All the Benjamins (or Yusof Ishaks if you’re Singaporean) in the world wouldn’t be any good unless you’re the only one with it

Lately, I’ve been doing some research on property investment and as a result, my Facebook and instagram feed has been flooded with sponsored ads which promise to teach you how to get rich through property investment with little to no money down.

Obviously, such ads are targeted at the mass-market investor because a common feature of such ads is how a couple with less than average household income in Singapore can afford a second property. A variant would be how “average Singaporeans” can own multiple properties with little to no cash down.

Personally, I’ve not attended any of these workshops but from what I’ve heard, the thing that they’re selling is co-owning multiple properties with numerous other owners or by leveraging up to your eyeballs (within the legal limits, of course) to afford the second mortgage.

Goodhart’s Law explains why the workshops are stupid

If you grew up in Singapore during the 90s, a popular idea at that time was that success meant having the 5Cs – Cash, Credit Card, Condo, Car, and Country Club membership.

Today, the aspirational quality of the credit card and country club membership has fallen by the wayside simple because it’s no longer difficult to obtain one.

I can’t say exactly when this happened but it has become a whole lot easier to get a credit card issued by a bank in Singapore. Although the credit limit wasn’t high, I remember getting two cards in the mail from my bank upon graduating from University. I didn’t even need to fill in an application or have a job. Ditto for the country clubs when NTUC and SAFRA* decided to get in the business and lower the barriers to entry for a membership.

These days, no one talks about getting credit cards or a country club membership because basically everyone has one. If we apply our imagination to cars, we can also conclude that once everyone has a car, it stops becoming an aspiration. After all, if everyone has a car, we would just end up with worse traffic and the rich would have then progressed to helicopters. Jakarta’s a perfect example of this.

In a twisted way, this is a version of Goodhart’s Law where the measure becomes useless when the measure itself becomes the target.

If having a car is a sign that one is rich, we would all work towards having a car to signal that we’re rich. However, that would eventually make having a car a terrible measure of wealth.

So, back to the property workshops that cater to the masses. The same logic means that if the masses could get rich through investing in property, they’ll quickly find themselves back in the middle if most people are able to invest in private property as well.

How to get ahead

Now, I have nothing about attaining material goods or getting wealthy. However, what most people need to recognise is that really wealthy people don’t buy stuff if it’s going to strain them financially.

A rich person wouldn’t own 39 properties on the maximum loan tenure in his/her own name with the solvency dependent on the rental income. If they can’t get tenants, they would still be able to pay off the mortgage and put food on the table.

Similarly, if you drive a fancy car but you have to hustle 14-16 hours a day and take on side gigs just to pay off the car loan and petrol, then owning a car isn’t exactly a sign of wealth.

So getting ahead shouldn’t be measured by something determined by others. You shouldn’t be getting a fancy car or apartment just because others think that’s what it takes to be a successful person.

Your success needs to defined by you.
On your own terms.
At your own pace.

So please, don’t be stupid.

Notes:
*NTUC is the co-operative that is the de-factor labour union in Singapore while SAFRA is basically the leisure and lifestyle arm of the Singapore Armed Forces. In short, these two organisations are about as mass-market as it gets because they represent the workers and the armed forces service staff.

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