The recent haze from Sumatra has reminded us of the vulnerability of a city state. The government has done an amazing job running the country, although there were several major policy errors. Overall, on a scale of one to ten, I'd rate our current government a seven for the last fifty years of ruling. One only has to travel around the region to realise what could easily have gone wrong.
But no matter how strong or clean the government is, we are still a vulnerable city state, with no natural food supply or energy resource. While we may be self sufficient in water in future, we rely entirely on friendly countries to supply us with food and energy. What happens if global warming raises sea level by one to two metres? How would that affect our geography? More importantly, how would the changing weather patterns affect the countries that traditionally supply us with food? If they are unable to feed their own citizens, will they then ban exports? I think this is highly probable.
Imagine Singapore suddenly running low on food supply. The first people to leave the country are the "new citizens" who are here for the low tax rates. If they are rich, they can go anywhere. Those with Malaysian roots would have returned to their home countries. There will be food rationing. Home prices will plunge overnight, another lesson to everyone not to have 100% of their portfolio in real estate. Stocks, bonds, unit trusts can be transferred elsewhere and not dependent on where you live. The so-called HDB heartlanders will be the worst affected.
That is why I feel that it is important to be financially free fast and to spread your roots worldwide with houses in at least three different countries. In this haze, my wife and I wanted to leave Singapore to have a long holiday abroad. But because of work we both are rooted here and are forced to forage for N95 masks, buy air purifiers.
Beautiful Sea Side Homes in Singapore, Malaysia and Lake Garda in Italy
On the topic of living overseas, I recently saw some terraces in Sembawang, 99-year leasehold, with sea view and Malaysia's Pasir Gudang opposite. For 5,000 sf of land and 8,000 of GFA, it costs around SGD7.2m. I naturally wondered if it indeed would make more sense to buy a bungalow for SGD1.2m in Iskandar in a gated development. Naturally, I began to think that if I wanted a place to retire, Iskandar would be the better choice. However, on the topic of safety of a gated development, I believe it is an illusion. If robbers were to come in a truck, armed with parangs, would the poorly armed and poorly paid security guards be willing to lay down their lives to protect us? At most, I think they will call the police for help but let the robbers pass. How long will the police take to reach the helpless residents? I'd be surprise if the patrol car turns up in 30 minutes.
In luxury houses in Gold Coast, every home has several security buttons and armed guards on patrol. These private security firms mean business because once my friend accidentally pressed the security button and within 10 minutes, an armed guard turned up. The police turned up 15 minutes later. Needless to say, my friend and I were impressed.
Now if you want a really beautiful home at an affordable price, you need to look at Lake Garda in Italy. Houses with direct lake views cost between EUR500k - 1 million! The climate is Mediterranean. Winters are mild (0 - 8 degrees). Summers are pleasant (15 - 25 degrees Celsius). Of course, up keeping the house will be expensive because you need someone to cut the grass, maintain the plants, the pool. All the cleaning involved. It will take maybe several servants to maintain it. Don't forget the power bill, which could reach EUR500 - 1k per month. Your monthly cost could reach EUR2 - 10k per month. But if are financially free, collecting dividends from your stocks and bonds portfolio, plus rental income from your many homes, this is just a small price to pay for a life that many people can only dream of.
Think about it. In Singapore, you can work all your life for that SGD2.5m property which you will spend your lifetime servicing the mortgage. But if you spend just 1/3 of the price, you can have a better climate, a view to die for, and the higher maintenance can be spread over many years.
See you in Lake Garda someday!
