As we are near the end of the first quarter in 2018, we take a look back and see how the year has started on a happy note.
Singapore’s GDP grows 3.5 percent in 2017. Salaries are expected to rise 3.9 percent this year. The stock market continues to close at new record highs. An en bloc deal is closed every other week, the latest being the second-largest ever recorded sale of Pacific Mansion at S$980 million.
Singaporeans have all the reasons to be happy. Still, Singapore ranks only 34th in United Nation’s newly published 2018 World Happiness Report, after dropping eight positions from the previous year.
According to a 2015 study by the WHO (World Health Organization), Singapore has the highest depression rate in Asia. The Institute of Mental Health revealed that there was a 20 percent increase in cases of major depressive disorder between 2014 and 2016.
Singapore is known for its stable economy, world-class infrastructure, excellent housing, education and healthcare systems that many countries envy.
Yet, why can’t Singaporeans be happy?
Fear and worry take happiness away
Singapore home ownership rate increased from 58.8 percent in 1980 to 90.9 percent in 2016. It is higher than any country occupying the top 25 spots of the World Happiness Index.
We are fortunate to own the roof over our head. We know we won’t be homeless in our old age.
However, to look at it from another angle: We are spending decades of our working life to toil for the banks who are the real owners of our home. Banks are also the first one to get paid when we receive our salaries.
But we are the ones to worry about interest rate hike, weak economy and high unemployment rate. We also have to plan for retirement and cash out from our homes when we grow old.
Along the way, we fear and worry about something might go wrong. We see people around us facing difficulties in life and we are afraid that we might be the next one – unemployed, failed business, investment loss, terminal illness, etc.
It is the constant state of anxiety that takes happiness away from us.
Worry never robs tomorrow of its sorrow, but it always robs today of its joy!
– Leo Buscagbia, American author and motivational speaker
As for the big question: Do we have the freedom to choose what we really want to do in life?
What? To tell our wife and kids that we are quitting our day job tomorrow to follow our dreams, to build a start-up, to travel round the world, and let them take care of the outstanding mortgage?
We dare not.
The more we have, the more we fear losing it. The uncertainties simply freak us out.
The pressure to keep up with the Joneses
Many Singaporeans believe that they have no choice but to work hard to keep pace with the accepted standard of living. Such is life of the middle class in our society.
But who set the standard of living in Singapore?
Is owning a 3-room, 4-room, 5-room or executive flat the “standard”?
Are the “middle class” in Singapore staying in HDB flats, BTO flats, ECs, condos or landed houses?
You may be comfortable staying in a 4-room flat. But your army buddy told you he recently applied for an EC flat. All your colleagues have upgraded to a condominium. You know your boss just bought a new semi-detached house.
You are secretly proud of the new cluster house you just purchased. You invite your friends from university days for house-warming, only to find that one of them just bought a bungalow.
We are truly satisfied with life only when we fare better when comparing with or benchmarking against people around us.
A society’s unhappiness level is not related to how poor it is, but rather how big the gap is between the ‘haves’ and ‘have nots’.
That’s why we are upset when we read stories about people who are young and rich or suddenly rich.
There are 3,375 en bloc owners in 2017. According to Singstat’s General Household Survey 2015, this is less than 2 percent of the total number of households in condominiums and private apartments (170,800). In terms of the total households in Singapore (1,225,300), it is a negligible 0.28 percent.
How many will cheer whole-heartedly for those who won the jackpot of a successful en bloc deal?
Your failures and misfortunes don’t threaten other people’s self-esteem … It’s your assets and your successes that are problems for people who derive this self-esteem from being superior.
– Carol S. Dweck, Mindset: The New Psychology of Success
Remember: Our parents are the only ones who can be genuinely happy for us when we are doing well.
The higher our income, the happier we are?
The Monetary Authority of Singapore came up with the TDSR (Total Debt Servicing Ratio) in 2013 to evaluate the affordability of homebuyers. The higher our income, the bigger the loan we can borrow from the bank, and the bigger the house we can buy.
Does that mean the higher our income, the happier we will be?
The Better Life Index of OECD (Organization for Economic Cooperation and Development) measures life satisfaction of member countries every year. Although US households have the highest average disposable income, the country only ranks 14th in its life satisfaction rating.
Another study by Princeton University showed that the statement ‘the higher our income the happier we are’ is valid only up to the salary of $75,000 a year. After that, the relationship between income and happiness disappears.
Why the magic number $75,000? Because at that income level, money is no longer an issue in everyday life. And most probably we have enough cash to do things that make us feel good.
Meanwhile in Asia, China’s GDP has a five-fold increase in the last 25 years. Despite the rise in income level, China experienced a decline in happiness. According to the 2017 World Happiness Report published last year, unemployment, diminished social safety nets and rise in material aspirations are reasons for the decline.
On the other hand, social and institutional factors (having someone to count on in difficult times, donating, trust in government and business, freedom to make life choices) are 16 times more impactful than increasing income!
Tom Rath and James Harter talked about the “comparison dilemma” in their book Wellbeing: The Five Essential Elements. Findings from an experiment proves that an ideal income level is relative only.
Considering the following two scenarios, and assuming the same purchasing power in both, which one would you choose?
An annual income of $50,000, while the people around you earn $25,000 a year.
An annual income of $100,000, while the people around you earn $200,000 a year.
Using a classic model, everyone should choose an income of $100,000 over $50,000. Instead, nearly half the people presented with these options pick the lower salary of $50,000 a year. They choose to make half the total income as long as it is double the income of their peers. It seems that the amount of money we make or the size of our home is less relevant than how they compare to others’ income and possessions. This plays out in the decisions we make every day, and that poses a real dilemma.
Money can’t buy happiness
In 2013, I attended the seminar “Pursuing Happiness – Unravelling the Truth”. Our President Halimah Yacob was one of the speakers to share her formula of happiness.
I remember one guy in our table had the following comment:
“If I had one million, I would be happy.”
I am sure some of you have experienced this before: The day your net worth crossed one million, you didn’t feel anything special at all.
It reminded me of a Quora post ‘How happy are Singaporeans?‘.
I think a sizeable number of working age Singaporeans are downright miserable, especially those in the middle or upper-middle income bracket. A significant portion of our unhappiness stems from our inability to be content. We are a highly materialistic society that is perpetually unable to stay content with our possessions. Our success has blinded us to what we have and we are in constant motion of wanting more as though that it is our birthright to have more – a bigger house, a more expensive car, an elite school for our children, more exotic holidays, having a privileged banking account. I think the older generation, who are now mainly retired, were a more content bunch.
When we don’t own property, we desire a HDB flat subsidised by the government. While we are paying off the mortgage, we pray for HDB prices to go up faster so that we can upgrade to a condominium. When property prices are climbing, we immediately do a trade in for a bigger home. When the collective sale market is hot, we are eager to sell our home for sky-high prices.
Greed and lust are ever-growing monsters if we let them grow and control us.
Ernie J. Zelinski said in The Lazy Person’s Guide to Success that “one reason people pursue the less important things is that practically everyone else in society is pursuing these things, which are really just status symbols”.
We are often wasting our time in life majoring in minor things, and “the road to unhappiness is paved with the pursuit of things that matter little”.
When we are young, we are taught to be obedient and follow rules. When we grow up, we are trained to be competitive to survive in this world. When we have our family, we need to work hard and have the financial means to support the economic needs of ourselves and our family. When we are old, we finally learn that what we really want is simply to be happy.
– Property Soul
A final thought
In Forbes’ 2017 Asia’s 50 richest families report, the Kwek family of Hong Leong Group occupies the 7th position, with a net worth of US$23.3 billion (S$31.6 billion).
You may be 100,000 times poorer than Kwek Leng Beng. But you can be sure that he can’t be 100,000 times happier than you.
Who knows? You may even be happier than him!
This blog post was first written for and published in 99.co.
If you need advice on property matters or residential properties in Singapore, you can check out my personal consultation service.
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This is a super timely reminder to many investors now especially in the heat of all the enbloc news.
Thanks Ruby.
We must also remember the fact that not every household (with 10 to 20 percent) and every member in the household agrees to the enbloc sale. Some enbloc displaced owners are not making money if they bought their home recently, after factoring in high purchase price, renovation cost and Seller Stamp Duty.
Great insight. Sometimes I wonder whether people are unhappy coz they are constantly in search of happiness not knowing that being mindful is all you need to find little happiness in life.
Happiness is like staying in a beautiful house. You are not aware of it because you are inside. You have to step outside, look at it from a distance, and you can appreciate the beauty of it.
Beautifully said 🙂
Thank you for this ‘check & balance’ blog article. Made me ponder on the value of my next asset progression.
One way to evaluate whether it is worthwhile pursuing is to ask yourself whether you ‘need’ it or you ‘want’ it, and not whether you can ‘afford’ it or not.
Best don’t envy others don’t compare with others.
Be grounded and do our best.
Agree. We all have different gifts. Happiness comes from being grateful of what you have, not what you have compared with the others.
Higher income is important to borrow higher loans and then bigger house. If you are investing all your income in buying a house then that will definitely make you stressed with those heavy loans.
You are right. Getting a pay rise doesn’t mean you have to get a bigger house and up your loan.; otherwise, you are in a vicious cycle of higher income but bigger loan. At the end, you are still asset-rich (or is it just liability?) but cash-poor.