Tag: t_w1r1

[17] sg as#1 retirement destination #Dilip

Posted on by tiger40490

See also

Hi Dilip,

After our chat, I wrote down my reasons. Singapore and U.S. (perhaps near NY) are two of my most likely retirement destinations. The advantages of Singapore include:

  1. in-patient medical — .. care is subsidized (for Singapore citizens), including all major operations and hospitalizations. In some cases (like mine) there’s no deductible or co-insurance and no claim limit.
  2. climate — My wife hates cold weather. I will, too, when I get older
  3. cost level — Excluding housing and cars, most everyday expenses are 15% to 30% cheaper than U.S. so our savings are more significant.
    1. Stable inflation. I have little worry about inflation in Singapore.
  4. nanny sate — Essential services from government. Singapore government is known as a nanny state, esp. attentive to senior and low-income citizens’ needs — maintenance; out-patient health care; disaster management; taxes ..
    • Shrewd fiscal policies. Government won’t run out of money and cut services
  5. My wife can work part time till an old age, as a Chinese teacher.
  6. Chinese communities — My wife much prefers Chinese communities. There are a few Chinese communities in NY area but we can’t afford the housing cost therein.
  7. My wife has a large extended family in China, so we could visit them easily. My mother may also live a very long life, and she too has an extended family in China.
  8. driving — No driving required when we grow old. Excellent public transportation. I lived in Singapore for about 20 years, never owning a car.

personal Perception:how soon2sell BGC condo #economist

Posted on by tiger40490

An 8VIC trainfer said — buy property only if you are convinced the local economy would grow over the long term. In such a context, property is a good inflation protection.

[2017/9/14] Hi Raymond,

I briefly described my Philippines property investment to a professional economist at Macquarie. He briefly pointed out a few basic principles applicable to any residential property market, across countries (I will add some principles of my own).

* Is the local population growing? I think so in our case
* is the population young or old? Young in our case. I think population aging is more common in Japan, Europe and developed countries
* Is their income level rising? I think the rise is reasonable
* Do you have 10 (or even 20) year horizon? I think at our age we can afford to wait 10 years.

He felt if all the answers are favorable, then we will witness positive return, in terms of rental income + appreciation.

I feel normal inflation would also boost property valuation. I think in a high-inflation economy, property is even more important, as an inflation protection.

I believe foreign investors are less reliable. Their hot money can come and go more quickly. They are likely to be “investors” rather than residents. Residential (local or foreign) demand is more stable and more “real” in my view.

[Market risk] Are our units affordable to the local buyers or only foreigners? I guess our small units are more affordable than the bigger units. One Philippines colleague said the price level is affordable to locals.

[Market risk] Did we buy overpriced? I don’t think so, as compared to other properties at that time. Did we buy at the peak? No idea. If we did, then we need to wait 10 years.

I also feel that way, at least sometimes. There’s bubble tendency in many top cities. Some feel Philippines also shows bubble tendency. Even the price level in Phnom Penh (much lower than BGC) is sometimes seen as bubble.
I like to judge real estate overheating by three ratios: price-to-rent; price-to-income; home price to non-housing monthly expense.

[Market risk] Are there many other locations that can be developed, causing an oversupply?

I tend to focus on a lot of theoretical risks. I can list more potential risks, but some are more likely than others. I feel the single most likely risk to hit you and me is currency risk. PHP is not a hard currency.

Based on these subjective perceptions, I decided last year (before U.S. relocation) that I will hold this MegaWorld condo for as long as I could, perhaps 5, 10 or 15 years.

–[2018] Some recent observations + minor notes

  • 腾飞 take-off in BGC/Cambodia valuations are less likely than in Chinese cities presumably because Chinese investors prefer first-tier metropolises like London, Toronto, Sydney etc. Mind share remains low for Manila and Phnom Penh.
  • PH economy feels not as strong as Korea or China (or India). Subconsciously (without any hard evidence) I tend to single out a few developing countries as strong and resilient. PH is not one of them.
  • For residential real estate, in the long term local demand is much more important than foreign “hot money”. I guess economists would agree with me. I feel the BGC location and price level creates reasonable local demand.
  • PH interest rate is high, so it’s best to minimize your mortgage amount.
  • One reason I feel unsure about PH economy is the PHP currency. Since I started in 2015, It has dropped more than 20% against SGD (32 to 39). I feel I have to wait longer for bigger appreciations to compensate for currency depreciation.

[20] U.S.income: 3segment

Posted on by tiger40490

In a 2020 CNBC survey, “financial elites” refer to those with $50,000 or more in investments and an annual household income of $75,000 or greater

In a May 2016 commentary in Business Times, Robert J Samuelson pointed out that in terms of annual household income the US “families” can be classified into 3 segments:

  • above 100k: 25% of US Population belongs to households earning above 100k
  • 40k to 100k: 1/3 of US population belongs to households earning within this range
  • below 40k: 40% of US POPULATION belongs to households earning below 40k

These are easy numbers to remember. Note in economic science, there are exact definitions of “household”. I will just call them “families”.

AVERAGE household income is skewed by the wealthy outliers (“average GS bonus” shit). Instead, let’s talk about median household income. As of 2013, US median household income is about $43k pretax.

— typical U.S. household cash flow level, as reflected in the Mar 2020 $2 trillion covid19 rescue package

  • The /bill/ provides one-time payments of up to $1,200 for most individuals and $2,400 for most married couples filing jointly, with an extra $500 for each child. A family of four would receive $3000.
  • /Assistance/ starts to phase out for individuals earning more than $75,000 (ending altogether for those earning more than $99,000) and for couples with more than $150,000 in income,

I’m surprised that a one-time $2k 红包 would mean a lot for many U.S. families.

It then dawned on me that my fellow ibank tech professionals are a wealthy privileged class in this society.

[15]black swan crash #600w

Posted on by tiger40490

big picture — financial protections (insurance, diversification, current income…) are important-partially-effective as protections of family livelihood. More important protections are non-financial

  • 1A) health and healthcare system,
  • 1B) strong marriage and family,
  • 1C) resilient career longevity
  • 1D) Good kids working on reasonable jobs would be a strong protection. This factor is largely within my influence as a parent.
  • 1F) strength of Singapore and U.S. , my two choices.

Black swan crash mostly affect stock market and property market. This scenario is different from long-term devaluations discussed in another blogpost

Many stock market crashes saw all the experts proven wrong, but each time, a few people seemed to be prepared for the crash, because … BlackSwan by definition is obvious in hindsight.

I feel every serious student has this same homework — study each crash and draw his/her own conclusions. I haven’t done my homework. I will simply point out that in a stock market crash, if we are cautious to avoid buying at the peak (assuming our judgement is right, though no one can predict.) then most investments should not suffer many years (specifics? no need) of draw-down. Suppose we see the longest draw-down is 8 years. We are right to assume the most likely length of the next draw-down is that long. But statistically we are unlikely to suffer exactly that draw-down, since we are unlikely to invest 100% at the very peak.

I feel developed market eq and bonds both exhibit a long term trend. Central banks will handle any liquidity crunch, so those are likely short-lived crashes.

— 3 CPF-life
— 4) diversification (at low correlation) could help, even tough all assets decline together.
Reality — Some assets recover faster than others. Some fall less than others. By diversifying, I have a reasonable chance of capturing some quick recovery, perhaps on a small position.
— 5) income stocks are safer among stocks, assuming most of them continue to pay dividends.
— 6) Gold is the strongest “currency” and a good hedge for equity market crashes and some (but not all) political upheavals, but you must be prepared to hold it for decades.
— 6b) USD is safer, so is SGD to a lesser extent. Flight to safety.

— 7) gov bonds are safe, partly because
* Gov have the (not unlimited) power to print money
* flight to quality
— 7b) I believe Investment-Grade bonds are safe, because government would inject liquidity to help the “normal” corporations survive and service their debt.

— 8) rental yield is more weather proof than the promise of windfall appreciation.

Suppose my high-yield rental property pays out NetRY 5% vs 2% for a high-end residential. In a down turn, valuation could drop by half. My rental income provides 4 cushion compared to the high-end

  1. in good times or bad times, my rental property is more likely to be rented whereas the high-end is less more likely to be vacant, because my property was bought for the sole purpose of rental.
  2. If both are rented out during the down turn, then my rental property is likely to generate higher rental yield just as before the down turn
  3. higher rental yield is an attractive feature during a down turn, as the prospective owners assess the positive cashflow. This is similar to income stock vs growth stock. Therefore, the valuation drop is less severe than the high-end residential.
  4. suppose we are forced to sell at a loss during the down turn, my cumulative rental income — hitherto received — would offset my losses.
  5. (Not a cushion) The promise of windfall would be very hard to keep after a huge draw down. In contrast, the rental yield was already realized over the preceding years.