Archives for category: Personal Finance

This is from November but still interesting.

Personal wealth per adult grew strongly in Singapore up to 2012. Since then it has risen slowly in domestic currency units, and declined a little in terms of US dollars. Despite this drop, average wealth remains at a high level – USD 268,780 per adult
in mid-2017, compared to USD 115,560 in 2000. The rise was mostly caused by high savings, asset price increases, and a favorable rising exchange rate from 2005 to 2012. Singapore is now ninth in the world in terms of household wealth per adult, giving it the highest rank in Asia.
– Credit Suisse Global Wealth Report 2017 (source)

The report puts our mean and median wealth per adult at 268,776 USD and 108,850 USD respectively. This isn’t hard to imagine for most people whose HDB flat has more or less been paid up for* which probably puts most middle to senior Singaporean residents in this category. Also, the study looked at wealth per adult which excludes children who are unlikely to have any substantial assets to their name. In other words, the wealth of a family with children is not diluted to the presence of children.

What got me searching for the wealth of an average Singaporean is because I was updating my own spreadsheets the other day and I was quite surprised at the total staring back at me on my spreadsheet.

Also, I had a hunch that I might be considered pretty well-off by other people’s standards. The problem for me was: What is “other people’s standards”? So now, I finally have some idea.

What’s interesting is that the CS report takes its data from the Department of Statistics Singapore (SingStat) so let’s dive a little deeper into what SingStat counts as assets and liabilities in calculating net worth.

Thankfully, that can be summed up in one picture.



Singapore Household Balance Sheet

Singapore Household Balance Sheet (source)

So looking at this, I’m actually quite surprised that the average Singaporean adult only has 268,776 USD (362, 815 SGD) in net worth if his primary residence and CPF is included in the calculation. Here’s why.

A typical four-room flat should be worth around 400,000 SGD. Assuming that it’s jointly owned by a couple, that would be about 200,000 SGD per adult. Are the mortgage and other loans so huge that their Cash, CPF monies and life insurance** add only 163,000 SGD per adult to their net worth? Furthermore, the average has been skewed upwards by outliers as the median isn’t even half the average.


So, am I missing something here? Or is the average Singaporean’s net worth really the sum of his/her HDB flat and CPF and they save next to nothing plus carry a mortgage and some personal debt (e.g. credit card, car loan)?

Let me know what you think in the comments.





* You can quibble about whether it’s appropriate to include your primary residence as part of your net worth but that’s how it was done in their study.

** I’m not even going to bothering adding equities as the average Singaporean probably doesn’t have much invested in the markets. Most people I know treat the market as a quick punt. There are very few people my age or even slightly older who have anything more than 50,000 SGD in the markets. For every one of me, there’s probably 7-8 more who have at most a five-digit portfolio.


With all my recent posts on bitcoin (here, here and here), I started thinking a little bit more about how people build wealth over time and I’ve come to realise that building wealth over time isn’t rocket science. It mainly comes down to what you spend your money on.

In general, there are three things in life you can spend your money on- one, things you consume immediately; two, things that will go up in value, and three, things that produce things of even greater value.

The first type of things – Cheeseburgers

Suffice to say, it’s clear that if you spend most of your money on the first type of things, you’re not going to get very far. Think of a cheeseburger. It tastes good when you eat it but after you eat it, it’s gone. It comes out as waste and gets flushed down the toilet. Even for things that last longer than a hamburger (e.g. a t-shirt), it’s clear that once the good is bought, it’s unlikely to be sold for at anywhere near the same price as when it was first bought. Therefore, if most of the things you’re buying are cheeseburgers, you’re unlikely to get wealthy.

The second type of things – Treasure Boxes

The next category of things is like treasure boxes. You buy one, thinking that it contains treasure and sometimes, they really do. People have gotten rich by being able to (through skill or otherwise) ascertain whether the treasure in the box is worth more than the price they’ve paid for it. Unfortunately, how much you can sell the treasure for in the future depends on how much people in the future are willing to pay for them.

Things like art or collectables are like this. You could pay $1,000,000 for a piece of art and in a hundred years, for reasons unknown even to the by-now long-dead artist, someone else may be willing to pay $2,000,000 for it. Or just as easily, it could be worth $100,000. Who knows.

The third type of things – Geese (golden, if you like) or Fruit Trees

Things like these produce even more wealth for you as time goes by. Geese can produce more geese if you don’t turn them into roast geese and fruit trees produce fruit that you can consume as well as, with a little sweat, use to grow even more trees. Starting with a pair of geese, you could get a whole flock. Or with a bag of seeds, you could get a whole orchard over time.

Don’t buy too many Cheeseburgers

This question is probably the one question that will determine how wealthy you eventually get. Obviously, you need to purchase some ‘cheeseburgers’. You have to have a certain amount of food, shelter and clothing for basic survival. For entertainment, you need some spending on simple luxuries like watching movies, an ice-cream, or even a holiday.

The point is, these things are all ‘cheeseburgers’. Consumed today and provides immediate satisfaction. The danger of consuming too many ‘cheeseburgers’ is two-fold. One, as you consume more ‘cheeseburgers’, you start to find that you need more ‘cheeseburgers’ than before to feel as satisfied as you once did. Driving a Toyota is cool when you didn’t have a car. Once you’ve had one, the next step is a Mercs or BMW even though its primary function is still to bring you from point A to point B.

Or take going to the club. The first experience is cool and exciting but after going to the same club many times in a week for multiple weeks and the mind starts to get bored. It’s the same with restaurants. With ‘cheeseburgers’, the mind needs that constant stimulation of novelty in order to feel the satisfaction derived from a ‘cheeseburger’.

The second danger is consuming ever-greater quantities of ‘cheeseburgers’ lead to an addiction that has unhealthy consequences. Indulging in too much food literally makes you unhealthy with the onset of obesity and the health problems associated with it. But buying ‘cheeseburgers’ like a more fancy car also leads to an unhealthy mental state like never being satisfied with what you have and always being envious of what others may have that you don’t. Using our earlier example, the Mercs or BMW takes on a second function of showing off one’s wealth.*

Treasure boxes or Geese?

Therefore, beyond the amount of ‘cheeseburgers’ needed for a sufficiently satisfactory life, we should be deciding whether to buy ‘Treasure Boxes’ or ‘Geese’. There isn’t a clear answer as to which one is better but we’ll look at the characteristics of each type. Both things will make you much more well off compared to people who only buy cheeseburgers but that will also depend on whether you have the knowledge, fortitude and good sense to know WHEN and WHAT types of ‘treasure boxes’ and ‘geese’ to buy. Let’s start with ‘treasure boxes’.

‘Treasure boxes’ contain objects of value. That value is decided in a market of buyers and sellers. In econ 101 terms, that means that whatever the value of the good is, depends solely on whatever other buyers are willing to pay for it and whatever existing sellers are willing to sell the good for. This also means that no one is really sure of what the ‘treasure box’ is worth and that its worth at any point in time is determined by what someone else would be willing to pay for it. In other words, it’s price is its current value.

A good example is the story of how diamonds came to represent love and commitment around the world. Prior to De Beers’ marketing campaign and control over the diamond market, no one would have bought a diamond as an engagement stone because diamonds were so rare and therefore reserved only for the super elite. However, as the supply of diamonds increased, the price of diamonds came down. De Beers, having substantial control over the supply of diamonds then restricted the supply in order to keep the price high while also paying to run a successful ad campaign that increased the demand for diamonds. However, for us, the more important question is: “Has the value of the diamond changed merely because its price has?”

And that is the thing with most treasure boxes. Without knowing what is inside, your best guess at its value is the price someone else is willing to pay for it and the price that the seller is willing to accept for it.

Making lots of money from treasure boxes in the long-run depends largely on having someone pay a lot more for your treasure box than what you bought it for. Many times, this can result in manias that drive the price sky-high when everyone wants to buy the “asset” due to greed which was probably fuelled by envy. After all, who likes it when you see your neighbour whom you probably think isn’t much more clever than you take a holiday in the alps while you are forced to work through the holidays? What more, he did it not by doing anything particularly clever or special. He just happened to buy (and sell) the right thing at the right time.

And finally, Geese

‘Geese’ are a special class of things. They can be traded just like treasure boxes but they can also be raised to produce more ‘geese’. If you keep a close watch on your ‘geese’, you’ll also have a good idea of whether your ‘geese’ are ill or your ‘geese’ are healthy.

And while ‘geese’ have a price in the market where there are buyers and sellers of other ‘geese’, that price is typically based on a value of what the ‘geese’ can produce over its remaining lifetime. For example, let’s take the example of a real goose. You can estimate the number of eggs a goose can produce over a lifetime. Furthermore, a goose can also be used for meat. Both goose eggs and meat are things whose value you could ascertain by checking out what goose eggs and meat currently sell for. Therefore you could roughly tell what the value of your goose would be. And if you so happen to come across an honest seller who is selling a goose for less than the value of the eggs and meat, you have found a good deal, haven’t you?

That is typically how the stock market works. You can roughly calculate the value of a company based on its current business and a plausible estimation of its future business if you know the industry well enough. And sometimes, Benjamin Graham’s Mr. Market comes along and offers to either buy or sell you a share of the company that is out of line with the estimate of the future business. In this scenario, price and value have diverged and there is a good chance that there is some profit to be made by taking advantage of Mr. Market.

Or, you buy cheap from Mr. Market and hang on to your ‘geese’ and have them produce more eggs for you over the years. You may want to consume those eggs or you could try hatching them to get more ‘geese’. That analogy is exactly how dividends are. You can choose to spend your dividends or you could choose to reinvest the dividends and have your returns compound.

Last word

I hope its pretty clear that spending most of your money on things to consume i.e. ‘cheeseburgers’ is a sure way to remain at your current level of wealth. If you want to get wealthy, you need to focus on buying ‘treasure boxes’ or ‘geese’.

If you choose to buy ‘treasure boxes’, make sure you know the market very well. After all, the price of ‘treasure boxes’ is determined mostly by demand and supply conditions for the item. There are also other factors like whether you use leverage or whether you can predict where that market is going. You may succeed but remember that it’s a zero-sum game. For you to win, someone else must have lost.

Personally, I prefer collecting ‘geese’. Right now, my ‘geese’ may be all equities but it could easily extend to rental properties or private businesses. I’m pretty certain that my own temperament is also more suited to collecting ‘geese’ rather than competing with others for ‘treasure boxes’ so this is what works better for me. Having said that, this is a much slower path to wealth as businesses don’t turn into an overnight success.


*Of course, the level of wealth can be an illusion. Many things can be bought on credit and give people the outwards appearance of wealth while their true financial situation only reveals piles of debt.

**To a certain extent, this is also true of ‘Geese’ but we’ll see that with ‘Geese’, we have other yardsticks for value instead of relying on price alone.

Sorry for the clickbait-y title but what I’m about to say is actually quite true for almost anyone in Singapore with a half-decent job and of at least lower-middle to a middle-class family background.

And to show you that’s entirely possible, I present exhibit A- (although most Singaporeans in the financial blogging community probably already know) Mr. 15-hour-work-week (15HWW).

Mr 15HWW recently wrote a post, summarising his 7 years (so far) in investing and it shows you exactly how (link here) most middle-class people around the world actually accumulate a decent amount of money.

If you read his post, you’ll realise that for two people in their mid-30s (counting both Mr and Mrs 15HWW they pooled their resources together), they have accumulated a six-figure portfolio that is probably the envy of even some Singaporeans who should be retired or are near-retirement. The sum doesn’t include their CPF or their home*.

For many younger people about to enter, or just in, the workforce, a six-figure sum is something that seems out of reach but many people have been there and done that. More importantly, Mr 15HWW’s post reveals that it doesn’t take a genius to do it.

His returns in the market were only about 6% p.a., something that you could easily replicate if you blindly invested in an index-tracking ETF such as the STI ETF or the SPDR’s S&P 500 ETF.

The bulk of the increase in their wealth came from an amazingly high rate of savings. I really take my hat off to Mr and Mrs 15HWW because my own savings rate is nowhere near theirs. If it was, my portfolio would probably be 25% larger than it is now.

Most people think investing is complicated or they try to aim for the stars but very often, a simple investing plan of (a) saving a lot of money, (b) investing it and (c) letting it compound will lead to wealth that most people can only dream of.

So why do most people fail to get there?

Well, that’s another story for another time.


*You will be surprised at how many people are counting on their CPF to retire and how the government is encouraging a reverse mortgage on your HDB flat**.

**Ok, technically it’s a lease buyback scheme which means the HDB pays you to stay in the flat that you’ve already fulled paid up for. And I can see the merit in the argument that you might as well monetise an asset that you can’t take with you to the grave. Also, since HDB flats are on 99-year leases, handing it down to beneficiaries when you pass away means that the asset may not be worth much when it’s passed on.


There’s a mystery in my current organisation that I’ve been trying to solve.

Currently, my organisation offers employees who reach the official retirement age of 62 years a one-year contract for the next three years. There is even an option to have that extended to 67. Of course, the employee has to meet certain performance requirements before these options are offered.

Some additional context

My organisation doesn’t offer a pension upon retirement. Singapore has a compulsory savings scheme called the Central Provident Fund (CPF) where workers have a certain portion of their monthly salary socked away until they hit a certain age.

Also, the colleagues in question are not low or even average-pay workers. They would easily be considered middle to upper-middle class folk for the last 20 or 30 years of their careers.

The mystery and my theories

The mystery for me is not what my organisation offers but why would my colleagues want to take that offer up in the first place. I have a few theories but none seem to be wholly satisfactory.

Theory #1: They need the money

One possible reason could be that some colleagues who work until 62 and beyond do so because they need to. In other words, if they retired at 62, they would have problems funding their retirement.

I’m not very satisfied with this theory because I’m pretty sure most of my colleagues have enough put away for the rest of their lives. Furthermore, most of their liabilities such as housing loan(s) and children’s education (yes, in this part of the world, parents usually pay for their education if they can afford to do so) would have already been settled.

Also, if you can’t afford to retire at 62 years old, then is another three to five years going to matter? It might also have been that many moons ago, these colleagues planned their retirement up till 65 or 67 and therefore, they are near the end but not quite. In that case, isn’t that level of planning a little suspect? What person plans to the exact year without having a buffer of some sort?

Theory #2: Retirement is boring

I can understand this sentiment. If you look around, there are many people who say that once their professional lives are over, their minds degenerate quickly because there is nothing to keep them engaged. This is a particular statement many elderly businesspeople make.

The flip side for my older colleagues is that interests can be cultivated or expanded. In fact, most of us have other interests outside of our professional lives. Wouldn’t retirement free up a lot of time to pursue those other interests in a bigger way?

Many older colleagues also tend to be grandparents and I’m sure their children would appreciate their help in taking care of the grandkids. Or maybe it’s finally time for my older colleagues to go out and see the world.

Theory #3: They love the job

Truth be told, there are some colleagues who fall into this category. They love the interaction with their students so much so that they don’t want to step away from it. However, the job isn’t all fun and games. There are many mundane administrative aspects to the job as well as the boring and utilitarian committee work that we’re all forced to be a part of. If they really love the job, they could always become a freelancer. This would allow them to focus on the teaching without having to be a huge part of all the administrative machinery.

If they love the administrative machinations, then that’s a whole other story but which begs the question- why not be part of an administration somewhere else instead? Other administrations would probably pay better.

Also, teaching doesn’t have to be confined to the classroom or the school. Sharing knowledge and guiding others happens digitally and in other venues such as religious organisations as well.


Those are my theories and none of them seems particularly satisfactory. From the viewpoint of a 30-something year old who’s been here for about five years, I can’t imagine why anyone would want to stay until 62. The only sane thing is that they really can’t bear to leave this place because of the joy of work. Therefore, my money is on theory #2 or #3 although there are some holes in that argument.

Having said that, if I could, I would go when I’m ready. After all, age really is just a number. If I was financially free, I would be doing what interests me or what is meaningful regardless of the amount of money it brings me.

Well, we’ve already hit June so it’s a little bit late to be talking about this but there’s a common adage in the market that tells people to sell their positions in May and ‘go away’ or stay out of the markets until October or November.

The question is, should you believe it?

There seems to be a compelling case as demonstrated by some academics from the University of Miami as highlighted in this CNBC article.

Fuerst, along with fellow University of Miami professors Sandro Andrade and Vidhi Chhaochharia, reported in a 2012 paper that stock returns were 10 percent higher in the November-to-April half of the year than in the May-to-October period.

 Importantly, this result isn’t solely based on historical American stock returns. In that case, the academics could be making the all-too-common mistake of “proving” an adage by using the same evidence that was used to bring about that line of thinking.
Rather, they examined returns across 37 markets within a 14-year time period that was not tested in a prior paper that also found support for the sell in May effect.
The problem with the paper is that it doesn’t consider any other alternative. After all, the alternative to “sell in may and go away” isn’t just to hold equities from October/November to May. Another more common alternative is to just hold your positions through it all.

Buy and Hold vs Sell in May

Another study found that while “sell in May” may beat “holding from May to Nov”, what’s beats “Sell in May” by a mile is Buy and Hold.



Just don’t go away.

Obviously, with all studies, there are assumptions made and whether actual investors could get the exact returns calculated is another question but I think with this, there’s no doubt that certain myths can be quite costly.

I can’t seem to find it but I distinctly remember a thread on (or one of its earlier incarnations) talking about this exact same thing and it was another forummer who pointed out the problem with studies like the earlier one mentioned. What I also thought I remember is someone posting the calculations of Buy-and-Hold vs. Sell-in-May for the Singapore markets and the results were similar to the one above.

Some anecdotal evidence

I have a colleague who happened, for a personal reason, to sell his entire equities position almost two years ago in May and that saved him from experiencing quite a bit of the downswing in 2015. The problem is that he never really got back in the market and that meant that he’s missed the entire run-up in the market since then plus the dividends distributed.

As for myself, although my portfolio took quite a beating in 2015 all the way up to 3rd quarter 2016, sticking to an investment strategy, the opportunity to deploy more funds into equities as well as collecting dividends along the way meant that my portfolio is actually larger than ever.

Valuations Matter

However, I’m not saying that you should always be fully invested in the market. What’s important is to be able to identify when valuations are getting expensive. During such periods of time, you want to either allocate more of your portfolio towards cash or fixed income.

After all, it’s just mathematics that a 50% fall in your portfolio means that you’ll need a 100% increase in the market in order to break even. Even Warren Buffett closed his partnership in the late 60s when he couldn’t find any more compelling investments. He was also ridiculed in the late 90s/early 2000 for not understanding the dot-com boom. All that were just some signs that the markets were getting too rich.

In short, don’t believe strict rules which make no sense such as “Sell in May and go away”. What you want to do is get a good understanding of how to tell if markets are overvalued or not.


Yes. That’s the exact clickbait-y (which obviously works) title of an article I saw on a site sanctioned by our Central Providend Fund (CPF)* and their answer is:

As an ideal, the correct amount to have saved up – at any age – is six months of your income. Any amount beyond this should be redirected into a retirement fund. This is because savings are just to deal with emergencies, whereas investments are for the long-term.

So if you have an income of S$5,000 a month, your savings are good if they are at least S$30,000. Note that your CPF doesn’t count, as it’s not savings you can immediately access.

That’s actually pretty sound advice.

At first pass, I nearly thought they were recommending you have savings of $30,000, period. I was thinking that it’s a pretty low number but after reading it properly, I realise that the article meant that if you earn $5,000, you should have about $30,000 in cash or equivalents.

What I think is more important is that people take heed of the second part of the first paragraph which tells people to invest any amounts above this buffer of 6 months’ income. Where and how you invest should be determined by the amount of financial knowledge and fortitude you have. If in doubt, consult a financial advisor you can trust. (Buffett’s pearl of wisdom about never asking a barber if you need a haircut comes to mind.)

The later part of the article is quite sad though.

Everyone’s financial situation is different. You may have responsibilities that others don’t. For example, some people have parents or siblings with medical conditions, who need more expensive healthcare. Some people have an income lower than the median, which makes it hard to save. There’s also one element that many people in their 30s have in common.

Your 30s are typically the age in which you’re saddled with your first major financial costs. It is probably the first time you buy a flat or car, and you might be settling down with your first child. It’s quite possible that you did save diligently from your 20s, but your wedding has wiped out those funds.

Seriously, if you find yourself agreeing with that part of the article, you have a serious spending problem. If you have an income so low that it makes it impossible to save any meaningful amount, then you really need to be prepared to work really, really hard.

I was looking through my records and it shows that my 30s (so far) have been the greatest period of my wealth accumulation and to be honest, without a proper savings game plan, it wouldn’t have turned out so well.

Don’t be surprised but there are plenty of 30+ year-olds out there holding very ordinary jobs who easily have six-figure bank accounts or stock portfolios. These are the people that you just never read about.

*The CPF is the name of the organisation that handles the compulsory pension savings account every Singaporean resident has.

The Sunday edition of the Straits Times has the Invest section which was the only real reason that I read anything in the Straits Times. I use the word ‘was’ because I haven’t gone through the paper in a very long time. The main reason is that I had access to copies of the Straits Times get a little more restricted and to be honest, the content in the Invest section seems to have gotten a little less useful.

Take the latest exhibit, The real cost of avocado toast. The article is obviously riding on the trend of bashing the guy who advised millennials to cut back on avocado toast in order to save for a downpayment on a house. The article does rightly point out that cutting back on certain habits every day and letting that extra savings compound will help you get quite a bit richer.

The problem with such advice is not that it’s wrong but that it doesn’t really provide you with a solution for getting it to work. It’s like telling an overweight person to eat less otherwise the chances of dying early gets higher. It’s good advice but the more important thing is how is the person supposed to use the advice to get results?

Since the article rightly points out that people need to cut back on certain habits, we must also acknowledge the fact that habits are hard to break. It takes a lot of willpower or an insanely good strategy to avoid going back onto the wrong path.

This is where I’ve found that it’s much easier to focus on how much you want to save each month and set up a standing instruction with your bank that automatically transfers that sum to an account that is relatively less liquid. i.e. You don’t normally use that account for daily spending.

Any monies that are left in the account after the automatic transfer to the ‘savings’ account is then left for spending. It’s that simple. People often think that this is not doable but I am willing to bet that it’s possible for the average person. After all, in Singapore, 23% of your monthly income gets put in your Central Providend Fund (CPF)* account and we’ve pretty much learned to live with that ‘savings rate’ of 23%.

So, try it. Start with transferring 10% of your monthly income to an account that you won’t touch unless you absolutely have to and have as much avocado toast you want with what’s left.



“The chains of habit are too light to be felt until they are too heavy to be broken.”

I don’t know who to attribute the above quote to because the first time I read it, it was something that Warren Buffett said but online sources say that it’s probably something that Samuel Johnson said.

Anyway, what’s more important is how true that saying is. We are all creatures of habit and particularly when our willpower is low in times of stress, we revert to the very things that we do without much thought. The danger is when some people fail to realise that their habits have taken them down a dangerous path that increases their chances of permanent ruin.

This morning, I watched an episode of a programme called “My 600-lbs Life”. The show follows the lives of extremely obese people in their bid to lose weight and regain their lives. This particular episode featured a man named James K. from Kentucky who is probably the heaviest person ever to appear on the show.

What struck me over the course of the two episodes that aired was that this guy and his girlfriend made all these bad choices that they basically couldn’t unwind. He’s so fat that he was basically bedridden and therefore it was his girlfriend who kept bringing him both the wrong kinds and wrong quantities of food. Her justification was that if she didn’t do so, he would get grouchy, argumentative and basically a pain-in-the-ass.

I know the guy has a food addiction problem and his girlfriend was obvious taking the easy way out by giving him what he wanted when his willpower was depleted. It didn’t help that they seem to be in poverty because at one point, her car broke down and she couldn’t get it fixed and that prevented her from going to get fresh produce which James needed in order to stick to his diet. Seeing all that, it’s obvious they weren’t going to be very successful in their goal.

Which is why I’ve realised that more than anyone else, I’m a creature of habit. I go to the same canteen every day to order the same cup of coffee, I have pretty much the same thing at the canteen in my school. When I’m home, my wife and I are watching the same few channels. Most importantly, I channel a part of my income into my portfolio automatically each month when I get paid.

That’s the trick with habits- habits can be both good or bad. What you want to do is develop good ones that help you meet your goals. And if you have bad habits, you want to make sure that they are inconsequential ones. If they are big, bad habits, then the first thing is to recognise them and set out a plan on how to correct them. It’s the old zen tale of a master who poured tea for his disciple until the cup overflowed. When asked why he was still pouring the tea, the master replied that new ideas cannot take root until old ones are uprooted.

I’m not perfect. I have many bad habits that I should work on. But at least I’m aware.

PS: There are so many people I know of that have developed terrible habits that they aren’t even aware of. Even if they’re made aware, they become defensive and think of all sorts of reasons to justify their behaviour. If you’re aware of your shortcomings, then kudos to you, you’re on the first step to putting things right.

Holy cow! 1/3 of the year has come and gone. So how’s your portfolio doing?

I just wanted to share a great insight on investing prowess vs. building wealth. Obviously, the better an investor you are, the quicker you’ll build your wealth. However, for mere mortals like most of us, I want to assure you that it’s still possible to build wealth.

Enter exhibit A. (Actually, this is the only exhibit.)



NAV per share (in blue) vs. Growth of actual portfolio (in yellow)

The blue line (NAV per share) shows how much $1 invested in the portfolio would have grown to. So naturally, this involves removing the effects of adding more cash to the portfolio which basically shows us how good an investor I am.

The yellow line (Actual growth) shows how many times the portfolio has grown by relative to the starting date. Of course, this includes savings and additional cash added to the portfolio.

If you’re aiming to be financially free, I can’t think of why building wealth would be inferior to being a good investor. Sure, being a good investor gets you there quicker and probably allows you to enjoy consuming more at the same time but if the goal is to eventually not have to worry about working for money, then getting a big enough portfolio that will allow you to live off a safe withdrawal rate (3-4%) should be your main priority.

My experience so far is that being an average investor will help you get there too.


PS: Of course, once your portfolio gets huge enough, your savings will hardly matter. An average household in Singapore makes something like 80-90,000 SGD a year. If the portfolio reaches 2 million SGD, saving half a year’s income (which is near to impossible for most people) will only move the needle by about 2%. Having said that, if your household can’t retire in Singapore on a 2million SGD portfolio with your house fully paid for, you have a spending problem.

An update on the Singapore property market. For background on this, read here. All data from SRX.


Using the price of HDB flats as the benchmark, we can see that prices for private property in all categories are at a sizable premium to HDB flats. Among the different classes of private property, the premium for private landed remains the highest although the index seems to be on a downward trend. For non-landed, it appears that resale units are at a lower premium than new units.


As for sales of all (new and resale units) non-landed private property, it appears that the area commanding the highest premium to HDB flats are in the RCR (Rest of Central Region).

Of course, prices will vary for individual projects and units but from a macro perspective, it’s going to be much easier to bargain hunt during periods like the early 2000s and ’09-’10 where there was hardly any premium over HDB flats. In fact, times like 1999 would have been a godsend to property investors.

I guess my two main takeaways are (1) despite the Singapore property market supposedly being in a doldrum, private property prices are not cheap right now and (2) HDB flats do keep their value quite well being the cheapest form of housing in Singapore and therefore is a reasonable benchmark for evaluating priciness (or cheapness) of the private property market.