Yes it will make more investment sense to hold 2 x 1.6m properties instead of 1 x 3.2m property for own stay.Originally Posted by price
Senior
Yes it will make more investment sense to hold 2 x 1.6m properties instead of 1 x 3.2m property for own stay.
Global recession is coming....
Since when did I say 3.2m must b in one property?
I just said 3.2M property.
Now, you ok with 3.2m property!
Wakakakakaa.......
Music of the night
Agree with amk ... endowment plan is a scam ... drop it immediately
Ride at your own risk !!!
Senior
i'm interested to here the maths/logic behind your conclusion on the endowment plan. i haven't gotten it for my kids and it was something that never really stuck in my head.
Senior
the one I had for my kid is from GELife. Can share some more information on why its a scam?
http://www.greateasternlife.com/sg/e...endclassic.jsp
Music of the night
With your family income of 16k ... all you need is a 5y renewable TERM plan about 1 million with probably 500k critical illness coverage ... other than those minor stuff like health / accident policies ... never never ask insurance co to invest for u ... it is very expensive and you are at their mercy
Ride at your own risk !!!
Junior
How much would such a term policy cost then?
Music of the night
Get a quote from your insurance agents loh ... how I know as it depends on age and whether you work for police or army or smoker or something... NTUC has LUV plan up to 200k for life/critical illness ... get that first if try to test test water
Ride at your own risk !!!
Senior
The purpose of this endowment is purely for my kid education only as I have other term plans that runs parallel to this. From my understanding the sum and bonus for the endowment plan are assured so at the end of 18 years, i will get back more that what I would have if I put them in FD or saving account. Is there something which I have not been told?
Property Newbie
i agree with this point
hope those buying into punggol $1500-1600psf condo ...don't do this
Just my 2 cent worth..
In think a fully paid car should also contribute into monthly expense based on depreciation value.
Junior
Ringo calm down, just for one minute contemplate what are being discussed here.
You worry about 4k interest. You get that because your investment is leveraged. If your investment is not leveraged there is no interest to talk about. Mortgage is the cheapest leverage you can get, even at 60% LTV. That's why people like Teddybear strongly favors it. Because ppl do get rich by leveraging. ( btw at 60% LTV a 3.2m has installment abt 6k at today's rate)
If you are risk adverse, then you choose the investment with less or zero leverage. that's fine too. Remember here I say you should invest at least 8k with a 16k salary. if you already doing that, then there is no difference between you and Teddybear. Just preference over what investment to use. You all can debate on that.
Btw I pick about car installment because that is one single item most ppl are not doing it right. Car loan is one loan one should never take.
Divine
agree with amk on this.
property investment comes leveraging. Just like how in FX u can choose to leverage too.
Be it 5 times of wat u have, (or 2.5 times if this is ur 2nd property loan) they are just different ways for investors to play with a bigger quantum investment. Indeed housing loan is the cheapest long term loan u can ever get in ur life.
As such, don't pay it off early.
Your strategy should be to
(i) borrow as much as possible
(ii) for as long as possible
(iii) pay it off as slowly as possible.
Be sure that you pay all other borrowings before paying down your home loan -- (since all other debt is more expensive).
but these are just guidelines and calculations done with statistics.
Based on the way you choose endowment to save up for ur children, i can tell that you are very timid when it comes to investments. If u bother to spend some more time to read up or learn, any form of investment beat getting urself tied down to an endowment plan in life.
Fixed D is never considered as an investment. Honestly, if u can lend me ur money for a fixed couple of years, I will be more than willing to pay u back 2% or more on it. There're so many ways out there to make back this interest or even double it.
Having said all these, like i mentioned in this forum before, many Singaporeans aunties and uncles feel so proud that they do not owe any housing loan. Good for you but really, it all depends on how old you are and thus how much u should leverage.
In the most basic accountings sense, how can a balance sheet be good without liabilities? if ur capital = ur assets ur not doing well in life.
Divine
We're just speaking in a value-for-money point of view. Endowment brings the least returns as an investment tool. I feel so painful when i see friends around me throw their monthly savings into insurance. What the other forumers say here are right. Never ever mix insurance with investments. Whats the point? u want guaranteed returns, u investment in other stuff with better returns. u want insurance, get a term or other forms of life packages they have for u. Not ILPs nor fund linked endowment policies or whatsoever they have these days.
Newbie
Actually, not true. The market such as IT has been totally wipe out by India.
And the fact that the cost is no longer as "reasonbly " cost effective.
These days, IT engineer drive to work. They used to scrimp . There is also a new pattern apperaing, and that is that they come here to gain "practical" experice, and once they have that ground experience, they comment X2 as much back in India or they move to US and AU.
So have taken the route to use SG as a temporary site to spend time and then go take their MBA full time.
Sooner then later, you should see that the job will evaporate and move to India to so call "reduce" cost. Typical example is a european bank that starts with "B" and have move everything to India.
The days of been hardwaorking and be very good at what you are at is no longer true. Manufacturing for one has gone the way of the dodo birds.
The next step such as HR which is deem non relavent in todays contaxt has started to move to India.
I hazard a guess that IT will be next sunset industry.
So what does that leave SG with ?. U guess it, Insurance, Property agent , etc.
Senior
Like I said earlier, if you are leveraging to generate passive incomes from investment property that is fine. but to over leverage so that you can enjoy a 3.2m property, that to me is suicidal. Although both are leveraging, but they are leveraging for the different purpose.
Can you explain from a cash flow point of view, how are you going to get "rich" by taking up 80% loan on a 3.2m property for own stay?
Like someone already said, weather you take up car loan or not, car and the COE is a depreciating assets and you still need set aside money for replacement when the car reaches 10 years.
Banned
leverage is fine, but i think a line needs to be drawn between family home and investment properties. I really cant see myself risking my family livelihood like this.
Divine
Just did a simple quick search,
Even if u really want to go for endowment plans, GE is not that ideal with distribution costs at 14 months.
in case u do not know what that means, distribution costs are selling expenses paid to the insurance company and sales agent. It does not contribute to the insurance or investments which the policyholder purchases with the endowment policy.
Aviva, NTUC, HSBC or Manulife all have lowest distribution cost from 6-12months. Basically every dollar u are hoping to pay for ur children's education, ur basically paying for ur insurance agent's children so to speak.
if u need a whole life insurance, stick to aviva or ntuc (12 months distribution costs)
if u really want to get an ILP, again NTUC is the lowest average expense ratio followed by GE, prudential, UOB then HSBC.
DIY insurance is also called "unbundling". It means buying investments and insurance separately.
Insurance companies and agents usually steer you away from DIY and toward bundled insurance, which pays higher commissions. The 3 most popular bundled policies are
(i) Whole life,
(ii) Regular-premium endowment (including education policies) and
(iii) Regular-premium investment linked products (R-ILPs).
DIY has three advantages: It is transparent, cheap and flexible.
(i) Whole life and endowment policies DO NOT disclose which stocks, bonds and property the insurance company has purchased for you.
DIY invests in unit trust and ILPs - which tell where they have invested your money.
(ii) Whole life and endowment policies DO NOT disclose the returns the insurance company has earned on the stocks, bonds and property it has purchased on your behalf.
DIY invests in unit trust and ILPs - which reveal the fund's performance.
(iii) Whole life and endowment policies DO NOT disclose how much the insurance company is charging to manage your investment.
DIY invests in unit trust and ILPs - which reveal the management fee.
(iv) Whole life and endowment policies DO NOT disclose the timing of your investment. DIY invests in unit trust and ILPs, all of which tell if you bought low and sold high, thereby making a profit.
Not only that, if you did buy low and sell high, insurers take some of the profit and give it to less fortunate endowment and whole life policyholders. There is no way to know if you are on the giving or receiving end of this re-allocation. The practice is called "earnings smoothing".
(v) Whole life and endowment policies DO NOT disclose the riskiness of your investments. This makes it impossible to adjust your investments to your risk/return preferences.
Insurance companies take policyholder premiums and invest them in a single “life fund”. There, all policyholders share the same investments. It is a "one size fits all" approach. A fresh young graduate and an 80-year old retiree have no choice but to share exactly the same investments.
Savings from DIY are equal to the distribution costs charged by regular-premium endowment, ILP and whole life policies.
The distribution cost is the bid-offer spread. It is typically 5 per cent of your investment. Both regular premium ILPs and DIY charge it.
Average costs for Singapore insurers:
(i) Whole life: 19 months' premiums.
(ii) Regular-premium endowment (including education policies): 14 months' premiums.
(iii) Regular-premium investment linked products (R-ILPs): 15 months' premiums.
On average, it costs from one to two years' premiums to pay commissions to the agent and insurance company that sold you the policy. None of these payments go toward purchase of insurance and investments.
DIY is cheaper since it does not charge this distribution cost. It charges only the bid-offer spread of 2 to 5 per cent of your investment.
Whole life and endowment policies give a pre-set mix of insurance and investments. For example, a whole life policy might use your premium payments: (i) 20 % term insurance, (ii) 30 % stocks and (iii) 50 % bonds.
There is no way to change the allocation or even to know what it is since no insurance company discloses this information to its policyholders.
DIY is more flexible. It allows you to choose any allocation you prefer, such as: (i) 10 % term insurance, (ii) 30 % health insurance, (iii) 20 % cash payments on your home loan, (iv) 30 % stock funds and (v) 10 % bond funds. etc. etc. You can also change the allocation whenever and as often as you wish.
Divine
Yep, thats why i always dont understand why people treat their first own stay home as investment tools.
Property Newbie
like this
bankruptcy will be at the doorstep if one fail to service their loan one day..
you can enjoy now but must face the music if you cannot take the risk later on...
so, it is up to one's risk appetite at the end of the day..
be it high risk, moderate or conservative.....remember to weigh the pro & con carefully..
Junior
No one is going to teach you how to invest.
You are risk adverse, this is evident. This is fine. It's a choice u made.
Everything is relative. Starting with a 1m pty own stay, with another 1m investment pty. 3yrs later, upgraded to a 3m pty own stay, and another 6m investment pties on leverage. Life on an edge ? Maybe, maybe not.
Can be 60%. I just give a scale. 3.2m cash flow is 6k a month.
Above just an example.
If you are not comfortable with a 8k investment with 16k income, you probably were not comfortable with a 2k investment with 5k income when you were single or younger.
There is no free lunch. No risk no gain. And pty is probably the least risky investment compared to stocks or funds, with the cheapest borrowing cost.
If u every day worry about "what if", then anything leveraged is not for you. In that case u also should accept you will not gain much in the end.
Junior
Btw just to clarify one thing, I'm not telling everyone to go buy pty now. I'm just talking abt pty investment, or leveraged investment, in general. Pty market today is in a strange state. Tread with extreme care.
Senior
Most people may not have a safety net like well off parents or inheritance. A mis-step will mean financial ruin for e rest of their lives. I advocate building up a safety nest of cash buffer first before using the new extra cash (i.e. u can afford to lose) for higher risk investments. I have myself built up my coffin money that I will never touch unless in emergency. Currently any incoming cash are used for investments.
Newbie
I suppse these people will be earning >$12k household income... otherwise might as well go for the EC... so instalment payment likely between 20% - 30% of gross income... depending on size.i agree with this point
hope those buying into punggol $1500-1600psf condo ...don't do this
Junior
2012 Property Prices Outlook: It's all downhill from here
Private residentials are too expensive now for what homebuyers are willing to pay which will lead to a 5% yearly dip, says Colliers.
The high-end market is experiencing a sales drought which should persist as purchasers look for more value deals, and even in the mass-market segment where such bargains can be found, the influx of new supply will still push prices down.
Overall, the 2012 property prices will suffer from a gradual easing with the government letting the current cooling measures drag down the price index to more reasonable levels.
"With prices exceeding historical peaks, homebuyers have become increasingly resistant towards further price growth. Coupled with the continued injection of land supply for the development of private residential projects, Executive Condominiums and more public housing from planned Build-To-Order flats, a buyers’ market with increased options may eventually emerge," said Ms Chia Siew Chuin, Director of Research & Advisory, Colliers International.
"Additionally, while the low interest rate environment could support home buying in 2012, particularly in the primary market, the slow resale market will continue to put a drag on prices. The high-end/luxury market, which is already languishing in slow sales activity, is also expected to see further price falls as prospective buyers continue to hold back on their purchases. In the mass-market segment, demand will continue to be somewhat supply driven. However, with increasing supply and options available, the potential price growth for mass-market homes will be minimised," she said.
Newbie
Are you trying to wind us up?
2.3M at 80% LTV easily 6-7k mortgage payment per month, thereby leaving your family to live on the 2k rental income, or during tenancy gap, live on free meals at temple? You have been asking lots of questions on property investments, so you must know about mortgage calculations. Therefore back to the question, why are you trying to wind us up?
Wait...ok maybe you are going to pay 50% with cash.
Senior
I would have thought homebuyers are more resistant towards further price growth until I saw how they were snapping up new developments at 30% premium to resale...
Global recession is coming....
1) Not true wah, still got so many people willing to buy new launch at >30%-60% premium to resale. They have cheaper option and that is resale properties at >30% discount! So how can private residentials be expensive? If you say the new launch are expensive, then the resale are cheap!
2) What value buyers are looking for in high-end properties when they are selling at like $1800-2500 psf when OCR already selling at $1500 psf? The gap between OCR and CCR are so small, at multi-decade narrowest gap, if that is not value than what is it?
3) Slow and cheap resale not affecting new launch!
Banned
Psf might be narrowing but the absoulute quantum gap between ocr and ccr properties is still there.1) Not true wah, still got so many people willing to buy new launch at >30%-60% premium to resale. They have cheaper option and that is resale properties at >30% discount! So how can private residentials be expensive? If you say the new launch are expensive, then the resale are cheap!
2) What value buyers are looking for in high-end properties when they are selling at like $1800-2500 psf when OCR already selling at $1500 psf? The gap between OCR and CCR are so small, at multi-decade narrowest gap, if that is not value than what is it?
3) Slow and cheap resale not affecting new launch!
Senior
aye aye captain...WE read you loud and clear...
Posting Permissions
Reply With Quote
