How Much is Your Net Worth?

[Dividend Warrior]

Sometimes, peer pressure can be pretty powerful too. 'Keeping up with the Joneses' effect.

IMO, there are 3 things in Singapore that people spend money on due to peer pressure.

- Private tuition for kids
- Fanciful restaurants/ foods
- Lavish weddings

My friend who is teaching in a primary school asked her class "How many of you have private tuition?"

Almost all of them raised their hands.

This particular class is a top class in the level!

[Temperament]

i think my "Net Worth" is almost limitless if i can practise to be happy and contended with very little or a lot. Well, this very thought alone enough to put me at ease? i don't know. i will try. But why? i still like investing in the market leh!
But i try my best to steer away from people who always try to keep up with the "Joneses".
i can't afford to even if i want.

[LionFlyer]

Strictly speaking, my nett worth is negative now because I bought a resale HDB flat earlier this year, before the changes in the policy.

I think the temptation to keep up with the "Joneses" is especially high here. I've worked in countries where both cars and houses (landed) are reasonably affordable and my observations are that people are generally more laid back and family oriented.

What I am saying is rather than being lazy, they don't really feel that material needs define their self-worth, which is the root cause of this competition. I feel it especially when I am back in town and in office.

[Musicwhiz]

I think the temptation to keep up with the "Joneses" is especially high here. I've worked in countries where both cars and houses (landed) are reasonably affordable and my observations are that people are generally more laid back and family oriented.

Yes, I feel the same way too. I was thinking maybe it's because we are a small country (in terms of land size) and with no countryside to "escape" to in order to chill out. This creates a "pressure cooker" environment and the only reason people accumulate wealth is to be "better than the guy next door", which to me seems pretty meaningless.

I've also visited other countries on business before and I realize that the concept of "Comparative Happiness" works pretty well - if you are in a third-world country where everyone lives below or around the poverty line, then you are generally satisfied because no one seems better off than you are. But in a country like Singapore where we are surrounded by gleaming sparkling new condos, luxury cars and branded bling, the tendency to compare is always triggered cognitively!

I've actually managed to avoid all this by simply focusing on what makes me happy as a person - happy and complete family, listening to music, nature walks, reading, watching the occasional movie and of course, the intellectual thrill of investing. Once you start on the hedonic treadmill, you will end up like a mouse in the rat race (pun intended)!

[smallcaps]

IMO, using net worth to judge one's financials is like using net assets to judge a company. Too little information to work on.
Even the usual method of computing net worth seems weird to me, since a cap rate is not assigned to the person's ability to earn $$ through his skillset.
If a person is capable of $100k in pass through salary annually, and applying cap rate of 10%, should he himself be considered as $1 mil in assets?

[corydorus]

Interesting thoughts. Well you have 3 variables there and the contentious one is cap rate. So using net worth and "age", you determine your "Cap Rate"！

[CityFarmer]

I think the temptation to keep up with the "Joneses" is especially high here. I've worked in countries where both cars and houses (landed) are reasonably affordable and my observations are that people are generally more laid back and family oriented.

Yes, I feel the same way too. I was thinking maybe it's because we are a small country (in terms of land size) and with no countryside to "escape" to in order to chill out. This creates a "pressure cooker" environment and the only reason people accumulate wealth is to be "better than the guy next door", which to me seems pretty meaningless.

I've also visited other countries on business before and I realize that the concept of "Comparative Happiness" works pretty well - if you are in a third-world country where everyone lives below or around the poverty line, then you are generally satisfied because no one seems better off than you are. But in a country like Singapore where we are surrounded by gleaming sparkling new condos, luxury cars and branded bling, the tendency to compare is always triggered cognitively!

I've actually managed to avoid all this by simply focusing on what makes me happy as a person - happy and complete family, listening to music, nature walks, reading, watching the occasional movie and of course, the intellectual thrill of investing. Once you start on the hedonic treadmill, you will end up like a mouse in the rat race (pun intended)!

I scrapped my car years ago, and using public transports including taxi service.

I found that I spent less time in travelling with public transports. I didn't find out the exact reason(s). It may due to time saved from parkings, traffic jams etc.

I found that I have more time during travelling. I can read/think during my trip, without jeopardizing safety. I also have more quality time to chat with my kid/wife during travelling over weekends.

I found that I walk a lot more with public transport. I walk between lines, from MRT to bus, bus to MRT etc. It helps for a person sitting long hours in front of computer.

Should I just own a car, since most, if not all neighbors are owning one or more? I believe the answer is obvious to me, especially with better taxi service nowadays with app like GrabTaxi.

[specuvestor]

^^^ If not for my young kids, I think having a car is a waste of money here since we have the most expensive cars in the world. To paraphrase Buffett, why would one wants to consume the most expensive burgers in the world?

IMO, using net worth to judge one's financials is like using net assets to judge a company. Too little information to work on.
Even the usual method of computing net worth seems weird to me, since a cap rate is not assigned to the person's ability to earn $$ through his skillset.
If a person is capable of $100k in pass through salary annually, and applying cap rate of 10%, should he himself be considered as $1 mil in assets?

Computing net worth is like computing RNAV. You can use cap rates on the assets to arrive at his Net Worth but either way doesn't look at growth potential.

The value way is to look at the ROIC instead. And that is based not on pass through salary but actually how much one saves ie "earnings" after expenses, post other non-employment income like stocks or rentals. Singapore's CPF system does put a floor on the "earnings" which helps to explain why we have so many "millionaires" here, including housing asset.

^^ agree... When young got time and energy, mid-age got energy and money, old-age got time and money. It is a trade off that we need to manage wisely else too late to rewind

If one is disciplined in saving (ie manage expense) and wise in investing then calculating net worth is not crucial... It is only important when one needs to remind oneself

Quote: In the 37th-floor lobby of GIC's headquarters at Capital Tower, an aphorism from its late deputy chairman Goh Keng Swee is inscribed on a wall. "The more you save and the more wisely you invest, the faster you get rich."

u worked there?

It's a quote but very typical of pragmatic Goh Keng Swee... He is a man I credit for being instrumental to what Singapore is today. We owe him.
http://www.valuebuddies.com/thread-5552-...#pid102725

[lilvestor]

IMO, using net worth to judge one's financials is like using net assets to judge a company. Too little information to work on.
Even the usual method of computing net worth seems weird to me, since a cap rate is not assigned to the person's ability to earn $$ through his skillset.
If a person is capable of $100k in pass through salary annually, and applying cap rate of 10%, should he himself be considered as $1 mil in assets?

Because skillsets can become obsolete, its similar to how companies can uncompetitive or even redundant due to disruptive technologies.

Networth is a far more accurate indicator of one's financials, unless of course you are leveraged to the hilt on stocks or property and your entire networth is based on that...

[pianist]

thumb up..
green

I think the temptation to keep up with the "Joneses" is especially high here. I've worked in countries where both cars and houses (landed) are reasonably affordable and my observations are that people are generally more laid back and family oriented.

Yes, I feel the same way too. I was thinking maybe it's because we are a small country (in terms of land size) and with no countryside to "escape" to in order to chill out. This creates a "pressure cooker" environment and the only reason people accumulate wealth is to be "better than the guy next door", which to me seems pretty meaningless.

I've also visited other countries on business before and I realize that the concept of "Comparative Happiness" works pretty well - if you are in a third-world country where everyone lives below or around the poverty line, then you are generally satisfied because no one seems better off than you are. But in a country like Singapore where we are surrounded by gleaming sparkling new condos, luxury cars and branded bling, the tendency to compare is always triggered cognitively!

I've actually managed to avoid all this by simply focusing on what makes me happy as a person - happy and complete family, listening to music, nature walks, reading, watching the occasional movie and of course, the intellectual thrill of investing. Once you start on the hedonic treadmill, you will end up like a mouse in the rat race (pun intended)!

I scrapped my car years ago, and using public transports including taxi service.

I found that I spent less time in travelling with public transports. I didn't find out the exact reason(s). It may due to time saved from parkings, traffic jams etc.

I found that I have more time during travelling. I can read/think during my trip, without jeopardizing safety. I also have more quality time to chat with my kid/wife during travelling over weekends.

I found that I walk a lot more with public transport. I walk between lines, from MRT to bus, bus to MRT etc. It helps for a person sitting long hours in front of computer.

Should I just own a car, since most, if not all neighbors are owning one or more? I believe the answer is obvious to me, especially with better taxi service nowadays with app like GrabTaxi.