Recently, we went on our first trip to Japan.
I am very impressed with Japan’s engineering capabilities, world-class quality, and attention to detail in design. They are a very disciplined and hard-working nation. They are very efficient and respect the value of time.
We stayed in 3 different hotels in Tokyo and Osaka as we flew into Tokyo, went to Osaka, and flew out from Tokyo. Hence, I got to observe 3 different toilets. I had designed and built toilets for vessels in the past. I was amazed by the slope to the drains, the choice of non-slip material, the technological level of their toilet bowls, the couplings, and the various small knobs to hang stuff.
Below are some photos I took at a bookstore which shows lots of Japanese working on their businesses. Some are freelancers and some are entrepreneurs. Of course, there are some students as well. It is bustling with activities. What a joy to see the energy level in the cafe.
I like how big countries like Japan can have a choice of different pace of living and different cost of living as well. When you are chasing for high income, you can choose to stay in Tokyo City and make a living there. When you have enough, you can elect to choose somewhere on the outskirts to enjoy a slower pace of life. I saw plenty of farms with nice houses. You don’t need to be a farmer but you need to get used to a countryside lifestyle.
JC Funds 1H 2024 breakdown
I had an Instagram post here as well.
Current Assets ~ S$3,100 k
Cash ~ S$341 k
SRS ~ S$137 k
Unit Trust ~ S$15 k
Equities ~ S$2,600 k
P2P MY ~ S$7 k
Non-Current Assets ~ S$3,673 k
JC CPF ~ S$590 k
Property 1 Book Value ~ S$ 1,433k
Property 2 Book Value ~ S$ 1,650k
Current Liabilities ~ NIL
Non-Current Liabilities ~ S$2,523 k
Property 1 Mortgage ~ S$1,046 k
Property 2 Mortgage ~ S$1,227 k
Parents’ Loan – S$250k
Total Networth = Assets – Liabilities = S$3,100k + S$3,673k – S$2,523 k = S$4,250k
2024 is the first year that we see our net worth cross the 4m.
The forecast dividend for this year will be ~S$114k. This will be updated later on.
I believe it is a matter of time before we will hit the ideal target dividend of S$120k per annum. The question is whether this dividend will grow with time or it will decay, that’s the crux.
The other concern that we have is the 2 leveraged properties. Properties is a leverage game. You put up 25% and loan the 75%. That’s leverage. I could just update my net worth to show that Property 1 is close to S$1,700k whereas the book value is S$1,433k. It is pointless to show market value because you have not realized it. There must be a willing buyer for you to realize the gain. Even if you sell it with a S$300k profit, you need to pay tax and commission to the property agent. Your net gain will be closer to S$200k. I will only update the net worth after I realize the gain.
One amazing thing is my wife shared with me recently that she wants to achieve financial independence earlier and focus on her side hustle business to grow it into a full-time one.
The 5 years strategy 2024 – 2029
Assume a perfect scenario where everything goes my way.
The target is to sell Property 1 after it reaches its Minimum Occupancy Period of 3 years which is around March 2026. Pray that I can realize the S$200k gain. That will add to equity of ~S$459k to derive S$659k. This S$659k can help to reduce Property 2’s outstanding mortgage to ~S$568k.
By March 2027, Property 2 will complete its Minimum Occupancy Period of 3 years and again pray hard that we can sell it and realize a S$200k gain. I estimate an S$100k per year gain but you need to deduct around S$100k from taxes, legal fees, touch-up renovation, CPF interest, and commission. This means the outstanding mortgage will be S$368k and we can get back S$1650k – S$368k = S$1,282k.
Hmmm…. this means today worth S$2,000k condo unit will be around S$2,249k – 2,300k. It will mean there will be a shortfall of 1m to fully pay off the house. This is the route if we are to upgrade to a more OCR condo. Upgrade of lifestyle means from 2027 to 2029 we need to continue to slog and continue to command a good salary. This is a highly stressful route.
Route 2, we don’t upgrade to an OCR condo. The life span of Property 2 has another 89 years in 2024. It will be sufficient for us until we pass on. We can easily pay down the remaining ~S$600k mortgage and live a stress-free life when I reach 45 years old. It is easier to pay down a S$600k mortgage within 3 years compared to paying down a S$ 1,000k mortgage.
Route 3, I am thinking out loud and trying to be creative here. We sell everything. We rent a place in Malaysia or another country and work overseas. After 1.5 years, we buy an HDB Prime Location BTO or EC. This is like buying Toto (Singapore pools betting), which needs to go through the ballot. I am low on luck. The cost of international school education in Malaysia is not cheap. I did an estimation, it cost close to S$500k for 2 kids. How about Perth? The accommodation is a hot cake now, you will be outbid before you even get to view one. The system is under stress due to the high level of migration. I like the education in Australia.
Route 4, sell both properties and buy something cheaper than S$1,200k. A downgrade of lifestyle. We can rent for 2 years and fully pay up for a resale HDB after that. We can call it a day if we wish to. Alternatively, why not buy a property in JB and apply for MM2H? I can get a car to drive the kids into Singapore daily for their school and work as a Grab driver after that. I can pick them up after school and we will head back to JB. There’s the RTS by 2027, maybe we can just take the train.
What will you do? Please share your comments below. I would like to seek your advice on this.
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