a. Inflation over 4 years.

The 3 room flat that I’m looking at now has an indicative price of about $175,000. That’s for BTO 2012 March launch which will be ready in 3 years. Assuming that we both decide to purchase a similar flat 3 years later, the price would be subjected to an inflation of conservative rate of about 2.6% p.a (based of the avg of inflation over the last 5 years), which will be $189,000, an additional of $14,000 at least.

The point here is yes, although every year theres inflation. But year on year it’ll be more expensive to buy a flat, so might as well get it as soon as possible and save cost. After all the payment will only commence later part.

* The correct index should not be inflation because from what I read, property price is increasing at the higher rate. But since I can’t find the correct index, we’ll stick with this for a conservative calculation.

b. Eligibility of Housing Grants.

Based on the HDB website, the government extends housing grant of up to $35,000 (3 room flat in new estates) to first time applicants who have a combine average gross monthly income of $5,000 or less, which we should be able to qualify now. In the same scenario of purchasing a flat 3 years later, we might face a possibility of not being able to meet the requirement of the grant, i.e, the income ceiling of $5,000. Of course I’m not saying that I’m very confident that we’ll hit the ceiling, but I guess everyone hopes to make as much money as they can. Base on my conservative calculations, if C earns about $2.5k a month as a degree holder and I earn a pay of about $2k as a dip holder. Our combined monthly income is about $4.5k excluding 13th month, variable bonuses. commissions and other possible sources of income.

The point here is that the later we purchase, the higher the possibility that we will need to fork out more (at least another $35,000 if we don’t qualify for the grant) as we earn more the longer we are in the workforce.

c. Temporary Housing.

Assuming if we settle down 3 years later and then decides to purchase a BTO flat, we will need to rent a room until we get our apartment, say 3 years later. The rental for me now is about $570. For the purpose of simplicity, we use $570 a month, ignoring inflation. $570 x 36 months works out to be $20,520. This could have been additional cost savings if we purchase a flat now a have it 3 years later instead of 6 years later.

The point here is that we should try to minimize the time inbetween not paying for our own accomodation till the point of time we are actually paying our installment instead of paying rent.

d. Possible growth of population resulting in increase in property prices.

Inflation aside. Singapore will see an increase in population over the years from the current 5.18 million to God-knows-how-much-people they are importing. Base on supply and demand, if demand is high, supply is low, price increase. How much it more will increase, we do not know. I’m putting a conservative figure of $10,000 more.

The point here is that land size has stopped increasing while population is always increasing resulting in more expensive property. The earlier we buy, we more we minimize the effect of overcrowding.

e. Smaller area of flat.

Over the years, as population increases and land size remains unchanged, the size of the flat is becoming smaller over the years. When I was staying in pasir ris about 15 years ago, 4 room flat was about 110 sqm, now 4 room flat is about 87sqm. So there will be a possibility where the BTO flat in which we will purchase 3 years later that will be designed to meet the needs of 6 years later will be smaller yet more expensive. Which means the cost per square metre is higher. In which case will indirectly affect the saleability and price of the flat when we sell to open market later. People would rather purchase older apartment for bigger space if the price difference is not too much? I’m not sure how much more, but I’m putting a conservative figure of $10,000 more to this. 

The point here is that every few years, the flats become smaller. The earlier we buy, the bigger the house we get for the same price later.

f. Possibility of improve in infrastructure.

Currently the estate is relatively new. No major shopping centres and relatively new transport network. Over the years as the estate becomes more developed, there will be better infrastructure such as better transport network resulting in shorter time taken to travel to city and a shopping centre that has all the entertainment facilities. This is also add on to the cost of purchasing a flat later on. +$10,000.

The point here is that we should try to buy before the estate is developed. Once it is developed, it will cost more.

g. Availability of BTO choices 3 years later.

What is available now may not be available later on. 3 years later, we may end up with choices that we don’t prefer, such as Choa Chu Kang, Yew Tee, Jurong, i.e the west side. If we so choose not to purchase those flats, we will have to 1. continue paying rental while waiting. 2. purchase from open market. +$10,000

The point here is the uncertainty of choices later on. We may not get what we want after 3 years resulting in a longer wait -> pay more rent for a house that does not belong to us.

h. Uncertainty of future resulting in short term plan costing more money.

Without a long term plan, we will require many interim plans until such time we have a long term plan in place. During this interim period, we may be making unneccessary moves which will cost us money for e.g moving from place to place as a result of bad rental relationships, which is absolutely possible. or adjustments due to unforseen circumstances. +$5,000

The point is to try to have certainty to reduce cost incurred due to uncertainty.

i. Possible changes in government/housing policy. 

We can not be sure that the policy will be the same after 3 years. Whether is it more favourable or less favourable, we can not be certain. +$5,000

There maybe other factors that I have missed out. Based on all this probable scenarios, we are looking at a possible difference of about $120,000 to $150,000 lost of cost savings if we choose to purchase BTO 3 years later, the additional cost from the point of purchase till the possible loss of profits when selling it back to open market.

The point here is that the more we save when buying, the more we will make when selling it, i.e when the market is good.

- This is just a rough sketch of ideas that I have come up with for my own reference. Along the way there may be new findings that will cause some of the points to become irrelavent.

Update:

After calling up HDB, I realised that the grant will only be extended if either or both parties have been working for at least 1 year. So the earliest we can embark on it is June 2013…

So after reading my blog, I was told that my comments can be ruthlessly candid at times and I should try to be rounder in expressing my thoughts in future. I really can’t agree more with that and I really do feel uncomfortable being blunt and impolite to others because I find it a pretty uncivilized thing to do. In fact, I am always very conscious of my choice of words and sentence structure to convey the tone and meaning of my message. However, there comes a point of time when some people are just daft and need to be told off right into their face. What’s the point of packaging the message nicely because we are afraid of hurting or offending them when at the end of the day they just don’t get it and we have to repeat ourselves all over again. So if my messages came across really blunt to you, then its probably not the first time I’m telling you or you’re pissing me off really bad.

Speaking of being blunt, I really prefer being blunt with a purpose than to be blunt for the sake of being blunt. I really do find myself out of this world because its really hard to blend in and understand people nowadays. They are blunt to just about anything that it becomes them, their character. Totally uncultivated. When you speak to them properly, they will snap, curse and swear at you at any opportunity they find that it becomes really hard to talk to them nicely. Maybe one day everyone will be scolding one another for every little thing. Here’s an example I saw while surfing a forum on NS related topics:

Heres what happened:

Guy who just joined the forum posted a question to ask if a sergeant could be coverted into an officer. Instead of answering the harmless question, which could have been just a simple yes or no, members started flaming instead of giving him an answer. When told that all he needed was answers, one of the member became sarcastic and tried to provoke him.

Whats with these people. Infact, its not just a few of them. There’s a lot of such people. What do they gain out of it? I mean, if someone asks a question you either,

1. Answer nicely, or,
2. Leave the poor guy alone if you don’t know the answer, or,
3. Keep your comments to yourself if you find the question stupid.

It’s a public domain. If you are unhappy, just ignore the thread. Why stir shit out of nothing?

So it becomes harder to live in this society with the right values. Or has the right values changed? What are their parents really teaching them? Or am I outdated and irrelavant already? Should I just join in and start snapping away?

Apple thought differently, thats why it is so successful today.

Thoughts after the last 5 months:

I’m not someone who is easy to get along with considering my attitudes and beliefs are very much different as compared to most people around me. I am someone who do not see a need to conform into what everyone else is doing just to fit into the group because they are the majority unless I personally see a purpose in doing so. Oftentimes, such attitudes are viewed as selfishness and lack of teamwork simply because people don’t prefer to have any outliers and conflicting thoughts because it could be very troublesome at times. I agree that being in agreement with any group or organisation is important but unlike some, I don’t agree for the sake of agreement just to fit in. I’m not saying that fitting into the group is wrong, (If you fit well into groups, good for you.) I just don’t fit in blindly without seeing a purpose that aligns with my personal goals and direction.

There are instances when I do agree to disagreement and work together with the majority, especially during official work. I have no issues with either the majority or minority because I think that everyone should also be allowed to be different if they so choose to. That said, I’m not always the minority. When I belong to the majority, I don’t try to rally, convince or pressure the minority to follow suit because they are entitled to their own choices. Lets face it. Everyone has an agenda and purpose in everything that they do. That said, not everyone in the group would find a purpose or support the intent hence resulting in a divide. If minority is deemed selfish for not resonating with the majority, on the flipside, aren’t the majority selfish to expect the minority to conform?

In this society, the leaders of any organisation would definitely prefer everyone be of the same mould, have the same beliefs and do the things they want you to do and don’t try anything different. Don’t ask, just follow. Blindly. Take the path that they’ve set for you and limit the possible outcomes so as to remain in leadership and control. Because we all know that everyone will choose to play a game that they have advantage in, if you happen to be good at something that they are not good at and the audience so happen to take interest in, then they may lose popularity and audience. No audience equals no power. So the best bet is to play the same game over and over again and if someone tries to do something new, they get rid of them as soon as possible.

I’m different in many ways. And I realized that people around subconsciously try to convince me that its wrong to be different. But thankfully, I’m come to a conclusion that its not wrong to be different. Most investors in the world would tell you the same thing: not to put all your eggs in one basket, i.e to diversify your investments, because should the market crashes, you still have other form of investments to fall back on. However, Warren Buffett, one of the top 10 richest man on earth, in his wisdom of investments teaches us not to diversify our investments but to put all our eggs in one basket and watch it carefully. Who makes the most money? Warren Buffett. Enough said. So Warren Buffett was different compared to the majority of so called investment gurus but he’s theory proved to make the most money.

Then the question will be: Since all the other investors didn’t make as much money as Warren Buffett, why did they teach otherwise?

1. Because they KNOW that Warren Buffett had the correct way of investing and they themselves are actually doing so but they didn’t want everyone else to be doing the same thing so that they can remain at the top of the game.
2. Because everyone else in the investment field is in the belief that one should diversify, so they just taught accordingly since this was the confirmation the market wanted, just to fit in.
3. Because their method made them tons of money. But how come none of them are as rich as Warren Buffett?
4. Because their method was an easier and failsafe way for any mediocre investor.

Why all average investors didn’t follow Warren Buffett’s way of investment?

1. Because it made the most money and if you are rich and powerful, you become an outlier.
2. Because although it could make a lot of money, making a pile was not the most important, being part of the norm was.
3. Because everyone else said so, I’m just following the majority.
4. Because I’m just an average joe, I want to make money but not so much money.

…

~11:30pm, 31st Dec 2011. Eating sunflower seeds and camwhoring while waiting for fireworks display.

Waiting for the fireworks. Best new year yet with my beautiful wifey. Though it was simple, I enjoyed every moment. 5 years down the road, I promise, we’ll be in MBS watching fireworks.

Nice view...

Beautiful skyline… after cropping out this:

Not so nice view...

Lots of  them. The entire horde literally CHARGED in and occupied the entire foreground. Looks like they will be in every year’s new year picture.

Crowd dispersing after the magnificent fireworks.

Back to reality, after 10 minutes of stand still.

During the chaos, the underpass to Cityhall MRT was closed. The security personnel only allowed people to exit the underpass. Thinking that it would lead us to a shorter way into the MRT station, we tried to get into the underpass. So I came up with this crazy idea to “Look front, walk backwards” to sneak into underpass in the midst of the chaos. Though we couldn’t get to the MRT station, I THINK it was still the shorter way. Nevertheless, we managed to pull off that trick and it was fun. (:

Heres a little food for thought as we enter into yet another year full of hope for the better. Words which left an impact on me from aunt’s biography of grandpa and some advices which grandma left to me when we met at grandpa’s 1st anniversary memorial service.

Here are some of the values which grandpa held dearly when he was alive according to aunt’s recount:

1. Never greedy.
2. Never lazy.
3. Never curious.
4. Never bothering others in his favour.
5. Never saw him took taxi before.

Words which grandma left to me:

1. All the little bits do add up.
2. Don’t just do the easy and give up on the hard.
3. Be practical.

Some of the things I think I need to improve on:

1. Consistency. Faithfulness in doing things.
2. Maintaining and balancing relationships.
3. EQ, people and communication skills.

These are some values which I would like to reflect about this year.

I need to take sometime to think about this year’s resolution and goals.