After the Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam announced that Singaporean families with a monthly income of $1k can own a small flat, my facebook wall start to get flooded with comment on how this is even possible when price of a flat usually cost more than 300k in Singapore even for a small flat. Even the rental of a two room flat cost about $1800 a month based on price listed in www.propertyguru.com.sg. However to make sure I get the facts right before I even start complaining, I decided to research on it.
Based on what I got out of the HDB website below , The Minister for National Development announced details of the Special CPF Housing Grant (SHG) on 3 March 2011. The SHG will given to first-timer families earning up to $2,250 a month to buy a smaller flat from HDB that is within their means. The new SHG is over and above the regular housing subsidies and the Additional CPF Housing Grant (AHG). Together with the other housing subsidies, it will enable more low-income families to own their first flats which they can sustain over the long-term.
Based on the above breakdown for their calculation. It is true that a family with an income of $1k can have a roof over their head with the new grant in place provided that the price of a 2 room flat is really $100k if you buy the flat directly off HDB and not from the resale market where price cost $240k upwards. With this I would want to applaud the government for coming out with this grant for the poor. Coming out with something that helps is better than doing nothing. At least now the poor families can buy a flat.
Now let me tell you what is the real problem. Singapore is a country made up of mainly middle income families. Let's take an average income of 4k per family. You need to pay more taxes than the poor, the average flat cost about 300k and above for you even if you buy it first time. You don't get any grant to buy your flat. If you do some simple calculation, you might be earning 4 times more than the poor but you are paying 300k/3.5k(price of flat after grant) = 8.7 times more for your flat than the poor. Seriously the lower middle income are not better off than the poor. If you buy a car with the current COE price you be sure to live off bread just to service the loan for the car and house. With stagnant pay and rising inflation, the income disparity between the rich and poor is getting higher. If this carries on one day there will be no middle income. It will be either you are rich or you are poor.
I am not here to complain. Below are some tips that might help my fellow Singaporeans save some money or become instantly richer. Some of the ideas are quite extreme so try it at your own risk.
Learn to buy things from the internet - You can buy nearly everything from the internet now at less than half the market price. From small items like clothing and accessories to big items like furniture and even food discount coupon. Below are a list of the website I compiled. If you have any to contribute feel free to comment.
For clothing, accessories to your pots and pans
www.taobao.com - use www.65daigou.com to help you buy and delivery to SG
For beds and furniture
For some great food deal
Tip on instantly increasing spending power:
Learn to earn and make money in SGD and spend in foreign currency. This method might sound a little extreme. I have a friend whom nearly everyday I see him travel in and out of JB. The reason why he go in everyday is because stuff like petrol and food there is cheaper. With the same amount of money you pay for a flat in Singapore you can buy a landed property in Malaysia. The money that you earn here have twice the spending power in Malaysia. If you don't mind spending an extra hour or two traveling back and forth this might be a great idea.
You can also rent out your property in Singapore and rent an apartment cheaper in JB. Best still I got a friend who rent out his 5 room in Singapore and now stay in Vietnam and every few weeks he will call me to rant about how he live like a king over there and don't even need to work. If I were that poor family i would get the flat and rent it out to others and stay in another country. With a monthly rental of 1.8k SGD for the 2 room flat i will have 9k RMB to spend in China. That makes me a high middle income family there.
Tip on investing:
If you can't beat inflation, inflation with beat the crap out of you. The only way to beat inflation is to learn how to do some proper investment. If the tips above is not suitable for you then this might just do the trick and possibly make you rich. The first thing you need to invest in is yourself. Invest with your time to gain knowledge. Once you have the knowledge learn how to save some money to make your first investment. If you are a person who save what you have at the end of the month then you will never have any proper savings.
Learn to set aside some fixed savings at the beginning of the month for investment purposes. Some people will complain and say what if i don't have enough money to survive through the month. My advice is don't worry about it because things will work out by itself. If you have $2k in your wallet chances are end of the month you will spend it all and if i put $1.5k in your wallet you will find a way to not spend more than that for that month.
I want to end this post by saying this. Nobody likes to be poor but many don't take action to escape from poverty. There is a saying that goes if there is a will there is a way. The first step is always to take action. I hope all the people I know will be rich and abundant in their life.
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