After graduation, I was hit with S$40k debts from loans in uni. I struggled with a 2k monthly salary during SARs crisis, meaning 1.6k take back pay, with >600 goes to loan each month leaving with less than 1k.
I begin to focus on growing my Career and giving more Tuition for extra income. I work very hard and learn as much as I could, while exploring different roles to have more experiences early. I started with on site hands-on dirty and tough work which most graduates do not want to do. After that, I make role switch to project and subsequently to sales. Within 7 years, my fix salary grew more than 5x, excl. bonus and some shares options.
“Lots of Hard Work! Add Value to the Company! Ownership!
- Learn investment for passive income/compound return as early as possible.
- Make plans to start your own business while in school.
- Get a job related to your business plan and learn as much as you can for next 5 yrs.
- Meanwhile advance your business plan by doing something part time.
- Once you are ready, preferably by 30 yrs old, quit your job and focus on your business.
Investing in Property is essential in land scarce Singapore. For average Singaporeans starting from small stock portfolio, the return can never be as fast as Property. This is due to the leveraging effect of property.
As long as you are still young, plan your expenses carefully, do your research, have the mindset of continuing working, I think it is worth considering buying a higher price property that has a potential of higher growth in future. This of course have to come from the earlier point that you already achieve Income Growth capability where accumulation of wealth is much faster for you to invest in Real Estates.
I had seen many of my friends waiting for prices to drop in past years. It never happen, many ended up buying at more expensive price. Those who bought earlier reap all the benefits of buying at low price with no stringent property rules. E.g a friend of mine who bought his 4-room HDB in 2008 at 200k with few grand of COV. He had finished paying his house loan and is renting at > 2k per month now. He is staying in a private property now. His salary over years then are quite comparable to most other friends. Some of whom are still waiting for the right time to buy a property.
Me and my wife currently own 2 properties, one 4-room HDB near MRT at central region and one private properties. We are renting the HDB with fix monthly income which is way more than the dividends of a let’s say 200k stock portfolio. This excludes the capital growth of the house.
For the private property purchase few years back, we selected one that is expected to have MRT station nearby in five years down the road. The value had since rise more than 30%.
I paid 200k down payment excl stamp duties, legal fees etc for a 1M condo. Current value is conservatively at 1.3M. For 3 yrs period, it means >300k return. i.e. 100k a year! I doubt I can get such return if I invested my 200k downpayment into stock 3 years ago. Nevertheless I did set aside quite a substantial sum of money in stocks then. This is to achieve a balance and diversify portfolio.
- Read a few property investment books, before your first purchase of property.
- Start early for the purchase, do not wait if this is your first time looking for a house to stay.
- if possible, conclude the sale within 3 months
- Better to apply for an HDB flat in your first purchase to achieve the benefit and low prices granted by government.
- View at least 10 flats on site and at least 100 on advertisements.
- Use 3.5% average interest to calculate your monthly loan repayment
- Require to have back Cash or CPF in OA for at least 12 months in case you stop working to repay housing loan.
- Better to pay slightly more for HDB/99 year leasehold near MRT station if you have the intention to rent it out one day.
- Spot for property with future upcoming MRT station.
- Buy freehold property if you have intention of selling one day, say after 10 years, since value virtually do not depreciate compare to 99 year leasehold property.
- Learn financial planning such as savings, insurance and investment when young.
- Learn what is business and how to analyse it even before graduating from school.
- Go to a company that allows you to learn more and not earn more when young.
- Focus more time and energy in Income Growth by adding value to your company or businesses.
- True experiences and knowledge of business is more valuable than reading from books. Once you acquire these skills, your income will grow indefinitely. With more income, means more investments inject to your Stock or Real Estates Investment Portfolio. It will compound much faster.