Me & My Money Series (Sunday Times)

[pianist]

ya sg economy is all about property boom play
from the reits holders, GLs, HDB, SLA, developers to rich property owners milking rental income..

[Musicwhiz]

Ya. Whole day made money thru property.

The success model for this series of articles: I work or do business. But I got rich from property boom.

Yes, the way more and more of these articles are written; seems to imply that property "investing" is the way to quick riches.

Or else why "celebrate" the success of a 25-year old in securing a shoebox unit? This is incomprehensible.

[CY09]

Just wondering anyone has a rough guage of the amount he forked out for this kind of shoebox unit upfront? It will be commendable if he paid the upfront money all by himself (assuming he does). And he has probably worked for only 2 yrs (after graduating from a PT degree) and amassed quite a bit from his secondary exploits

[TheMillennium]

Yes, the way more and more of these articles are written; seems to imply that property "investing" is the way to quick riches.

Or else why "celebrate" the success of a 25-year old in securing a shoebox unit? This is incomprehensible.

True.. they should show the number of unsuccessful people as compared to the occasional one.

I think the writers of such articles do not really care about whether their articles will influence people to start investing as a get-rich-quick method. Or even if they do, they are not involved and whether the reader earns or loses, it does not matter to them at all.

I just feel that they(i dun mean the writers or their bosses.. but the u-know-hu) want to portray SG in good light, where even youngsters can easily attain "success" so that people feel that they are efficient

[mobo]

This article is weird, the interviewee is just a typical young boy who joins a Big4 and tries to live the life of an accomplished yuppie. His profile probably describes like 50-60% of the typical fresh graduate.

Career wise his is pretty average run of the mill. It is not mentioned anywhere if he had other redeeming qualities that warrant a newspaper feature, so now even average university graduates who found a job can be interviewed for financial and money management advice???

The spin on what is actually over-leveraged speculative behavior as "proud property owner" is stretching things too much.

[Musicwhiz]

This article is weird, the interviewee is just a typical young boy who joins a Big4 and tries to live the life of an accomplished yuppie. His profile probably describes like 50-60% of the typical fresh graduate.

Career wise his is pretty average run of the mill. It is not mentioned anywhere if he had other redeeming qualities that warrant a newspaper feature, so now even average university graduates who found a job can be interviewed for financial and money management advice???

The spin on what is actually over-leveraged speculative behavior as "proud property owner" is stretching things too much.

Haha nice summary, but I think I will cut the guy some slack - after all he is rather entrepreneurial and has a good savings habit. Time will tell if his foray into property investing will turn out to be a good idea. Then again, it may be also due to luck rather than skill. In property, with such long cycles, it's not easy to separate skill from luck I feel.

Regarding over-leveraging, the article does not say how much he put as downpayment, so I guess an assumption would be the usual 80% financing, which amounts to $400,000. At today's low interest rates, I guess he should be able to afford the installments comfortably with his current salary. Then again, since the property is not completed, perhaps the drawdown will be gradual and his liability will only increase a few years down the road (when his earning power increases). So there are quite a few assumptions involved in making this work.....

I guess for now his leverage is manageable; only if something unexpectedly negative happens would he be pushed to a "crisis" situation.

[mobo]

This article is weird, the interviewee is just a typical young boy who joins a Big4 and tries to live the life of an accomplished yuppie. His profile probably describes like 50-60% of the typical fresh graduate.

Career wise his is pretty average run of the mill. It is not mentioned anywhere if he had other redeeming qualities that warrant a newspaper feature, so now even average university graduates who found a job can be interviewed for financial and money management advice???

The spin on what is actually over-leveraged speculative behavior as "proud property owner" is stretching things too much.

Haha nice summary, but I think I will cut the guy some slack - after all he is rather entrepreneurial and has a good savings habit. Time will tell if his foray into property investing will turn out to be a good idea. Then again, it may be also due to luck rather than skill. In property, with such long cycles, it's not easy to separate skill from luck I feel.

Regarding over-leveraging, the article does not say how much he put as downpayment, so I guess an assumption would be the usual 80% financing, which amounts to $400,000. At today's low interest rates, I guess he should be able to afford the installments comfortably with his current salary. Then again, since the property is not completed, perhaps the drawdown will be gradual and his liability will only increase a few years down the road (when his earning power increases). So there are quite a few assumptions involved in making this work.....

I guess for now his leverage is manageable; only if something unexpectedly negative happens would he be pushed to a "crisis" situation.

Will have to disagree with you on at least 2 counts:

1. Cut him slack - If he were just another average graduate I happen to know, I will cut him all the slack he needs. But since he is prepared to appear in a self-promotion piece in the national papers dispensing supposed good practices, he has to be able to stand scruitny on his own merits.

2. Leverage manageable - Not at all I think. A $400,000 loan needs approximate instalment payments of $1,400 every month. A PWC Tax Associate earns anywhere from $2,800 to $3,600 monthly, the instalments are a very significant proportion of his salary. This guy is banking on complete smooth sailing in leasing and job security to pull off this stunt.

Anyway most housing experts recommend a maximum of 5x annual salary for the purchase of a home. This guy is getting a so-called investment property of close to 10x his annual salary inclusive of bonuses.

[Musicwhiz]

2. Leverage manageable - Not at all I think. A $400,000 loan needs approximate instalment payments of $1,400 every month. A PWC Tax Associate earns anywhere from $2,800 to $3,600 monthly, the instalments are a very significant proportion of his salary. This guy is banking on complete smooth sailing in leasing and job security to pull off this stunt.

Anyway most housing experts recommend a maximum of 5x annual salary for the purchase of a home. This guy is getting a so-called investment property of close to 10x his annual salary inclusive of bonuses.

Agree with you on the first point, I cannot understand why he would want such "attention".

But a small note on the leverage - as I mentioned he will probably drawdown progressively which means not the whole $1,400 a month will come due. A friend of mine also did the same thing and told me the installments will scale up gradually as you draw on the loan progressively. So perhaps the burden is not as high as we would think, in the short-term.

Though I do agree this means he is taking on a liability which is many times of his annual salary, thus making it "very high-risk". That said, he may have spare liquid assets to cover his backside if need be. He had mentioned he factored ina potential 5% interest rate into his calc.

[a74henry]

It is always better to invest with an eye on the worst case scenario. Every investment has its risk and returns. The keys are one's outlook on the potential reward and the risk one is comfortable to take without being excessive to the point of greed.

[mobo]

2. Leverage manageable - Not at all I think. A $400,000 loan needs approximate instalment payments of $1,400 every month. A PWC Tax Associate earns anywhere from $2,800 to $3,600 monthly, the instalments are a very significant proportion of his salary. This guy is banking on complete smooth sailing in leasing and job security to pull off this stunt.

Anyway most housing experts recommend a maximum of 5x annual salary for the purchase of a home. This guy is getting a so-called investment property of close to 10x his annual salary inclusive of bonuses.

Agree with you on the first point, I cannot understand why he would want such "attention".

But a small note on the leverage - as I mentioned he will probably drawdown progressively which means not the whole $1,400 a month will come due. A friend of mine also did the same thing and told me the installments will scale up gradually as you draw on the loan progressively. So perhaps the burden is not as high as we would think, in the short-term.

Though I do agree this means he is taking on a liability which is many times of his annual salary, thus making it "very high-risk". That said, he may have spare liquid assets to cover his backside if need be. He had mentioned he factored ina potential 5% interest rate into his calc.

The interesting thing is if he has indeed factored in 5% interest rate, we are talking about a monthly instalment of ~$2,200. This can mean only 2 scenarios:

1) He is gambling that he will be able to secure the promotions few years down the road and stay employed as there is no way his current pay as a Tax Associate can support that sort of payments short of parental support.

2) He has other sidelines or income besides his pay that causes him to take it easy and conclude that although his pay cannot sustain the instalment, it will be more than enough to cover the loans even in the worst case scenario.

This of course brings to question:

Scenario #1 - This is a hao lian article on a not so smart gambler, what in the world is ST thinking?

Scenario #2 - His side income is much more interesting and suitable for the theme of this article. ST is focusing totally on the wrong parts of his story.