Ramblings
Haiti having disaster. 100,000 estimated dead, plus about 3 million homeless, which is like 1/3 of the population.
Generous Singapore goverment donated USD 50,000 to the relief effort. After conversion, it is only about SGD 70,000. The cost of a Toyota Altis. 70 iPhone 3GS. 5000 bags of 10kg rice. Barely enough to feed the injured one meal.
Frankly, that sum is so meagre that I doubt it will even repair one house, much less do much help. Yes, I do not have that kind of dough but still, if we can donate 1 day of ERP collection, that should amount much more than that amount, no?
If I were the goverment, I would rather not donate a single cent and just send a small medical team there for the relief effort. Wait a minute, may that cost more...
On the other hand, the goverment is saying that HDB is affordable. A family with household income of about 3,000 per month can spend less than 30% of their household income on the house which can cost up to 250,000. A family with 4,000 can buy a house worth about 333,000. Pretty decent on the face value. Now here are some things not mentioned.
- There is a 20% deposit required for buying the flat. A flat worth 250,000 will need a 50,000 downpayment.
- On average, a family saves about 15% of their income. That means, a family with a 3,000 income will save on average about 600.
- On average about 23% of your gross income goes to your CPF Ordinary account. This means that if you earn 3,000 income, about 690.
- You need to have about 120,000 by the age of 65 in your CPF account.
- The loan term is 30 years, which is the maximum term.
- The interest comes up to about 40% of the total amount.
Therefore, looking at the above:
- if you spend about 30% of your income, it means you will spend about 900 per month on the repayment ONLY. With CPF contribution to only 690, it means you will have to cough up about 210 cash for the repayment.
- To save up for 50,000 (basing on simple interest of 0.8%), you will need to save up for about 80 months, which translate to about 6.5 years.
- Back calculating from the retirement age of 65, you need to purchase your flat LATEST by the age of 30. HDB calculates it base on a maximum age of 60 years old.
- You will have to have a household income of 3,000 by the age of 23.5 years old. Average guy graduates with a degree at the age of 24. A degree in engineering has a starting pay of about 2,600 to 2,800. Science grads are worse off at about 2,400 to 2,600.
- This excludes property tax, TV/radio license, conservatory charges, water and electrical bills which are compulsory. This average to about 80 to 100 per month.
- Take home pay for 3,000 is about 2,400. Income tax per year is about 400, or about 30 per month.
- 2,400 - 210 (extra for house, read above) = 2190. 2190 - 100 - 30 = 2060.
Actually, the amount if pretty sufficient for one pax. But divide this by 2 for 2 adults. This leaves about 1,000 per adult. Averaging per meal to be about $5, 30 days x 3 meals x $5 = 450. Transportation to and from work is about $4 per day. This means 4 x 23 (average number of working days) = 92. That leaves us, 1,030 - 450 - 92 = 488.
Handphone bills, $40; Presents (weddings/birthdays/someone dying/etc.) is about 50 per month. That leaves us with 488 - 90 = 398.
So we have to squeeze 398 per month for insurance, taxi rides, entertainment, clothes, bags, shoes, etc... How to afford a kid??
Government needs a better strategy...
Generous Singapore goverment donated USD 50,000 to the relief effort. After conversion, it is only about SGD 70,000. The cost of a Toyota Altis. 70 iPhone 3GS. 5000 bags of 10kg rice. Barely enough to feed the injured one meal.
Frankly, that sum is so meagre that I doubt it will even repair one house, much less do much help. Yes, I do not have that kind of dough but still, if we can donate 1 day of ERP collection, that should amount much more than that amount, no?
If I were the goverment, I would rather not donate a single cent and just send a small medical team there for the relief effort. Wait a minute, may that cost more...
On the other hand, the goverment is saying that HDB is affordable. A family with household income of about 3,000 per month can spend less than 30% of their household income on the house which can cost up to 250,000. A family with 4,000 can buy a house worth about 333,000. Pretty decent on the face value. Now here are some things not mentioned.
- There is a 20% deposit required for buying the flat. A flat worth 250,000 will need a 50,000 downpayment.
- On average, a family saves about 15% of their income. That means, a family with a 3,000 income will save on average about 600.
- On average about 23% of your gross income goes to your CPF Ordinary account. This means that if you earn 3,000 income, about 690.
- You need to have about 120,000 by the age of 65 in your CPF account.
- The loan term is 30 years, which is the maximum term.
- The interest comes up to about 40% of the total amount.
Therefore, looking at the above:
- if you spend about 30% of your income, it means you will spend about 900 per month on the repayment ONLY. With CPF contribution to only 690, it means you will have to cough up about 210 cash for the repayment.
- To save up for 50,000 (basing on simple interest of 0.8%), you will need to save up for about 80 months, which translate to about 6.5 years.
- Back calculating from the retirement age of 65, you need to purchase your flat LATEST by the age of 30. HDB calculates it base on a maximum age of 60 years old.
- You will have to have a household income of 3,000 by the age of 23.5 years old. Average guy graduates with a degree at the age of 24. A degree in engineering has a starting pay of about 2,600 to 2,800. Science grads are worse off at about 2,400 to 2,600.
- This excludes property tax, TV/radio license, conservatory charges, water and electrical bills which are compulsory. This average to about 80 to 100 per month.
- Take home pay for 3,000 is about 2,400. Income tax per year is about 400, or about 30 per month.
- 2,400 - 210 (extra for house, read above) = 2190. 2190 - 100 - 30 = 2060.
Actually, the amount if pretty sufficient for one pax. But divide this by 2 for 2 adults. This leaves about 1,000 per adult. Averaging per meal to be about $5, 30 days x 3 meals x $5 = 450. Transportation to and from work is about $4 per day. This means 4 x 23 (average number of working days) = 92. That leaves us, 1,030 - 450 - 92 = 488.
Handphone bills, $40; Presents (weddings/birthdays/someone dying/etc.) is about 50 per month. That leaves us with 488 - 90 = 398.
So we have to squeeze 398 per month for insurance, taxi rides, entertainment, clothes, bags, shoes, etc... How to afford a kid??
Government needs a better strategy...