k pa, and recently bought a jap car for $200k.
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  #6810 (permalink)  
Old 20-02-2015, 06:34 PM
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Quote:
Originally Posted by Unregistered View Post
The condo I am staying in - fully paid up
The other two investment properties: combined value $1.6M, combined loan remaining $0.8M
Not worried about interest rates rising at all. The income from the rent already covers the loan repayment+tax+maintenance+agent fee etc etc for both properties. Even if one or both of the properties have a tenancy problem, my monthly cpf contribution more than covers one monthly payment, and my salary is more than double of the other loan.

I have not much cash because - I invested it in the properties lah !

My question is - in the eyes of other people, what type of car does someone with my financial profile ought to drive?

Admittedly its a very personal question, with no right or wrong answer. But I am curious to see the views of other people.
The loan quantum is quite ok. The problem is with the high downpayment required for a new car and your cash is low, so in your situation I would probably go for a second-hand car in the range of $80K.
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