Read? The Tale Of Three Old Men In The Same Office Space (True Story)
After reading this ---> Exclude this, exclude that...
Lets return to the HDB heartlands.
Even without a 2nd investment/rental property, those who treat the humble HDB flat as an investment would play the 2 bites of the cherry, upgrade, downgrade game.
Look around your relatives, neighbours, colleagues and classmates. There are lots of annecdotal evidence. Verify for yourself!
See?
The Mind or psychological part of investing is quite powerful, isn't it.
CW8888: Hmmm ...
Back to real person, real people in his ex-office cubicle
Verifying!
Residential Property as Retirement Fund
Both of them took the path of their residential property as their retirement fund.
57 stopped speculating in stocks and took the property path. He has upgraded from three room HDB to 5 room HDB and currently still have a few years of mortgage to go.
He couldn't meet his MSS (BRS) at age of 55 and automatically has to pledge 50% of his HDB flat to meet MSS (BRS).
CW8888 vs. 57 Senior
CW8888 with no second bite of cherry but allows his CPF OA to compound at 2.5% rate while 57 Senior took second bite of cherry by upgrading to 5 RM HDB Sengkang.
Even this 57 Senior finally took down downgrade game.
Since it is not million dollar property; Uncle8888 doing the Maths doesn't think that he is going to have fatter retirement fund.
Posts
Second bite at the Cherry may turn out to be costly affair for retirement. Not everybody wins!
ReplyDeleteAfter 1994, the rapid price escalation of HDB flats; the extra-ordinary success stories of large investment gains from second bite of Cherry should be less.
ReplyDeleteYour case of second bite is still under the era of Buy Low. Sell High. After 1994 is the era of Buy High. Sell Higher; not so easy to make large gains liao!
ReplyDeleteUncle 8888,
ReplyDeleteAs HDB is 99-year leasehold, shall we plan, long before the retirement, to upgrade to a new flat once our current HDB flat is over 30 year old ?
Thanks.
When we apply for HDB flat in our late 20s or early 30s; by the time the HDB flat is over 30; we are over 60s. Not sure it is wise to get into debt at this age. At 60s, we should be retiring soon as debt free and better to see open over accumulating bigger wealth. LOL!
DeleteThanks a lot for sharing.
DeleteQuote : "So after MOP, you can sell the 2nd cherry anytime by down grading or even buy the same 4-RM to 4-Rm flat in the resal market."
ReplyDeleteReal Ex-neighbour. Real 4 rm to 4 rm in re-sale market earning the difference in lousy location.
Read? Home for Living and not for profit taking - Part 2
Sometime we like to think we are smarter; but in life sometime blur blur and get through life without too much worry and poorer is far better
ReplyDeleteNowadays with levy, very hard to gain with 2nd cherry. Even worse when your 1st cherry is in non-mature town and your target 2nd cherry is in mature town or is a bigger flat.
ReplyDeleteCan only win if 2nd cherry is same-size or smaller flat in similar town or cheaper town e.g. 5rm non-mature to 4rm non-mature, or 4rm mature to 4rm non-mature.
If same-size BTO to another same-size BTO in similar town, then can only breakeven. This may be useful in a rising property market if you want to simply clear your mortgage immediately. E.g. I have a relative who sold his BTO 4rm in non-mature estate and got another BTO 4rm in same estate in 2005. He had to pay the resale levy. The remaining sales proceeds from his 1st BTO could fully cover the cost of 2nd BTO, including basic renovations. But nothing much left. At least his family had peace of mind of fully-paid housing which is utmost important to them as they are not well educated and danger of losing jobs or downgrading pay is very real for them.
Like any investment; taking a second bite at Cherry for financial gains is an investment. Market timing over market cycle will determine who will make money and who will LPPL.
DeleteCW,
ReplyDelete1. You win! You used data point of 2 to make your case. That's DOUBLE of what most others do :)
2. In stocks, even with all your experience, you have shared recently you've missed the train during 2009.
In property, you've missed some trains but you don't care since property not in your radar mah!
3. We just need to outrun the hunter beside us.
I think some readers may think twice standing beside you when it comes to DIY Singapore stocks only - you panda koala specialist mah!
But when it comes to property or overseas socks, based on what you've wrote, I think some have no qualms standing beside you!
LOL!