is Uncle a millionaire?

First, what is definition of a millionaire?

I think one of the more commonly accepted version is : Having nett USD1M of assets, excluding your primary residence.

Uncle will not include CPF in measurement

Uncle has equity of about 1.6M in my primary residence, but cannot count that.

But there is also an outstanding mortgage of 1.6M. So do I deduct 1.6M from the value of my other assets?

My home is where me and my family live in, it's our shelter, it does not generate passive income, even if its market value continues to go up over time. In fact, it is an expense, due to mortgage interest, property tax, utilities and upkeeping costs.

But should I just deduct the outstanding mortgage from my net worth? That doesn't make sense, because at least 50% of the monthly repayment goes into the home equity. So maybe I'll take a haircut of 50% (i.e. 800k) as a cost.

So combined with my wife, we'll have a net of almost USD2M in assets, excluding the equity of our home. Yay! We are millionaires! But why still so stressed leh? lol

That's because of the high cost of living in SG.

Yes, you may say, just move back to HDB and you'll be in better position! Well, that does come with a financial cost too...the value of the HDB will not go up as fast as value of private condo. It's a risk vs reward tension. We want to hang on to see it grow and grow, for future adjustments when value of current home is even higher.

BUT TBH, a million dollars doesn't cut it anymore today. I would say, $5M at least is what we should go for. Inflation and cost of living / housing eats up a lot of money.

Comments

CPF balances 24 July 2024

I think for SA, my balance is considered "self-sustaining" as the 4% pa for SA could ensure my balance will continue to meet the FRS requirement every year until I reach 55. from CPF website, my SA balance already exceeds FRS for 2024. Every year, the FRS increases a little for inflation. E.g. the FRS for 2025 is 3.4% increase compared to 2024. But SA interest rate is 4%, so as long as you already reach FRS amount for current year, you will be fine I think, even if you stopped working (i.e. SA stops having contribution)

Income tax for YA2024

Lesser than previous years due to lower stock prices during vest date. Got lucky. Interest-free instalment for paying income tax spread over 12 months...about $5k per month. Quite a lot of cash outflow per month just to pay tax, but I think this is already low compared to most other countries

Getting comfortable without a salary from working

Not sure if I am there yet. Basically I am effectively drawing down my cash each month, primarily due to 2 things : mortgage and income tax mortgage (after CPF) is about $9k per month income tax is about $5k per month My investment cashflow covers all my other expenses, including utilities, groceries, handphone/internet bills, insurance, property taxes, condo maintenance fees, personal spending. With some input from wife who is still working, I am still out of pocket by almost $11k per month. She will continue to be able to save a decent sum per month and I'll let her grow that and managed it for her via safe investments. Am I comfortable? Not really. I will if I am not out of pocket per month. If I really stop working for good, the income tax amount will go to $0 after 2025. So only mortgage left We can pay off the mortgage but I think I said before, it doesn't make sense since it's our home and we will be locking the money up with little leeway to do other things. So I ...

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