If This is Your Average Singaporean's Life Summed Up, What Can You Do About It?
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If This is Your Average Singaporean's Life Summed Up, What Can You Do About It?

Ming Feng
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Most people die at 25 and aren’t buried until 75.

-Benjamin Franklin

All thanks to a Facebook post that I chanced upon, this quote is now stuck in my head.

Given our life expectancy,

Most Singaporeans die at 25 and aren’t buried until they’re 80.

Congrats on five more years of being “dead”.


Since young, the formula to be a typical “successful Singaporean” was passed down to us.

Passing of facts
Source: giphy

A summary of a typical Singaporean’s life has been circulated around on Social Media.

We updated some of the figures to give a more accurate summary of it.


The Typical Template of What A Singaporean’s Life Journey Summarised

Average Singaporean's life summed up

You are born.
You Study.

You serve NS and are put under a 10 years reservist and IPPT cycle that can stretch into your 40s while you have to juggle family and work commitments at the same time.

After NS, you come out to work, fall in love, married and start a family.

Now the nightmare and Math truly begin.

A wedding costs a lot, so most Singaporeans marry in their late 20s, mid-30s or even later than that.

Now we come to the house.
Upon successfully balloting for the house, you need to wait at least 3 years for it.
You can also buy from the open market or private developers at an even much higher price.

Once you get your keys, your entire CPF OA will be depleted totally and the rest of the mortgage balance will be paid by your monthly CPF contributions for a maximum of up to over a decade or 25 years max.

During this time, every month of your CPF contribution will not be able to save and accumulate CPF interests because you are using it to settle the house loan.

25 years past, and your house is finally fully paid for, but by then you will be 55 or into your 60s.

You want to rest and retire but you can’t because your CPF OA account is empty and there is a minimum sum of $90,500 (Basic Retirement Sum)

So in your 50s or 60s, you still need to work until you die or at least for another 10 to 20 years in order to build up your CPF OA account.

By the time you can really rest, you will be in your 70s or 80s already. Most would have met their maker by that age. LOL. How to look forward to retirement bliss?

Also, your health also could be failing or no one is willing to employ the elderly Singaporeans. What are they going to survive on?

In the end, their CPF Medisave accounts got wipeout and they either rent their flats out to sustain themselves or sell back their flats and lease to downgrade in order to survive in their dying years.

This is basically the life story of a common Singaporean. And don’t forget, in the middle of all these, one still needs to raise up kids and take care of sickly ageing parents and in-laws too.

If anyone can still say Singaporeans are living a blessed life then I clap for you.

Source of the above: unscrambled.sg

I clap for you
Source: giphy

Is That the Best We Can Do?

Without feeling sorry for ourselves, we can still change what the future has installed for us with a slight change in mindset and proper personal finance habits.

Change
Source: giphy

Some of us are fortunate enough to have quite a bit of time on our side.

The truth is that no matter which country do we reside in, there are bound to be policies, laws and a certain way of life that are already in place. Very much like the rulebook for every board game.

Like every other game, it is important to understand the rules (in our case, the housing policies, CPF system, etc.) before we go on and try to win our “personal finance game”.

Care about the rules
Source: giphy

Serving National Service (NS) and Reservist

National Service (NS) is a national policy and is required of all male Singaporean citizens. Given the importance of defence to Singapore, this is a mandatory policy which we cannot forgo unless we can come out with a better solution.

To look at National Service (NS) on the positive side, male Singaporeans can start saving up their NS allowance.

NS allowance in Singapore

Depending on your combat allowance, if you:

  • Went to OCS and became an officer, your total NS allowance ranges from $24,495 – $26,735
  • Went to SCS and became a sergeant, your total NS allowance ranges from $20,812.50 – $23,512.50
  • Went to a unit, your total NS allowance ranges from $16,980 – $21,230

And if you saved 50% of your NS allowance, you would have saved:

  • $12,247.50 – $13,367.50 if you went to OCS (read: I guess there’s more incentive to go to command school?)
  • $10,406.25 – $11,756.25 if you went to SCS
  • $8,490 – $10,615 if you went straight to a unit

On top of that, passing your yearly IPPT commitment and saving/investing the IPPT incentives can give you an extra savings of $2,005.51 to $7,230 (if you super fit and get gold every year).

Getting Married in Singapore

An average wedding can cost you as much as $27,610 or more.

Costs of WeddingYet, the cost of getting that legally binding document from Registry of Marriage (ROM) is only $42.

Most of the other costs incurred are from the typical perceived type of Singaporean style wedding that is held at a hotel or expensive wedding venue. By breaking the norm and restricting your guests to your close friends and relatives, you can free up some cash that can be channelled into the renovation of your BTO instead.

Are Resale Flats Always More Expensive Than BTO Flats?

We get the misconception of resale always being more expensive than BTO flats a lot.

Truth is if you do not wish to wait years to get your own home, there are affordable resale flats available and some can be cheaper than your BTO flats.

Wiping Out Your CPF OA to Get Your House

While most Singaporeans will use their CPF to pay for their house, it may not be the wisest choice.

By using your CPF to purchase a flat, you need to take note that if you choose to sell your apartment one day, you

  • need to return CPF the amount you used to pay for your house
  • need to return the accrued interest that can be earned from CPF

If you are able to generate higher stable returns than what the CPF is giving you, using your CPF can be an option.

If not, consider leaving $20,000 in your Ordinary Account to earn that additional 1% interest.

The initial thought of paying for your flat using cash can be painful, but it may benefit you in the long run when you are able to reach the retirement sum set by CPF faster.

You Will Only Have Your Good Health Till 73 Years Old

If you are concern about insufficient Medisave to foot your medical bills in future, getting yourself proper health insurance coverage can help mitigate the risk of incurring unpredictable medical bills.

You can do so by looking at an Integrated Shield plan (IP), which is an optional health insurance plan, collaboratively insured by the CPF board and the private insurer of your choice. It provides additional coverage on top of your basic MediShield Life.

MediShield Life is a basic national health insurance plan that all Singaporeans and PR have.

IP is a great product of Singapore’s two-tier healthcare system where governmental regulations and private insurance companies play their parts collectively to provide affordable universal coverage for its residents.

Escaping the Singapore Rat Race

Escaping the rat race singapore
Source: quickmeme

Lastly, here are some ways you can consider to escape from the Singapore Rat Race.

MethodRiskChance of SuccessPotential PayoffTime RequiredDuration NeededExample
SavingsLow80%LowMinimal10 Years or moreCPF or/and high interest savings account
Passive InvestingModerate33%ModeratePart time/ Full Time3 months or moreDividend stocks, side business
Small Business ExitHigh10%High24/72 to 8 yearsF&B cafe sale
Startup ExitExtremely High1%Extremely High24/73 to 10 yearsFounders at Google

In short, while there seems to be a template for an average Singaporean life, we can still change things on our own!

Grind, don’t stop hustling and don’t quit!

About Ming Feng
A stint in Bloomberg gifted me with a beer belly, which only grew larger when I moved on to become a Professional Trader. Now I turn caffeine into digestible finance-related content.
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