Should I become a permanent resident (PR)?

I am publishing this in the hope that there are PRs amongst my readers who are willing to share their thoughts on the matter.

From reader:

Hi AK

 

I have been reading your blog for half a year now. It has been my great source of knowledge! Thank you for wonderful blog!

 

I have some questions on whether I should apply for PR. Here is my background. I have been in Singapore for 10 years. Started off as student at secondary 3 then JC and university. I have been working for nearly 2 years now. Still holding an EP. My friends and colleagues often ask me if I would apply for PR. My answer to them so far is no. The main reasons are I still do not see myself living here permanently. The high costs of house and car are the main factors as well. Nonetheless, I may end up living here if there is great opportunity ahead, plus I have pretty much adapted to life here.

Also, the benefits of PR, of course, is CPF contribution from employer but I also do not like the idea of monthly contribution while I am still uncertain of living here or not. I know that I can take all CPF back if, in the end, I discard my PR but again, there is no second chance if I drop my PR. Short-term wise, I see myself here in the next few years. Should I then apply for PR?

 

If it does not trouble you so much, I'd like to seek your advice or opinion on this matter. Thank you for reading this.

Regards,
C
 

Share a thoughtful moment?

My reply:

Hi C,

I cannot give you any advice but I can share with you how I might think if I were in your shoes.

Being a PR has quite a few advantages compared to being an EP holder, as you have rightly pointed out. I would simply ask myself whether those advantages are important and attractive enough for me to want to be a PR. If they are, then, I should apply to be a PR and pray that I am successful.

There is a big element of subjectivity in making this decision, of course. So, only you know if this is something you want to do.

Best wishes,
AK

Please leave your thoughts in the comments section for C. Thank you.

A way to be $48,000 to $60,000 richer in a decade!

My blog post on what I had for lunch yesterday attracted an interesting response from a reader who is in his 20s and who is new to my blog.

He said that his breakfast is typically bought from Subway or McDonald's near his office. These would cost him about $5.00 to $6.00 every morning. His lunch would cost as much or, usually, more. Any amount between $5.00 to $10.00 for lunch is quite normal.



Then, if he should stay in the office to put in extra hours in the evenings, he would spend another $10.00 on dinner which usually includes a cup of gourmet coffee from Coffee Bean. I was surprised it wasn't Starbucks but that is not the point.


Anyway, typically, he would spend some $400 to $500 on meals at work every month. Over the course of a year, it would amount to $4,800 to $6,000. That is quite a bit of money for someone who is making under $3,000 a month.

Anyway, the long and short of it is that the reader is thinking of making his own breakfast and lunch for work now, winning a stamp of approval from AK!

If he is good at this, he is going to be $48,000 to $60,000 richer over the course of a decade. 

I cannot see how that is not a tidy sum of money to have and this is assuming he leaves the money in a biscuit tin (or mooncake tin) at home too. No interest income and no investment income.


Related posts:
1. A quick and economical lunch.
2. Afternoon tea break with AK.
3. Economical gourmet sandwich.
4. What's for lunch?
5. Seven money saving habits.

A quick and economical lunch. Healthier?

What did I have for breakfast? Did you guess oatmeal? You are right!

What did I have for lunch? Did you guess instant noodles? You are right, again!

OK, before anyone starts scolding me, I love instant noodles but I have been cutting down. The last time I had this was in June. Not too bad lah.

It is the same brand of instant noodles. It is the type that comes in a bowl and all I have to do is to add hot water after pouring in the seasoning and dried vegetables that come with it.

The last few times I had this, I added only half a packet of seasoning. This time, I decided not to add any at all.

I know that the packet of seasoning is just lots of MSG and I know it is bad for me. Actually, I have become less tolerant of MSG as I grow older. I really should watch it.

Anyway, I also felt like having noodles without the soup. So, I poured in 50% less hot water than usual. The end result? Not bad.

Price? $1.10.

Warm, moist, springy and still tastes quite good without any seasoning. Well, the noodles are naturally fragrant and the vegetables had some flavour.

OK, maybe, it's more acceptable to older people.
Seriously, I have found that in recent years, I like rather bland food.

So, don't take my word for it but you might want to try it. If it is too bland for you, you could always add the seasoning later.

What? You threw the packet of seasoning away already? Oops.

Related post:
Think we can't save $400,000?

In my 40s, married with kids? What would AK do?

To do better, one way is to invest for higher returns but at the same time we want to have some measure of stability. This is quite natural.

As we age and take on more responsibilities, including getting married and having children, we might start looking at things differently. 

Quite suddenly, we might not feel so carefree. 

Of course, we want to provide our loved ones with a better life too.





We fear that one wrong move on our part, we might jeopardise not only our future but the futures of those who are dependent on us. Again, it is quite natural to feel this way.

For people who have fallen along the way, it could be really difficult to get back up to continue the journey. 

I know because it happened to me before too but such is life and we simply have to soldier on. 

We only lose when we stop trying.

My way might not be your way.
However, we will find our cup of tea.

So, to someone in his 40s, married with young kids, who lost lots of money in his investments before and who is trying to find his way now, it could be quite a stressful process. 

Add multiple leveraged investment properties, some of them co-investments, and it could create a feeling of being stretched too thin, like spreading a little butter over too much bread, as Bilbo Baggins would say.

Here, I share a recent reply to a reader:

Actually, it is really a coincidence that you should be writing to me at this juncture because I have been invited to give a talk for a "recovery group" next week. 

It is for a group of people who lost a lot of money in stocks and are feeling somewhat demoralised...

... when bad things happen to anyone, there has to be closure. It is like a wound that needs to heal but it should heal properly. 

To have proper closure, we have to examine what went wrong and if there is some way we can grow to accept it and grow stronger in the process. 

Not an easy process which is why many who fell never recover.

You might remember that I have a blog post on how building an income portfolio is like building a house. 

So, if a bad thing should happen and the house was destroyed, what do we do? Go without a house? No, of course not. 

We build another house. This time, try to make sure that the foundation is stronger. Maybe, even install some earthquake proof technology. ;)

Bad things happen sometimes.

So, I would say that we want to take care of the basics first:

1. Have an emergency fund ready, enough to cover fixed expenses for 12 to 24 months. In your case, this should include the many mortgage payments for your many properties as well. 

2. Make sure you have necessary insurance in place. H&S, Critical Illnesses, Disability and Term Life. Term Life should cover the remaining mortgages of your properties and your dependents' needs till they graduate from tertiary education. Ask your insurance agent about reducing Term policies for the mortgages. Yes, they exist.





3. Plan for retirement and that is where your investment properties possibly fit in. If you feel that you are over-exposed and are uncomfortable, reduce your exposure. Losing sleep over anything is a bad idea.

4. I like the CPF-SA and I have maxed it out years ago. I do not know of any other instrument that will give me a risk free return of 4 to 5% per annum. As a tool for retirement funding, this is as easy as it gets.

5. Any excess money then can go into a war chest to wait for opportunities.




Like with anything, start from the ground up. 

Financial planning and investing for a better future? 

Much of it is about staying grounded and having a peace of mind. :)

I hope that this blog post has provided food for thought and if you should have opinions which you would like to share, please feel free to do so in the comments section.

Related posts:
1. Building an income portfolio is like building a house.
2. The best insurance to have in life.
3. Achieving financial freedom is a family affair.
4. How to upsize $100K to $225K in 20 years?
5. Thoughts on financial security for Singaporeans.