Friday, 24 February 2012

Middle Class struggles in Singapore

The Middle Class really struggles in Singapore. I am not sure the exact income group to really categorized as one, but I believe among me and my peers, most of us belong to this class.  This post is not to complain about life being in the middle class, but to look at the common reality of life in Singapore.

Growing up, we are told to study hard, get good grades and you will do well in your career. If you do so-so or what we call moderately well, then as years passes by, you realised you belong to the one of the many in Singapore who continues to slog for a living or Middle Class. How come the schools here do not teach us about financial freedom ? How come there are no subjects about personal finance management in classes? Why is that Nobody told us that we need to be in the upperclass so that we will not be stuck in the rat race?

Average Singaporeans burn a hole in the pocket after their marriage, burn another hole when they get their first flat or property, burn another hole when they have kids. After so many holes, there are none left for retirement.

I had tea with a good friend today, he told me life is a struggle in Singapore, he belongs to the middleclass. After many failed attempts to apply for a HDB and getting fed up, they bought a executive condominium. Why?
They wanted to consider buying a resale HDB, but with them living around Clementi area, all the COVs being extremely high, they decided it is silly to pay for such a premium.

Their combined income had exceeded the ceiling inorder to buy a flat direct from HDB. Both had to used up a huge chunk of their cash to pay for the downpayment for the EC.

With the young baby growing up, they had to buy insurance coverages and endowment policies for the kid's future education. After paying for their monthly properties mortgages and insurances fees, in addition to the daily expenses, they have little left to save for retirement or even investment.

My friend is very thrifty by nature, but circumstances made him to commit himself to this situation. Stuck in the middles class, both need to continue to work inorder to supplement all the expenses. Now they are slowly trying to save up and continue to be thrifty.

The Singapore Government always encourages people to pro-create on Television news or on papers. All of the government officials belongs to the upper class.

You slowly start to understand the term "Talk is cheap" once you step into the middle class.


  1. 1) "they had to buy insurance coverages and endowment policies for the kid's future education" -Had to? Did they "buy" or were they "sold" to?

    2) "they have little left to save for retirement or even investment" - I guess they do not know about or practice "pay yourself first".

    3) Buying a 2nd hand apartment with $600,000 valuation + $200,000 COV (for illustration only) versus a brand new apartment for $800,000 valuation - What's the difference?

    4) Financial literacy information is everywhere. You can bring the horse to the water, whether it will drink is another matter!

    5) Sorry, I would rather the Govt focus on the disadvantaged and less well-off segments of our society.

    First things first.

    (It's a bit rich for well educated couples who earn more than the HDB ceiling to cry poor or disadvantaged)

    1. maybe there would be less poor people in the society if financial literacy was made available earlier when people are younger?
      I only started out to know more in my 30s, it is abit late..but better than never..

      No matter what the govt do, you will still see many poor and old people out there collecting paper card boxes, cans , newspapers, selling tissue papers..

    2. Good question!

      I am mixed up myself...

      Like in Rich Dad Poor Dad, there are those who have little formal schooling but are financially literate and uber rich (who taught them anyway?); while Phds may be working for such people.

      I have a terrible thought. If most Singaporeans are "taught" to be financially literate, who will do the "working"?

      Would we then become like UAE where 80% of the population are "foreigners"?

      I think I better let sleeping dog lie.

  2. Tough. But I think there could have been other options if one is is willing to sacrifice a little more, such as living further away at a cheaper and smaller place but accepting and tolerating the longer commute. We all have choices. The best decisions made in our lives are the ones that save us the headache of overcommitting financially. The world is changing. Maybe we ought to seek new possibilities.

  3. TRANSFORMING a Third World slum into a successful modern city has created an elite class in Singapore in one generation that in the West took hundreds of years to develop.

    It didn't exist 40 years ago when the state became independent and the people were mostly poor and owned no property. The rich were few in number.

    But with education and wealth, Singapore became a middle-class society and gave birth to an elite force in almost every field - from schools to business to politics.
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  4. The main reason that the middle class struggles is that the middle class is the salaried class. They are the employees. Thus when any new money is created by the central bank/monetary authorities, the middle class receives the money last. When new paper money is created, the main beneficiary is the one who receives this new money first. These are the various investment banks and big banks. The big loser is the one that receives this last, which is the middle class. Not many people know this since the press in every country suppresses this. No country in the world really has a free press. If people knew this as the real reason, it would undermine the government in every country. Because of Rampant money creation (paper notes), the middle class is struggling in every country in the world, not just singapore. In the United States as well as India, and now in Europe, the middle class is struggling for it's very existence. The reason in all cases in rampant paper money printing by the respective Central banks (RBI in India and the Federal Reserve in USA). In Singapore the reason is the new singaporean dollars being created by the Monetary Authority of Singapore in order to absorb all the USD emanating from the Fed which the MAS does to maintain the SGD-USD exchange rate at current levels.

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