Home prices and average salaries

Some readers have commented that the benchmark of 3 years income to pay for a home is outdated. I agree.

In my book on financial planning, I have used the benchmark of 4 to 5 years. I consider 5 years to be on the higher end of the scale. Some people have commented that they are not able to buy a decent home using this benchmark, as prices are high, even for HDB flats.

My advice is not to go beyond 5 years. It may mean that you have to consider other options, such as renting your home or buying a smaller flat.

Some people pay 6 to 8 years of income for their home. They calculate that they can afford the monthly repayment. But, they forget to take the following factors into account:

a) Interest rate may increase in the future, from the current low levels. The higher interest rate will increase the amount of repayment.
b) Jobs are uncertain. If they lose their current job, they may not be able to find another job that pays the same salary.

If more people take this advice and act prudently, the property price will not continue to escalate, as it had in the past years. Do not chase a property bubble. Do not think that you are making a good investment. An overpriced property can drop in value by 30% and leave you with a large financial burden. This has happened in USA and Europe. It can happen in Asia. The low price may be stuck for a decade or longer, as it has happened in Japan.

 My book on Financial Planning can be purchased here.

Tan Kin Lian

Intelligence Quiz Vol 3

Two nieces visited my home. They asked for my Intelligence Quiz book. The younger girl, who is now in primary 2, was able to complete the beginner quiz within 10 minutes. They competed with each other and enjoyed solving the quiz tremendously. I was surprised that they found it interesting, at their young age.

You can get your children to be interested in this quiz. It trains their mind to be analytical and also to approach the puzzle in a systematic way. The book contains 72 puzzles at three levels - beginner, intermediate and advanced. They can do the puzzle first, because they have done the earlier volumes. The book also contains instructions on how to solve this type of puzzle.

Volume 3 is available in the bookstores at $7.90. The earlier volumes 1 and 2 have been sold out. You can enjoy a 15% discount (net $6.72) if you order through the internet during this month (promotion code - BLOG). The discount is also available for the other books.

Click here.

Talks on Financial Planning at Company Premises

I am available to give talks on Financial Planning at the premises of organisations. Details as follows:

Title: Financial Planning - for Good and Bad Times
Speaker: Tan Kin Lian, Author, Practical Guide on Financial Planning
Duration: 2 hours, including Q&A
Audience - at least 20 people
Fee - to be discussed
Requirements - seminar room with projector.

If your company or organisation is interested, send an e-mail to kinlian@gmail.com

Talks on Financial Planning

I held two talks at Yishan and Pasir Ris Library. They were successful. The contents were suitable for the public.The interaction with the audience was fun and great.

I hope to be able to hold monthly talks at the National Library in Bras Bash Road and at Singapore Exchange in Shenton Way. This will be arranged under FISCA (Financial Services Consumer Association) with NLB and SGX.  Each talk will be for 2 hours and include Q&A.

FISCA also intend to organise a 12 hour course (4 sessions of 3 hours during weekends, to cover 8 topics in more detail).

Accountant interested in Pro-Investor

I introduced the Pro-Investor simulation game to an accountant. She was fascinated with the game and said that she would like to try it. It allows the player to practice and develop the skill of picking the right stock. Click here.

Good response to rechargeble torchlight

I gave the rechargeable torchlight to two friends. They found the torchlight to be most useful and were surprised that the price was only $6.50. One friend bought 10 pieces to give away. At the talk on financial planning,  the participants bought all the 10 pieces of the torchlight that I brought along.

You can buy the rechargeable torchlight ($6.50) at 15% discount in February (promotion code BLOG). The discount is also available for the books. Order here. Click on "details" to see a photo of the torchlight.

Talk at Pasir Ris Library - Financial Planning in Time of Crisis

I am giving the above talk at the Pasir Ris Library today (20 Feb 2010) 5 to 6 pm.
Please register at the NLB website or come early to the Library to register on the spot (subject to availability).

To register:
http://golibrary.nlb.gov.sg/Event.aspx?EventID=31770

Please note that the talk shows the previous title - which has now been changed.

Title - Financial Planning during Time of Crisis

Speaker - Tan Kin Lian, President, Financial Services Consumer Association

Place: Pasir Ris Public Library

Date: Saturday 20 February 2010

Time: 5 - 6 pm