My Journey Of Purchasing My First Property [Part 1]

Hi Everyone!

Starting from this post, I will share with you on my experience on purchasing my first property which is a 2 bedroom condo at the north area.

For this part, I will share with you on the preparation work before eyeing on the first property and also the must know stuff before you purchase a property.

1) Are you purchasing for your own stay or for investing. Many may asked why is this question so important, afterall it's still the same. Well yea, after all the property that you purchase, you can either stay or rent it out. But, when it comes to financial terms, you might be doing it wrong.

Why do I say that? Because we need to know that the property that you stay in might not be an asset (which I think it's true). The reason is because the property that you stay in, is most likely a liability because you will need to pay for the possible expenses as well as you will need a place to stay so you can't really sell that property unless you downgrade. In other words, do think of it as paying for your rent to stay.

So, why is there a difference in deciding whether to stay or rent? Not sure if you thought of it this way but personally i will have different criteria for purchasing property for own stay and investing. For me buying for own stay, I will look out for bigger space, psf not so expensive and then considering location and amenities. If I am looking for investing, I will go for location first before the size of the property.

The reason why I think this way is because having a bigger space is crucial for me and my Wife is because we will be expecting to have children in few years time thus we would need bigger space so that it won't be so cramp. So bigger space is very important to me if I am living in it. On the other hand, for investing, location, location and location. Without that you might/will not be able to get a good rental yield.

To sum up for Point one, my criteria for purchasing my property is size, mid to Low price and monthly installment is affordable.

2) New property or resale?

Of course new property will definitely be better as everything is brand new and not much renovation is required, new is good for me:) so we start our property hunting 2 years back( from 2015 till 2017). Initially we wanted to check the property market and what are the layout of the condos (including the various design amenities and etc) to understand the condo facilities and the cost as well.

Due to the lack of fundings we were not able to purchase any property back then even when highpark residence was launch at the very affordable price (so no choice have to skip that)

Up till this year where I have hit my target of 160k and more, which enable me to start looking for property with the intent to purchase. Back in 2016, my Wife and I already looking out for condo at Bukit Batok (le quest) which initially we thought that it will be affordable after all not much amenities around that area and it's not near mrt. Which makes us thought that the psf will be lower like around 1k psf. But we turn out to be wrong because the indicative price for 2 bedroom is around $1158 and when the actual sales it went up to $1200++. So which means a 2 bedroom with the size of 598sf would cost around $800k++.

The size is small and psf is high which isn't what we looking for. Of course we still went through the balloting process and we didn't purchase it. We were devastated during that moment but we didn't give up, instead of looking at the new property, we change our direction to look for resale property, those that Just completed 2, 3 years ago.

We spotted quite a number of units in the north east area like Punggol, Sengkang and etc. But the location is too far from our workplace. So although the price is attractive but the Travelling time really not worth it unless we change job. So our search continues until we found the one with 850 sf with the psf below 1k and is quite near to our workplace. The price is around the same as le quest 2 bedroom but the size is bigger, bigger by 252sf. To me it's totally worth it.

So this is my part one of my sharing, do look out for part two as I will share with you regarding the finances of purchasing a property.

Thank you :)

Short interview with seedly regarding managing financial experience

Hi all,

Recently I have received an email from seedly and conducted an interview with them asking about my experience in managing my own finances. I always believe that sharing experience with others is a good way of learning as the more I share, the more I am aware on my own experiences impacting other people. This, learning what are the improvement that I can made.

Not just be alone, there are other financial bloggers that were invited for this interview by asking them to share their experience, portfolio and advice to those who start out their financial journey.

Below is the link to the write-up and do visit seedly for more financial related articles!

https://blog.seedly.sg/investment-blogger-shares-best-financial-advice-investment-portfolio-jykl-saving-investment-blog/

Thank you and see you next time

Finally Got My New Home

Hi All,

As mentioned on my blog title, I finally bought my new home! Although it nearly clear all my funds but to me it is a big step for me! Like mentioned before, I am unable to purchase HDB, so before anyone asked, I have bought a resale condo (850 square feet).

This is a happy moment for me but also a mountain of debts coming for me as well since I am taking 30 years loan. With this, I have finally settle one of my goal which I kept mentioned in my blog since last year and the goal I had for myself (the green bar on the right), has been clear and will be updating the target bar soon for my portfolio.

So when will I be continuing my financial portfolio? should be early next year and will start my ball rolling again. Finally for a few months later, I can resume my portfolio and go forward to my passive income.

So this post will end here, and I will explain more on my purchase of property process in the next post so that you will have a better idea on what to expect when purchasing a private property.

So see you next time!

It’s not just Amazon’s fault

Retail stocks have been annihilated recently, despite the economy eking out growth. The fundamentals of the retail business look horrible: Sales are stagnating and profitability is getting worse with every passing quarter.

Jeff Bezos and Amazon get most of the credit, but this credit is misplaced. Today, online sales represent only 8.5 percent of total retail sales. Amazon, at $80 billion in sales, accounts only for 1.5 percent of total U.S. retail sales, which at the end of 2016 were around $5.5 trillion. Though it is human nature to look for the simplest explanation, in truth, the confluence of a half-dozen unrelated developments is responsible for weak retail sales.

Our consumption needs and preferences have changed significantly. Ten years ago we spent a pittance on cellphones. Today Apple sells roughly $100 billion worth of i-goods in the U.S., and about two-thirds of those sales are iPhones. Apple’s U.S. market share is about 44 percent, thus the total smart mobile phone market in the U.S. is $150 billion a year. Add spending on smartphone accessories (cases, cables, glass protectors, etc.) and we are probably looking at $200 billion total spending a year on smartphones and accessories.

Ten years ago (before the introduction of the iPhone) smartphone sales were close to zero. Nokia was the king of dumb phones, with sales in the U.S. in 2006 of $4 billion. The total dumb cellphone handset market in the U.S. in 2006 was probably closer to $10 billion.

Consumer income has not changed much since 2006, thus over the last 10 years $190 billion in consumer spending was diverted toward mobile phones.

It gets more interesting. In 2006 a cellphone was a luxury only affordable by adults, but today 7-year-olds have iPhones. Our phone bill per household more than doubled over the last decade. Not to bore you with too many data points, but Verizon’s wireless’s revenue in 2006 was $38 billion. Fast-forward 10 years and it is $89 billion — a $51 billion increase. Verizon’s market share is about 30 percent, thus the total spending increase on wireless services is close to $150 billion.

Between phones and their services, this is $340 billion that will not be spent on T-shirts and shoes.

But we are not done. The combination of mid-single-digit health-care inflation and the proliferation of high-deductible plans has increased consumer direct health-care costs and further chipped away at our discretionary dollars. Health-care spending in the U.S. is $3.3 trillion, and just 3 percent of that figure is almost $100 billion.

Then there are soft, hard-to-quantify factors. Millennials and millennial-want-to-be generations (speaking for myself here) don’t really care about clothes as much as we may have 10 years ago. After all, our high-tech billionaires wear hoodies and flip-flops to work. Lack of fashion sense did not hinder their success, so why should the rest of us care about the dress code?

In the ’90s casual Fridays were a big deal – yippee, we could wear jeans to work! Fast-forward 20 years, and every day is casual. Suits? They are worn to job interviews or to impress old-fashioned clients. Consumer habits have slowly changed, and we now put less value on clothes (and thus spend less money on them) and more value on having the latest iThing.

All this brings us to a hard and sad reality: The U.S. is over-retailed. We simply have too many stores. Americans have four or five times more square footage per capita than other developed countries. This bloated square footage was created for a different consumer, the one who in in the ’90s and ’00s was borrowing money against her house and spending it at her local shopping mall.

Today’s post-Great Recession consumer is deleveraging, paying off her debt, spending money on new necessities such as mobile phones, and paying more for the old ones such as health care.

Yes, Amazon and online sales do matter. Ten years ago only 2.5 percent of retail sales took place online, and today that number is 8.5 percent – about a $300 billion change. Some of these online sales were captured by brick-and-mortar online sales, some by e-commerce giants like Amazon, and some by brands selling directly to consumers.

But as you can see, online sales are just one piece of a very complex retail puzzle. All the aforementioned factors combined explain why, when gasoline prices declined by almost 50 percent (gifting consumers hundreds of dollars of discretionary spending a month), retailers’ profitability and consumer spending did not flinch – those savings were more than absorbed by other expenses.

Understanding that online sales (when we say this we really mean Amazon) are not the only culprit responsible for horrible retail numbers is crucial in the analysis of retail stocks. If you are only solving “who can fight back the best against Amazon?” you are only solving for one variable in a multivariable problem: – Consumers’ habits have changed; the U.S. is over-retailed; and consumer spending is being diverted to different parts of the economy.

As value investors we are naturally attracted to hated sectors. However, we demand a much greater margin of safety from retail stocks, because estimating their future cash flows (and thus fair value) is becoming increasingly difficult. Warren Buffett has said that you want to own a business that can be run by an idiot, because one day it will be. A successful retail business in today’s world cannot be run by by an idiot. It requires Bezos-like qualities: being totally consumer-focused, taking risks, thinking long term.

Reached my goal but something happened!!

Hi everyone,

It's been a while since I post any new post on my blog. The reason is because of my packed schedule (work and family) which drains out all my energy for updating any post in this blog. Certainly I will try my best to squeeze out time for this blog and share my savings and investing experience with my readers.

Recently, I have hitted my savings target of 160k!! But that result doesn't stay Long as I have invested in some small business (a joint venture with my wife and we do really hope that it work out)

So now I am down to around 98% and hopefully I still have enough money for my condo down payment. This is certainly a risky bet for us because with the small venture that we start it might be a lose lose situation whereby our business didn't work out well and we can't go for the the condo that we are working towards on.

Of course we also look at the win win situation where both work well. But we are banging on the situation on at least one of the aspects work well so that the lost won't be that huge.

Just a short update from me and soon I will update more if the condo release more information. Hopefully it is within our budget( finger cross)!!

Beginning of 2nd Quarter 2017!

Hi Everyone,

Today is the beginning of the 2nd quarter in 2017, and I have tabulated my financial report card to check to see what is my current progress.

I will report based my result in percentage (current savings / my financial target *100): 95%

95% of $160,000! This is indeed very near to my expected target! 5 more percent which is around $8,000 more to go!

I have given myself 3 more months to reach this goal as I am expecting to get to view the place that I wanted to buy in around June 2017! (Finally! The time has come for me to see if I can purchase my first property!)

However, in the month of April, I will be heading to Taiwan for a 6 days trip, guess I will be spending more this month (but I do really need this trip to relax myself)

So I left 3 months to hit this target and if I roughly do a calculation (8,000/3 = $2,670), I would need to save $2,670 per month in order to hit that target. I believe I can do it and I hope to achieve even more (maybe 1k or 2k more).

That's it for the review of my report card in the first day of April! See you guys in my next post!

Personal Experience on Saving and Investment Journey (Year 2016)

Hello everyone!

2016 is a pretty calm year for me as I did not switch job, did not do much investment and also not much changes in the financial plan for myself. The only big changes is my marital status, I am married last year!

My saving journey for the year of 2016 was quite stable and I did not really over spend too much although I have to cover the wedding expenses (which cost around 20K). Luckily my wife also tries to help me to ease my finance by chipping in in some of the expenses like our Korea honeymoon and furniture expenses.

With these, I manage to head towards my goal of 160K before I hit 29 years old (which includes CPF). I raise my expectation to 160K not because I want to achieve more (of course the more the better) but I want to have a buffer and able to purchase a bigger house for my family as 150K  can only translate to the home price of 650,000 worth and in the size of the flat it is just 592 square feet (if the price is $1100 psf). 592 square feet is pretty small, although might be okay for small family, but I still prefer to get a bigger size condo for my family and also high floor.

So with the raise of the target, it sets me go towards my goal in achieving that. I think it goes pretty well! Now I am in 91% and more will come and I believe (if my calculation is correct), I am able to hit my target in May (earliest) or June (latest)

One more thing to my reader, just focus on your goal but at the same time, do spend the money on yourself as you need to reward yourself during the process in the saving journey. This way, you then able to motivate yourself to work harder to achieve better results!

Last thing, my blog hit 100K view!

On the way to getting my first property

Hi Everyone!

It's been a while since I have update my blog due to my busy schedule, I did not have time to post any update on my side. Despite my busy schedule, I still make an effort in working towards my goal in getting my first property. I am nearly there as you can see my target bar on the right side of this blog, I manage to hit 91% of my target.

This is definitely a good news for me because 9 more percent before I hit my target of 160k and with this amount I hope I can get a decent two bedroom condo for my family. So with 160k, what is the price I am looking at? I believe some of you might be looking at purchasing your property, so we shall do a simple math.

For a first time purchaser of property, you will need to take into consideration of these cost other than the purchasing price of the unit. You will need to take into consideration of stamp duty, legal fee, commission and etc. (there might be some other fees that you might need to take into consideration).

So for me, as I need to take a rough estimation, for my formula, I took the easy way of calculating 23% of the sales price of the unit. So if I am looking at a unit which cost 700K, 23% of 700K will be around 161K.

Of course, when purchasing a property, you also need to take into consideration of the loans that you can get from the bank or HDB loan if you are purchasing HDB.

For a condo, the size that I am looking for is a 2 bedroom condo, hoping to get a size of 650 square feet so the price per square feet should be around $1050. Certainly, if the PSF is lower, it would be great to purchase 2 bedroom + study (ideal choice for me). Of course, the public transportation should be good as well so that it is accessible for my family.

So with this, I am working towards my goal of achieving my financial goal, and of course do take note that I will not be in 0 dollar after my down payment of my unit. Because you will need to take note of the payment schedule (5% right after you confirm and within 2 months to pay the remaining 15%). So do plan well if you intent to purchase your first property.

Investing Notes - a new platform for centralize information on Shares/Stocks

Hi Everyone!

Recently there is one new investment website called investing note which is a platform whereby people can share their thoughts on shares and also a centralize place to get news and information on stocks like share price and etc. 

I believe this is a good place to go to even if you are new to investment in shares. Of course, you can asked or share your thoughts on other financial issue. 

If you want to try and, do register yourself via this link to investment note. This platform is absolutely FREE. So do feel free to join and we can share our thoughts together in this platform. 

Big Event and Year 2017 Update

Hi Everyone,

It's been a while since I have update this blog, mainly due to preparation of my big day (my wedding) which leads to insufficient free time to update my blog.

2016 has been a fruitful year for me because there are several happy event took place. First is my wedding and ROM, it was a wonderful event with my wife as we prepare really hard for this (day and night preparing all the things that we need during the actual event). The reason why we are so busy is because we did not hire any event planner thus, we have to do all the planning all by ourselves. The reason why we did not hire any event planner is because of cutting the unnecessary cost and also since wedding is a once in a lifetime event, we should be the one prepare for it so that it will be meaningful to us when we look back after 10, 20 or even 80 years later (if we are still alive).

Second event is that I have revive this blog in around mid of 2016 (May 2016), this is because I want to keep track and share by journey with the readers once again. The journey in 2016 is pretty good and I hope I can maintain it in the future.

Third event is that I have created my own financial tracker (web platform), which helps to monitor my savings, it is called  Big Saving Small Planning. Below is the sample screenshot

Last but not least, I have managed to save 100K cash in December 2016 and my total net worth now is around 140K!

For the year 2017, as I have mention quite a number of times last year, my main target it to purchase 2 bedroom condo. Although the current cash and CPF that I have might not be able to pay the down payment, well, I still have few months more to go. Nothing is impossible for me, I shall go for it and clear this target of mine :)

That's all for this update, will update my report card soon!