What High Speed Rail and my tenant taught me on investment

7 months ago JCprojectfreedom 0

With the recent election in Malaysia comes to a closure and newly minted Prime Minister Mahathir confirmed in the press on Monday during an interview that the high speed rail project will be terminated. How will this impact the property prices in Jurong East? I cannot predict the future impact and whether the cross island line will be built. Recently, Jurong Region Line has been announced by Singapore government on the various stations. From the High Speed Rail event, I estimated the book value of my property will drop by 10% and to be evaluated again at a later time.

I will not be taking the High Speed Rail to Kuala Lumpur so that this will not affect my life. I will continue to bang on the Jurong Lake District story which will change Jurong area into the 2nd Central Business District as Singapore is decentralizing to make the island a more livable place.

From this incident, I learn that you cannot control the external factors but you can control the internal factors as a “property investor”. The external factors will involve geopolitical forces such as a new government, trade policies and economic forces. The internal factors will be deemed as local government policies and plans. Till this date, I believe Singapore government is trustworthy and predictable.

Recently, I made a business trip to Kuala Lumpur and spoke with a few Singaporeans who are residing there as the offshore & marine industry has shifted from Singapore to Kuala Lumpur. Malaysia is picking up and things are improving as a whole. Not only just Malaysia but our other neighbors as well. If Singapore does not make a breakthrough to the next level, we will be stagnant and fall back in terms of competitiveness.

I met up with my parents’ tenant as he will be terminating the rental in advance. He told me that the company’s growth rate is turning to negative and needs to report positive profit growth of 4-5%, means travel budget cut and eventually leads to more jobs cut. His competitors are undergoing restructuring to reduce cost. This tells a lot about the industry and why the share prices are taking a hit.

He explained to me his situation that he has been looking for a job for the last seven months and his wife is a full time stay home mum. It is a very difficult financial situation for them. He is in his mid-forties and it is very difficult to compete with the younger generation to look for employment. To aggravate the situation, he explained that the family fund is in bank for the last 20 years and slowly eroded by inflation. He did not invest any of his money. Furthermore, he does not have any additional sources of income.

This meeting taught me:

  1. Above 40 years old, your value as an employee will start to decline and with a seniority level, the cost to employ you will be high. A general rule of thumb, you need to generate 10 x your annual income for the company to justify your existence.
  2. Do not put all your money in the bank. Put your money to better use and make it work harder for you. I am 36 years when I am writing this and I hope that when I am 45 years old, my cash flow from my investment will liberate me from the rat race.
  3. You cannot depend on one source of income only and you need to diversify to multiple sources of income. Increase your saving ratio. Stop wasting time on non-productive activities and use them to learn a new skill, increase your income or create new income.

Matthew 6:25-27 “Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more than food, and the body more than clothes? Look at the birds of the air; they do not sow or reap or store away in barns and yet your heavenly Father feeds them. Are you not much more valuable than they? Can any one of you by worrying add a single hour to your life?

Do not worry and live courageously. Stay strong for the family, my friend.