Singaporeans have a unique challenge. We are the most modern country in South-East Asia, one of the richest country in the world. As described in the previous post [link], foreigners flock to Singapore and solve their retirement problems by working in Singapore and leveraging on currency differences. Sure, we are glad to lend a helping hand and so our foreigners have achieved their early retirements, what about us Singaporeans?
Forget about pledging your HDB flats. Old folks should always watch out for scams. Anyway, if you are old and have not saved your pot of gold by now, be prepared to suffer a little in the only self acclaimed world class city with no safety nets. In the meantime please make yourself useful by educating the young for a change instead of brainwashing them to walk the paths you did.
My target audience is young Singaporeans earning median wages. If you are high flying on a corporate ladder, your earning power and your ability to retain your wealth will solve future problems. You don't need to plan early. For the rest, the exit plan start from, if it isn't obvious enough, getting the fuck out of the place. Please, I don't mean travelling to a new country for holidays every year. That's dumb. If you would like to spend your hard earned money this way and decide that you know a country so well because you did a speed trip across every city possible and deem Singapore is "still the place best on Earth", by all means join the old folks back there to rot. Your turn will come, just wait for it.
A good exit plan is near impossible to execute. The SG government (giving them a huge benefit of doubt) unknowingly made it that way. (I'll explain later) I believe there are plausible models all around but I don't have the space (and the patience) to list them all. One will look something like that:
Work immediately after graduation.
Get married early
ROM only if possible. If not, throw a banquet that you can afford without requiring any money contributed by guests. That is the size of the banquet you should be doing. Unfortunately, this is out of our control at times, marrying young that is, not the size of the banquet because it is your fucking wedding not your parents'. Dump the narcissistic wife who dream of a princess wedding. This is serious business. If your partner doesn't share your financial goals and future dreams, it will not go well down the road anyway. Open your eyes mate.
Buy a HDB flat
Most unfortunately, we need to get married to do this. So forever alones will have to choose another exit plan. Fret not, there are many ways you can do this. This is just an example. The government effectively twat the plan by coming out with the BTO scheme, changing our accessibility to public housing into a lottery game. Time is precious in this game and we have to waste a lot of it here. To make it worse, even if you strike 4D and get a BTO flat quickly, it takes a few years to build that bloody thing. Then the worst thing of all, a 5 year-MOP on top of those years wasted waiting to acquire a flat. A resale flat is not at all ideal for this plan. This is the reason why getting married early is essential. Ideally, we don't want to be over 30 years old by the time the MOP expires. Keynote: Spent not more than $10k on renovation. Make it livable and move in. Not able to do it with $10k? Change your definition of livable.
Work for 8-10 years
In the meantime trying to get a HDB flat, bear with the bosses, work hard for a decade.
Save every penny you earn
Save everything you earn. I mean, every fucking cent. No vanity tours, delay all gratifications. Cars are out of question. No buying of fancy kettles. You exchange your soul and blood for these money. Don't spend them away to nurse a bruised ego. Respect your time and youth.
Apply for Permanent Residency in another country (preferably a country with competitive currency)
Do this after working for 5-8 years. There isn't a lot of choices for Singaporeans. Just pick somewhere you like. Plan your career from Day 1 to fit the immigration criteria of your country. In fact, plan your education for it as well. If you want to come to Australia for instance, don't fucking do a Business Degree. Simple to understand?
Move overseas to work
Once you get your PR, move.
Rent out the HDB flat
The MOP is over. Rent the whole damn thing out. It will be enough to self finance its mortgage payments. There will be excess, on top of the minimum required payments. Use the excess to reduce the loan faster, unless you need extra funds to tide you over in the new country.
Rent cheap, get jobs and work to build savings and credit ratings
Squeeze in a room, don't rent a whole house unless you already have kids by now.
Buy a small place in the new country
Keyword - SMALL.
Work for 3-5 years
Save as much money as you can. Feel free to tour but keep it within the new country. Minimise flying back to Singapore. No overseas trips for now.
Get a second property
The Chinese has a saying, “养兵 一世 用兵 一时” (Nurture an army for a lifetime, activate it for a decisive moment) This is where the fund you put aside from not doing pointless wedding banquets, liability renovations, not going for the tours that makes you fat and the useless home trophies you didn't accumulate comes useful. Park the funds in an offset account for the little small house you bought. Use the equity to buy get a loan for a second property. You are now officially 1 million dollars in debt. No you don't really have 3 houses. They belong to the bank. You own nothing but debts. From now on, it's a good time to die. Still better than being dead broke every end of the year driving a shitty $150,000 car in Singapore and getting fat and even more dead broke from overseas trips, looking like walking dead from overworking everyday.
Overwork-stress-holiday to destress-broke-need to work-overwork. SG life in a sentence.
Rent small property out
Yield may be shitty but a half paid property may not be that bad. The reason to keep this small is to keep all expenses down. Maintenance, rates, repair etc etc. The smaller it is, the less expenses. So what if it fetches the lowest rent in town? It actually means you will have a higher chance to get a tenant as compared to the landlords with expensive flashy houses. If will be ideal if this property breaks even. A positive cashflow is a bonus. A small negative cashflow is acceptable. You have done something wrong if the negative cashflow is too much.
Look around to plant a 3rd flag, the country should be a "Third World" country with good and affordable healthcare
I'll let you know when I figure things out
Work for another 10 years
You are only 40 at this stage. It is time to slow things a little. Smell the roses, go camping, enjoy parenthood, go for road trips and even an odd overseas trips. You'll gain those things you have been depriving yourself back double. Triple. If your wife is not dumped or left you yet, she begins to see why not buying that $10,000 gown was a good idea.
The HDB flat should be paid up by now
Or another 5 more years to go. The first stream of retirement income is almost ready. Not a lot of money, but well..... peasants cannot be choosers. That beats cardboard picking. If you are still working now, put aside the funds every month. Go for holidays as long as your annual leave allows. In another couple of years...
The small house should be paid up by now
The second stream. Smallish but at least you need 2 governments to fuck you up simultaneously to get into trouble. Sure beats putting everything in one fascist country.
Move to 3rd flag
Kids grown up. Moved out. If they are financially independent, it's time to move on. If not, leave them in the third house. Get them trained early to operate an Air Bnb to lease the spare rooms out whenever possible. Use the funds to pay the mortgage for the remaining payments. When the property is paid, the kids will have it as a gift.
Meanwhile, third world country, third world cost of living. What's so first world about struggling in a first world country anyway?
There are 1001 ways to do this. The above is just a hypothetical one. It is by no means perfect, ideal or optimised. There is surely many better ways to do things. So let's hear it from the smarter brains.