What is it like to be 50 years old and jobless?

Yesterday, the government released a White Paper projecting that Singapore's population would be 6.9 million by 2030. I suppose this is a hint that the government is going to open the floodgate to import more foreigners in order to meet the population target. After all, going by our nation's current low birth rate of 1.2%, it is not possible to reach this goal through natural replacement.

The government's rationale for importing immigrants is because Singapore needs foreign talents to support the economy. Our unemployment rate has been consistantly low for the past few years, hovering about 2-3%. Yet many Singaporeans, especially PMETs, have complained that foreigners compete with them for jobs in recent years. This made me wonder aloud whether the influx of immigrant should be calibrated. I mean what kind of foreign workers do we really need to import to sustain our economy? I agree that we need foreign nurses and construction workers because they do jobs which Singaporeans do not want to do. But do we really need additional one million nurses or construction workers? Besides foreign labourers, are we really short of talents in Singapore that we have to resort to mass import of immigrants? During market downturn, what is going to happen to these foreigners or PRs? The market is always cyclical in nature and we shouldn't always base our growth statistics on current rosy scenario. These are concerns which I think the NPTD failed to answer in the White Paper.

How can you say that Singapore workforce would remain the core when half the population would be foreigners in 2030?

As a stakeholder, I am deeply disturbed by this issue. I am in my early thirties and is gainfully employed as a professional. But I shuddered to think the quality of my life in 20 years time. With almost 7 million people in Singapore, I am not sure whether I am still able to be gainfully employed and compete against foreigners for jobs in my homeland. Currently, the playing field is already unlevel, given the low wages earned by many foreigner workers. Many employers typically favor employing foreign workers because they are seen as cheaper and younger and not because they are more competent than us. At 50, I think I would also have lost the energy to fight but then again, I would still need income to support my daughter. Sometimes I feel sorry for myself and fellow Singaporeans. We struggle and work so hard all our lives trying to make an honest living, yet in the end, we are discriminated in our homeland when we are old.

Magically yours

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Unconditional love

In my previous article, I chronicled the life of Dad and wrote about his demise two weeks ago. In this post, I would like to share with my readers on a few reflections of mine. No doubt many of us are busy making money, but I think it is important that sometimes we pause down and reflect on events in our lives.

Importance of protection
I am not an insurance agent and I don't work in the finance industry. But you might be aware that in my previous articles, I have always encouraged my readers to insure themselves adequately. It is also important to educate yourselves on the type of insurance that best suit your needs. In my father's case, when he was healthy, he ignored the importance of buying insurance. It was only after he suffered from stroke, then he regretted and realised his mistake. By then, no insurers would offer to protect him because he was considered a high-risk personnel to insure. Even Great Eastern rejected his Dependent Protection Scheme and returned his pro-rated premiums. So do make sure you are protected adequately and purchase insurance policies when you are healthy. My view is that term insurance policies offers the best protection value because for a low amount of premium, you can be insured for a large amount of money. Don't waste your money on expensive whole-life or investment-linked policies. You are only fattening the wallets of insurance agents.

Quality time with family
A few readers wrote that they are making effort to spend quality time with their aging parents. I think that's good and commendable. Recently, I came across several online articles that mentioned that we should "invest" time with our family. I don't like the word "invest" because when we talk about investment, we expect returns. But we shouldn't view relationships with our family in terms of gains or losses. After all, our parent's love for us is unconditional, so why should our love for them be conditional? Very often, our parents don't need us to buy them expensive meals or gifts, they just want to have more quality time with us. So do make effort to spend time with your parents as they would not be with us forever. There are things money cannot buy and kinship is one of them. Now that I had become a father, I can truly appreciate this point.

Magially yours

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Living with stroke for 20 years

On 5th Jan 2013, Dad passed away peacefully at home. He was only 58 years old. His demise ended 20 years of suffering from stroke. I am writing this article to pay tribute to a great man who had struggled and sacrificed so much for my family.

My father did not received much education and worked as a lorry driver in his youth. He was a very hardworking man and worked every single day of the year, except for Chinese New Year. As he was the sole breadwinner, he was also very careful with his money but always ensure that my siblings and myself received good education. There were frequent quarrels with my mom over money issues but he always ensure that my mom has enough to spend for the household. In the eighties and early nineties, Singapore construction was booming with many projects in the pipeline. Dad's small lorry business began to do well and we were not doing too bad either. There were frequent family outings and durian treats at home. In those days, under the old scheme, COE was even higher than today, but my dad managed to buy a second hand Toyota family car. Things were looking pretty well for us.

Disaster struck in 1993 when my father collapsed at work in his lorry. I recalled one afternoon, Dad's colleagues carried him back home. He was semi-conscious and could not move his left side of the body. My family were wondering what happened Dad as he had never came back home to rest in the afternoon. In the early nineties, awareness of stroke was also very low and my siblings and mysef were too young to comprehend the implication of the incident. Eventually, we decided to send Dad to hospital the next day. He was diagnosed with stroke at the hospital.

Everything went downhill after my dad suffered from stroke. Dad could not drive a lorry because of his condition and so my family lost a valuable source of income. Dad also did not purchase any life insurance back then, so we had no insurance payouts to fall back on. To top it off, my elder brother, myself and my sister were still schooling in secondary school. Money was really tight and we had to depend on Dad's small lorry business for survival. Those were really lost years as my family struggled financially and also hoped that Dad would recover from his illness fast.

Dad never recovered from his stroke. In the next two decades, we struggled to cope as his condition worsen. In 2007, he was diagnosed with multi-system atrophy, a condition which caused him to lose the ability to speak, swallow, urinate, walk and sit. We realized that its a illness that is much worse than stroke. Over the last 5 years, it was really heart wrenching to see how my father transformed from a big strong man to being wheel-chair bound and then bedridden. The journey was very emotionally distressed. Because at one end, my father lost his quality of life and personal dignity, at the other end, it pained us to see him suffering in this way.

Although we knew the outcome of his condition, it really hit me hard when my father passed away. I was not by side when he passsed on because I was on overseas duty travel. This was one of my greatest regrets. I did not get to bade him farewell when he left. If I could, I would have told him how much I loved him.

I think I would miss my father very much.

Magically yours

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7 in 10 Singaporeans plan to change jobs in 2013

According to a survey done by online recruitment firm Jobstreet.com, nearly 75% of Singaporean workers are considering changing jobs in 2013. This is despite the anticipated economy slowdown and forecasted sluggish job market in Singapore. Among the top pull factors for a job switch are salary and career progression.

Money still rules
The report confirmed my view that in order to draw a better salary and climb up the ladder, there is a need to switch job. Typical salary increments in Singapore average about 3-5%. With this kind of increment, normal salaried Singaporean can barely meet the inflation and maintain a comfortable lifestyle. Even if job promotion is factored in, the increase in salary is probably $500 to $800. But if a better job offer comes along, the quantum increase is usually much higher. As a rule of thumb, job seekers should only consider switching job only if there is 20% hike in salary. There is no point switching companies for the sake of a few hundred dollars increment. You are better off staying in your current job and continue to build up your skills and networks.

When to jump ship
The report stated that the majority of the respondents singled out the first quarter as the best time to start a job hunt. This is not surprising as most employees would want to collect their bonuses before jumping ship. Most Singapore companies would have paid out their bonuses by the first quarter. Moreover, another factor to consider is that most job seekers would not want their bonuses in their new companies to be affected. If they joined their new companies later in the calendar year, their bonuses would be much pro-rated and reduced.

The report also indcated that "the market sentiment has improved from last year with only 50% of Singaporean workers expecting to take longer than 3 months to secure a job in 2013 compared to 70% in 2012. Companies are also taking a more optimistic approach to hiring with only 7% of employers not intending to hire this year instead of 20% in 2012". This news is definitely reassuring for job seekers who intend to leave their companies for greener pastures.

Magically yours

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The Best Property Cooling Measure for Singapore

Today, the Singapore government announced a slew of measures to cool the residential property market. It also introduced a Seller’s Stamp Duty on industrial properties for the first time, to discourage speculative activity in the industrial market.

Measures Applicable to all Residential Property
The following measures will take effect on 12 January 2013:
a)      Additional Buyer’s Stamp Duty (ABSD) rates will be:
i)       Raised between five and seven percentage points across the board.
ii)      Imposed on Permanent Residents (PRs) purchasing their first residential property and on

Singaporeans purchasing their second residential property.
b)      Loan-to-Value limits on housing loans granted by financial institutions will be tightened for individuals who already have at least one outstanding loan, as well as to non-individuals such as companies.
c)      Besides tighter Loan-to-Value limits, the minimum cash down payment for individuals applying for a second or subsequent housing loan will also be raised from 10% to 25%.

Measures Specific to Public Housing
The following measures will take effect on 12 January 2013:
a)      Tighter eligibility for loans to buy HDB flats:
i)      MAS will cap the Mortgage Servicing Ratio (MSR) for housing loans granted by financial institutions at 30% of a borrower’s gross monthly income.
ii)      For loans granted by HDB, the cap on the MSR will be lowered from 40% to 35%.

b)      PRs who own a HDB flat will be disallowed from subletting their whole flat.
c)      PRs who own a HDB flat must sell their flat within six months of purchasing a private residential property in Singapore.

Measures for Executive Condominium Developments
The following measures will take effect on 12 January 2013:
a)      The maximum strata floor area of new EC units will be capped at 160 square metres.
b)      Sales of new dual-key EC units will be restricted to multi-generational families only.
c)      Developers of future EC sale sites from the Government Land Sales programme will only be allowed to launch units for sale 15 months from the date of award of the sites or after the physical completion of foundation works, whichever is earlier.

Cooling Measure for the Industrial Property Market: Seller’s Stamp Duty
With effect from 12 January 2013, the following SSD rates will be imposed on industrial properties and land bought and sold within three years of the date of purchase: a)      SSD at 15% if the property is sold in the first year of purchase, i.e. the property is held for one year or less from the date of purchase.
b)      SSD at 10% if the property is sold in the second year of purchase, i.e. the property is held for more than one year and up to two years from the date of purchase.
c)      SSD at 5% if the property is sold in the third year of purchase, i.e. the property is held for more than two years and up to three years from the date of purchase.

My views on the recent cooling measure
In my view, this latest package of cooling measure for the residential and industrial properties is not going to dampen the demand and change market sentiment. Throughout history, the best form of cooling measure had always been a recession. During recession, there would be widespread retrenchment by companies. It is only when people lost their jobs, then they would be forced to sell their investment properties at cut throat prices. When this occurred, the market will correct itself and bring down property prices.

Magically yours

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Singaporeans' misconceptions on money & marriage

I saw an interesting article by fellow blogger AK71 on the the topic of money and marriage. In his article, he illustrated a married person in his early 30s who keep borrowing money to support his family of four and pay monthly housing loans. The person's gross income is $28k and he is the sole breadwinner and has two kids. AK71 wrote that the person "should not have gotten married" and that he should not have bought a 5 room flat, given his dire financial situation. I have different views from AK71.

Married for the wrong reason?
Firstly I can understand what the person is going through. After all, I live in a 5 room flat, is a sole breadwinner, my wife is a full time housewife, have a baby girl, support my parents, support my in-law and own a car. So the burden on my shoulder is no less than the person in question, albeit I drew a much higher salary. But in my opinion, his current financial plight is not caused by his decision to set up a family. In fact, it is a misconception among many Singaporeans that "if you don't have money, you should not get married in the first place as marriage requires financial commitments". Marriage itself is not the root cause for a person's financial downfall. Rather, it is the person's poor personal finance mastery that led to his current financial situation. If he, like many of my readers, have been following my blog over the years, he would not have landed in this state. In fact, he could be lending money to others and not borrowing!

How to get out of the pit hole?
So you must asking me how to help the fellow? Well if you have been following my blog for the past three years, the solutions were all written in my previous blogs. Actually for the person to pay off his debts and to achieve financial stability, there are three solutions. First, he can rent out the other 2 rooms and share the master bedroom with his two kids. That will generate monthly $2000 rental income. Second, he can choose to downgrade to three room flat and live with parents or in-laws. Thirdly, switch job and become a property agent.

Incidentally, there is an article on a study commissioned by the National Population and Talent Division (NPTD) which found that marriage and parenthood aspirations remained strong among Singaporeans. Some 83% of single respondents indicated that they desired to get married. This is close to the 85% result in the 2007 survey, and higher than the 74% result in 2004. The study also found that 80% of singles who indicated a desired number of children wanted to have 2 or more children, similar to 84% in 2007.

There is nothing inherently wrong for wanting to get married despite being poor. But your financial altitude and perception will dictate your destiny. So don't be stubborn and stupid any more. Don't follow the wrong person. Start following my blog and spread the words around.

Magically yours

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