Ah Pek Told Me Anyhow Buy Also Make Money

That day, while in the coffee shop eating my laksa, two uncles (three including me) were talking about wealth thru properties.

As I think about properties when I am awake and sometimes even in my dreams, my ears perked up. I pretend to look for cockles while tuning my ears to their discussions.

They are in their late 60s. I recognise one of them. He stayed around this estate and drove a new Merc S400 at below 30km/h.

My car was behind him once. Jill said rich people no need to rush. I nodded and overtook him with my supercar. I am still creating wealth, I need to rush a little.

The other Uncle is dressed up nicely … I assumed he is a housing agent.

They were looking at the new shops for sale in a newly completed shopping mall in D8.

The agent was leaning forward and explaining how to build wealth from properties.

The uncle was sipping his kopi-o and then interrupted and said after putting down his cup, “Singapore so small, anyhow buy also make money”.

He said loudly that the shops are freehold and he like freehold. Its $2500psf. He said cheap. He commented that these properties should be $5000psf in ten years.

He calculated that he needed 4 shops, one for each grandchild. Total is $6,000,000. He said cheap and he would pay full cash.

“Aiya taking loan very troublesome, pay cash is easy. After all , bank interests is peanuts”, he said.

I almost drop my cockles.

The rich Uncle went on and talked about his younger days. He owned a row of shophouses at Bugis thru the money make from taking photos of Japanese tourists on trishaws. He would be paid cash, including tips on those photos. At month end, he would have sacks of cash. He used it to buy shop houses at Bugis where the trishaws parked. He saw how properties doubled every five to seven years.

Side Note to younger readers … Japanese tourists disappeared when their economy bubble burst in the early 90s. .. I get to witness their greatness, their downfall and the current Tokyo. It was a huge difference, even till today. … another story for another day. … sorry to divert, lets carry on the story.

I know those days in Singapore. Jill and I were just joining the workforce. Jill was selling branded goods and her customers, the shopowners, were busy making profits.

Every trade in Singapore at that time was making money. Regardless what you sell, just open shop and people will buy, that’s what another rich customer told before moving his entire family to Australia some years ago.

In those days, condo sold were flipped within days and many millionaires were created within a year, without actual owning the units.

Foreign companies were pouring money into Singapore to produce goods like washing machines, video recorders (many of wont know what is this), TVs, walkmans, CD players, mini-compo (not computers) and lots of clothing factories.

Those were the good old days. If you hear any old folks talking about the good old days, they were referring to this era most of the time.

BUT now its different. Manufacturing has shifted to other countries. Our country is changing. Many shops are empty and without people, there is also no mosquitoes to smack.

While it may be ok for this rich Uncle to buy these shops and not worry about rentals, his game is more of Capital growth. I would image his grandchildren hitting 21 and collecting million dollars ang pow. He is merely shifting cash from the banks into properties. This is a different game. It’s a game of wealth preservation.

However, the average Singaporeans who are building wealth should think twice about buying such shops. It will take many years for these pty to be filled up. And many more years before rental can match bank payments using bank loans of 80% and 25 years loan tenure.

The strategies for building wealth is totally different from preserving wealth. Take note guys. Read this sentence five times to get it into your brains.

Anyway, back to the discussions between the two. The rich Uncle told the Agent to select four best units, give a discount and then pick up the cheque from his office next week. Just like that, a $6M deal is sealed. I assumed agent comm is 5% and that would be a whopping $300K earned. Wow.

It would take the average Singaporeans 30 years of working to save $300K.

It would take me one good property deal to make $300K within one year.

And this Agent, drink coffee and make $300K…. really salute him.

Again I dropped my cockles when I think of all these. This time the laksa soup stained my white t-shirt. Jill is gonna kill me.

My phone rang and its time to switch from a kaypoh uncle (me) to be a good partner to help Jill with the bags of groceries.

While walking to her, I told myself … when I grow up, I want to be like the rich Uncle … drive a new Merc S400 at below 30km/h.

My friends, please tell me by typing in the comments below, when you grow up, what do you want to be ?

Love, Marko
Investor, Practitioner & Full-Time Coach