Measures to curb property speculation finally revealed

Today’s papers reported that measures are rolled out with immediate effect to curb property speculation. In layman terms, they are:

(1) Sellers to pay stamp duty again if they resell the property within 3 years of purchase. (A $1m property attracts $24,600 of stamp duty.)

(2) For buyers who have outstanding loans with banks or HDB they

(a) need to pay at least 10% in cash for downpayment, instead of 5%.

(b) can only loan up to 70% of property valuation limits.

Looks like the government is intervening as the property market astronomical rise is going out of hand and they can only continue to roll out measures in a such manners to react accordingly.

I feel that more can be done to curb the property craze. It is a good thing that government is trying to balance speculative interest from real home seekers. However from my observation, most speculators are already sitting on high paper/real profits; the people who are trying to buy now are real home seekers.

That’s truly an irony.

Then again, what is the definition of speculator? If I am investing in property because I want to leverage on cheap interest rates and earn rental income for 10 years before selling off, am I a speculator?

Actually, I am only trying hard to save for retirement. With the stock market increasingly unpredictable, savings interest rates at 0.2%, buying a property seems to be the next best alternative for anyone who can cough up 20% downpayment.

Yet again, I am always priced out.

I applaud the government for proactively solving problems. But may I suggest that they stay on top of our problems by reacting before they even surface?

Prevention is better than cure, am I right, Mr. Govt?

Public transport

I tried taking the MRT and bus to work recently. It was a horrible experience to take the train. As I need to alight in Orchard area, I had to smell the arm pits of commuters. Then I tried the bus, service 65. Below was the snap shot.

I was pleasantly surprised! I could even read papers there! The ride was a short 30 minute ride from my home. I could check the bus arrival times rather accurately using my iphone from the SBS website. Meanwhile, I could even have a cup of coffee and noodles for breakfast while waiting for the bus.

The dedicated bus lanes also narrowed the time savings between public and private transport. I felt sorry for the cars beside me having to pay hefty $4 ERPs (accumulated), $150 season parking while being stuck in jams daily.

My daily transport cost? $2.20. Of course I hate to leave my car at home, but it just doesn't make sense to pay 100 times more and spend more time travelling.

As LTA races to tender out railway network in Singapore, I seriously doubt the marginal increase in ridership will increase the profits of SMRT. The circle line is already operating at a loss, major lines running at full capacity, what kind of growth are we looking at? A PE ratio of above 20 doesn't justify its growth rate ahead.

Though the bus business seems to be a dying trade, I would prefer to take the bus anytime now, considering the current situation of MRT rides. Due to training purposes, public transport for me will only be a temporary measure, but I am quite sure I will research the bus routes instead of MRT whenever I take public transport.

Well done SBS!

Make money blogging

I have been meaning to write on blog monetization so here it is!

I started Singapore Blue Chips in May 2008, it has been slightly more than 2 years from now. I would say that my blog did generate decent income to cover my internet bills over the past 2 years. The majority of my income did not come from direct advertising but rather from indirect sources.

I earn referral fees from US advertisers to put up their advertising on Singapore blogs. I receive $6-$10 for each referral. So during my free time I comb the local blogging fraternity for possible referrals.

Another part of my income comes from online requests. Prudential once approached me to moderate their forum, http://www.honestlyspeaking.sg/ (forum closed down as campaign ended) and I was paid $100 weekly. The forum was part of their advertising campaign and I am honoured to have the opportunity meet their advertising team to discuss on the online advertising aspects of insurance products.

Occasionally, I do get tertiary students asking me to complete their finance assignments. I do charge high prices for that, at $40-$60 per page. Most of them get good grades anyway, so ethics aside, this blog does generate indirect income similar to online tutoring service. I do discourage prospective students from approaching me though as you are eventually short changing yourself.

Lastly, online advertisements account for the least income. My readership isn’t high, slightly over a thousand unique views weekly, hence payouts from advertisers have been slow. And I know you guys reading my blog never click on my advertisements too!

Fortunately my “Singapore Blue Chips” is always the 1^st search result on google and yahoo. Hence readership can always be maintained at a decent rate even if I stop blogging for 3 months. Mr. Tan Kin Lian has kindly linked his blog to mine, which generate the highest number of web referrals too.

This blog was never intended to make money anyway. But it is really satisfying to be able to generate income from a hobby, however little it may be.

I do get several emails a day from readers asking advice on stocks and wealth accumulation. I rarely reply them due to time constrains and the information provided is simply inadequate. Besides, I have no license to advise on financial matters! All I can say that it is never simple to make money through equities investing. Making money through equities does not mean you are correct in your financial concepts. The acumen needs to be honed and there is no short cut in hard work to build one’s fundamental knowledge in finance.

Lately I have been blogging lesser on equities mainly because my portfolio is generating decent income and passivity is my best way to monitor the market. I have no desire to generate super normal returns and my farmer philosophy has served me well.

Hence, everything will continue as so.