Why Singaporeans envy the New Zealanders...

[Dennis Ng]

I agree with some of the points mentioned by Leong Sze Hian in the article below. Frankly, becos I chose NOT to have a car, this is why I could save extra S$800 every month (compared to a person who owns a car) and becos I know how to grow the money, this is how I managed to accumulate one million dollars at age 39.

Today I am financially free (can choose to stop working and still can maintain my lifestyle for the rest of my life). While many Singaporeans, if they do NOT do any planning or grow their money, might not even have a million dollars by age 60.

This is why since last year I decided to start focusing time and effort to conducting seminars to share with seminar participants How to Save and Accumulate One Million Dollars and the Secrets to Making Money in Stocks and the Secrets to Making Money in Property...

Cheers!

Dennis Ng

Leong Sze Hian
February 10, 2010



I refer to the article “Singapore envies Kiwi lifestyle” (New Zealand Herald, Feb 9).

It states that
“The bait was better working hours, cheaper cars and housing – and in three weeks thousands from Singapore have registered their interest in living in New Zealand.

An Immigration New Zealand pilot project aimed at attracting Singaporean migrants has resulted in over 1000 registrations each week since it was launched last month, with 3565 potential immigrants having registered their interest in just three weeks”.

According to another article “Survey finds that workers in Singapore put in longest hours” (The China Post, Jan 12),

“Singapore’s workers continue to lead the pack when it comes to the number of hours they put in at work, according to a report by the International Labor Organization (ILO). The report puts them at the top of 13 economies in the group’s Global Wages Report for 2008-09, surpassing even the notoriously hardworking Japanese and Taiwanese”.

Singaporeans are among the hardest workers in the world, but do not have enough, upon retirement, to live in comfort in their home country. Is there any wonder why they should choose to migrate to other places that are much more affordable?

Cars for example, are so expensive in Singapore that a car owner may end up with $2 million less in retirement. This is calculated from an estimated cost of $1,000 monthly compounded at 6 per cent over 40 years.

To explain the poverty of retired Singaporeans, we’d have to explore the possible link between the 2 largest entities that effectively ‘lock up’ the wages of Singaporeans – HDB and CPF.


Increasing flat prices decrease the amount of CPF upon retirement

In line with the government’s policy of letting Singaporeans use their flats for asset enhancement, many Singaporeans have bought their flat, using the bulk of their CPF in a typical 30-year mortgage, in hope that the continued increase in property prices would serve as a boon during retirement.

By pricing flats under ‘market subsidy’ pricing, asset ‘enhancement’ schemes such as upgrading inevitably become a burden to Singaporeans who have no choice but to use even more of the CPF for their upgraded HDB flat. In addition to that, HDB has never disclosed the cost of building flats. Thus, flat pricing, and the amount of CPF ‘locked’ in it, is really at the whim of property speculation.

With 80 per cent of the population living in public housing, and with a bulk of a typical homeowner’s CPF savings ‘locked’ by the flat, social security for the average Singaporean is contingent on HDB policies. When you can’t pay your mortgage, you may lose your home and maybe your life CPF savings too.

Consequently, with the bulk of their CPF ‘locked’ in unliquidated assets, many Singaporeans end up with very little CPF when they retire.


CPF gets transferred out of Singaporeans’ hands, into HDB’s pockets

When the HDB sends a notice of Compulsory Acquisition to flat owners, 90 per cent of the flat’s valuation is used to offset the loan arrears; HDB makes a profit of 10 per cent of the valuation. While it is understandable that HDB as a statutory board has to run on a sustainable business model, it seems counterintuitive that a public housing board should profit from the destitution of its citizens.

For example, flat owners in addition to losing 10 per cent of their flat valuation to HDB, are only given one month to vacate their flats. Why does the HDB not give them a bit more time to find alternative accommodation?

As a public housing authority with the mission to provide affordable housing for Singaporeans, is the HDB not in a sense, in breach of its fiduciary duty, in this arbitrary practice of ‘pinching’ 10 per cent of the valuation?

Are there any public housing authorities in the world that takes an additional 10 per cent profit on foreclosure?

Parliamentarians may like to raise this issue with a view to refunding the ‘pinched’ valuation to all past foreclosed flat owners.


Why it’s almost impossible to get enough cash upon retirement

Effective last year, if you sell your HDB flat after age 55 to downgrade to a smaller flat and to monetise your flat for retirement, any CPF utilised plus accrued interest has to be returned to the CPF account if the CPF Minimum Sum (MS) has not been met.

With the current MS at $117,000, what this policy change means is that this sum cannot be used to purchase the smaller flat downgrade.

Why are we making it harder for Singaporeans to downgrade to monetise their flat for retirement?

Many Singaporeans subscribed to the call for asset enhancement by purchasing HDB flats – only to be hit by the policy change now, which in effect, may result in their inability to cash out of their “enhanced” HDB asset.

The CPF Minimun Sum (MS) was raised from July 1, 2009, for those aged 55 years, to $117,000, up from $106,000. 

This is an increase of 10.4 per cent, much more than the inflation rate for the previous year, which was 6.5 per cent. How can the increase in MS be “an adjustment for inflation, is to ensure that Singaporeans set aside sufficient savings for their retirement?”

Similarly, the MS was increased by 6.4 per cent in July 2008, from $99,600 to $106,000, when inflation was only 2.1 per cent in 2007.

With the current recession, some of those reaching age 55, may have lost their jobs or failed in their businesses, and thus a large increase in the MS, may cause some financial stress to them. 

As last year’s increase is the highest in the history of the MS scheme, at its current quantum of increase, does it mean that by 2013, the MS may be about $161,000 ($117,000 now plus $11,000 increase for 4 years)?


Can anyone afford to retire in Singapore in future?

The Longevity Insurance Committee’s (LIC) CPF Life report last year only projected a MS of $134,000 in 2013 (chapter 4). 

Adding the projected Medisave Required Amount (MRA) of $36,000 in 2013, does it mean that those reaching age 55 may only be able to withdraw $5,000, if they have less than $197,000 (MS $161,000 plus MRA $36,000) in their CPF? 

How many Singaporeans will have more than $197,000 in their CPF in 2013?

The answer can be found in the LIC report: only 60 per cent are projected to have at least $67,000 in their CPF in 2013.

At the current rate of increase of $15,500 per year ($11,000 MS + $4,500 MRA), will the combined MS and MRA be $352,000 and $507,000 in 2023 and 2033 respectively?

In conclusion, is it any wonder why so many Singaporeans may be thinking about migrating to New Zealand?

[wemakebread]

Oh dear, Singaporeans are so unproductive
1) longest hours at work
2) declining birth rate
What's the use of working so hard but don't have a life?

Oh dear, Singaporeans are so rich
1) got money, cannot use
2) got house, cannot unlock value
What's the use of having assets whose value cannot be realized?

Oh dear, I feel so insecure
1) buy house, I will be in debt forever
2) don't buy house, I will be paying expensive rental
What's the use of being a citizen when it's so challenging to get a home?

[ederxu]

Oh dear, Singaporeans are so unproductive
1) longest hours at work
2) declining birth rate
What's the use of working so hard but don't have a life?

Oh dear, Singaporeans are so rich
1) got money, cannot use
2) got house, cannot unlock value
What's the use of having assets whose value cannot be realized?

Oh dear, I feel so insecure
1) buy house, I will be in debt forever
2) don't buy house, I will be paying expensive rental
What's the use of being a citizen when it's so challenging to get a home?

oh this is so true to heart..

[sereneloong]

There are 2 sides to a coin. Here's another point of view:

- Great! Singaporeans have jobs! (Just ask any unemployed Greek or American.)

- Great! Singaporeans are rich! (We are lucky our currency is strong, and we have a roof over our heads.)

- Great! Security is a myth. So what do you have to lose? Go out and live the life you want.

Remember your life is but a mirror of your thoughts. Choose your thoughts wisely. And always be grateful for what you have. Thank you for listening.

[danielcheng]

Singapore is a small country with no natural resouces at our disposal, human capital is probably the only resource we have & yet it is so little with 5million people including immigrants.

It is definitely not easy but take a balanced approach, know how to give & take & be grateful of what we have too.

We will always be unhappy if we keep focusing what we don't have & take what's available for granted. Other than that, take action to achieve what we want for ourselves, family or others.

[Battleship]

I agree with this. We should focus on ways to increase our value add as an employee or employer, which in turn will reward us with higher pay. People are just limiting themselves if they always focus on those negative stuff.

I'm really glad to be in Singapore. =)

There are 2 sides to a coin. Here's another point of view:

- Great! Singaporeans have jobs! (Just ask any unemployed Greek or American.)

- Great! Singaporeans are rich! (We are lucky our currency is strong, and we have a roof over our heads.)

- Great! Security is a myth. So what do you have to lose? Go out and live the life you want.

Remember your life is but a mirror of your thoughts. Choose your thoughts wisely. And always be grateful for what you have. Thank you for listening.

[jfoo2]

- Great! Singaporeans have jobs! (Just ask any unemployed Greek or American.)

- Great! Singaporeans are rich! (We are lucky our currency is strong, and we have a roof over our heads.)

- Great! Security is a myth. So what do you have to lose? Go out and live the life you want.

I don't agree with the above.

Yes, I think more and more Singaporeans are facing greater difficulties than their parents. And I believe the HDB, CPF and foreign talent policies are some of the issues that need to be re looked at.

Imagine HDB flat costing $1-2millions on average, i think the younger generation will really rise up in revolt. Don't talk about retirement, i think they can forget about setting up a family in the first place...and more social problems.

[zipink]

There are 2 sides to a coin. Here's another point of view:

- Great! Singaporeans have jobs! (Just ask any unemployed Greek or American.)

- Great! Singaporeans are rich! (We are lucky our currency is strong, and we have a roof over our heads.)

- Great! Security is a myth. So what do you have to lose? Go out and live the life you want.

Remember your life is but a mirror of your thoughts. Choose your thoughts wisely. And always be grateful for what you have. Thank you for listening.

I came across this in facebook... My friend went to London for a vacation for 1-2 weeks I guess. Here's what she wrote on her wall. Food for thoughts:

If you think Singapore's service is bad, go to London...
If you think Singapore's train is in a bad condition, go to London...
If you think Singapore's taxi is expensive, go to London...
If you think Singapore is flooded with FT, go to London...
If you think Singapore's attractions and shopping close too early, go to London...
If you think Singaporeans are walking around too fast, go to London...
London wins Singapore in all of the above, in the bad way.... haha....

Personally, I have stayed in Cambodia (Phnom Penh) for a few months before. Singapore is still the best. I appreciate Singapore more when I came back. Of course, now and then still make some grumbles (Singaporeans mah, haha!)

[TieGe]

Interesting posts here.
Some say singapore is the best, some say other country is better than singapore etc....

You are all right. Personally I believe is really what you want in life.
I was an expat in china fro a couple of years and I went there cos to grow and see the world more. I can adapt there cos there is a specific purpose to be there.

I got a friend who moved to nz and his whole family is there. They like it there working as a land lord but his other skill and professional experience cannot put to good use. They are happy.

I like to put in this way, it is less important to conclude where is the best. However if you can adapt in all circumstances then you have really arrived.

Meaning, if I stay in a 6 stars hotel, I will be happy and if I stay in a 1 star hotel I can be equally happy. Same for with car or no car in Singapore. stay in private or hdb. I met rich millionaires that live like very average Singaporean. I am sure u come across them too.

Tie Ge

[candy_chia]

Americans march on street to protest " a growing wealth disparity" between large U.S. corporations and average citizens in the wake of the financial crisis.

In Spore, we can only complaint online and through votes in General Election (milllion$ ministers pay compared to average Singaporeans)!

Why not provide low cost ($100 to $300) childcare centre (nowadays full-days childcare on average costs $1,000 without government subsidy) to all Singaporeans families so as to increase fertility rate rather than import foreigners!

Yes, I think more and more Singaporeans are facing greater difficulties than their parents. And I believe the HDB, CPF and foreign talent policies are some of the issues that need to be re looked at.

Imagine HDB flat costing $1-2millions on average, i think the younger generation will really rise up in revolt. Don't talk about retirement, i think they can forget about setting up a family in the first place...and more social problems.