What gives? Instant gratification or future cosy retirement?

[cougar]

Compare owning a car say $60,000 for 10 years, you pay $700 monthly for 10 years, buy another car after that another 10 years and the whole cycle goes again, most likely for the next 30years of your useful working life, this car thing is a norm for some. So for next 30 years, you be paying $700 x 12 mths x 30 years = $252,000 for that period of time. Excluding maintenance, wear & tear replacements, road tax etc.

 

For a house, loan $300,000 for 30 years, monthly mortgage $1,000 for 30 years, but balance lease 60 years, still can pass to children. For the next 30years cash payout is $1,000 x 12mths x 30 years = $360,000.

 

So technically to have these 2 luxury items in Singapore, you need to fork out $1,700 monthly on top of daily expenses to maintain. Of course the house part may not feel the pinch because if both spouse working, $500 cpf each can easily neglect the pinch of the house mortgage. But both must maintain jobs for 30 years and constant if not increasing salary ranges.

 

So it does not make economic sense for most families to acquire a car and forgo a tidy savings of $250k excluding compound interests for their retirement, and end up CPF already wiped out by housing loans. And yet, cars are selling like hotcakes in the showroom, and COE prices does not seems to be a deterrence.

 

And now US so call diverted their default payments, and Asian markets are happy jumping beans again, dam, looks like COE is not going to come down for my bike's renewal. NB.

 

Btw material pursuits in the developed world has neglect poverty in the 3rd world, imbalance in the distribution of wealth, but who cares, just make money.

 

PS, the calculations are just for illustration only, base on best estimates, but close enough to be real-life case study.

Edited August 1, 2011 by cougar

[Icomeforyou]

Good point, initially i was also considering upgrading to car, but car expenses will really affect cash flow liquidity in the immediate next 2-5 years. I was looking at 2nd hand cars btw.

 

Doing the math, if I had purchased a car for 5 years loan, assuming loan is $500/mth, petrol $350 (Mixed with M'sia), season parking and monthly savings for road tax, installment and insurance, it would cost on average a monthly expenditure of $1200.

 

Now even if one earns $4000 a month, and takes home $3200, the car alone would drain a third of all expenses. If single and without family, maybe still can cope, but if with family, tough.

 

Compare that to putting aside $1000/mth for 10 years savings + investment, $12000/year over 10 years + 3-5% interest... For a tidy sum of $126,000 after 10 years, in cash. More than enough to downpayment your future home easily.

 

It's always a choice between short term and long term. For me, a home will always be more important than a car.

[Jehuty]

I see a car as a convenience in terms of purpose and applies only to families and not singles.

 

They may give excuses like if got children, leceh to go on public, it is but does it justify the cost of a car?

 

Malaysia, definately worth it to have a car, long distances,nuff said. Singapore, no.

[bukitmerah]

Good point, initially i was also considering upgrading to car, but car expenses will really affect cash flow liquidity in the immediate next 2-5 years. I was looking at 2nd hand cars btw.

 

Doing the math, if I had purchased a car for 5 years loan, assuming loan is $500/mth, petrol $350 (Mixed with M'sia), season parking and monthly savings for road tax, installment and insurance, it would cost on average a monthly expenditure of $1200.

 

Now even if one earns $4000 a month, and takes home $3200, the car alone would drain a third of all expenses. If single and without family, maybe still can cope, but if with family, tough.

 

Compare that to putting aside $1000/mth for 10 years savings + investment, $12000/year over 10 years + 3-5% interest... For a tidy sum of $126,000 after 10 years, in cash. More than enough to downpayment your future home easily.

 

It's always a choice between short term and long term. For me, a home will always be more important than a car.

 

"Old-school" style of "delaying gratification" DISCIPLINE = "If you have to take a loan to buy it, you probably cannot afford it whatever it is" ( with the exception of real estate / property / business ).

 

even in the present or future world, "Cash is King" ( with the exception of Gold / Silver / Oil ( Black Gold ) of course )

 

it is NOT even about "still far away" retirement, it can be about your "very near" present. Unless you have a "iron rice bowl" ( if you are the lucky few that belongs to that category, you are exempted from such discipline )

 

look around you, see a lot of middle-aged PMETs that are unemployed & have to take lower income jobs ? ( they even have to go for "upgrading" courses to take up a job with lower pay! btw, that is already a "lucky" "upgrade" )

[ChaoPuzzy1968]

safe safe safe kenna piang by car you die ...wife, saving and insurance monie get screw by other man

 

loan loan loan with no insurance kenna piang by car ...... wife kenna service by loan shark......

 

ftw

[Wormwood]

Whether it makes economic sense depends on how much gratification one actually gets out of owning a car.

 

The value of a car is greater to people who don't have a bike license. Cars and taxis are the only obvious ways they can save time and avoid the unpleasantness of buses and trains. If getting a car can save more than an hour each day (let's say about 30 hours a month) and enable a person to avoid the rush hour squeeze, it doesn't seem like such an extravagance. 30 hours a month (especially when you consider that they'll probably feel like **** in that time) is worth more than say $1,000 to many people.

 

Since we have bikes, the inherent value of a car is lower to us. We can get around fast, and on rainy days or drunken nights it's still cheaper for us to take cabs than buy a car. So it doesn't make as much sense for us to pay $100,000 for a vehicle as it does to someone who doesn't ride.

[cougar]

woodworm, good analogy . does it mean we bikers if we survive through retirement, we could end up richer than that ah beng owning 3 sports cars burning his pocket during his life time.

ok, ok, limit this comparison to just 2 individuals with same income but choose car and bike respectively, all other finances being constant.

[Throttle]

Compare owning a car say $60,000 for 10 years, you pay $700 monthly for 10 years, buy another car after that another 10 years and the whole cycle goes again, most likely for the next 30years of your useful working life, this car thing is a norm for some. So for next 30 years, you be paying $700 x 12 mths x 30 years = $252,000 for that period of time. Excluding maintenance, wear & tear replacements, road tax etc.

 

For a house, loan $300,000 for 30 years, monthly mortgage $1,000 for 30 years, but balance lease 60 years, still can pass to children. For the next 30years cash payout is $1,000 x 12mths x 30 years = $360,000.

 

So technically to have these 2 luxury items in Singapore, you need to fork out $1,700 monthly on top of daily expenses to maintain. Of course the house part may not feel the pinch because if both spouse working, $500 cpf each can easily neglect the pinch of the house mortgage. But both must maintain jobs for 30 years and constant if not increasing salary ranges.

 

So it does not make economic sense for most families to acquire a car and forgo a tidy savings of $250k excluding compound interests for their retirement, and end up CPF already wiped out by housing loans. And yet, cars are selling like hotcakes in the showroom, and COE prices does not seems to be a deterrence.

 

And now US so call diverted their default payments, and Asian markets are happy jumping beans again, dam, looks like COE is not going to come down for my bike's renewal. NB.

 

Btw material pursuits in the developed world has neglect poverty in the 3rd world, imbalance in the distribution of wealth, but who cares, just make money.

 

PS, the calculations are just for illustration only, base on best estimates, but close enough to be real-life case study.

 

the calculations are very ball park but totally unrealistic becos you simply cannot exclude the cost of usage/maintenance which can be as much as the cost of the item itself.

 

There is absolutely no need to slap one's face swollen in a bid to look fat, if you know what i mean.

[Throttle]

woodworm, good analogy . does it mean we bikers if we survive through retirement, we could end up richer than that ah beng owning 3 sports cars burning his pocket during his life time.

ok, ok, limit this comparison to just 2 individuals with same income but choose car and bike respectively, all other finances being constant.

 

if base on elementary maths and all else equals situation. YES

[cougar]

the calculations are very ball park but totally unrealistic becos you simply cannot exclude the cost of usage/maintenance which can be as much as the cost of the item itself.

 

There is absolutely no need to slap one's face swollen in a bid to look fat, if you know what i mean.

Yes, just the loan figures alone it already makes car ownership a extravagance luxury, yet people are flocking to the banks to slap themselves swollen doing it!

 

i just ranting that the coe for bikes fall victim to this ridiculous herd mentality, dam my trusty old bikes coe is due next year. i need a coe fluke.

[Throttle]

problem with a lot of Singaporeans is that , we like to show status.

bigger problem is that, those CMI ones also want to show.

in the end , who's butt gets whipped?

[B20]

problem with a lot of Singaporeans is that , we like to show status.

bigger problem is that, those CMI ones also want to show.

in the end , who's butt gets whipped?

 

should put it as "those CMI ones reluctant to admit that they are the CMI ones"...

in the end, their butt gets whipped.

[Throttle]

"Old-school" style of "delaying gratification" DISCIPLINE = "If you have to take a loan to buy it, you probably cannot afford it whatever it is" ( with the exception of real estate / property / business ).

 

even in the present or future world, "Cash is King" ( with the exception of Gold / Silver / Oil ( Black Gold ) of course )

 

it is NOT even about "still far away" retirement, it can be about your "very near" present. Unless you have a "iron rice bowl" ( if you are the lucky few that belongs to that category, you are exempted from such discipline )

 

look around you, see a lot of middle-aged PMETs that are unemployed & have to take lower income jobs ? ( they even have to go for "upgrading" courses to take up a job with lower pay! btw, that is already a "lucky" "upgrade" )

 

I feel and live by this rule.

so i take no loans on all my bikes and cars.

 

and to add on, in todays world there is no such thing as iron rice bowl.

[Jehuty]

If got enough money, want to show status even when you're not that rich, I rather ride, something in the name of BMWs or Ducatis etc. The cost of those bikes are still cheaper than a junk 2nd hand car.

[bukitmerah]

Yes, just the loan figures alone it already makes car ownership a extravagance luxury, yet people are flocking to the banks to slap themselves swollen doing it!

 

i just ranting that the coe for bikes fall victim to this ridiculous herd mentality, dam my trusty old bikes coe is due next year. i need a coe fluke.

 

i hate to be "cocky" but in my most humble opinion..."HERD MENTALITY" is the cause of something like 95% of the problems we have in Singapore today.

 

if your COE is due next year, ( probably ) like me you will recall how we used to renew our COEs for $1 or

[bukitmerah]

I feel and live by this rule.

so i take no loans on all my bikes and cars.

 

and to add on, in todays world there is no such thing as iron rice bowl.

 

1) THUMBS UP ! on your financial discipline.

 

2) really??? so why does so many people spend as if they all have many iron rice bowls ??? Oh, they believe in the whatever-"2012-end-of-the-world"-something-whatever-who-cares? ah ? Hey, i thought Singaporeans are a well-educated bunch, still believing in such stuff ? ( just a joke )

[ChaoPuzzy1968]

[Jehuty]

People give themselves excuses that they need a car, even a bike is a convenience. The only part where you really need a personal vehicle is when part of your ricebowl involves using that vehicle like delivery etc.

[Jehuty]

1) THUMBS UP ! on your financial discipline.

 

2) really??? so why does so many people spend as if they all have many iron rice bowls ??? Oh, they believe in the whatever-"2012-end-of-the-world"-something-whatever-who-cares? ah ? Hey, i thought Singaporeans are a well-educated bunch, still believing in such stuff ? ( just a joke )

 

No matter how educated you are, greedy is greedy, I think everyone knows this. I admit to it but not many can help it.

[bukitmerah]

 

THANKS!

[Forgestryker]

I feel and live by this rule.

so i take no loans on all my bikes and cars.

 

and to add on, in todays world there is no such thing as iron rice bowl.

 

wow..how do you take no loans on a car??

you must be really well to do bro...

[Throttle]

wow..how do you take no loans on a car??

you must be really well to do bro...

 

Everything is relative, dude

[papabread79]

wow..how do you take no loans on a car??

you must be really well to do bro...

He is. And he makes it known here to others.

 

Others who are better off in here don't.

[Throttle]

He is. And he makes it known here to others.

 

Others who are better off in here don't.

 

 

Great under-the-belt swipe, dude. thanks.

 

You should really work on that inferiority complex of yours.

and try to stop tagging behind me, ok?

 

cheerios

Edited August 3, 2011 by Throttle

[papabread79]

Great under-the-belt swipe, dude. thanks.

 

You should really work on that inferiority complex of yours.

and try to stop tagging behind me, ok?

 

cheerios

Ahh.. now u feel something...