28 years old. started working at 26 after getting qualified.

starting pay check was 5.2k monthly for 1.5 years; got headhunted and switched firm half a year ago and started with 11.5k for the next 6 months. Salary just got reviewed and earning 12.5k this month.

Cash savings: approx 29k
CPF OA: approx 31k
CPF SA: approx 8.5k

investment linked policy surrender value: approx 6.2k.

Not started investing in stocks; thinking of going into property after accumulating more savings for down payment. target to get first property 1.5 to 2 years from now.

How am I doing? Is there a national savings guide on how much one should have saved by 28 (apart from the JP morgan survey). Just looking for mean values across age groups to compare how I fare.

What profession are you in? Your remuneration of $12.5k pm (at 28) will make a lot of people weep. Does your job has longevity?

Most people at 28 (if graduates with good honours) will be looking at $5k - 6K pm.

this is me. opinions welcome.
 

male, single
25 going on 26
living at home with parents

- worked 2+ years
- current salary $5.0-5.3k/ month
- about 15% of monthly salary goes to my parents (for their love over the years lol)
- bought a $1.2mil condo in 2012 - will TOP in 2015/16 (parents paid down payment of course)
- paid $100k from my own savings so far, currently left with about $20k in the bank
- cpf: unsure of amount

plan:
1. pay up my condo - monthly rental will go into this
2. buy another condo in my mid 30s, abt 10 yrs from now

A $1.2m condo sounds like a stretch for your income level even though your parents paid for the deposit. Assuming a 30-year loan of $960k, and using 3.5% as interest (MAS guide), your monthly installment is $4,300. This amount is more than 80% of your monthly salary, way above the prescribed TDSR of 60%.

Did you obtain the loan before the TDSR policy kicked in?

im not very familiar with the details of the housing loan as my parents deal with it, but i bought the condo in mid 2012 and so the loan must have been obtained then.

once the condo TOPs and a monthly rental income of approx $4k (i hope) comes in, i am hoping that things will get better.

for the record, i do not have any other outstanding loans, ie car/study loan etc.

Ah Xia Kia, then.

I thought I revert back due to some similarities we share. Apologies to others for divesting

I had a similar investment when I was about 27, invested in a apartment (dare not call it condo) 1.1M central location now worth about 2M. This was many years backs and it was also a shared investment with my parents. Difference is when I bought the place I knew how much I contributed, how much they contributed. I arrange the loan (spoke to 4 banks), the lawyers, bargain for freebies, arrange for rental agents, contractors etc.

If you are serious about wanted to buy more in the future I suggest you start making yourself aware of the obligations you got yourself into since its your name its under. Besides the loan have you accounted for MCST charge, property tax, renovation cost etc once the condo TOPs?

You are lucky you're parents took care of it all for you, but it would have been a good learning experience if you did it yourself. You should take the reins now if you really to buy another condo in the future. There is something to learn from every purchase.

I can tell you once your condo TOP its very likely we gonna hit a sh*t of a rental market so you better be prepared for it to stay empty for awhile. Take the time to workout your obligations and be aware of your finances and how much you should save for that rainy day.

Your folks can bail you out of course but they shouldn't have to at the end of the day.

I think the motivation for buying the condo under the son's name was to bypass ABSD. We wanted to do the same using our son's name but he reminded us that by doing so he would miss the chance of getting a subsidized brand new HDB flat. So no choice, we bargained for the ABSD to be absorb by the seller.

clearly a lawyer

12.5k at 28 is still alot for a lawyer though, most in the big firms would be making 7 -8k.

Yep agreed that could be likely, since he put the post as him buying the condo he should be responsible if not aware of the finances behind it and plan accordingly.

It seems you have a son who is savvy in that respect and weigh's the consequences and options, kudo's. I considered that same factor as well but I was a far way off from getting married at the time, thankfully the apartment I bought paid off well (challenging for such returns in today's market).

i want to say thank you to the person who shared this. many of my friends who are in their mid 20s like me have not yet invested in a property. most of their salary is spent on food, partying, staycations and shopping. while i sometimes envy them, i know that it is never too early to start investing and start saving.

my parents both come from very humble backgrounds. all their life they have saved and scrimped on every penny just to provide me with a better future. now about 60 yrs of age, they are both retired and own a number of pvt properties amounting to $11 million (my estimate). the rental income is more than enough to keep us going. of course, while we are not upper-class rich, we are very comfortable. they still do not splurge, we still take the bus/mrt, and we all enjoy cheap hawker fare.

this condo that i bought was my parents' idea. then in my early 20s, what would i have known about investing in property? instead of seeing my money do nothing in the bank, they wanted to see my money put somewhere with potential for growth. we did understand then that with a pvt property, i'd probably never own a hdb. which will hold true as i will most likely breach the income ceiling for a hdb flat.

i know i am lucky to have what i have, to be starting on a higher ground than most others. every investment comes with a risk. i readily accepted it when i bought my property. should the rental market be less than optimal when my condo TOPs, no problem, i have to take it in my stride and deal with it. with holding power, everything will turn out just fine.

Good observation. The legal industry is undergoing a shakeup with offshore firms and that really helped boosted earnings in recent years. that being said, the hours are really long and it essentially is trading long hours for good money. making partner may or may not happen anyway, so being a lawyer is usually employment income, not something that is passively gained and multiplied by itself. there are probably more efficient manners of accumulating wealth.

How much would most ppl by 28 have in savings though? the JPM survey started at 30 - didn't find that very helpful. It would be extremely helpful to save with a comparison figure in mind.

Anytime, I will wish you the best in your future and in property investment,

Just want to add on this, Ironically I think its important to strike a good balance of partying yet future planning. You're only 20 once and once you hit 30 your energy and commitments to other responsibilities will not give you the same opportunity to do so..

I started owning and managing one property like you did, now I am mid 30's and I own 3 investment properties (2 residential, 1 commercial) and I can tell you with every purchase I learnt something be it good it bad (bad ones I had to pay 1000's to find out). Always good to start early. If you are serious about property investments as a approach take time to hone your property picking skills (i.e what location, old or new, rental potential, en bloc etc) and always keep a list of contacts like agents, handymans and bankers. There are many good local property blogs you can read on for more details especially marking timing.

More importantly it will feel good when you're hit 40's and know you have financial security despite your job. :)


Contributing to the savings thread purely liquid assets.

Liquid Stocks: 150K
Cash/CPF and equivalent - 2M
Outstanding Debt obligations - 1.4M

Me (30), wife (19).

3 Fully paid GCB at 1 at Tanglin, 2 at Holland.
5 Fully paid shophouses 3 at Joo Chiat, 1 at Beach Road, 1 at Holland V
5 Fully paid Condo (ranging from 800sqft to 3500 sqft), all are in D9 and D10 area.

Stocks:
Major shareholder of 3 SGX listed companies

Cash:
Not too sure, I leave it to my bankers (3 different swiss banks) to managed. Last I heard was around USD$1.35B

Not too sure how I am doing. I think i am just doing quite average.

Tsk, tsk.

Have you forgotten to take your medication today?

yes, I had. Thank you for reminding.
I called my doctor and he just sent me my $888K tablet that I take daily.

Yep, you are just a average joe. Suggest you downgrade to a hdb 3 room when you retire to free up some cash to see doctor.

Why should I downgrade to hdb 3 room to get the cash to see doctor? I already have the cash. So who need to see doctor actually? You or me?

Business owner, age 27 male Singaporean. Monthly personal income ranges from 5k to 18k, average will be around 8-9k. Annual revenue my company does around almost half a million. Venture is 2 years old plus. There are bad days and good days but I believe there is potential and my partner is joining my company.

Bought a private condo this year for 800k.
No other loans like study or car loan, though I have a car that I am taking over its instalments next month. ($800+ per month)

My savings: 20k+ (because of condo down payment)
CPF: Zero because self-employed

I don't do shares investment as any profit I get is recycled back into the biz since I convert $1 input to $5 output anyway.

My condo will TOP in 3 years+ time. I plan to stay in that unit and buy another unit 5 years from now for rental purposes. If rental market really becomes bad, I'll look elsewhere for property investment, maybe commercial.

Only you will know.

Then it's you.

Chanced upon this forum recently and admire that so many here have successfully build up their saving and retirement. I hope to get some advise.

My wife and myself are in early 40's with 2 young kids (3 and 5yo). Our combine income/saving are

Income = 170k pa (exclude bonus)
Savings= 30k
Stock=150k
CPF OA = 170k
Property (hdb) = 600k (fully paid)
Passive Income= 5k pa (Stock)
1 car (6 year old, fully paid)
Debt = 0

We hope to achieve
- more passive income
- invest in property (but have little saving)
- build up education fund for children
- build up retirement fund

Thanks in advance.
Clueless daddy

What is the order of priority for your plans : ie

To start you off, think about the following :
1. Based on your age profile, conceptually both you and your spouse have around 25 years of working life to go.
How much do you need when you retire and how long ? A general recommendation is plan to live on your own means without charity up to 90. ie 25 years post 65 yrsold.

Assume you need $5000 pm as a couple and without need to support anything else and ignoring all the other stuff like time value of money, inflation and simple mathematics = 5 k * 12 mths * 25 yrs = S$1.5 million.

And with that you have a off hand calculation of a retirement goal

2. Also you mentioned you have kids , so around 12~15 years time, when they start their university studies , you may have some financial commitments there to think about.

Do you think your kids will study overseas or Singapore ?
Will any of them be doing post grad or those super expensive course like doctors , lawyers and architecture ?

If Singapore and not the so expensive course, i will assume 75k to 100k max for a 3 year duration of study.

Thanks for the advise. For retirement as base on your scenario, $1.5 million and this shouldn't include property that we live in by then, it is really scary how stressful it is living in Singapore. I am definitely very far from this goal and I don't think i can achieve this by simply working till retirement. Hence I hope by achieving more passion income and by investing on property, I can be nearer to the impossible goal.

For education, I would think local university will be our only option. We do not have high income and can't afford to send our kids oversea for studies.

To everyone, assuming you are in my position, what would you have do? All advise and comment are appreciated.

Many thanks
Clueless and worried daddy

Well, it is not that scary. Dont get yourself too worried by all the stories out there. Here are some real life point stages/pointers :

1. Like any good parent, i guess you wish to bequeath your HDB to your children. . If so, would it ok to receive a form of appreciation with that ?
Eg monthly allowance from them say $500 pm per kid?

2. Related to point 1 - Will you be receiving any inheritance from your parents or in laws ?

3. Despite all the negative news in the press about CPF, the CPF minimum sum is precisely what is going to help you with monthly expenses. Assume $117k in RA, that is around $ 700 - 1k per month from 65 depending on the plan you choose.

The above points alone can help you up to around S$2-2.5k. So you just need another 750k . To achieve this

4. You already are saving 30k pa. 30k x 25 yrs = 750k !

5. While you have some expenses ahead - ie children education, remember that after your children graduate ie year 17 onward to 25 , expenses for you should drop significantly. No more pocket money to kids, enrichment lessons, etc and possible income back from them. Those 8 - 10 yrs should build your retirement nest egg nicely.

Hopefully, the above 5 points should give you some idea and comfort.

Now onward to your question of passive income and investing.

This is a relationship of risk and reward. Higher risk, possible higher reward .
Lower risk, more certainly low reward.

I have asked my friends why they want a 2nd property. From a financial perspective, the main answers are : capital appreciation and rental income. The risk from over leveraging (ie bank loan , interest rate, etc) . Based on present property sentiment for the past 7 years, this has been a good bet. However, it is a capital intensive bet. A mishap along life journey ie job loss can cause severe stress instead providing the comfort and peace of mind. From a social and political point in Singapore, the government if they are really concerned (and that another debate) , will not allow this situation of property price to run away in a similar manner. So likely, my view is that an investment in this area and in Singapore is going to be marginal for the next 5-10 yrs. Rental yield is not likely to rise above 5-7% with capital appreciation of the property likely to remain relatively flat at max 1-3% as well. Coupled with ABSD and sales tax for flipping early, this long term bet to me can really be rather inflexible. I am sure someone will counter that there are good buys etc, but I tend to think that will be dependent other factors like location, dis-stressed asset sale etc. . I will skip further discussion on this eg overseas investment etc based on your life profile needs.

The traditional way of investing have always been equities. In achieving good returns on equities, there are many theories. For me, I am a fundamentalist. ie analyse the PE of companies, their annual reports, management track records, and products /business they are in.

To confine this discussion a bit, I will just share what kind of service /products Singapore needs in the future and Singapore equities directly involved in meeting that need.

If you look at it, the first no-brainer is that Singapore healthcare needs a reform. The greying population and rising health care cost poses a great threat to the growth of Singapore. So in this regards, companies that have proven track records in unlocking the value will be greatly desired. My take , eg buy Raffles Medical when you feel the time is right and hold hold hold !

What else is required ?

Traditionally, Singapore strengths lie in the airline/logistic/freight sector. This sector has been badly hit by competition and companies like SIA etc have posted weak growth and poor earnings. Will this turn around and when ? If you think you know the answer here, buy these stocks and you should reap a nice reward.

Finally, Singapore is going to remain a financial sector. If this sector collapse, we will really see dismal future for Singapore. There are rumors of financial distress due to overseas eg Fed raising i/r and Singapore banks will be caught up with this wave if it hits. But otherwise, really, take a look at UOB/DBS / OCBC. Their cheap source of funding (by giving Singapore miserably interest) is likely to remain regardless of worldwide interest rate shooting up. Competition from the foreign banks will snap up some depositors but I am sure competitive actions in return will be taken. On a long long run, these stocks can be held to your retirement.


Whew ! I think that enough from me for today

Your post had me thinking back to when I was in my late 30s, some 16 years ago. Our combined income then was similar to yours now. Times was hard for us. Here was what happened.

Years earlier when we got married, we applied for an exec HDB flat. When we were told we had to wait 3 years for it, we decided to buy a small private apartment instead. As our children grew they wanted their own rooms and with my parents staying with me, we upgraded to a 4 bedroom private property. We bought the bigger property first while waiting to sell our smaller property. Then the Asian Financial Crisis hit, and we were stuck with 2 properties and 2 loans!

Luckily we were "relatively young" then, we held on to both properties and rented out our smaller apartment for a song. Would you believe for only $900 a month!? For a further agonizing 10 years we held on to the smaller apartment, where at long stretches it remained vacant, because for that rental we were getting unsavory tenants. So we decided that we rather leave the apartment empty.

Then enblocs got into fashion, and we got 3 x what we paid for the small apartment. There was no looking back for us. With the money, we invested in another 4 bedroom condo for rental. And at the same time, our own 4 bedroom apartment also got enbloc-ed! Buoyed by the property magic, we bought yet another.

We are now staying in the newer 4 bedroom condo apartment with another brand new condo apartment for rental income. Both fully paid.

Looking back, my wife and I felt that had we waited for the HDB flat, we would still staying in the HDB.

Hi Lazyplane,

Many thanks for your advise I really appreciated it. I have been pondering over what you mention over the weekend, and explain to my wife (she is less savvy) and with some friends. At this stage, I think I will continue to look at investing in stock for passive income, as I am mainly investing in SGX I plan to also look at oversea stock investment (if you have any advise to kickstart a newbie like me it will be great), and also looking at bonds (to balance the risk and exposure in stock only) and wait for opportunity for a second property when timing is right and saving is sufficient (maybe after the ABSD is lifted).

Thanks again, and really appreciate it.

Regards
Cluess daddy.

16 years ago, the same income should be quite high as compare to now. Now, even a small condo will cost at least close to $1M :( Your story serve as an inspiration to me. Hopefully 16 years later I can share a similar story :)

Cheers
Clueless daddy

31yo, male
Annual wage >$142k
Stocks >$210k
Unit trusts >$35k
CPF > $220k
Property ($1.2mn; paid up $300k)

But I only have $2k savings. How?

Your net worth and salary is quite ok for your age. My wife and i had about the same at 31 ( 1.4M combined ). What you can do is use the cpf and cash from selling your stocks to invest in property if prices come down. Thats what we did and we doubled our net worth in the next 7 years

I am not too keen at overseas investments at this stage of my life. I dont like the FX impact to SGD and if you see the past 5 years, u really need to get above nominal 3~5% returns just to break even. And i dont need the overseas diversification because it is not like i am huge funds to manage over eg $100 m . But thats my view ok.

Bonds in SG are pathetic. you can refer SGS for latest gov bond prices.
Corporate bonds, well, guess u know that u take the credit risk etc. So if u think they are ok, then go for it. Unfortunately, last time i check, i think there is a MAS cap that prevents individual from investing unless u r deemed "sophisticated" investor and able to shell out around S$250k.

Some good ones will come, but i think that at this preset moment, it is not that good.

Single,Early 50s Male
Cash:35k
Investments:1.34m
Total income PA:120k
7 yo porsche 911 fully paid
living with parents in 4 room condo worth 2.2m, 1.8m loan left.

Late 30s, female locum GP
Cash: $50k
Stocks : $40k
Cpf OA and SA: $160k
SRS $20k
1 terrace in Sg bought 1.1 mil, now valued at 1.8 to 2 mil , loan 567k left
1 bedder condo bought $ 636801, loan $380k, due to TOP, hope to rent out , converted to 2 bedder, very near mrt
1 JB semi d, $380k, full equity loan

Hope to semi retire in JB soon and pay off Sg props as much as possible with hubby to get as much rental passive income as possible. Terrace may sell in future if need to send kids overseas for uni...

1. Sell your landed and pay off loan. Prices falling anyway. Say you sell at $1.7m, you get back $1.1m after paying loan.
2. Pay off your 1 bedder loan and your jb house loan. Total $760k. You are left with $373k and invest in good blue chips.
3. Get passive income from 1 bedder ($2k pm) and blue chips. If you get $4k pm and convert to RM and get RM10k, should be ok. When you are 65, you get $2400 pm extra (you and hubby's min sum). And your sons can give you $1k each every month.

What do you think?

Yes, tempted to retire now by selling off landed...have put it up for sale and had an offer of 1.8 mil but hubby rejected....still having viewers interested...

But we also hope to finance our sons' overseas university if necessary in future and we can only do that by selling our terrace in future as it will likely appreciate by then....

Will see how, if we get a good offer, we might sell....

Home prices may drop 20% by 2016: report

Sep 10, 2014

Home prices in Singapore could fall by 20 percent between 2014 and 2016 as economic restructuring, tighter population policies and property measures continue to weigh on the real estate market, according to a Bank of America Merrill Lynch (BOAML) report in the media.

“We believe the fate of the market will depend very much on the direction of policy, particularly on restructuring, immigration and foreign workers, as well as the timing of the relaxation of strict property measures,” wrote economist Chua Hak Bin in the report.

He noted overly tight population policies will limit the number of a younger foreign workforce, and affect property prices. Maintaining the cooling measures would also “imply a greater negative impact from rising mortgage rates and persistence of housing distortions”.

On the restructuring front, Chua believes Singapore’s move to a productivity-driven growth model, which is a long-term process, has produced mixed results. Notably, it has reduced the growth of Gross Domestic Product (GDP), while employment growth and total job creation is expected to moderate this year.

“We do not see the government reversing course, but a pause may be in order…as companies, particularly SMEs, are having trouble adjusting to the speed of the tightening,” said Chua.

Any potential relaxation of property cooling measures is likely to happen only in H2 2015, as cyclical property measures such as stamp duties and loan-to-value limits may be relaxed when US interest rates and Singapore mortgage rates start rising.

Though prices may drop in the short term, they will still rise in the long term esp with 6.9mil population coming...

The smart ones take advantage of property cycles.

Let's say you can sell your condo now for $2m and after 2 years if prices fall by 25%, this means prices have fallen by $500k.

So if you sell your condo now and rent for two years (rent a cheap one bedroom unit for two years at $2k per month or $48k for 2 years - you can find many of such condos in Woodlands), then you buy back a similar condo you own previously for $1.5m, this means you would have profited $450k. After transaction costs, maybe your net profit would be $400k. This is a lot of money for many Singaporeans.

If a property is worth $1.8m now, a fall by 25% means a loss in value of $450k.

Landed property prices have also gone up too much over the past few years and likely to fall hardest.

Luxury condo owners cutting their losses.


More luxury condo units sold at loss as resale market ebbs

Tuesday, Sep 16, 2014

Lee Meixian
The Business Times

SINGAPORE - A larger percentage of high-end luxury condo homes on the resale market are being sold at a loss and a smaller percentage at a profit, as the tide of the once-rosy property market recedes and reveals those who have been "swimming naked" - that is, those without adequate holding power for their extravagant purchases.

According to data compiled by STProperty.sg from URA Realis, 7 per cent of transacted units in the prime districts 9, 10 and 11 sold at a loss in the first eight months of this year, up from 5.5 per cent over the same year-ago period.

Fewer people are profiting from their resales too: only 62.2 per cent enjoyed any capital gains - a steep drop from 83.5 per cent a year ago. And 4.5 per cent sold without making a profit or a loss (versus 0.4 per cent a year ago).

Yields are also under pressure. The low-rental environment is leaving more owners struggling to repay their mortgages. Assuming a $1.6 million loan (equivalent to an 80 per cent loan limit for a $2 million property) is taken out at an annual 1.5 per cent interest rate over a 30-year tenure, this would amount to a monthly mortgage of $5,500. Rentals would therefore have to be in excess of this to cover mortgage payments.

"In some cases, the monthly rental cannot cover the mortgage. Take a $5 million Sentosa Cove condo: It would take a monthly rent of $13,800 to cover your loan," said Christine Li, head of research and consultancy at OrangeTee.

"That said, it's quite common that rents cannot cover monthly instalments, especially for bigger units. But those who don't have holding power would have to let go of their units. Others may be forced to do mortgagee sales," she added.

But not all the sellers who were willing to stomach losses were overleveraged. Some could simply want to exit the market because they don't see the cooling measures ending any time soon (meaning, they expect that price recovery is still far off), or just as a way of rebalancing their overall portfolio.

Lee Lay Keng, DTZ's South-east Asia regional head of research, said: "A large proportion of purchases in the prime districts are by foreigners; perhaps they are just pulling out of Singapore. But the fall in demand for private homes makes it harder for sellers to find buyers.

"So if they really need to sell, they will have to lower their prices significantly."

RST Research director Ong Kah Seng said that investors would also have bought into high-end properties in major cities in the United States, Europe and Australia, where there have been exciting properties launched in recent years.

In all likelihood, despite pulling out of Singapore, they might have profited elsewhere, as other countries saw an uptick in residential property prices after the global financial crisis.

Meanwhile, loan curbs and price cutting by developers at new condo launches also continue to sap strength from the resale market.

Condo homes in the prime districts 9 (Orchard Road, River Valley), 10 (Bukit Timah, Holland, Balmoral) and 11 (Novena, Newton, Thomson) have traditionally been purchased as investment homes for capital gains and rental yields.

Buyers bank on demand from expatriate lessees, most of whom enjoy staying near the city. But with corporate housing budgets having shrunk post-financial crisis, these foreign employees are moving instead to the city fringes and suburbs, with some even renting Housing Board flats.

Losses made in resale transactions from January to last month this year range from $9,300 for a unit at The Hillier in Bukit Timah, to $2.06 million for a unit at St Regis Residences in Tanglin. The latter was purchased at $6.8 million in 2007 and sold for $4.7 million in April.

Mine is a freehold landed terrace not a condo....freehold landed supply is very limited now unlike condos sprouting up everywhere, so unlikely to drop in value as much as condos in the longterm...