I believe that a wealthy person should have diversified portfolio of stocks, bonds, bond funds and balanced funds, also a real estate portfolio that spans worldwide.
Here are the reasons why you cannot put everything into one basket in Singapore:
1. Global warming. Food and water may be scarce in future. If Singapore's GDP repeatedly declines because most of our expats flee, and we have food rationing, I'm sure our property prices will drop a lot. Banks will not be able to recover the mortgages. You CANNOT stop loss a property. It takes 3 weeks to 3 years to sell a property.
2. War. The world goes through major wars every 50 years. For whatever reason, we could have one soon.... How do you sell your properties in Singapore after the first missile drops. Look at Tripoli, Bagdad. Do the inhabitants have time to sell their portfolio when the political situation suddenly deteriorates?
3. Even if you own properties in Australia and the UK, there is no guarantee that you have to right to reside in these countries. But I believe long after Singapore is gone, or if we go through very turbulent times, the UK, Australia, the US will still be around. Even China and India will still be around long after Singapore disappears into history.
Here are the reasons why financial investments can complement you:
1. Take a good balanced fund that pays 5% yield and leverage 1.5x. At 1.5% borrowing cost, you can achieve 12% IRR already, excluding capital gains.
2. You can't achieve this with the current rental market in Singapore.... The yield compression worldwide and taxes on rental will make it difficult or you to achieve any kind of decent cashflow.
3. Financial assets have no borders. You can transfer you unit trusts and bonds from a nominee based in Singapore to another nominee in Zurich. If your country is unstable, you can migrate easily without the baggages of your properties.
4. You can invest in financial assets and still have the freedom to pay off your car or credit card loans because borrowing against financial assets is secured lending which usually has a lower interest.
Here are the reasons why you cannot put everything into one basket in Singapore:
1. Global warming. Food and water may be scarce in future. If Singapore's GDP repeatedly declines because most of our expats flee, and we have food rationing, I'm sure our property prices will drop a lot. Banks will not be able to recover the mortgages. You CANNOT stop loss a property. It takes 3 weeks to 3 years to sell a property.
2. War. The world goes through major wars every 50 years. For whatever reason, we could have one soon.... How do you sell your properties in Singapore after the first missile drops. Look at Tripoli, Bagdad. Do the inhabitants have time to sell their portfolio when the political situation suddenly deteriorates?
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| Tripoli at War Today |
3. Even if you own properties in Australia and the UK, there is no guarantee that you have to right to reside in these countries. But I believe long after Singapore is gone, or if we go through very turbulent times, the UK, Australia, the US will still be around. Even China and India will still be around long after Singapore disappears into history.
Here are the reasons why financial investments can complement you:
1. Take a good balanced fund that pays 5% yield and leverage 1.5x. At 1.5% borrowing cost, you can achieve 12% IRR already, excluding capital gains.
2. You can't achieve this with the current rental market in Singapore.... The yield compression worldwide and taxes on rental will make it difficult or you to achieve any kind of decent cashflow.
3. Financial assets have no borders. You can transfer you unit trusts and bonds from a nominee based in Singapore to another nominee in Zurich. If your country is unstable, you can migrate easily without the baggages of your properties.
4. You can invest in financial assets and still have the freedom to pay off your car or credit card loans because borrowing against financial assets is secured lending which usually has a lower interest.
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