The email address in "Contact AK: Ads and more" above will vanish from November 2018.


This guy has 800K in his CPF. (AK responds to HWZ Forum.)

A reader pointed me to a thread in HWZ Forum which discussed about my CPF savings being more than $800K. He wanted to clarify certain que...

Past blog posts now load week by week. The old style created a problem for some as the system would load 50 blog posts each time. Hope the new style is better. Search archives in box below.


"E-book" by AK

Second "e-book".

Another free "e-book".

4th free "e-book".

Pageviews since Dec'09

Recent Comments

ASSI's Guest bloggers

They chose financial independence over home ownership.

Wednesday, December 14, 2016

This is somewhat extreme but watch how this Canadian couple chose financial independence over home ownership. 

They are in their 30s and, well, they are retired.

If we qualified for a BTO HDB 5 room flat which costs, maybe, $500,000 today, why do we need to buy a condominium which costs $1.5 million, for example?

If we didn't need so much living space, would a BTO HDB 3 room flat in Choa Chu Kang which costs less than $180,000 be good enough for us?

Now, would you rather have $1 million in income producing assets (e.g. income stocks) or a $1 million home (which doesn't generate income but instead would incur expenses)?

Very often, people over consume when it comes to housing and, not surprisingly, they might also be the people who find financial independence out of reach despite enjoying higher than average earned incomes.

Reader says:
Today I had a conversation with a colleague. She has a relative who is very unhappy at work due to unfair treatment and feels like quitting. 

"However, this relative's family intends to buy a condo while retaining their HDB. 

"The wife of this relative told him that if they go ahead and buy the condo, he MUST not quit. 

"If he buys a condo, he is stuck between a rock and a hard place, and that is not good for mental well-being."

AK says:
"Often, it is peer pressure.

"Keeping up appearances is more than just financially destructive.

"Do you believe me when I say that when I tell people I downsized from a 2 bedroom apartment to a 1 bedroom apartment, most of the time I would get a negative response?

"Recently, when I told my new banker that I bought a small car, he said the same thing as my dad that he would not buy a small car unless he could not afford a bigger one.

"It is peer pressure but it is also how we deal with it."


Reader says:
"maybe i have the wrong perception. 

"i thought AK got the funds from property investment.

"thats why you have the funds to invest in stock market."

AK says:
"You might have missed this:
How did AK create a 6 digits annual passive income?"

It doesn't hurt to have some advantages in life but unless severely disadvantaged, all of us can be financially independent.

Related posts:
1. Housing and the CPF.

2. To rent or to buy?
3. The biggest and most expensive.
Purchasing a 3-Room BTO flat:


STE said...

Hi AK,
Yah! This is very important point ,,,,as matter of " life style inflation " and keeping up status from " peer pressure " , we keep upgrading our housing need,,, 1 room , 2 rooms, 3 rooms , 4 rooms, 5 rooms,5I , EC , Condominium (OCR,RCR,CCR), Detach , Semi-D, Bungalow, Good Class Bungalow, VGC Bungalow,,,,,,never ending ,,,, chasing and chasing ,,,, how to retire ? Of course housing is matter of choice and very personal,, for me ,,, I would rather staying in HDB ,,, and having decent size of portfolio which would give me enough passive income.
,,,, and enjoying my holiday at skiing resort , Interlaken , Switzerland,,,
Cheers !! :-). Also always remember that house is being classify by how many room and size it have ,,, but the more important is " home" ,,,,on family bonding and relationships of family members in that " house " matter ,,, not the size and rooms ,,,

AK71 said...


We are on the same page here. :)

This is possibly why the tiny house movement is gaining momentum in the USA. A smaller mortgage and, in some cases, no mortgage allows people to do a lot more with their limited resources.

sinkie over said...

I have gone the extreme. I am renting a room. I can stop working anytime. A friend of mine who was financially independent in his 40s lives in a 1 room flat.

overseas sinkie

AK71 said...

Hi OS,

An asset light strategy with a focus on cash flow. You've cracked the code. ;)

sinkie over said...

Ak71, thanks lol.

in Singapore, property tax is very low especially for HDB flats. Overseas, housing tax can be a few thousand dollars a year for a regular sized apartment or house. In addition, there are numerous other fees to pay.

If ever I have a property, it will be a tiny house or one of those mickey mouse apartment. Cheap and good.

overseas sinkie

AK71 said...

Hi OS,

Unfortunately, many Singaporeans do not know how fortunate we are and in more ways than one too. :(

I have friends who moved overseas for a while and came back singing praises about Singapore. It is very ironic. Some of them were very unhappy with Singapore before they left. Truly, we do not know we had a good thing until we lose it.

Oh, I downsized to a shoebox apartment. It was a bold move as there were so many voices against it. To be fair, I must say that anything smaller than 400 sq feet would probably be too much of a challenge for me.
How is shoebox apartment living in Singapore?

AK71 said...

We need a home but a condo?

steady said...

"However, this relative's family intends to buy a condo while retaining their HDB."

Maybe the family wants to buy a condo and rent it out as part of their retiremment planning & investment strategy.
Some family are not savvy and good at stock investing hence they opt for property investing.

AK71 said...

Hi steady,

Investing in real estate is actually a lot more daunting than investing in stocks because of the amount of money involved, the relatively less liquid market and also the concentration risk.

Some might say they would like to invest in properties because they think it is easier to understand and even execute. I would say it isn't. -.-"

AK71 said...

Also, see:
Buy that 2nd residential property and pay the ABSD.

AK71 said...

Ben said...
I am a simple peasant with no apartment and car. I am content to have the passive income to last the rest of my life.

AK said...
Many people are trapped by consumerism.

If our homes do not generate income, they are consumption items.

If our cars do not generate income, they are consumption items.

A paradigm shift is needed for those trapped in a spiral of consumption in order to achieve financial freedom.

This might be viewed as extreme by many but it is doable. :)

Ben said...

Hi AK 71,

I totally agree with you that such approach will be entirely up to the mindset mentality. It depends on the willingness of one to be able to release the mental blockage which hinders him/her from pursuing the desired approach.

I used to have a lot of concerns on how to go about sustaining a simple lifestyle with the passive income. This is made easier by willing to be flexible in the choices we are presented at the time of point.

I will use myself as an example. I rent instead of buy property. I believe that most of the people will view renting as a waste of money. I will not be able to own the property eventually as the rent goes towards the landlord rather than the homeowner who takes loan with the HDB or the banks. In time to come, the property will eventually be in the name of the individual after making good of the loans with HDB or the banks.

I used to have such opinion. I come to the realisation that one still need to pay for the recurring housing related expenses such as property taxes, conservancy charges, condominium maintenance fees etc. Eventually, I give up the previous decision of purchasing the property upright through HDB/bank loan.

I use the passive income from the shares to pay for the rent. In fact, the rent is free of charge i.e from my share dividend. The cash cow from the shares pay for the monthly rent forever. The advantage of renting is the mobility to relocate to other place if the need arises.

I work because I want to and not because I have to. If my current or future job requires me to relocate to other countries, I will have no qualm of relocation if I see it deem fit to do so. This strategy gives me the flexibility of choices.


AK71 said...

Hi Ben,

Many people would not feel secure unless they own their homes.

You have achieved financial nirvana.

Your mind is enjoying a state of ZEN and it is something precious. :)

AK71 said...

Having said that, it could make more sense to own our homes if the numbers are right:


AK71 said...

Jackson Yang says...

Im also grateful that hdb price in singapore are at least somewhere "reachable" within our life, unlike taiwan (to be specific is actually taipei), hong kong and even big cities in japan.

I just shared with one of my friend that if one not enough money to buy a private condo (she is pr and single), just rent! At least no need to worry about heavy mortgage loans during our old age.

AK71 said...

Reader says...
Your latest FB post makes me want to rent and not buy lol

AK says...
I am sure there are many people who feel that way too. ;p
However, in Singapore, if we qualify for subsidised HDB flats, we should buy one.
No doubt about it. :)

AK71 said...

Winshern Ho says...
We should choose a small roof over our heads and focus for financial independence

Monthly Popular Posts

Bloggy Award