For many 1st time property buyers, the biggest obstacle is saving enough for the down payment.
If the target of your 1st property is a $500K unit, by saving $3,333 per month, you’ll have your 20% deposit in 2 ½ years’ time.
In fact, you can achieve that even earlier — with money from your CPF ordinary account or your year-end bonus. Of course, you need to set aside extra funds for stamp duty, legal fee and repair (minimum 3% of purchase price).
Between 2002 and 2004, I found a lot of good buys in the market. Life becomes a catch-up game to save enough for my acquisition. Whenever I save near the $100K mark, I added another property to my portfolio.
Jack Welch, the former CEO of GE, told Forbes in 1994,
There is infinite potential for savings. The human mind is always able to find a better way to do things.
I remember my flatmate showed me how to keep track of expenses. Every evening, she would record every single purchase of the day. In that case, she was able to refer to any item bought previously, compare prices, and avoid buying useless and overpriced items.
I was really impressed!
To some people, money means instant pleasure. They look for ‘immediate gratification’.
It is easy to lead a carefree life of spending money in branded items, high tech gadgets, nice cars, luxurious holidays, social entertainment … if you indulge in the short period of happiness they give you.
I see money as a means to freedom. Good properties create passive income and accumulate wealth. And money offers me more options for how I live my life in the future:
- I can choose to do what I enjoy most in my career without worrying about income.
- I can pick any residence with my spouse without toiling 30 years for the installments.
- I can choose how I spend my time when I have kids.
- I can control money rather than let money control me.
T. Harv Eker is a strong supporter of ‘deferred gratification’. He said in his book Secrets of the Millionaire Mind,
If you are willing to do only what’s easy, life will be hard. But if you are willing to do what’s hard, life will be easy.
You can save and invest. You can also borrow and spend. The choice is yours.
Nice article v___! This article will be on my “like” list like a facebook button. I share the same aspirations.
Current climate makes things more difficult. I want to share this famous economist when he sum up the situation, I rephrase “qualitiative easing leads to high asset prices leading to higher credit, we all know where this leads to” Raghuram Rajan
What does the future hold for us..Gen Y
Nice to hear from you again. I’m glad that you like this post!
We know now is not a good time to buy properties. But it doesn’t mean that we can sit around doing nothing.
When prices are high, it gives you time to do research. So you are more prepared when it’s time to buy again.
It’s a perfect time to take profit from your previous buys and move on to a safer or up-and-coming asset class.
The higher the prices climb, the nearer they are to the turning point of the next fall. If you are savvy, you can start looking at some reverse hedging.
P.S. Every generation has its own challenges and opportunities. Whether you are Gen X, Y or Z is not the point. With hard work and discipline, everyone can be a successful investor at any stage in their life.