Whats your net worth

If I were in your shoes....

I will downgrade to HDB (5 room) and use the remaining money for passive income.

Let's say you are still not 55 yrs old yet (you are probably 45?). I would expect quite a bit of the money from your current condo to flow back into your CPF? Use that to pay for the HDB (800K).

Put aside an emergency fund (100K). Park the rest into dividend stocks. Quite a number are still yielding about 4%. $1m will yield $40k pa conservatively. This will go some way to supplement your income in your new job. As you rightly pointed out, getting back to a $200K job may not be realizable.

Without a job, I wouldnt want to commit to a 2nd property to earn rental income. That leaves no room to manoeuvre in case the economy tank.

Originally Posted by Unregistered

Dear all,

I need your kind advice.

I was let go one year ago after 20 years with the company. I think I cost too much. Got retrenchment benefits which is almost finished. I gave myself one year to get a new job but unfortunately there is no available jobs that pays $200k pa any more. My age could be a hindrance. I have given up hope to get back to my previous role.

My assets today are worth $2.5 mil, the bulk of it in my condo (no loan, paid up). What should I do? Should I downgrade to a small condo worth $1m and buy another condo worth $1.5m to give me passive rental income? Or should I just get a $500k HDB flat and invest $2m in the stock market?

Appreciate any comments and advice.
Thanks.

Sorry to hear about your predicament. It is true that older professionals have difficulty getting a new job. This is the harsh reality. You must be prepared to be unemployed, you either have to retire or you have to bring yourself low to become a security guard or taxi driver.

If I were you, I will not invest so much money into the stock market. The stock market is volatile, and you can even lose all your capital. In crisis, stock prices can plunge as much as 90% and may not even recover at all. On the other hand Singapore property is more resilient and will rebound very quickly. In 2009, the property market fell by 30% but then rebounded strongly. Now property prices is even higher than prices before the 2009 global crisis.

I would recommend you buy a small $800k condo and invest the rest into a rental condo NEXT to an MRT station. This is important as condos next to MRT stations can still be rented out during a recession (but at lower rentals). You can easily get $48k pa for a $1.2m condo next to an MRT station. Keep the balance $500k as emergency fund. If you can keep your expenses less than $48k pa, then you can effectively retire since you have achieved financial freedom. Of course if you can get another job, it would be a bonus. Some ways to reduce your expenses include: getting rid of your car, stop maid services, stop unnecessary subscriptions, stop investment related insurance products (just go for protection), stop kids' tuition if you have kids (you can teach them instead), reduce eating out (just cook yourself), get rid of all loans if possible.

Originally Posted by Unregistered

Dear all,

I need your kind advice.

I was let go one year ago after 20 years with the company. I think I cost too much. Got retrenchment benefits which is almost finished. I gave myself one year to get a new job but unfortunately there is no available jobs that pays $200k pa any more. My age could be a hindrance. I have given up hope to get back to my previous role.

My assets today are worth $2.5 mil, the bulk of it in my condo (no loan, paid up). What should I do? Should I downgrade to a small condo worth $1m and buy another condo worth $1.5m to give me passive rental income? Or should I just get a $500k HDB flat and invest $2m in the stock market?

Appreciate any comments and advice.
Thanks.

This is not the best place for the advise you seek, now if you were paid that much you must be a person who is aware of how to at least handle your ins and outs for you and your family.

Everyone situation is different, and everyone comfort level in investment is also different. Best you speak to close friends and family familiar with this investment instruments before making a decision.

Least if something goes wrong someone familiar can ease your doubts. I invest in property its not for everyone, some will recommend stocks. But do you know the pitfalls and grey areas in property to invest in them soundly? Same goes for stocks if the market tank are you calm enough not to dump your holdings?

I am assuming you don't invest regularly and hence come here to ask? As I said speak to friends and close ones. Anonymous people on the internet should not be relied on for this type of decision.

Good luck

Originally Posted by Unregistered

Dear all,

I need your kind advice.

I was let go one year ago after 20 years with the company. I think I cost too much. Got retrenchment benefits which is almost finished. I gave myself one year to get a new job but unfortunately there is no available jobs that pays $200k pa any more. My age could be a hindrance. I have given up hope to get back to my previous role.

My assets today are worth $2.5 mil, the bulk of it in my condo (no loan, paid up). What should I do? Should I downgrade to a small condo worth $1m and buy another condo worth $1.5m to give me passive rental income? Or should I just get a $500k HDB flat and invest $2m in the stock market?

Appreciate any comments and advice.
Thanks.

Originally Posted by dives

This is not the best place for the advise you seek, now if you were paid that much you must be a person who is aware of how to at least handle your ins and outs for you and your family.

Everyone situation is different, and everyone comfort level in investment is also different. Best you speak to close friends and family familiar with this investment instruments before making a decision.

Least if something goes wrong someone familiar can ease your doubts. I invest in property its not for everyone, some will recommend stocks. But do you know the pitfalls and grey areas in property to invest in them soundly? Same goes for stocks if the market tank are you calm enough not to dump your holdings?

I am assuming you don't invest regularly and hence come here to ask? As I said speak to friends and close ones. Anonymous people on the internet should not be relied on for this type of decision.

Good luck

... i partly agree with the above. it's ok to read stuff on the web, but you have to be discerning and filter out the noise from the signal. there are lots of good sharing around, even in this forum. from my experience, the WORST kind of advice is from those "professional" relationship managers, personal financial "con"sultant and fund managers. even the radio and newspapers are sometimes filled with sales people who are out to get your money (their pay comes from your commissions).

Let me share my own experience.

I was retrenched at a young age of 48. I could have been economically active still but the relevant opportunities were simply non existent. I did not want to stoop so low as I was a highly successful executive. Egoistic? Yes, I am egoistic. Why should I disgrace myself among my family and friends? So instead of taking on a shameful job, I decided to retire.

Just before my retrenchment, I had three properties - one 3 storey landed property and two condos. I decided to sell my prestigious landed property to a less prestigious condo in D10. I had to explain to all my friends and relatives that I had decided to retire and wanted to rest after working for so hard, and so long hours all these years. I managed to clear all my mortgages and all other debt. I also sold my conti and settled for a smaller Jap. My two condos now gives me passive income, enough for me and my family. We still manage to go to holidays in Europe, but instead of twice a year, we have to settle for only once a year. We survived.

Originally Posted by Unregistered

Dear all,

I need your kind advice.

I was let go one year ago after 20 years with the company. I think I cost too much. Got retrenchment benefits which is almost finished. I gave myself one year to get a new job but unfortunately there is no available jobs that pays $200k pa any more. My age could be a hindrance. I have given up hope to get back to my previous role.

My assets today are worth $2.5 mil, the bulk of it in my condo (no loan, paid up). What should I do? Should I downgrade to a small condo worth $1m and buy another condo worth $1.5m to give me passive rental income? Or should I just get a $500k HDB flat and invest $2m in the stock market?

Appreciate any comments and advice.
Thanks.

Originally Posted by Unregistered

... i partly agree with the above. it's ok to read stuff on the web, but you have to be discerning and filter out the noise from the signal. there are lots of good sharing around, even in this forum. from my experience, the WORST kind of advice is from those "professional" relationship managers, personal financial "con"sultant and fund managers. even the radio and newspapers are sometimes filled with sales people who are out to get your money (their pay comes from your commissions).

Thanks, just to clarify what I meant is looking at his post the investments he was proposing was so out of place with each other it shows he does not have alot of experience in either areas. IMO for people without such experience its dangerous for them to have an influx of cash and not know what to do with it.

But agreed on the "professional fund managers" and so called "con artisit" be much safe to buy the STI index and park the money there.

Original post

What should I do? Should I downgrade to a small condo worth $1m and buy another condo worth $1.5m to give me passive rental income? Or should I just get a $500k HDB flat and invest $2m in the stock market?

Originally Posted by Wiseman1

There is nothing wrong with me, but something very wrong about your mentality. I am doing you a favor by shaking you out of the dreams and start facing reality. I had been on the boat, enjoyed the joys of sailing, saw it sunk right before my eyes and had to struggle to swim real hard to shore for my life.

I am not trying to be a wet blanket here.

Your mentality is typical of many here in this forum as well as many silly-poreans up there. All you all can think of is property prices would only head in one direction: north. Alot of you are probably old enough to have witnessed the last property downturn in the 1990s which lasted 10 long years and property prices hit rock bottom. The bottom line is that would happen again. It is just a matter of time. Either you guys have very short memories and you choose to conveniently forget it.

Even the National Development minister Khaw have spoken at least twice to ask Sillyporeans not to be too bullish on properties and sink too much cash into bricks and motar. Yet few sit up and take notice, continue to indulge in their property castle dreams.

Let me ask you: What is your basis for saying your property would double in value to $3m in 10 years? Did you just based it on past price trends and make a straight line extrapolation? Or the value would automatically reach that level simply because there are new MRT lines?? Either you are a property agent trying to do the typical sales pitch to the readers here or you are just pure naive and stupid.

I would ask you further: Who are going to be the target buyers for your so call $3M house? Even at your current worth of $1.7m it is already a very limited pool of high income earners who can be your potential buyers. You would have to make sure their income levels double in the next 10 years for you to be able to sell your house to them at $3m. What is the possibility of this happening??It is not even within your control!

And it follows from above that if you cant liquidate your house for $3m cash, what is the point of saying it is worth $3m???. Can you eat off the bricks and motars for your retirement years???

A word of advice: Dont count on your property value to double or triple for retirement needs or get rich, like what alot of the misguided sillyporeans out there are doing in herds, behaving like monkeys.

Put aside enough cash, dont sink all your fortune into bricks and motars, cash is always king. The low interest rate environment is only temporary, sooner or later the cash is going to earn you alot more interest than now!

I am curious to know what would you recommend as an investment vehicle Wiseman? Everyone has their own comfort zones of investment, what would yours be?

Thanks for sharing. I'm inspired by your story. I think I will follow your footsteps. Will buy a cheap condo for stay and another for investment. Stocks looks very risky, you can see now the stock market is falling, even the dividend stocks and REITs are crashing. Property will not be like this.

Originally Posted by Unregistered

Let me share my own experience.

I was retrenched at a young age of 48. I could have been economically active still but the relevant opportunities were simply non existent. I did not want to stoop so low as I was a highly successful executive. Egoistic? Yes, I am egoistic. Why should I disgrace myself among my family and friends? So instead of taking on a shameful job, I decided to retire.

Just before my retrenchment, I had three properties - one 3 storey landed property and two condos. I decided to sell my prestigious landed property to a less prestigious condo in D10. I had to explain to all my friends and relatives that I had decided to retire and wanted to rest after working for so hard, and so long hours all these years. I managed to clear all my mortgages and all other debt. I also sold my conti and settled for a smaller Jap. My two condos now gives me passive income, enough for me and my family. We still manage to go to holidays in Europe, but instead of twice a year, we have to settle for only once a year. We survived.

You are joking right? He bought his properties sometime back (meaning at lower values), while you are entering at this elevated price environment.

Let's look at the options.
What you have : $2.5m

Condo for own stay: $1m (at this price can only get a 2 bedder - maybe 750 sf?)
Agent, stamp and legal fees: $35K?
Renovation & furnishing: $100K (simple one)

Condo for rental : $1m (same as above)
Agent, stamp and legal fees: $50K (incl ABSD)
Renovation: $30K (enough for renting out)

Emergency fund: $250K

For 2 bedder, I think can get only $3K monthly rental? Or $36K pa. gross

If put in stocks, can get better returns (from 4-8%). Some more stock now correction, good window to go in. More manoevrable - if need cash, can sell in parts. Property not so liquid. Some months no tenants then how? Still got recurring cost, maintenance and taxes, repairs

btw are you supporting yourself only - then $2.5m is adequate to the end. If got wife, and children then by hook or by crook better get a job.

Originally Posted by Unregistered

Thanks for sharing. I'm inspired by your story. I think I will follow your footsteps. Will buy a cheap condo for stay and another for investment. Stocks looks very risky, you can see now the stock market is falling, even the dividend stocks and REITs are crashing. Property will not be like this.

Originally Posted by Unregistered

$2.5m is adequate to the end. If got wife, and children then by hook or by crook better get a job

$2.5m is adequate for a small family to lead a rather good quality life. Bear in mind that the kids will grow up and be independent in 10-20 years.