Showing posts from August, 2009

Property 101: prices can go down

Judging from the brisk sales at launches, it appears many Singaporeans have jumped on the runaway property bandwagon.

But before you get caught up in the sales pitches and showroom euphoria of property agents cheering as each unit is sold, industry players warn that you should step back, take a breath and think twice.

This, they say applies to both HDB upgraders as well as those looking for a second property to spruce up their financial portfolio. Here are a few pointers that ought to be at the back of your mind.

1. Do your sums

It may sound obvious but it is often forgotten. Consider upgrading only if there have been significant changes in your credit profile, say, a pay rise and if your appreciating assets are holding up, said PropNex chief Mohamed Ismail.

If you’re upgrading from HDB, think about your net proceeds and what you can put into a new property to reduce your loan. Work out how much you need to pay each month. Be prudent and do not over-leverage. Consider the repayment period.…

Bursting the bubble rumours

OVERNIGHT queues, balloting, midnight crowds – these dramatic scenes at the Optima condominium at Tanah Merah recently were precursors to the 270 apartments selling out in three days, and fuelling concerns that a property bubble may be brewing in Singapore.

Industry players have largely shrugged off such concerns – attributing the recent property effervescence to pent-up demand, peak public housing prices, excess liquidity and a growing population.

However, Today’s checks on the ground reveal a less simplistic picture – one with buyers signing on the dotted line without even viewing the showflats, buyers asking agents to sell a property right after purchase; and irrational decisions.

While these instances are, by and large, uncommon, their very existence is proof of unhealthy streaks in the market.

The buyers (speculators included), said agents, are split between those who already own HDB flats and those who are holding onto private property.

“They typically have fully paid up the mortgage…

Sentiment, not liquidity, driving asset prices: C Suisse

THE recent sharp rebound in asset prices in Asia is not due to loose monetary conditions or a deluge of foreign capital, a senior economist at Credit Suisse says in a report.

Rather, improving sentiment among investors is likely the main driving force behind the recent run-up in equity and property prices, according to Credit Suisse economist Cem Karacadag.

In a separate report, Citigroup’s Singapore equity strategist Chua Hak Bin says he now believes the Straits Times Index could reach 3,000 points by the end of March next year, buoyed by better economic data in the next few months.

‘This economic recovery will continue to look V-shaped in coming months, as third-quarter gross domestic product and job growth continue to show a definite improvement,’ he says.

In his report, Credit Suisse’s Mr Karacadag refutes the ‘prevailing wisdom’ that the recent rally in equity and property prices is due to too much liquidity caused by central banks trying to keep interest rates low and local currenci…

Examining the Link Between Gender and Finance

Laura Rowley

Crystal and Harry Gettings have spent months hunting for an investment property in their native Orlando, where foreclosures abound. Harry, 26, works in his family's production company and recording studio. Crystal, 24, is a public relations executive. They shun debt, stash their savings and discuss their goals and progress every other Saturday over breakfast.

"He's interested in investing and stocks and learning more about the strategies that go along with that, whereas I'm interested in saving money on a day-to-day basis and taking care of the bills," says Crystal. "Harry's more of a risk-taker, and I'm a little more reluctant. I want to make sure it's the right thing."

Research suggests women tend to be like Crystal -- more risk-averse in their financial decisions. But a new study argues that gender is not the issue. Researchers at Northwestern and the University of Chicago found women who have higher-than-average levels of testo…

French: The Most Productive People In The World

Vincent Fernando and John Carney

A new survey from UBS has shown that the French continue to work the least amount of hours per year in the world. Once again, the French have blown away the competition.

People work an average of 1,902 hours per year in the surveyed cities but they work much longer in Asian and Middle Eastern cities... People in Lyon and Paris, by contrast, spend the least amount of time at work according to the global comparison: 1,582 and 1,594 hours per year respectively.

Upon seeing this data, some might criticize the French for being lazy, but that misses the point completely. The real message here is that the French are likely some of the most productive people in the entire world.

Think about it. Nationmaster ranks France as #18 in terms of GDP per capita, at $36,500 per person, yet France works much less than most developed nations. They achieve their high standard of living while working 16% less hours than the average world citizen, and almost 25% than their …

Preparing for the Worst

by Robert Kiyosaki

"Is the crisis over?" is a question I am often asked. "Is the economy coming back?"
My reply is, "I don't think so. I would prepare for the worst."

Like most people, I wish for a better future for all of us. Life is better when people are working, happy, and spending money.

The stock market has been going up since March 9, 2009. Talk of "green shoots" fill the air. Yet, in spite of the more positive news, I continue to recommend that people prepare for the worst. The following are some of my reasons:

1. I believe the stock market is being manipulated. I suspect the government, banks, and Wall Street are doing everything they can to keep the market from crashing. Our leaders know that nothing makes the world feel better than a raging bull market.

Do I have any proof that the market is being manipulated? No. I just smell a rat, or a pack of rats. I believe greed, self-interest, arrogance, and fear control the financial markets. I …

20 Lazy Ways to Save Money

Katie Adams

While the media can't decide if the recession is nearing its end or not, we do know that there hasn't been a tremendous surge in wages, job creation or the stock market. Consequently, most of us are staying pretty conservative on our spending. Here are a few relatively simple ways to keep an eye on your pennies while you're waiting for that brighter economic future to arrive.

1. Schedule automatic payments. Have (at least) your fixed monthly bills paid automatically to avoid missing a payment and having to fork over extra money for late fees and/or interest. You can set up auto pay features through your bank's online bill paying service or by arranging it directly with the company or service provider.

2. Eat your groceries. Did you know that Americans regularly throw away nearly 15% of the food they buy at the grocery store each year? That can add up to hundreds or, depending on your supermarket budget, thousands of dollars each year. Save money by actually e…

World emerging from deep slump but can it last?

Recovery in Asia, Europe gain steam, but fueled by stimulus spending and may not hold

By Tom Raum, Associated Press Writer

WASHINGTON (AP) -- Turnabouts in European and Asian economies, along with recent gains in the U.S., are raising hopes that that the worldwide recession is drawing to a close. That's not to say the coast is clear.

The brightening outlook in Europe and Asia and the improvement in U.S. credit markets and indicators reflect heavy government stimulus spending. Many analysts question whether the top economies can sustain recoveries after stimulus measures and easy-credit policies have run their course -- and in the absence of significant new consumer spending, especially among Americans.

"It's not clear that these economies can continue to move forward without stimulus," said Mark Zandi, chief economist for Moody's "And that's in part why stock markets across the globe are nervous."

It will be difficult for other countries t…

7 signs of the property craze


Far East Organization launched its Centro Residences in the heart of suburban HDB town Ang Mo Kio at prices starting from $1,100 per sq ft (psf). Deals done last month were at $1,117 psf to $1,228 psf.

According to property experts, such prices are more typical of city-fringe or prime projects and set a record for suburban leasehold homes.

In the mid-1990s boom, Far East set a leasehold record with its Bishan 8 project selling for up to $1,100 psf.

At a number of recent launches, above-market prices were also seen. For example, Ascentia Sky in the Alexandra Road area sold for $1,064 psf to as much as $1,459 psf.

Next door, The Metropolitan – launched at $780 psf on average in late 2006 – recently traded at around $900 psf to $1,200 psf.

In Tanah Merah, the 99-year leasehold Optima went for $810 psf on average. Right behind it is Casa Merah, which was first released in April 2007 at an average price of $588 psf.


A look at the number of pairs of shoes out…

The Economic Recovery: Fast, Slow or Neither?

by Sudeep Reddy

Some Analysts Predict a Sharp Rebound While Others Foresee Sluggish Growth; a Few Say Another Slump Is Possible

The U.S. economy is pulling out of its deepest and longest recession since the Great Depression. Some economists expect a powerful recovery, others a sustained but muted one. Some even say it will be neither: a fleeting rebound quickly followed by a second slump.

For Americans beleaguered by almost two years of economic pain, the contours of the recovery will determine how many people linger without jobs, whether cutbacks to public services are restored and how quickly savings and investments gain value.

Economists trying to predict the shape of the recovery look for parallels in previous recessions. But the current downturn, which started in December 2007, has echoes from a multitude of economic slowdowns.

It featured the same kind of deep dive in economic output of the 1970s and 1980s recessions, which were followed by sharp rebounds. The credit shock from the l…

Japan out of recession

TOKYO - JAPAN'S economy returned to positive growth in the second quarter, following Germany and France out of recession as massive government spending resuscitates the ailing global economy, data showed on Monday.

The rebound is welcome news for Prime Minister Taro Aso, whose long-ruling party risks being swept from power in an election at the end of this month amid discontent about the country's worst recession in decades.

Japan's economy, the second largest in the world, grew by 0.9 per cent in April-June, after contracting for four straight quarters, the government said. Japan's gross domestic product grew at an annualised pace of 3.7 per cent in the second quarter, having shrunk a revised 3.1 per cent in the first quarter and by 3.5 per cent in the fourth quarter of 2008, the Cabinet Office said.

Japan plunged into recession in the second quarter of 2008 as a severe global downturn crushed demand for its cars, electronics and other goods. The worst of the slump in…

Australia warns of 2nd wave

CANBERRA - AUSTRALIA'S top Treasury official on Monday said there were grounds for optimism about the economy but warned a 'second shockwave' may yet derail recovery from the global downturn.

Treasury Secretary Ken Henry said that while Australia had proved resilient and avoided sliding into recession, it was too early to say the crisis had passed.

'It does appear as if the economy is behaving better than people were thinking late last year or early this year,' Henry told a business function.

'We're not rushing to judgement on this just yet. We need to be somewhat careful in prematurely declaring the war is over.' Henry said the economy remained vulnerable to a second slump which, while not as big as the one that plunged the globe into crisis, could still curb growth.

'I have no reason to believe it'll be anything like the first shockwave in size and intensity - it won't,' he said.

'But there could be a second shockwave to hit us and…

How to be rich (part 2)

Exactly 5 months ago, I suggested that a mentor is the way to riches and that luck may play a part.

Now we have hard data that luck really plays a part (at least according to a report by trusted names like Capgemini and Merrill Lynch).

A high net worth individual is defined as having more than US$1 million of investable assets on top of his/her residence property. So if you have US$1 million in your savings account, you’re a HNWI. Or if you have a 2nd property worth US$1 million, you’re one of the 67,000 HNWIs in Singapore.

22% of the high net worth individuals in Singapore became rich because they inherited the wealth.

That is about 15,000 of them. They are lucky to have wealthy parents. Their lucky kids are probably future HNWIs.

To be fair, the rest are self-made millionaires. In fact, 36% or about 24,000 got rich from their businesses, but a week ago, we just touched on the issue of fewer entrepreneurs.

22% + 36% = 58%

So what about the remaining 42%? I infer from the report that “earned…

How to be rich?

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How to be rich?
May 24th, 2007


My Paper interviews the co-creator of the “Chicken Soup for the Soul” self-help books.

Mark Victor Hansen made his first million at age 35. He’s now an accomplished wealth guru coaching people and giving seminars around the world (obviously making more money).

Like other self-help gurus, Mark has advice for people who aspire to be wealthy. Let me gloss over the standard stuff and highlight what I think is important.

Standard stuff (mostly vague):

* Have a vision
* Be a team player, work with people
* Have a system of generating wealth quickly (but how?)
* Have “tools”
* Save 10% of what you earn, donate 10%, and invest 10%

Here’s what I think is useful: find a mentor. Yes, get someone who’s been there and done that to coach you. (But I don’t think this is the same as attending get-rich seminars, so please save your money.)

If you’re lucky to find such a mentor - maybe a close relati…

Millionaire Forummer Shares Experience and Gives Valuable Advice

- How did you make your first million?

“Made my first million i think around 30 or 31 years old. Graduated from uni in 1999, started own business in 2000 and have been running it for 9 years now. Am 34 this year. My family saves a lot. We save about 80% of total annual income.”

- How long did you take?

“About 6 years to make the 1st. 2 years for 2 second and 1 year for third. Make about 1M per year now. Probably can increase it to 2M per year over the next 5 years. It is very true that the 1st is hardest to make and the subsequent easier.”

- If you were to do it again in today’s context, how much time do you need? Would you do it differently and how?

“Well, i make my money mostly from company profits and pay. My 1st company took 5 years to hit 1 M turnover, my 2nd company took 1 year. Experience, a good team and knowhow really helps. I will still spend time, money and effort in business with stock trading as a fun sideline.”

“Investments I enjoy trading stocks but i never trade with more th…

Making sense of the recent market rally

One important reason for the bullishness is that the market has already discounted much of the bad news

RECENTLY, one of my clients told me he was confused about the significance of the recent market rally. Many of the blue chips such as Singapore Airlines, NOL, SGX and CapitaLand are still making quarterly losses. On top of that, some 47 companies listed on the Singapore Exchange have announced quarterly results with combined earnings lower than the previous quarter.

On the job front, unemployment is still rising. According to the manpower ministry, the worst is not over yet. This is the first time employment has contracted for two consecutive quarters since the 2003 economic downturn.

GDP for 2009 is expected to contract by 4 per cent to 6 per cent. ‘Aren’t all these bad news for the stock market?’ he asked. Over the last four months, equities have done extremely well with the Dow Jones Industrial Average up 20 per cent; the Standard and Poor’s 500, 23 per cent; and the Straits Times I…

4 Ways To Weather An Economic Storm

Andrew Beattie

Economic conditions can be as temperamental as the weather. In this article we'll look at some simple steps that can help keep the financial boat afloat during an economic tempest.

Batten Down the Hatches
Warren Buffet derides management that embarks on cost cutting, as good management shouldn't need to be prompted to control costs – that should be second nature. People are less strict with their personal finances than Buffet is on management, but a downturn quickly provides the motivation needed for cost consciousness. There is always room for cutting frivolous expenses, or at least substituting them with cheaper alternatives. This applies to everything from the morning coffee to landscaping the backyard.

Set in Stores
Even if you have creditors banging on your door and ringing you at work, your first priority should be building or augmenting your emergency fund. When money is consistently flowing out of your bank account leaving a near-zero balance, there is no cus…

Hong Kong exits recession

HONG KONG - HONG Kong pulled out of its deepest recession since the Asian financial crisis in the second quarter as GDP grew more than 2 per cent from the previous three months, a source familiar with the situation told Reuters on Friday.

The source would not clarify whether gross domestic product growth had hit or exceeded 3 per cent, but growth was well above analysts' forecasts for a 1.1 per cent expansion.

The government is due to announce second-quarter GDP data at 0830 GMT (4.30pm Singapore time) on Friday.

Hong Kong follows Singapore, which surged out of recession in the second quarter, and Germany and France, which both announced on Thursday that they had emerged from recession, raising hopes the global economy may be on the mend.

Still, some analysts say the road to recovery could be volatile. Recession is generally defined as two consecutive quarters of seasonally adjusted contraction in GDP.

Improving trade flows helped Hong Kong's economy in the second quarter, as …

Economists Call for Bernanke to Stay, Say Recession Is Over

by Phil Izzo

Economists are nearly unanimous that Ben Bernanke should be reappointed to another term as Federal Reserve chairman, and they said there is a 71% chance that President Barack Obama will ask him to stay on, according to a survey.

Meanwhile, the majority of the economists The Wall Street Journal surveyed during the past few days said the recession that began in December 2007 is now over. Battling the downturn defined most of Mr. Bernanke's term, which began in early 2006 and expires in January, and economists say his handling of the crisis has earned him four more years as Fed chief.

"He deserves a lot of credit for stabilizing the financial markets," said Joseph Carson of AllianceBernstein. "Confidence in recovery would be damaged if he was not reappointed."

The Journal surveyed 52 economists; 47 responded.

After months of uncertainty, economists are finally seeing a break in the clouds. Forecasts were revised upward for every period, with 27 economists …

New Bull, New Bubble, New Meltdown by 2012

by Paul B. Farrell

Something's in the air. You can feel it. A new bull. Hype? Maybe, but also a roaring new bull -- and eventually another meltdown.

Television is a metaphor for our cycles, so see how America's becoming a huge ratings competition:

-- "America's Got Talent." Complete with kooky judges like "The Hoff" (ex-Baywatch lifeguard David Hasselhoff), Ozzy's wife, and Piers Morgan (no relation to JP). And you've got to love those wacky contestants going mano-a-mano for Nielsen ratings against those noisy "disrupters" being sent to health-care town hall meetings by the GOP crew. A sure sign America's employment picture is improving and the economy is in recovery.

-- "Who Wants to Be a Millionaire?" Regis Philbin, the original moderator, is back for 11 fabulous nights in August. Why? A cover-up? Maybe it's tied to all the TARP money paybacks and hot earnings that let the "too-greedy-to-fail" banks make more …

Recovery in Asia Begins to Gather Steam

by Bettina Wassener

Has Asia’s economic recovery reached a turning point?

Recent economic data, some unexpectedly good results from companies around the region, early signs of some new hiring, and a stock market rally that has defied most analysts’ expectations would seem to indicate that perhaps it has.

On Tuesday, economic reports from Singapore, the Philippines, Australia and China provided the latest fuel for hopes that Asia was on track for a recovery that would outpace that of Europe and the United States and give the region more economic and political clout.

Even in Japan, which is mired in its deepest recession in decades, the central bank’s governor, Masaaki Shirakawa, struck an upbeat note after a rate-setting meeting on Tuesday.

“Asian economies seem to be growing at a faster pace,” he said, according to Reuters. “Since the spring, the financial system has also been improving. The overall direction is heading toward improvement.”

Still, Asia has depended heavily on government sti…

US economy has bottomed: George Soros

By Edward Krudy

NEW YORK (Reuters) - The U.S. economy has hit bottom and the current quarter will see positive growth due to the government's stimulus spending, billionaire financier George Soros said on Tuesday.

"I think it (the stimulus) has made a difference, the economy has actually bottomed and I think we are facing a positive quarter, and I think that is largely due to the stimulus," he said in an interview with Reuters Television in New York.

The Obama administration is pumping $787 billion into the economy in a bid to turn around the deepest recession since the 1930s. The U.S. economy shrank by 1 percent in the second quarter after tumbling 6.4 percent in the quarter before that, the biggest decline since 1982.

Soros said he did not believe the economy needed more stimulus money, despite calls for a second round of spending. Notably, in July, House of Representatives Majority Leader Steny Hoyer said the U.S. should be open to more government spending if needed.

Also o…

The 7 New Rules of Financial Security

by Carolyn Bigda and Paul J. Lim

In a world turned upside down, you must re-examine some basic assumptions. A good place to start: understanding the true nature of risk.

Rule No. 1: Risk

Old thinking: If you can stomach the ups and downs that come with risk, you'll be rewarded.

New rule: Risk isn't about your stomach. It's about making or missing an important goal.

You know you have to consider risk. But what is risk? Many of us have learned to think of risk as synonymous with volatility. For years, what came down reliably bounced back even higher. You could easily conclude that risk tolerance was just a matter of taste. As long as you had the fortitude to see the occasional loss on your 401(k) statement and not panic, you would capture superior returns over time.

What to do: You shouldn't run from risky investments just because they lost money - that train has left the station. But the old buy-on-the-dips advice isn't quite right either. This bear market's lesson is…