|
|
Post by oldman on Oct 20, 2015 6:12:59 GMT 7
An asset to me is something that i can sell and make a profit during my lifetime. The key sentence is: during my lifetime. Yes, it may become an asset to your children but not to you.
For stocks, this is simple as I do intend to sell my stocks during my lifetime to reap the profits or suffer some losses. I do not view most insurance products as assets as a life policy only gives you money when you have died! The exception is a critical illness plan that gives you money when you are diagnosed with a dreaded disease.... however the amounts here tend to be quite small.
Along the same lines, you are unlikely to sell your primary residence during your lifetime. If you do, you are more likely to upgrade and take on even more loans. Your primary residence is for you and your family to enjoy. It is better seen as an expense of living. There is a lot of outflow of cash needed to sustain the house.
There are those who try to comfort themselves by saying that these expenses will eventually increase the asset value of the house. I don't agree as my definition of an asset differs from theirs.
Then there are those who point out that if you do not have a house, you need to rent. I don't see the logic of this argument. If I rent a car, that does not mean that buying a car is an asset. These are 2 different things. Whether you buy or rent, this is a lifestyle decision.
Living requires you to have a roof over your head. Whether you rent or buy is to fulfil this requirement. Again, this is a lifestyle decision.
Of course one feels better to lump your primary residence as part of your assets....as for many of us, this may be our biggest asset. But you and I know how difficult it will be to sell this within our lifetime. This article is meant to set your mind thinking as to what really constitute a real asset and what is imaginary but feels good.
I hope in future, folks won't put a value on their children as by using the same logic as they have applied to their house as an asset, their kids should naturally become part of their assets!
|
|
|
|
Post by zuolun on Oct 20, 2015 7:21:07 GMT 7
oldman, A fully-paid house/flat is an asset once it can be monetized through various methods. Whether you prefer to sell the asset or leave it to your children during your lifetime, it is still a real asset. MM's philosophy on home ownership: "Your HDB flat value will never go down." (You won't be able to monetize it and use all the money in your lifetime.) This is the same as Minister for Manpower, Tan Chuan Jin's “CPF is your money.” (You won't be able to fully withdraw it and use all the money in your lifetime.) An asset to me is something that i can sell and make a profit during my lifetime. The key sentence is: during my lifetime. Yes, it may become an asset to your children but not to you. For stocks, this is simple as I do intend to sell my stocks during my lifetime to reap the profits or suffer some losses. I do not view most insurance products as assets as a life policy only gives you money when you have died! The exception is a critical illness plan that gives you money when you are diagnosed with a dreaded disease.... however the amounts here tend to be quite small. Along the same lines, you are unlikely to sell your primary residence during your lifetime. If you do, you are more likely to upgrade and take on even more loans. Your primary residence is for you and your family to enjoy. It is better seen as an expense of living. There is a lot of outflow of cash needed to sustain the house. There are those who try to comfort themselves by saying that these expenses will eventually increase the asset value of the house. I don't agree as my definition of an asset differs from theirs. Then there are those who point out that if you do not have a house, you need to rent. I don't see the logic of this argument. If I rent a car, that does not mean that buying a car is an asset. These are 2 different things. Whether you buy or rent, this is a lifestyle decision. Living requires you to have a roof over your head. Whether you rent or buy is to fulfil this requirement. Again, this is a lifestyle decision. Of course one feels better to lump your primary residence as part of your assets....as for many of us, this may be our biggest asset. But you and I know how difficult it will be to sell this within our lifetime. This article is meant to set your mind thinking as to what really constitute a real asset and what is imaginary but feels good. I hope in future, folks won't put a value on their children as by using the same logic as they have applied to their house as an asset, their kids should naturally become part of their assets!
|
|
|
|
Post by me200 on Oct 20, 2015 8:02:57 GMT 7
I agree that primary residence is part of our lifestyle... and up to this point it is an expense of living.
The primary residence is likely to appreciate overtime, and we can turn this "expense" to asset when we downgrade to a smaller and cheaper residence.
However, if we intend to maintain our lifestyle and keep this primary residence, then it would be an legacy to our children and not our asset.
|
|
|
|
Post by oldman on Oct 20, 2015 9:42:04 GMT 7
Zuolun, it is good to be able to disagree with you for a change. Like we say, we can always agree to disagree. My primary residence is also fully paid up ( I don't use loans) but instead of putting this as part of my assets, I removed it. I know that I will only sell it if I were to upgrade and this means more losses in my 'assets'. I stick to my philosophical definition of assets as defined earlier.....makes no difference if it has been fully paid up or not.  oldman, A fully-paid house/flat is an asset once it can be monetized through various methods. Whether you prefer to sell the asset or leave it to your children during your lifetime, it is still a real asset. MM's philosophy on home ownership: "Your HDB flat value will never go down." (You won't be able to monetize it and use all the money in your lifetime.) This is the same as Minister for Manpower, Tan Chuan Jin's “CPF is your money.” (You won't be able to fully withdraw it and use all the money in your lifetime.) An asset to me is something that i can sell and make a profit during my lifetime. The key sentence is: during my lifetime. Yes, it may become an asset to your children but not to you. For stocks, this is simple as I do intend to sell my stocks during my lifetime to reap the profits or suffer some losses. I do not view most insurance products as assets as a life policy only gives you money when you have died! The exception is a critical illness plan that gives you money when you are diagnosed with a dreaded disease.... however the amounts here tend to be quite small. Along the same lines, you are unlikely to sell your primary residence during your lifetime. If you do, you are more likely to upgrade and take on even more loans. Your primary residence is for you and your family to enjoy. It is better seen as an expense of living. There is a lot of outflow of cash needed to sustain the house. There are those who try to comfort themselves by saying that these expenses will eventually increase the asset value of the house. I don't agree as my definition of an asset differs from theirs. Then there are those who point out that if you do not have a house, you need to rent. I don't see the logic of this argument. If I rent a car, that does not mean that buying a car is an asset. These are 2 different things. Whether you buy or rent, this is a lifestyle decision. Living requires you to have a roof over your head. Whether you rent or buy is to fulfil this requirement. Again, this is a lifestyle decision. Of course one feels better to lump your primary residence as part of your assets....as for many of us, this may be our biggest asset. But you and I know how difficult it will be to sell this within our lifetime. This article is meant to set your mind thinking as to what really constitute a real asset and what is imaginary but feels good. I hope in future, folks won't put a value on their children as by using the same logic as they have applied to their house as an asset, their kids should naturally become part of their assets! |
|
|
|
Post by zuolun on Oct 20, 2015 10:24:10 GMT 7
"A person's worth is contingent upon who he is, not upon what he does, or how much he has. The worth of a person, or a thing, or an idea, is in being, not in doing, not in having." - Alice Mary Hilton Zuolun, it is good to be able to disagree with you for a change. Like we say, we can always agree to disagree. My primary residence is also fully paid up ( I don't use loans) but instead of putting this as part of my assets, I removed it. I know that I will only sell it if I were to upgrade and this means more loss in my 'assets'. I stick to my philosophical definition of assets as defined earlier.....makes no difference if it has been fully paid up or not. |
|
|
|
Post by pain on Oct 21, 2015 9:20:37 GMT 7
Oldman / Zuolun, Primary residence is a place for my family to stay in. Strictly speaking, unless we sell this primary residence and resorts to renting, then there is no income or profit/loss. I have set a target of 27 age old for my children to "get out" of the primary residence. Maybe it is harsh, but I hope they are able to survive outside either by renting or purchase their own place. Thereby, I can monetarise this primary residence with options. In a lifetime, primary residence may not be an asset if unrealised in sale. However, in the above scenario and if I am still "around" then, it can be an asset. Just my thoughts only. Zuolun, it is good to be able to disagree with you for a change. Like we say, we can always agree to disagree. My primary residence is also fully paid up ( I don't use loans) but instead of putting this as part of my assets, I removed it. I know that I will only sell it if I were to upgrade and this means more losses in my 'assets'. I stick to my philosophical definition of assets as defined earlier.....makes no difference if it has been fully paid up or not. oldman, A fully-paid house/flat is an asset once it can be monetized through various methods. Whether you prefer to sell the asset or leave it to your children during your lifetime, it is still a real asset. MM's philosophy on home ownership: "Your HDB flat value will never go down." (You won't be able to monetize it and use all the money in your lifetime.) This is the same as Minister for Manpower, Tan Chuan Jin's “CPF is your money.” (You won't be able to fully withdraw it and use all the money in your lifetime.) |
|
|
|
Post by roberto on Oct 21, 2015 11:53:51 GMT 7
Reminds me of the saying - wealth is not yours until you spend it.
|
|
|
|
Post by chlio on Oct 21, 2015 12:55:05 GMT 7
This is an interesting topic.
Basically, any item you own and can liquidate (and extract a positive value) in a market within a reasonably short time should be classified as an asset.
Oldman has laid down his own rule that he would only upgrade and the upkeep of his property makes it cost-incurring and therefore he chose not to classify it an asset. Additionally, one needs shelter for living. Fair enough.
However, let's take this to the bulk of the residents in Singapore. Suppose in 50 years time, when there is an avalanche of HDB 99-yr lease ending, and there is a requirement to top-up lease. What then is the treatment of this primary place of residence for many?
I recall there were some terraced houses in Geylang with less than 30 yr lease remaining. If I was an owner staying there, and I can't find tenants to derive income, and there are no ready buyers, is it still an asset to me?
|
|
|
|
Post by zuolun on Oct 21, 2015 14:38:22 GMT 7
时势造英雄 A hero is nothing but a product of his time "Asset-rich" people-in-business becoming "drop-off" heroes（落马英雄）
|
|
