Weekend Food For Thought – 28 April, 2012

Just How Do Singaporeans Live?

The cost of a one bedroom apartment in Tg Katong/Paya Lebar is now S$900,000.

The cost of any small car in Singapore now comes at a minimum of $100,000. (That’s not even considering the $90K COE for a 2L car.)

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You need to be a millionaire to afford a tiny house and a small car in  Singapore today … or be seriously in debt to own these things.

And if you were in debt owning these things, you’ll be in serious trouble if the economy takes a small 7% hit. That doesn’t even consider your daily expenses, utilities and existing obligations. Now consider that the government is raising its monetary policy in view of tightening the value of the SGD. This is usually a signal to banks to start tightening as well. Now consider your debt when the banks start raising its rate.

If an above average Singaporean earns around S$5,000 monthly, at no interest, his monthly repayment for this $900,000 shoe box apartment will be about $2,500 for the next 30 years. His monthly repayment on his little $100,000 car over 10 years at no interest will be $830. Other monthly expenses; utilities average around $150, parking $200, petrol $300, ERP $120, …. I think I’ll stop there.

This alone works out to $4,100 which leaves $900 of his salary remaining which works out to $225 a week for other expenses.

Wait a minute, I also didn’t consider his CPF contributions and income tax deductions … and a lot more other stuff.

And we still haven’t factored in interests.

I also didn’t consider if this person was married with kids.

Things in Singapore are becoming much like West Malaysia where costs are outweighing income. The poor Malaysians have been living under worse conditions for a much longer time and the Little Red Dot is following suit.

Inflation has risen from nothing to 5.2% since 2010.

The price of housing has risen by as much as 40% since 2010.

The price of cars has risen by at least 115% since 2010.

Bread is now 50% more than in 2010.

Many other basic expenses and staples have risen so much in the last two to three years but we continue to suffer in silence and worse, abet it with our lavish spending and thoughtless investments. I really wonder how many can actually afford to spend they way they are spending. Its no wonder so many apartments were returned with the buyers defaulting on their deposits. That is just a small example of the kind of thoughtlessness I am referring to.

In the meantime, salaries have not risen by more than 5% in the last two years.

Banks are still paying out 0.nonsense% in savings interests.

And your stocks are not higher than where they were in April 2010.

We know where all this money … or should we say, debt … is coming from and we just keep mounting it higher and higher.

Now that China’s meltdown is imminent, Spain and UK are in recession, most of the manufacturing world’s PMIs are still in contraction and America’s GDP has contracted, it is only a matter of time that we will pay for our greed, pride, face and ego.

I am just praying that our elected leaders have a firewall or a plan B in place when the shit hits the fan. Coz I don’t want any of that shit to hit my face when I have been financially prudent and undeserving of any punishment as a result of other people’e thoughtlessness.

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i seriously doubt our leader have plan b…

As a trader, I would have thought you’ll be able to capitalise when shit hits the fan and at the same time make more money teaching others how to benefit from crisis.

I never said I didn’t or wouldn’t. I don’t like that our reserve money will likely be used to bail out the thoughtless ones.

And I take exception to your suggestion about making more money from teaching in such a dire situation. That is not who I am. Please rephrase or take it back.

Crises will happen and they are not caused by me or you. We owe it to ourselves to make money by making the correct trades in such situations. I don’t see anything wrong with doing so and you teaching others how to do it. Like I said, making the correct trades in such situations (and teaching others how to do so) is right thing to do and does not even cause or aggravate the crises. I am surprised you take exception to this when you and I and everyone else do it all the time.

I took exception to your insinuation that I make “more money teaching” during such times. I would have appreciated it more if you had phrased it as “… at the same time teach others how to benefit from crisis.”

In your most recent response, you left out the “make more money”. Thank you for that.

Pardon me but I’m confused. Are you saying you personally think that it is wrong to make money teaching others your wisdom and that you do not make money teaching others? I don’t see how that is wrong.

What has your query and your postings have to do with the topic at hand? Why are u insisting on pressing on with trading the crisis and making money teaching when it has nothing to do with my topic? I don’t know your agenda but I feel under attack from you.

All you seem to do is put words in my mouth like you’re setting me up. This is the second time ur going head to head with me. What do u have against me and what have I done to you to deserve ur harrassment?

You can have the last say then I am locking this thread.

Conrad, Thanks for sharing, housing is expensive beyond my imagination. I know is expensive but to what extend not until I walk into a showroom and working on the numbers. It’s a scarely sum of affortablity and is true. We need to be clear of what we can afford. Must have or nice to have? Everything comes with a price ( your price of exchange ). we need to be clear of our own choices, end of day we are master of our life.

Thanks Linda. If only more people realized this instead of living like it didn’t matter.

I guess people do know things are not looking good. But what should we do other than not taking up those unnecessary debts? Are there more things we can do to make things better? Thank you.

Yes there is a lot that we can all do as a collective effort to control and even bring down inflation.

We can stop spending lavishly with money we don’t have! This goes back to the thoughtlessness I was referring to. Lots of people here are heavily leveraged on their credit cards and spending beyond their means with no real solution to paying off all their debts. Others are over-leveraged on loans based on their current income capability instead of realistically looking at their long-term affordability even factoring in bad times.

We’re spending money we don’t have on things we don’t really need. We’re entertaining ourselves and making ourselves happy today without care for tomorrow. All this lavish spending only encourages inflation.

Spend when you need to. Spend on what you can really afford. Spend on what you truly need. Otherwise, stop spending especially when you can’t afford to and don’t need to. Every contribution helps.

Hi Conrad,

I read this post imagining how you would speak it, and this was so entertaining! And clear as well. Really good for keeping me awake at work (…and using my brain a little more than i otherwise would at work…ha…) “Wait a minute…I also didn’t consider his CPF contributions…” Classic Conrad right there, love it! X-D

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