Salary.sg – Your Salary in Singapore

There’s an informative article on buying property in the financial adviser column of today’s Sunday Times. I’ll summarize and add my own bits. (Please also refer to my previous post on investing in property.)

When buying property, these are the basic pointers:

• Buy within your means. This is a no-brainer. A general guideline is that the monthly loan installment should not exceed 40% of your take home pay. If you have other installments to service, you should be even more conservative.
• Inspect the property. Check for defects that you’ll have to spend money to fix. For example, if a window leaks when there’s a heavy downpour, you can think of asking for a discount.
• Consider the land tenure. As mentioned previously, it’s still best to buy a freehold or 999-leasehold properties for long term investment. However, 99-leasehold properties are more affordable and can fetch a higher rental yield, but note that there may be a higher chance of capital depreciation when compared to a freehold property.
• Get in-principle approval from at least one bank. As mentioned in the article, “you might risk forfeiting your option money” if you can’t get a loan approval eventually.

When considering bank mortgages, look out for:

• Maximum loan duration, if you intend to stretch out your loan repayment. Some banks look at your current age. Some look at the youngest age among all the joint applicants. Others could be more conservative. Speaking of joint applicants, do you know that you can invest in private property while living in a HDB flat that is still subject to the 5-year penalty period? If you trust your parents (I’m sure you do), you can ask them to own the private property on paper, and all of you jointly apply for a mortgage loan so that the bank can stretch out the loan based on your age.
• Interest rate. There were complaints recently that banks are not too transparent in terms of their “board rates”. I recall one complainant, as reported in the media, said that his bank had different rates for new customers and existing customers. Existing customers, due to the fact that they can’t easily refinance or switch to another bank, are apparently “bullied”. So take note. Ask on how transparent the bank is with regards to its rates, and check around to see if the bank has a reputation for “bullying” loyal customers.
• Lock-in period. Also called penalty period. The idea is that the bank can ask for a penalty payment if you redeem the loan in part or in full before the lock-in period expires. Check with the bank to be sure.
• Freebies. It’s quite standard for a bank to offer to foot the legal fees and fire insurance. But still, it’s good to make sure. And note that if you redeem the loan before the end of the lock-in period, you may have to reimburse the bank for these payments.
• Free one-time refinancing. This allows you the option of refinancing your loan at a later time when the bank offers more attractive packages (e.g. with lower interest rates).
• Special packages. For example, some banks offer to offset your interest payment with the interest earned in another current or savings account. This is extremely popular with cash rich people. How this works is that you deposit your cash in an account (the cash is still liquid; you can withdraw any amount anytime), and whatever interest earned in this account will be used to offset the interest payment for your mortgage loan. This means that a higher portion of your installment goes to reducing your loan principal, effectively shortening the loan repayment period. At the same time, your cash is not locked in any way. No wonder it’s extremely popular.

So should you buy a property now? The short answer is I don’t know. No one can predict the future. What I can tell you is the following:

• The property market is booming now. Contrarians will advise you against buying a property now. However, some people are saying that certain property segments are still worth looking into, such as those in the sub-urban districts.
• It doesn’t augur well if residents find it hard to afford a roof over their heads. If property prices are so beyond the reach of the man in the street (recall the property super boom in the mid-90s), chances are that the market is heading for a crash. If the current market doesn’t seem too hot to you, then you should consider buying.
• Those who made money now had bought their investment properties a few years back. Again, no one knows if those who buy now will make money in future.

You make the call.

In Sunday Times’ “Me & My Money” column, Lorna Tan interviewed a network marketer who spends “an average of 15 hours a week” and makes as much as a lawyer.

Helen Tay was formerly a lawyer who worked 15-hours days. She now runs a network marketing firm.

What’s interesting is that the reporter alluded to the low success rate of network marketers by asking Helen:

Would you agree that you are in a minority in succeeding at network marketing?

Maybe only the ones at the top of the network marketing hierarchy can make enough? Does this explain why this successful ex-lawyer started her own network marketing firms instead of just participating in others?

My recommendation: if you want to do network marketing, consider starting at the top.

Sunday Times reported that Singapore is experiencing a rental boom that has surpassed the previous boom in 2000.

The boom is said to be due to “strong demand from foreigners”. However, it has not reached the record set in 1998.

According to the rental figures cited in the ST article, a small 2-bedroom is fetching a monthly rental of $4,300 or about $5.10 per square foot. Compare this to the “3.5 times” formula mentioned in my previous post. However, when I calculated the average per-square-foot rental for all the examples cited in the ST article, I got the average to be 3.48 surprisingly.

Continuing on the topic of government incentives for having children, IRAS also has certain incentives in the form of child reliefs.
The Qualifying Child Relief (QCR) is at $2,000 per child, up to your 4th child. The way a tax relief works is that it is used to offset your assessable income. That is, the $2,000 [...]

It’s good to have babies – enjoying the cute little ones, having family life, experiencing unconditional love, passing down your genes…
In Singapore, you even get financially rewarded for having babies. As the country is facing a dearth of babies, the government encourages procreation by giving baby bonuses and parenthood tax rebates.
If you have 1 baby, [...]

SMU has launched a course in commodities trading for its students, reported the Business Times today.
Students get to learn about things like agri-commodities, oil and energy products, transhipment of commodities, financing, and management of credit and operational risks.
I think it’s a good start.
As mentioned previously in the top 100 jobs in Singapore, the 75th-percentile commodities [...]

I know of many engineers who regretted not getting the right career advice when they were in school. (What’s “right” is subjective, of course.)
Envious of the high income that an investment banker can fetch, some of these engineers decided to take up courses or certifications that hopefully will give them a chance to enter the [...]

CNet Networks has been advertising its IT Salary Benchmark Survey throughout the web.
Friends tell me that the free report that you will receive after taking the survey is quite accurate in terms of the salaries IT professionals are getting.
If you are working in the IT industry, why not take the survey, get the free report, [...]

Based on Clemen Chiang’s article in today’s Business Times, the global market is heading for a crash in 2009.
He made this claim after analysing US data for “birth peaks” and “spending cycles”.
However, Singapore is prepared to face the downturn, as we have the right investments in the right industries.
How should we invest then? After looking [...]

Chanced upon a local magazine called Executive.
The current issue of Executive talks about the best paid jobs in Singapore. Well, a glance at the article reveals that most of the information comes from the Kelly Services Salary Guide, which was mentioned here previously in Pay rise in high-growth sectors.
What’s noteworthy is that the guide covers [...]