Money matters. S$36,700 to S$4mil in 50 years. Grandma vs grandson.

Two things for us to learn today, both related to money. This is the news article about it in The StraitsTimes. First one is about the attractiveness of property investment, over a very long period, say 50 years? If we had bought a S$36,000 landed property in 1967, how much would it be worth today? Well, it may be worth S$4 million today. Of course, anyone who is able to afford a S$36,000 home in 1967 would be pretty rich but anyone who is able to afford a S$4 million home today? That’s definitely someone within the top few percent in the country. This is why people always say that property investment must start as early as possible. In fact, a friend who’s in the management team in one of Malaysia’s largest developer used to tell me this long time ago. He said, ‘Everyone knows the best time to buy a property was 20 years ago. Not many think of today as the second best time.’ He may be from the developer side but I agree wholeheartedly with his statement. Think about it.

Second thing we learnt is this. The grandmother is suing the grandson because she wanted to ensure she has a share of the house that her grandson was about to sell. Her name was however not in the will which was drawn up by her husband; the grandfather of the grandson. Money is the cause of many issues. Not necessarily problems but the court case has shown us this actual fact which is the main reason for the court case. Imagine if the home value is still the same as 1967…. Financial stress is a huge topic. According to a survey by the Australian Psychological Society, finance is the top reason for stress. Here’s that news article in abc.net.au In order to have less of these family feuds, it is best that everything is done way before some parties leave this world. Arguments / debates should have happened much earlier if necessary. Else, it will become a court case which would usually last many years and whatever family relationship there is will be long gone. Do read the full facts of the case again. The Straits Times article. 

My good friend said that he has never failed to advise couples that it is best not to buy a property jointly unless they are married. While people may not stay married forever, couples who are not married would usually have a higher probability of breaking up and the jointly owned property would become a source of stress. Perhaps I may add that it’s best for married couples to buy properties because if they do, then they have less money for all other useless stuffs. More money in pocket, more things that we WANT to buy. Right?  Lessons? Property prices do go up, even in secondary cities. My parents bought a semi-detached home in 1987 for RM86,000. Well, it is nowhere near RM4 million but it has multiplied by about 6 times, still an awesome number considering that it is 30 years later. Note, it should be in a good area for this kind of appreciation. There are certainly areas in Ipoh which is still not super attractive today. Secondly, please be aware of the legal implications and take steps to safeguard what is ours way earlier than when it’s needed. Just like financial awareness, not knowing enough is a peril. Happy buying a home, jointly. (Just make sure it’s clear…)

written on 10 Nov 2017

Next suggested article: When petrol prices do not go up, will we own a property faster? (Hmmm…)

2 thoughts on “Money matters. S$36,700 to S$4mil in 50 years. Grandma vs grandson.

  1. $36k to $4m in 50 years happened because it was Singapore. From 3rd world to 1st world, the economy has grown astronomically in such a short period of time. The feat (as you rightly pointed out of your home in Ipoh) cannot be repeated elsewhere. The grandma happened to be lucky as her wise demised husband bought that property 50 years ago.

    For investment as long as 50 years, it would be wise to invest in economies with growth potential, a country with political stability, the national will to preserve peace, and with a legal structure to protect individual property. How many of us would think of enriching our grandchildren( whom we may not even see) instead of ourselves. So a young man starting out in life, instead of buying a house to enrich future generations, would prefer to buy a Iphone X now? For his own retirement maybe, definitely not for future generations!

    Today, if one tries the same thing, the result may be different. Singapore is already developed. First world to first world, how much economical growth can there be? Singapore, from the sixties to the nineties experienced double digit economic growth annually. In the teens of 21st century, it merely struggles at 1-3% annually.

    Haha…My two cents…

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s