Sunday, December 27, 2015

Random thoughts: convincing my wife against selling HDB flat

Today, as my son entertained himself at the indoors playground, I had a deep conversation with my wife. We talked a lot, from wills, parents to children. 

Eventually, the conversation drift to property. She wanted a shift to a private property and leave it for our son when we go see our makers. She wanted to do it "when the market is right" (my poison)

I told her these:

1) You need to understand these because I might passed away earlier than you. 

2) Misconception of rental money is the best investment money. Many look at the 2-3K rental and believed it is a good investment since the rental can pay off the property eventually. I ask her to consider yield. How much capital is put into the property to generate that few k of rental.

3) I ask her to calculate the yield of her mother private property and our HDB unit. I ask her which is a better investment? 

4) I told her the yield Is even lower if you max out the possible credit to buy that private unit. With leverage there is interest  risk and the possibility of repossession at the worst case scenario 

5) investing in equity, if you have the heart for the volality, required only meaaured injection of capital and there is no risk of leverage (unless you are pro and doing ES or CFD or the likes) 

6) there is no going back to HDB. 

7) better to buy a reasonable studio or smaller unit to rent and sell when the market is right.

She is not very happy with my answers but I think she understands. But if I passed away, not sure if her mind will be in a better state than her heart? 

I wonder why the craze to leave a property to the children. Wouldn't it be better for the children to learn to earn their keep? Of course, if I do stay in a private property when I go see "God", I will leave it to him, but I won't planned to squeeze it out of my life to pass it down.

I used to think it is a lame excuse of adults for vanity for those who over stretch their finances for a private property. They are using their kids as a shield for their own vanity.

I had a colleague who downgraded from a semi-D to a private. He made a profit of almost a million. He told me his wife objected to the downgrade and want to leave the house to their kid. He told his wife it's better to hold cash and take profits and decide what to do later. 

Am I the odd one out? Am I the only one not thinking of leaving a property behind?

When my FIL told me DTL is free, and wanted to try it, I said it will be crowded and I don't like crowds. He asked me to send him to the station and he takes it alone. I told my wife later that it is quite "bo Liao" to ride for the seek of riding just because it is FOC and endure the crowd right? 

She told me many of her colleagues did that today too. 

I seriously think I am "odd" 


  1. Hi sillyinvestor,

    I wouldn't want to leave behind private property for my children, simply because they may not want to stay in it as they could be living overseas or whatever strange reason they don't like it then how. Haha, I also know a lot of people who are taking the DTL for kicks just because it's FOC, I also find it bo liao!

    1. Joyce,

      I think most people will leave it behind, but will leave it to the kids to do whatever they want.

      Keep rent or sell. They just want a smooth life for they kids.

  2. Well if you are odd, then so am I haha

    1. Hi Goh,

      I am sure I am
      Not alone. But I wonder if I am minority lol...

      People also ask me what tuition I send my son to, I say swimming only ...

      Again I am the minority

    2. U r not odd, u r just cheap! LOL

  3. Hello SI,

    My wife also has the desire to move to a bigger place, preferably a five-room HDB flat with four bedrooms. But it wasn't to leave a legacy for our children, but to let my two boys have a room each and a spare room for studies.

    Many a times we think we are doing things for our children, but it is merely to satisfy our own ego. I'm giilty of such acts at times. Lol

    1. Hi Ss,

      I think 5- room flat only have 3 bedrooms lei, even executive units have only 3 bedrooms unless U want to partition it.

      Ya.. The same reason she gave me. When we have no.2(if we do have) how to share room?

      Ya ego problem ... I have that too. Maybe it's a guy thing ... But the way, are u a Leo? Seem like that from the posts you written. I am a Leo

    2. Hello SI,

      Yes, I am a Leo. You can tell by reading my writing? Lol

    3. There are some old HDB 5I flats that have 3 bedrooms *and* a study. I'm staying in one :)

    4. Hi SS, just find the "kuang" and "say" sama sama


  4. Not sure why many woman folks love bigger home?

    2. For many years, you have resisted your wife for upgrading to bigger and spacious 5-room HDB or Executive. Now, you have plenty of cash in CPF OA earning the best interest rate in Singapore @ 2.5% CAGR.

    Read? How will the Future You thank you?

    1. Uncle CW,

      Ask u something very off huh. When u turn 55, the excess of MS from CPF, is it easily given? Or it is a lot of forms to fill and the default it to leave the money with CPF?

    2. For this, CPF is efficient. Auto one. LOL!

    3. Hi CW

      Auto to keep the excess or return as cash??

    4. Is it a admin nightmare? Very ley Chey..

      I am those who believe money is real but I prefer it in my hands type before you change the goal post type lol

      Talk about trust ... Lol

    5. Surprisingly when I asked around those above 55 in the office, no one take out their CPF money. LOL!

  5. Uncle temperament

    Thank you for the idea of leaving HDB... Quite true huh ....

    Maybe if the price is right an EC can be a consideration too. Waiting for the gap to close between the 2. Which I believe will happen ...

    We are are odd balls ... LOL. And particularly odd and off in the eyes of our loved ones

  6. Sillyinvestor,

    SS got the main point; and you knew it too.

    1. Wife's mom lives in private property.

    2. Wife wants to leave property to children.

    3. You are now staying in...

    Dancing around the elephant in the room is not having a deep conversation.

    1. Hi SMOL,

      i need to google what u mean by dancing around the elephant.

      Well, maybe it is not deep by absolute standard, but i am happy it is progressing well ...

  7. I am always in agreement that what your children get in asset is only what you have left and not what you actually have to leave for them. This mindset is important because the focus is on how to fish and being a good parent. Yes it can be odds for many.

    1. Hi Cory,

      Guess financial bloggers think more "alike"

      Who don't want to leave something if we are able to

  8. i am a mother and i want a bigger property! but i am currently living in condo and wanting to shift to those huge ass HDB jumbo flat coz kids just needs so much space. I don't think its a good idea to think of leaving property to kids (especially if you have more than one). most of my peers end up either quarreling with their siblings over what to do with the house (some wanted to sell to cash out and split it equally and some wanted to keep for rental and wait for price to go up, some wants to keep it for sentimental reasons). All are not wrong but its tough for siblings to make a decision on what to do with property especially if no one can really pay for the upkeep. But property is more than just practical reasons, its good to hear the "real" reasons behind wanting a property!

    1. Wow, gag me with a spoon,

      tell me about it. All the space needed. I used to have not enough space when I live in my 5-room flat, now that I lived with my I. Laws, we somehow make do with a room.

      Of course, when my son goes P1, we might need more space .

      But I will just take a step at a time.

      Those jumbo units are in short supply now... Dun think many want to sell too.

  9. i am a mother and i want a bigger property! but i am currently living in condo and wanting to shift to those huge ass HDB jumbo flat coz kids just needs so much space. I don't think its a good idea to think of leaving property to kids (especially if you have more than one). most of my peers end up either quarreling with their siblings over what to do with the house (some wanted to sell to cash out and split it equally and some wanted to keep for rental and wait for price to go up, some wants to keep it for sentimental reasons). All are not wrong but its tough for siblings to make a decision on what to do with property especially if no one can really pay for the upkeep. But property is more than just practical reasons, its good to hear the "real" reasons behind wanting a property!

  10. Monkey see Monkey do. One buy condo, all follow suite without understanding how much you put in to generate that few thousand dollars of rental income. How many are hit by the sudden increase in housing bank loan interest rate due to Fed rate hike?

    1. Actually SR,

      My "gut feel" is Singaporeans are really much richer and many than I expect. Many bought and do fine, and many have buffer for interest rate hike to 4%

      My friend expect to be able to do fine with 7% interest, the ironic is 7% interest rate, I am quite sure the investment is screw unless your Loan is neligible

  11. Hi SI,

    That's a good analysis, "using their kids as a shield for their own vanity".

    I have only one word: social expectations.

    If other teachers are also moving into a condo, if you're the odd one out, the implication is that "you must have screwed up your finances"!

    1. Hi 15HWw,

      Tell me about it. There are plenty of rich teachers. 3 groups of them in fact.
      1) rich families
      2) second career, already reach FI and teach for "passion". (Although I always feel like being slapped lol)
      3) those who live frugally, climb the ladder can too...

      But I not really affected la. Come on, on the bloggersphere, how many are as "poor" monetarily as me at my age. I think I am mostly pass that although the inner demons does rear its ugly heads there and then. Let it come,
      Let it go

  12. Now, this is an interesting post :) Indeed, SillyInvestor you are certainly odd. Odd is the person who goes against the grain of societal expectations and norms which insists on constantly "upgrading" one's current position.

    I take great pleasure in going against the grain, and I suspect you must too :) Certainly not an easy position to be in, for both your wife and yourselves. Embrace this challenge, and embrace being "odd". For these things set you apart from the lemming herd.


    1. Retired by 35,

      Thanks! To be very honest, I dun enjoy going against the grain per se, I am just realistic.

      I rather be the majority with few hundred K cash and I will join the property party too... LOL

      I rather to go with the flow if possible ...

  13. Uncle temperament,

    I think you are not alone to feel that sometimes we find more like minded people here than the people
    We meet in real life.

    But I wonder, could it be possible behind one one the nicks is actually someone I know in person.

    I dun say what I say online with my friends or colleagues too. At least to most of them

  14. Odd? I am aiming to live in a 4/3 room hdb flat and FI sooner than 37 years old.

    You "look perfectly normal" than me now owning a 5 room flat and driving? I took public transport and aim to walk/cycle to work soon.


    1. Ha ha FD,

      We are all odd balls ... 37 is young .. I am 37 next year. Enjoy your FI when u reached it

  15. Tell your wife that a private property can be much smaller ( at an affordable price)
    No place to hang laundry
    No place for maid to sleep ( sometimes )

    And if you can afford landed housing:
    Stairs to climb
    Large area to clean
    Garden to trim
    Rubbish & refuse has to be carried through the house ( unless its a corner unit )
    Parking issues

    Better to leave the HDB home to the kids.
    They can decide what to do with it... sell, rent or stay in it.
    Straight forward, with lots of FAQ and help from HDB... and lawyers are familiar with it.

    No, you are not an odd ball.
    There are better things to do than to enjoy free rides on a mrt, bus or even a flight to no where.

    Dont believe a word printed by SPH or spoken over the airwaves.
    They have an agenda.

    1. Retired,

      If I say until like that, think my wife will be very pissed lol.
      Anyway, market not correcting so we not in a rush la.
      Plenty of details to work out and quarrel over lol

  16. Hi.
    I am not too sure whether I reach financial independent.

    My current dividend yearly is about 18k (but suffering huge paper losses)

    Then I rent out 2 bed room to my siblings ( staying in 5 room flat) . They subsided me with 1k.

    then I do a bit side income.
    ( this one can't tell you how much la)

    So even one day no working. Still able to survive.

    Retire or not. I am ok.
    Actually I quite like what I am doing la.

    My expenses very minimum. No car. No much restaurant dining. But I spent a lot money in fruits. I eat quite a lot kiwi. Strawberry, blue berries etc. All expensive fruits.

    1. Yeh,

      FI is a wonderful goal that gave people a choice.
      You had the choice, but choice is a double edge sword. Just enjoy and do wahtever u like ...
      Kiwi ex? Aiyo please la... U already say u dun drive Liao.

    2. hey.
      4 kiwi 4.85 leh. i ate 2 per day.

      expensive not?

    3. Aiya... Zzzzz

      Yeh, I not number crazy. Maybe that's why I dun save even half of what I are doing.

      Frugality is a virtue, but chill man

    4. Har. One month need about 150 for fruits leh. But this is my dinner expenses la.

      still haven't include any comestic, skin care, facial, Chinese medicine etc expenses.

      Think one month do spend few hundred on all these.

      Increment not enough!

    5. Lol.

      As there say it, if u think it's not enough is not enough

      We both think have not enough

  17. SI you are not alone. I plan downgrade from a privatized 1700 sq ft HUDC which I bought for $480k to a HDB via enbloc. Planning to squeeze my wife and 4 children into a HDB. Thankfully my wife agreed.

    1. Hi siew Mun,

      If it is not too much to ask, why the decision to downgrade.

      No worries if u dun wish to answer. Resisting upgrading is normal, but degrading at our stage seem "drastic"

  18. Actually it is not drastic the reasons are:
    1. More financial freedom with no liabilities. I don't want to be a slave to mortgages at SG50 this year.
    2. Generate more dividend income with extra cash.
    3. Home is where relationships are built and enriched. Well, a condo is just a condo
    4. I don't keep up with the Jones. Rather be myself.
    5. Both HDB and condo is depreciating 1% every year based on 99 year lease. I rather to depreciate HDB.
    6. Don't want to incur extra expenses of monthly condo maintenance fees. Like it or not you are compelled to pay regardless of using the facilities.
    7.. Looking forward to travel using the dividend income.
    8. Most importantly I can sleep more peacefully at night. I can quit my job and not worry about putting food on the table.

    1. Thumbs up siew Mun

      It is something simple yet so difficult to achieve by many.

      That's a great achievement. I rememebr u writing something to that effect on AK blog

  19. Hi, just to share my views on landed property, if thats what you are thinking. Condo may be different story.

    For landed, there are many cons compared to HDB. The 2 biggest imo are 1. transport, 2. amenities (mainly food).

    1. Transport. Depending on the location of your unit, you may have to walk quite far out just to take a bus.

    2. When you want to buy food, where is the nearest place? HDB can just go downstairs, walk 5min. Landed... good luck.

    My personal conclusion: don't go for landed. there is higher chance your children will become spoilt and suffer more.

    - momo

    1. Hi hi momo

      Defintely not thinking about landed. Actually I am quite tight lol

  20. I have had the opportunity to read many blog
    entries of yours , that, now i must share with you a true story, that
    of my husband's family.

    My mother-in-law has 2 daughters, followed by 3 sons.
    The 1st born married young and so had the opportunity to achieve the Singapore
    Dream - buy HDB at 90K and sell at 400K.
    The rest of the children married late and so did not experience the 'quantum leap".

    It is never " better to hold cash" .

    At that time when she made a profit of almost 300k, her mother told her
    to buy a freehold apartment at Siglap but she insisted it was better to hold cash ; she + husband then used their CPF to buy a resale HDB.
    20 years on, there was Enbloc , she could have made 700k, this
    could have been used to fund her children's university fees or pay for her own cancer treatment.

    Meanwhile, having lived in the resale HDB in a particular place with no MRT and LRT for 20 years, her profit stands at around 200k. Her original profit 300k has diminished to 100K because her husband got cheated in a business deal, they had to pay banks, pay for university education of children, parents medical bill, etc.

    For a woman, your wife will feel more secured if at the back of her mind, she has something , anything!
    I support your wife's decision, you should think from her standpoint.

    My mother-in-law , even at age 70s still has an investment unit, even if rental yield is not good during recesionary years, during good
    times there will be higher valuations.

  21. to continue my story, in the last decade, my husband and I sold our Ponggol HDB flat and bought a freehold unit at bukit timah, near hwa chong.
    At that time, it was less than 1 million!

    But now, with 1 million, one cannot buy anything along this stretch of road.

    From there, we moved to River Valley, with 1.5 million, we could get a decent place ( 3 bedrooms+ dining room+ kitchen + enclosed backyard + underground carpark).
    much Later, we checked property prices and classified ads + newspaper advertisements, $1.2 million now buys a Mickey Mouse apartment in this area.

    I say again, it is never better to hold cash.

  22. You made such an interesting piece to read, giving every subject enlightenment for us to gain knowledge.
    Selling HDB Flat

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