View Full Version : [UPDATED] Investments Poll
Imagine you have a stable salaried job that pays relatively well, you've young kids, a nice car, and live in either a 5rm HDB or better. Your current home is sitting on positive equity of $200,000. You have liabilities of $400,000 for your current home, and $80,000 for the car. Your net operating cashflow month to month is positive as long as you keep your job.
Keeping all the above in mind, assume you have $100k in spare cash to invest in, whether for short term gain, long term gain, hedging, etc etc.
As a savvy investor, where would you put your money?
Imagine you have a stable salaried job that pays relatively well, you've young kids, a nice car, and live in either a 5rm HDB or better. Your current home is sitting on positive equity of $200,000. You have liabilities of $400,000 for your current home, and $80,000 for the car. Your net operating cashflow month to month is positive as long as you keep your job.
Keeping all the above in mind, assume you have $100k in spare cash to invest in, whether for short term gain, long term gain, hedging, etc etc.
As a savvy investor, where would you put your money?
not very rich to invest...liabilities total is at $480k... might as well keep the spare cash for raining day or to redeem the loan for the car... most expansive loan
not very rich to invest...liabilities total is at $480k... might as well keep the spare cash for raining day or to redeem the loan for the car... most expansive loan
Unfortunately not everyone is as cash rich as you. The above scenario is a very common one for middle class singaporeans
bargain hunter
06-07-10, 23:03
but for non cash rich, 80k for a car loan seems a tad high considering only 200k of equity for current home and the 400k home loan. should get a smaller car. :)
Unfortunately not everyone is as cash rich as you. The above scenario is a very common one for middle class singaporeans
but for non cash rich, 80k for a car loan seems a tad high considering only 200k of equity for current home and the 400k home loan. should get a smaller car. :)
fine fine, i'm amending the scenario:
Imagine you have a stable salaried job that pays relatively well, you've young kids, a nice car, and live in either a 5rm HDB or better. Your current home is sitting on positive equity of $200,000. You have liabilities of $400,000 for your current home, and $40,000 for the car. Your net operating cashflow month to month is positive as long as you keep your job.
Keeping all the above in mind, assume you have $100k in spare cash to invest in, whether for short term gain, long term gain, hedging, etc etc.
As a savvy investor, where would you put your money?
Eh but actually if you think of it, my original scenario quite zhun what.
average 35 year old has 1.5 kids of childcare age, owns a junior exec car, stays in 5 rm HDB or 3-4rm suburban condo.
whack 20 system 7 and system 12!!!
joking :p
bargain hunter
07-07-10, 00:34
if i m the fella below, i would buy a cheaper japanese car hehehe...so 40k instead of 80k car loan is more appropriate. but the housing scenario would then be wrong becoz the hdb or condo would likely be bot before 2006 at lower prices and the net equity vs loan ratio should be at least equal if not lesser loan than equity. but if its a 30 year old then your scenario is right (assuming also the 30 year old is a show off and wants a nice car) :)
Eh but actually if you think of it, my original scenario quite zhun what.
average 35 year old has 1.5 kids of childcare age, owns a junior exec car, stays in 5 rm HDB or 3-4rm suburban condo.
greentea2005
07-07-10, 09:04
If the cash is not required, you might put into SRS and invest in those dividend stock. Can have income tax rebate and stock dividend. What do all of you think?
fine fine, i'm amending the scenario:
Imagine you have a stable salaried job that pays relatively well, you've young kids, a nice car, and live in either a 5rm HDB or better. Your current home is sitting on positive equity of $200,000. You have liabilities of $400,000 for your current home, and $40,000 for the car. Your net operating cashflow month to month is positive as long as you keep your job.
Keeping all the above in mind, assume you have $100k in spare cash to invest in, whether for short term gain, long term gain, hedging, etc etc.
As a savvy investor, where would you put your money?
Based on the above, a likely scenario would be as follows
1. Positive equity of $200k now in 2010.. Using max 5 room resale value in Marine Parade, that would be about $700k (source HDB) http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyResaleFlatMedianResalePrices?OpenDocument ).
2. So the initial purchase price is $500k
3. The HDB resale index (flash estimate) is now at 160.9
http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyResaleFlatResaleIndex?OpenDocument
4. So the time the house was bought would be around 2007 third quarter at index value of 115.1, value of $500k.
5. What would be the age if he bought in 2007? with young kids now...
6. And with current liabilities of $400k? it is not quite likely as his down payment would be 10% minimum of $500k, and loan at $450k. If max loan taken is 30 years.. his outstanding would be less than $400k now. Anyway, for your sake, just take it as it is.
If in this case, I would recommend
1. pay off car first...no need to down grade... or
2. Get a cheaper alternative, OPC car. or
3. If possible don't drive
Strongly encouraged not to invest in properties at all. If hand itchy, use 50% spare cash to play reits.
I spent in average $3,000pm in my two children, the best investment
In 21 years, I spent almost $600,000 in my daughter, including overseas education.
arrrgh the point wasnt the scenario but to see what investment options forummers like. project fail....
bargain hunter
07-07-10, 10:22
ok lah, we still vote according to our perception but we juz kachiao ur scenario in the forum section for fun. LOL. so the poll is still accurate. :)
arrrgh the point wasnt the scenario but to see what investment options forummers like. project fail....
ok lah, we still vote according to our perception but we juz kachiao ur scenario in the forum section for fun. LOL. so the poll is still accurate. :)
lol i'm bad at scenarios
arrrgh the point wasnt the scenario but to see what investment options forummers like. project fail....
no worries.. doing some analysis on the scenario to better decide on the recommendations.
This guy should sell his HDB now and move in to a MM unit immediately. haha :)
bargain hunter
07-07-10, 10:32
but he has 1.5 kids hehehe. seriously, would anybody sell a hdb to stay in a MM studio? i seriously doubt it.
no worries.. doing some analysis on the scenario to better decide on the recommendations.
This guy should sell his HDB now and move in to a MM unit immediately. haha :)
it's quite interesting, but scary, that almost everyone chooses equities and property as their primary investment class
but he has 1.5 kids hehehe. seriously, would anybody sell a hdb to stay in a MM studio? i seriously doubt it.
Got, HDB's EC... fellow forummer without kids.. ->
http://forums.condosingapore.com/showpost.php?p=100362&postcount=17
The following scenario is fine
Age 30, when bought a 4 room HDB at $300K in 2007
Now Paper gain of $150K
Outstanding Loan $50k
Spare Cash $200k
Outstanding car loan $50k
Kids 2
What should he do?
bargain hunter
07-07-10, 10:50
at least for now, downpayment for studio has not overpowered all other options add together yet. when that happens, i would be truly scary. :scared-4:
it's quite interesting, but scary, that almost everyone chooses equities and property as their primary investment class
Provided they have sufficient funds in their CPF to pay for the downpayment, so that the cash can be invested in more liquid means and act as buffer, should property prices turns south. :rolleyes:
at least for now, downpayment for studio has not overpowered all other options add together yet. when that happens, i would be truly scary. :scared-4:
Provided they have sufficient funds in their CPF to pay for the downpayment, so that the cash can be invested in more liquid means and act as buffer, should property prices turns south. :rolleyes:
Yup, totally agreed with sleek.
I would invest 40% in highly liquid-able assets like reits or even mixed stocks play.
Another 10-20% into insurance.
Have another 40-50% cash to buffer.
REITS not worth investing (I won't even use the word "invest" for this category). Why 'invest' in properties managed by others and let them charge you management fees & all sort of expenses (e.g. company cars) etc left-right-centre (just like buying unit trusts)? Want to invest in properties, then invest directly better or pull together money to invest still better than buying REITS.
Yup, totally agreed with sleek.
I would invest 40% in highly liquid-able assets like reits or even mixed stocks play.
Another 10-20% into insurance.
Have another 40-50% cash to buffer.
REITS not worth investing (I won't even use the word "invest" for this category). Why 'invest' in properties managed by others and let them charge you management fees & all sort of expenses (e.g. company cars) etc left-right-centre (just like buying unit trusts)? Want to invest in properties, then invest directly better or pull together money to invest still better than buying REITS.
On the scenario of high debt to assets ratio, high cost loan repayment could be most ppl priority while some wanted to conserve cash to built buffer & "bullets".
Ease of Liquidity was my intention for the short term.
Direct properties investment carries a certain strong amount of risks which suits certain ppl's risk profile. Moreover transaction is never a "push a button" type & the duration is pretty long. Unless its a firesale... haha..
That's just my view.
Put 11.4K into SRS every year. That will save you on average 1.14K in deferred taxes (assuming 10% tax rate). i.e. you save 1% of 100K.
With the remaining 88.6K, put all in equities, blue chips if possible (and more liquid ones). A mix of property, commodities, utilities (e.g. Keppel Land/Capitaland, GAR/Noble, S.Post/SingTel/M1/StarHub/SPAusnet etc.)
No point repaying car loan as you do not gain much, assuming 7-year loan and you are at mid-point (3.5 year). And the sum of digits calculation doesn't really benefit repayment - maybe someone can tell me otherwise. Additionally, I assume your COE is around 10K-20K level, which would be cheap compared to the 30+K level now, so changing car is not a good idea.
Just my thought. investing in properties makes no sense simply because 100K is not a lot.
BR
TBM
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