What makes an undervalued and thoughtful gift?

UPDATE:
I remember some people of rather limited imagination calling me a cheapskate after reading my blog post. Well, at least I did not "re-gift".

"HAPPY HOLIDAYS AND MAY ALL YOUR PROBLEMS BECOME SOMEONE ELSE'S."
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I know someone who orders canned green tea at coffee shops all the time. He says it is a healthier option compared to carbonated soft drinks. 

Well, I told him that canned green tea has lots of sugar too and that they are not necessarily much healthier alternatives. (AK can be very sensible about food too, you know.)

Anyway, for his birthday, I gave him a box of green tea. I told him that he just needs to bring a tea bag a day to work and he would be able to save $30 a month from not ordering canned green tea during lunch! His office has a hot water dispenser, I am sure.

Definitely a healthier alternative with lots of anti-oxidants and no sugar too!

When I told a friend what I did, he said I was a cheapskate! 

Oh, dear. Why did he say that? Actually, did you think the same way? 

Now, now, you can be honest with AK. I promise to listen.

Anyway, I told him it was a $80 gift! That puzzled my friend. He wondered if I bought some atas green tea from Japan. 

No, of course I didn't buy expensive green tea from Japan.

Then, what did I do? I explained:

Well, that box of green tea (which is a product of Japan, by the way) costs me a bit more than $5.00 and has enough tea bags to last about 2.5 months. 

So, the recipient of the gift is going to save $75.00 in those 2.5 months assuming that he pays $1.50 for a can of green tea during his lunch breaks (i.e. 50 days x $1.50).

Genmaicha.

In fact, if the habit grows on him, he would continue to save money during his lunch breaks forever.

The gift might not be costly but it is worth a lot more than it looks. 

It is an undervalued and thoughtful gift from AK. 

Remember the difference between price and value?

Well, I hope my friend appreciates it.

Related posts:
1. The price of convenience.
2. Genmaicha.

Do I need a bigger home and what to do if I do?

Housing is a topic that is close to our hearts. It would not be wrong to say that most people tend to be somewhat emotional when talking about our homes. After all, home is where the heart is.

So, being objective which means not being emotional about our homes when it comes to viewing it simply as an asset or liability is not easy for many people. 

Fortunately, for some reason, AK is quite emotionless when it comes to his home or so his friends have observed.

Here, we have an example of AK dishing out some objectivity on a reader's housing situation:

Hi AK,

Hope this email finds you well.

Thank you very much for taking your time responding to our queries in relation to giving us your honest opinion in matters of money management.

I have a "worry".

Currently, we bought a condo and owing about $400k+ with the bank and paying our monthly mortgage still at $2000/month. Its a one bedroom small condo and small enough that we feel we needed a bigger place given that we just had a baby a few months ago.

option
1) Sell condo now and wait for 2 years before we are "allowed" to go into Econdo and might take another 4-5 years before TOP. In practicality, i feel its not practical to wait that long because we will need a bed for our 5 year old grown up boy but pros are we could save up "more" before buying into a bigger econdo home for a 3 member family. So more time for us to save up for something more value for the money e.g econdo, hdb. We made the mistake of buying to condo initally.

2) sell this condo now and buy into another bigger place with our current savings of $250k, meaning take out our savings and buy a bigger place, something like a 2+1 bedroom private condo. pros we can take opportunity of the low condo price now and "hope" in few years it shall provide us some asset appreciation. Note: Selling our current 1 Bedroom condo will make a 50-60k loss because of the low demand in current market now. we would have made 25% loss on our initial downpayment.

3) take our savings and stay vested so we could have more passive income (my idea actually). If stay vested with REITS e.g saizen of $250k. we could have about 1-2k per month passive income. Cons is we wont have a bigger place (will need to stay with our parents) and there is risk of an economic downfall (my wife's worry) and i am not sure during the last subprime recession how much did Saizen drop to? Meaning if i used my savings for buying a property at least the pros is i could have something physical at hand during economic downturn. Am i making any sense?

4) lower our debt ratio and sell off when the market improves then rip the profit--> then buy in to a bigger place. ( by then may be the property market and outlook would have improved)

I know nobody can tell the future but i would sincerely hope if you can share your experience and expertise on the subject i have at hand currently.

Sincerely
B

Hi B,

All of us need a roof over our heads. How big or pricey a roof? That depends on each person's circumstances.

I like to approach situations such as yours by thinking about the needs:

In your case, the first question to ask is whether you really need more space or could you make do with what you have (i.e. your current one bedder condo)? If you could somehow make do with what you have, then, no issues. Think about possibly refinancing the housing loan if that could bring down the cost of servicing the loan.

If you absolutely cannot make do with what you have and really need more space now, then, sell your current place only if you are able to find a good value for money offer in a larger condo somewhere. Don't buy a larger condo unit just because you can afford it, always bearing in mind that our homes are consumption items and not investments. What about buying a resale HDB flat instead?

If you think you don't need more space now but will need more space in the future, then, selling your condo and moving in with your parents first while waiting for a couple of years before you could buy an Executive Condominium from a developer (or a BTO HDB flat if your combined salaries are not too high) will most probably give you the best value for money. In the meantime, you could invest some of the money in the stock market for some extra income.

In summary, what you decide to do at the end of the day should consider:

1. What you need.
2. When you need it.
3. What kind of housing is acceptable.

I hope my talking to myself is helpful to you. :)

Best wishes,
AK

Related posts:
1. Affordability and value for money.
2. Buying an apartment: Considerations.
3. Buying a property as an owner-occupier?