Notes

Benefits of Property Asset Progression
If the Progression strategies are executed correctly and on time, property owners can look forward to owning one or two fully paid private properties by their retirement age. These owners can choose to sell these properties, downgrade to an HDB and enjoy a comfortable life for the rest of their living years or put the funds in a fixed deposit account to collect interest.

In some cases, property portfolios would comprise high rental yield properties that generate passive incomes even before the owners reach their retirement. This is fantastic news for those who are still trapped in the corporate rat race because the recurring rental income will boost financial wealth, create positive changes in their living standard and even fund their children’s education.

Another upside of adopting the https://andygohproperty.com /asset-progression-plan/">Property Asset Progression lies in the fact that such investment requires extremely low cash outlay. Purchasing private property in Singapore uses only 5% cash, while the remaining 95% can be funded by CPF and bank loans.

Furthermore, unlike investing in asset classes such as stocks and gold, banks are more than happy to issue a mortgage loan to fund a property investment. Simply put, property buyers can invest using someone else’s money even without dipping into their savings!

Important Criteria for Selecting the First Property in Property Asset Progression

Affordability – The first property should be purchased within the couple’s financial means and without overleveraging financial loans. A detailed financial plan will give clarity to how much combined cash and CPF they have and the monthly mortgage repayment they can afford.
High capital appreciation – The property should have qualities that will continue to boost capital appreciation and be able to generate good returns when it is sold after the 5-year MOP.
Suitability – The property should have qualities that are aligned with the buyers' goals and plans for (at least) the next 5 years. This consideration should factor in the possibility of family expansion or lifestyle changes.
Asset Progression Plan

An asset progression plan is a plan to enhance the value of your net worth.

It is a long-term plan that one has to follow very closely. It involves meticulous calculations and guidance.

Like all investments, the earlier you start, the more time it has to grow in value.

Why do I even need to start an asset progression plan?

I have a nice house, which I am paying for using CPF.
I have an emergency fund.
I spend within my means.
Yes, it is great that you are responsible for your money. The problem is that most of us are paying for our house using our CPF. CPF is meant for retirement and is one of our first investment vehicles.

We are actually one of the few countries, which allow its citizens to buy a house using our retirement account. And this may be one of the reasons why our houses are ridiculously priced.

Secondly, because we are allowed to use our CPF, we will need to “payback” the accrued interest when we sell our house. Accrued interest is the amount of interest the account could have made if we do not use it.

Thirdly, it is found that many Singaporeans are actually inadequately prepared for retirement. This is because most of our net worth is actually tied to our home value. The outdated plan is to buy a big house by utilizing the maximum CPF, stay in the house for 30 years, then downgrade. The plan used to work a long time ago. We see housing prices data from 1975 till 2019 increased from 8.90 to 152.2 Index Points. A 1600% increase!


How many times have you heard your parents say they bought their house at $25,000 and now it’s valued at $400,000? If growth is going at the same rate as before, your $400,000 HDB should cost $6,400,000!

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