Category: U.S.RentalProp

##6ppa realistic longTerm return across asset class

Posted on by tiger40490

Q: What’s a realistic, reasonable expectation of long-term annualized compound return?

%%%%%%A: primarily depends on the historical period you are looking at, assuming we use historical return as a basis for forecast. Regime change is rather common. For example, real estate growth was very high for some time, but now … slower.

Rental yield is more stable and resistant to regime change.

%%%%%% A: depends on the asset class

  • My FundSuperMart equity investment averaged 3-5% over 4 years
  • GIC 20Y return is 6.1%.
  • hedge funds — if a fund can consistently deliver 6% (to their customers) it’s considered pretty good, according to an insider
  • insurance — I think 4% posted return is a common, conservative expectation.
    • CPF Life annualized return? Perhaps, presumably 5-7% with severe illiquidity .
    • Insurance as an asset class has poor liquidity and long lock-in period, but only 3% – 5% annualized return. Insurance companies typically achieve negative 10% to positive 20% investment return each year on their internal portfolio.
  • Property
    • My Blk 177 flat? roughly 10%+ excluding rental income.
    • top cities in Asia? roughly 10% – 15%
  • alternative investments
    • [a] 24% achieved over 2Y — German property private high-yield bond
    • [a] 28% achieved over 2Y — Brazil property private high-yield bond
    • [a] 33% per year to be delivered — Asian property private high-yield bond
  • [a=not compound annualized)

multiple houses]US:don’t compare with cohort

Posted on by tiger40490

Owning multiple houses is an advantage but be very careful when comparing with those peers. We might be able to own multiple homes somewhere down the road but in the first 10 years, it will be painful and self-hating if we fall into the habit of comparing with our so-called “peers” who own multiple, big homes.

  • Some of the techies are more successful and earn much higher than me
  • Many of them have both parents earning
  • Some of them have been earning high salaries for 20 years. (I started only in 2010 Citigroup)
  • Some of them are stock market mavericks
  • Some of them can create the spare time for renovation. I think Anthony and Hou Li’s husband could.
    • Some of the mothers could multi-task better rather than spending all the time on the kids.
    • Some of the kids don’t need so much parenting time

My tentative conclusion — my family don’t have their income or the spare time. So we will settle for one, small home, and make it loving and beautiful.

I feel such a comparison is deeply emotional and personal at times, esp. when it’s semi-conscious, so we want to be /mindful/aware/ when our mind goes into those sensitive territory, often automatically and semi-consciously.

It’s very important to feel satisfied with what we have — loving family, wonderful kids, better career prospect than in Singapore…