I was supposed to be in some form of self-imposed hiatus for this blog but some recent articles have got me thinking, and of course writing. Thoughts on my generation’s aspirations and concerns below:
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Why Goh Eng Yeow Is Unrealistically Optimistic
Long-time Straits Times money correspondent, Mr Goh Eng Yeow wrote an article last Sunday. It attempted to encourage youths like us to start saving early so as to allow the 8th wonder of the world – compounded returns to work its magic. This would then give us a good chance to emulate the previous generations and enjoy the material wealth that they currently have.
There’s nothing really wrong with that advice, but realistically, in terms of catching up with the previous generations, the odds really ain’t in our favour. As Mr Goh also noted in his article, there’s a strong likelihood that a 75 year old retired teacher stays in a landed property, his 50 year old counterpart might live in a condominium and the 25 year old NIE trainee would probably be assessing the affordability of a 4-room BTO.
Due to our nation’s high home ownership rates, strong economic growth for the past few decades, and government policy of asset enhancement, it’s increasingly difficult for the 50 year old teacher to own a landed property and the 25 year old teacher to own a condo now, not to mention the landed property. Well, unless their father or grandfather was a teacher too. 😉
As an example, even if I were to increase my saving rates to 70% and continue working for another few decades, it’s still quite unlikely for me to be able to afford a landed property (>$2 million?) like those young civil servants 50 years ago.
Why My Generation Is Better Off
But then, so what? If we exclude housing and car in our comparisons, we are way better off than our forefathers in almost every other area.
Security and nutrition was a real worry 5 decades ago and the average families didn’t have that much disposable income to be able to dine out at restaurants once a week. Holidays and honeymoons were limited to Southeast Asia for most then, not the Europe or Maldives that’s increasingly common these days.
If given a choice, would you be willing to trade the internet for a bigger house? Or forgoing the cell phone for a car? The choice seems obvious to me, even if I am the rare few who is not addicted to technology. (I doubt it would be that difficult not to log in to FB for a week.)
And well, it’s interesting to note that the comparisons between the different generations earlier was also not exactly fair. The average teacher was probably the among the top 10 percentile earners 50 years ago, the top 20 percentile 25 years ago and possibly just above the median these days. If you’re a top banker/broker like Jordan Belfort, the landed property is probably still only a couple of annual paychecks away.
The Obsession with Housing and Car
But it seems like most of my peers doesn’t share my sentiments. During the NTU Ministerial Forum that was held about 2 weeks ago, we found out that 9 out of the 15 interviewed were concerned that they won’t be able to buy a flat and a car. And then PM Lee had to REASSURE young Singaporeans not to “worry that they will have a tougher time than their parents because they were born too late and missed out on opportunities”
Seriously, are they really sure they want to be born a few decades earlier? Ever heard of dentistry back in those “good old days”, guys? Be careful of what you wish for!
And then, don’t you think that it’s a joke that our “best” talents don’t have bigger dreams other than owning a condo and a car. Yeah, it’s not even about climibing to the top of the corporate ladder anymore.
Concerns about the flat is probably reasonable and kudos to the government as Minister Khaw has helped many young couples with the huge BTO launches in the past year. But if they are talking about cars, then there’s really some appalling entitlement mentality lying around. Haven’t they read this article?
In my opinion, these people just want to have their cake and eat it too.
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Those top management in MNCs, Banks or TLCs are millionaires again and again every year!
Most young people worry about the high cost of owning a house is real. Imagine paying $1000 every month for 30 years with a $4000 monthly income. That’s assuming both husband and wife are not degree graduates. Their monthly cpf is not even enough to cover the monthly installment ans they have to come up with extra cash.
Singapore wants to be like new york where 75% of the population takes public transport. We may not even need cars in the future when public transport gets even more convenient. Condos are nothing but a showoff for most people. In my opinion, living in hdb flats is just as comfortable.
Hi SGYI,
Housing is a valid concern and I think the government is doing its fair bit in moderating prices recently. But cars?! Much as I don’t wish to say it, I guess the entitlement mentality is really starting to rear its ugly head.
Hi 15hww,
i agree with your points above . There are so much temptations compared now to then as technology progresses .
People comparing what they wear , what they eat , where are they going to enjoy for their next holiday trip , how much credit card limit they have swap off and etc materialistic wants .
These are all especially true when you came out to work in the society and looking around at your peers , it’s not hard to find such example ( they spend more than they save or even earned )
Regarding opportunities , even if it comes , if one is not prepared enough / or take action ( with major luck invovled ) ..it’s all baseless talk.
One needs to know what is need and want .
Regards
Small-time investor .
Hi Small-time Investor,
Thanks for your comment. Perhaps that’s why voluntary simplicity is gaining so much traction as a movement.