Sunday, March 11, 2012

Where is my money? Rich Kids, Poor Folks

Singapore is known as one of the biggest financial hub in Asia. The average gross monthly paycheck for individuals range from $5500 to $7000. There is no doubt to such a figure, but we are talking about average nationwide. Some Singaporeans earn up to $200,000 a month while most make merely $1200 a month.

What is going wrong?
Inflation!
Eggs that used to cost $0.45 10 year ago is now $1.50. Housing that used to be 15 times cheaper is now crazily unaffordable now. The average inflation in Singapore is about 4% - 6% P.A, while the average wage growth is only 1% - 3% P.A.

How could anyone survive?
Business owners survive because they make more than 10% P.A.
Self employed individuals survive because their earnings walk hand in hand with inflation.
Employees survive because they invest any disposable income.
People who do not survive because they are none of the above.

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