Saturday 27 April 2013

Slave to Condominium?

I have friends who told me that they known of people living a frugal lifestyle in order to support substantial monthly repayment of over $3k in mortgage for $850k of bank loan for private condo. They told me this is very sad as they felt that this is not a healthy way to live life. Also if interest rates were to raise by just 1%, monthly installment will go up further. These friends also told me what if recession comes and both the husband and wife got retrenched. Also a home for staying is not income generating albeit the price can give rise to capital appreciation. My thoughts on such lifestyle choice is to strike a balance. 

The other extreme end would actually be people who can afford to stay in private condominium but choose to stay in HDB. Also such people do not own cars as they proudly proclaim that the 4 wheels are depreciating assets. They prefer to save the money for investment so as to generate even more cash. The respectable financial guru and millionaire Mr Dennis Ng Kah Wan 吴加万 (RIP on 26 Jul 2012 at the age of 43) is one such person. Make no mistake, I used to be deeply influenced by Dennis Ng's philosophy as what he advocates makes perfect sense and makes one wiser financially too. But his death at such a relatively young age makes me wonder whether it makes sense to live so frugally till we miss out on so many of the finer things in life. Such is life which is pebbled with uncertainties and just unpredictable.

First and foremost, it is important to build up a stream of passive income. This will reduce the stress of holding on desperately to one's job to finance a condominium lifestyle. Also, my views are that in time of crisis, one can also rent out rooms in the condo unit for a year or two to tide over any cash strapped situation. Next, buy a condo unit that is reasonably priced and affordable. The Sky Habitat at Bishan is an example of overpriced condo that one should avoid. It is more suitable for the ultra rich folks. Make choices wisely and live life to the fullest without regrets in the future. Enjoy it with our loved ones ya.