This Is One Way I'd Get To Financial Freedom 🔥 - If I Were Single And Earning $6,000/m

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0:00 Introduction
0:45 Starting with assumptions
2:20 What ads might suggest
6:30 How I'd do it
8:28 Why
9:45 Big kicker
#financialfreedom #financialindependence #financialindependenceretireearly #retirement #retire
We do not make any recommendations on whether a security is a buy/sell as every investor has different investment goals and risk profiles. The presentation of ideas from Josh Tan and TheAstuteParent are strictly for education purposes. You are advised to perform independent research yourself or seek a qualified financial adviser. We will not be liable for any losses directly or indirectly from the material. Some of the referral links in the video summary are products and services personally used by Josh Tan and they may pay an affiliate commission or referral bonus.
It is not an endorsement of the product unless explicitly stated and we will not be liable for any losses. The content in this video and any promotions mentioned is accurate as of the posting date.
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About Josh Tan:
Josh holds a degree in Accounting from NTU. In 2016, he co-founded the financial education website TheAstuteParent to provide detailed insurance plan analysis and financial planning tips.
As a ChFC Charterholder, Josh has agreed to be bounded by the ChFC®/S Code of Ethics. This includes, among others, acting in a professional manner when it comes to conducting due diligence on primary and secondary sources of investment-related data, and articulating his investment opinions based on his research and beliefs. Based on his research and analysis, he highlighted his beliefs and opinions, and illustrated the concept of time value of money, as of the time of the video.
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[@kevinlim7974]

"ads preaching giving back.... don't give me that crap".... :) Haha I so very much agree with this statement ! 👍

[@joshconsultancy]

😬

[@Potatowarrior89]

Thanks Josh ! A video I much needed now 😊

[@joshconsultancy]

Happy to hear that =)

[@livingfooly]

Hee, your son is so cute! Glad to see a video for singles! So many videos for couples but quite some of us singles around also haha Thanks Josh for the insights always!

[@joshconsultancy]

Happy to do so =)

[@viky9414]

Hey Josh! Thanks for the awesome videos! Just curious, are you still vested in suntec reit?

[@joshconsultancy]

I’m still hopeful it can get a privatization offer haha 😉

[@arriflex]

Could you please do a case study for ppl in their 40s and how they can adapt this formula? thanks

[@joshconsultancy]

Need some details 1) single or married 2) age now 3) income now? Or joint income amount? 4) cpfoa now 5) cash balance now 6) own any flat now?

[@rolandchia3805]

That was my dream too! 😂

[@joshconsultancy]

😂😂

[@benjaminteo2909]

HI Josh, based on the HDB example u gave, are u basing on the assumption you will keep the property all the way for rental income? Do u forsee that such older HDB property will depreciate in price over the next 5-10 years or will it appreciate based on the current property trend? cause if it drops then essentially the gains we made from rental income might/might not cover the capital gain loss.

[@joshconsultancy]

Drop 7% due to market forces like recession yes but not due to lease decay actually. The lease decay factor has been exaggerated imo

[@ocswoodlands]

The easiest path to FIRE is to get married with a like minded spouse and NOT have children...😂

[@yeeen123]

😮 How abt hvg children who can earn well n also fillial? But of cos that's not controllable

[@joshconsultancy]

Haha marrying someone rich even easier path

[@regisnewgate]

​@@joshconsultancy LOL limpeh like yr idea

[@eightfoldsg]

@@yeeen123 Sounds like treating children as investments, which is why sandwiched generation occurs today

[@muzzplaygames]

That’s the reason why the population is going down. Everyone want to get married but don’t want to have kids. It’s a liability. Ouch

[@eugenegoh]

Josh your equation matches what I am doing now. Except the last part of $1500 I use it to buy 🚗. 😅

[@joshconsultancy]

wa so you really rented not 1 but 2 rooms? hows things?

[@arriflex]

any tips on how long the HDB lease should have left for this to work?

[@joshconsultancy]

Don’t think there is evidence how many years left is the ultimate factor to return rate. Yes newer properties are less impacted by BALA curve but also more expensively prices. Ultimate Guide To Buying First Property Now In Singapore! HDB or Condo? - check this sharing too =) kzbin.info/www/bejne/kImXZHRplpZjqs0

[@dbh998]

Being single really isn't too bad, but too late now 😅

[@brt525]

👍👍👍👍👍👍

[@eightfoldsg]

Thanks for this insight, from a 35 year old single. Would you stick to this strategy if i would have $0 grant? Only proximity grant i am eligible.

[@joshconsultancy]

Without the housing grant the appeal factor does drop :)

[@rebabara]

Hi Josh, if need around 2 to 3 years before 35 to buy HDB, would it be better to buy a 1 BR condo instead?

[@joshconsultancy]

I am of the assumption that we are in or near a peak cycle in residential property. That assumption gives me the bias that it is not better. Hope it is food for thought

[@rodneykoh2354]

May I know what is the website that you using to do the calculation

[@joshconsultancy]

mortgage calculator? Edgeprop

[@leeroz5024]

hi josh. i owned a condo. capital appr abt 250k now. renting out aft cpf deduct abt 2k in pocket. do i sell and buy a hdb? single mid 30s.

[@joshconsultancy]

Sell condo there is a 15mth waiting period before buying HDB, do note

[@keantan24]

Don't forget U need to pay the utilities bill for that 2 rooms rented out...about >$250

[@joshconsultancy]

Your're right =)

[@HealingRedHeart]

Josh, you can only buy HDB when you are 35. When you are 35, the percentage of your income going into OA is 21%. So your mortgage from OA is only $6000 * 21% =$1260, not $1380. Timestamp 11:24

[@joshconsultancy]

I think you could be right. Follow the principle and adjust the numbers =)

[@dynaway]

i agree.. buying at least a 4rm hdb flat for singles to safeguard yourself...in the worst event of job loss, you will still have at least 1.8-2k income from 2 bedroom rental.

[@joshconsultancy]

Yes exactly. Share with someone who should hear it too

[@dynaway]

@@joshconsultancy back then in 2016-2018 i was looking at buying a 1br condo...then when the price went above $680k for 1br condo i figure out i cannot retire if i buy a 1br condo so i switch to look at 2rm HDB scheme for singles which end up you cannot rent out..both option sort of doesnt make sense if you want something to fall back with some income and a place to stay. i was lucky and bought a 4rm hdb in late 2019 at a reasonable good price just before Covid explode.

[@WorldAquariumSingapore]

Yes for singles workable and only if the single is able to tong and sacrifice his/her privacy for money or better still can he/she stay with his/her parents if possible? how about do a video for married couple will be better as most are married? and seems married couple difficult cause due to the max 6 pax per household so if the family is 4pax only can rent out to a couple? etc any advice??

[@joshconsultancy]

With kids the equation is harder I understand. I’ve done case studies on The Josh Tan Show, would suggest this kzbin.info/www/bejne/oqKclJWbgaafaq8

[@nikkikhooniqi]

I think, actually many of us property owners, especially those who entered before the “boom”, can actually retire already. Say we have finished paying our HDB mortgage, rent out our homes and just use the money to retire super early in any of our neighbouring countries. But then if everyone does the same, hey, where are the Singaporeans?! Just don’t everyone follow me can already

[@SGBOI]

Can do an episode on earning 3K? 3 room possible?

[@joshconsultancy]

Any angles to explore further? or constraints to the situation like CPFOA at a certain amount?

[@JL-ud6xx]

what is this calculator to calculate max bank loan? Can share? pls.

[@joshconsultancy]

mortgage affordability calculator from edgeprop. Do note, this 4% floor rate may need to be revised up soon

[@thomaslim9083]

The sacrifice of privacy tho. 2 tenant.

[@garlicbread68]

Resale can’t make money in general. Just look at the previous historical trend. Covid is an outlier. Buying now, the interest portion will erode any gains u have made through capital appreciation. plus resale sellers are asking for stupid pricing now. Buy and hope price will appreciate is a really stupid strategy.

[@sylves5788]

hi Josh, if you are single and earn a pretty high salary. Will you still choose HDB or a Private for more upside?

[@joshconsultancy]

Ah, I take care of affordability and cashflow. I dont assume the upside, we never know the future =)

[@david888a]

If one has a high monthly income n good down payment ,one should go for FH private for own use especially with land being scarce in Sg. You still can rent out a room if u choose to. HDB, might be cheaper than private but it’s a decaying lease n in the future you might think of upgrading to a private…so why not do now if u can afford…JMO

[@janicetan4626]

do we have to pay back the housing grants with interest when we sell the property?

[@joshconsultancy]

Grant is given as CPF to you. NO need to return UNLESS you buy a second subsidised hdb flat. Check - CASH RECEIVED FROM MY HDB SALE! I've Gone On An Investment Buying Spree... - I mentioned on it kzbin.info/www/bejne/q5azk4Kmdrd8sKs

[@genmumbles]

To clarify further, owner doesn’t need to return the housing grant to HDB. The grant amount is returned to owner after sale from the proceeds (assuming not a negative sale) and CPF interest accrued still applies on the grant amount that the owner used.

[@genmumbles]

If you buy a second subsidized flat from HDB, then the resale levy applies.

[@DN2Aria]

what if above the 7k and not eligible for the grant, still hdb option?

[@joshconsultancy]

HDB resale is still an option BUT no grant which reduces the appeal of the equation imo what are your thoughts?

[@bloggeraldwin]

Just sleep and whack t bills and ssb and use the interest to stocks and options

[@joshconsultancy]

Thats way slower... maybe Id do a followup on this point =)

[@bloggeraldwin]

@@joshconsultancy I bought bac at 26.77 Sold a call at 26 for 9 months took back $3 plus up coming 0.50 of dividend - 0.77 of current minus strike I am quite satisfied with 10% of profit for 9 months if the option is excerised With a 10% of bufffer of drop in price

[@bloggeraldwin]

@@joshconsultancy when I did it for Manulife stock this strategy people called me crazy and scared . Then the crash of banks came . I am one of the ones staying afloat with still stock price above the cost

[@mymemorieslane]

Does it means to apply this way, one needs to quit from his/her job in order to get the full 55k grant if single?

[@joshconsultancy]

Loan may be affected. As to the timing, need to check w HDB. But Ive seen on ground people doing MBA and that period of low income was timed well

[@sylviafoh9596]

Ppl said HDB is NOT asset as 99 lease , when retire u cannot sell n downgrade ... What is ur opinion ?

[@joshconsultancy]

When retire how come cannot sell and downgrade? Can... Can go to 3rm or 2rm if need. HDB even has a buy back lease method to partially cash out. 99 lease is true but applies not just to HDB but also private 99y condos In fact, owning both before, id safely say the running cost of owning a HDB is negligible vs high sinking fund cost when condos age.

[@qjlim3035]

single can buy 4 rm hdb?

[@joshconsultancy]

Resale can

[@henry5225]

Just to bring out the other side of this logic, you assume the entire unit were to rent out or with one room reserved for own use. The cash outflows about using cpf money to pay mortgage and rental income is just merely “ cash out of monthly cpf payment” The only butter is extra portion between rental income and mortgage payment + utilities + stamp duty The key might be how to make use of the money wisely and generate income higher than cpf OA

[@joshconsultancy]

Cash out effect was not the intention... more aiming cash in addition. One can choose to still pay mortgage w cash and conserve OA.

[@gracepassion77]

Was income and property tax factored in ?

[@joshconsultancy]

If $6k income, the rent income may not sit in too high a bracket yet. property should still be owner occupied tax. But yes agree should add them in

[@RayWilliamWilson]

If everyone do this then wouldn't it make the HDB prices go up and up? Majority of people out there buy HDB as a home to stay in and will definitely be affected by the increase in HDB prices. On a personal level nothing wrong on doing this for financial freedom and a more comfortable life but on a societal level it just deprives others of the opportunity for an affordable home.

[@joshconsultancy]

No deprevation. This scenario person buying is for home and just taking one room

[@andrew-l9j]

It would also help lower the rental prices though, which is also needed. High rental price = fewer foreign workers = weaker economy.

[@pangshengwei]

How are you going to buy HDB as a single < 35? If married, are you sure you and your wife would want to only stay in 1 room?

[@joshconsultancy]

35 and above than can buy as single. Thats why equation is IF I AM SINGLE =)

[@SGBOI]

@@joshconsultancy After 5 years, do you think its challenging to upgrade from a 2 room flexi?

[@starlite4975]

How about income tax?

[@joshconsultancy]

Valid point. At $6k/m income, the increment impact of rent income on overall income tax is not too big (yet)

[@joee2743]

Jia you super dad. Your 1 mil snowball still has time to grow. Maybe can make a video on some of the plans you've done for your own kids and attract parents as clients to plan together with you. Sometimes husbands willing to invest but to appease the wife need to have fixed/ my stable plans as well. Had to look after your kid that day?

[@joshconsultancy]

Ya and I had inspiration to produce that day also. Tried to park him w some toys but he wouldn't let me off 😂

[@valuabletips560]

Is it more worth to buy bto or resale hdb to rent it out?

[@laivincent561]

Property like equity has a cycle In HK lots of seller are selling even at a loss when usa and Hk property crash further u can always buy back at a lower price

[@joshconsultancy]

In this situation w rent and w grants, I think there are strong merits

[@valuabletips560]

@@joshconsultancy so bto or resale better though?

[@joshconsultancy]

@@valuabletips560 oh do note for single, CANNOT BUY 4rm BTO., only 2rm. Secondly BTO has build up phase and there is no CPF housing grant. The equation changes significantly. Hope its helpful =)

[@SGBOI]

@@joshconsultancy If 3K earning, any other choice? 3 room resale possible?

[@derekalex4506]

That I thinking 2 is better than 1. Find a capable spouse that could live beyond his or her means and both of you going for the financial freedom goals ❤

[@joshconsultancy]

agree =)

[@user-xh9gi9gs1g]

Did you mean to live a spouse that can live “within” his or her means, instead of beyond? 😂

[@rananapier8424]

Im saving this, lol im 26 and just started working a decent job, so will take a while to accumulate money first

[@joshconsultancy]

yes~ and share with someone who should hear too =)

[@GrowInTheDark]

What if you’re single 35 over 6000 salary but not exactly high earner…

[@joshconsultancy]

Grants part may not apply and hdb loan also. the equation is slightly less favourable

[@GrowInTheDark]

@@joshconsultancy Yup. Would this still be the best option without grants and without HDB loan?

[@tanqinxiang]

For people that just started out their career for 2 to 3 years and almost hitting the $6000 income, do you think we are on a comfortable track?

[@joshconsultancy]

Definitely. Big jumps in career is 30s and 40s. Doing well earning sounds like you're on a fast track =)

[@nikkikhooniqi]

Young man, your percentage increment says you definitely are. Keep hopping every 2 year till your income plateaus, and your very much ahead your peers. Then congrats, you game the system. Then comes a stage of your life, when u’ll realise that job environment and your mental well-being matters over that endless wealth chasing. Life is short and unpredictable, once money is more than enough, start spending more on the intangibles, your bucket list of to-Do’s.

[@gavinyuen040680]

6000 a month cant do crap la be real

[@joshconsultancy]

Hmm?coz to me thats more than median income already and steps can be done as shown. Anyone else do comment if $6,000 cant do crap

[@david888a]

⁠@@joshconsultancyGavin must be a high spender thus $6K per month is peanuts to him. $6K to me is a good monthly income if one budget n spend frugally. I believed he couldn’t comprehend your steps as shown…😂😂😂

[@DonYang73]

Good luck guys, you’ll borrow your life away 😂😅

[@joshconsultancy]

Be nice. DY what would be your advice if in this situation?

[@Minnn08]

Hmm the good thing is, you can choose to rent out whenever you feel comfortable for as long (or as short) as you would like to, be it when you just purchase the property or when you have lower income or when you grow older. If you value personal space very much, then this would not be an option for you to consider anyway.

[@DonYang73]

My advice is pay off the roof over your head and hve other liquid investments. Properties as investment? Yes if you can truly afford it. Dont become a slave in the process….many people do. Its similar to BNPL….😅😅

[@miklee4834]

Buy toto😂

[@laisowfong]

Buy big sweep also..

[@kakaboo]

but you have to wait for 5 years after buying the flat before you can rent it out right ? so you would be paying 5 extra years of mortgage without any rental income....

[@joshconsultancy]

5y MOP is entire unit. Thats why "I'd have to live in it" in this simulation