Volume 3 Issue 29: Intelligent Investing

Singapore Has Highest Concentration of Millionaires

I want to say I am surprised to find this out, but given the asset prices and the growth of Singapore's economy, I wouldn't say it is too surprising. What I found surprising was that about 15% of Singapore's households are millionaires. This means that if you walk past 10 families down Orchard Road, at least one of them should be a millionaire. OK, maybe the rich people don't hang out at Orchard Road, but you know what I mean.

What is even more suprising is that the 2nd ranked country, Switzerland, is a huge distance away from Singapore, with "only" 9.9% of its households being millionaires.

The funny thing is, the people in Singapore don't think of this as a big deal. In fact, some of them see this as a huge problem:

However, Singapore’s median household income remains at a modest $5,700 per month, according to the Department of Statistics. This starkly illustrates a growing income gap, one of the biggest problems facing the country today. Singapore already has the second-highest Gini co-efficient in the developed world, behind only Hong Kong. The Gini co-efficient is a measure of income disparity, and it is indeed alarming that income is distributed more unequally in our country than even India or China.

Another problem that comes with having a “wealthy population” is a high cost of living. In a 2010 survey of 214 cities by consulting firm Mercer, Singapore ranked as the 11th most expensive city in the world for expatriates, on a par with Oslo and more expensive than New York.

Read the full article here.

Economics @ Home © Volume 2 Issue 23

Who Wants to be a Millionaire?

Below is an article from the Star on 9 Aug 2010 about a man who won RM1 million in a lottery.

Monday August 9, 2010

Man torches self after ‘burning’ lottery win

A VEGETABLE farmer who lived a life of luxury after winning almost RM1mil in a lottery five years ago torched himself when his “pot of gold” became empty.

The 63-year-old from Serian, Sarawak, known only as Khoo, was reported to have dug a “grave” at the back of his house before splashing petrol on his body and lighting it, reported Berita Minggu.

The man had won more than RM750,000 five years ago and then reportedly spent up to RM1,800 on a single bet over the years, hoping to strike it big again, the weekly said.

Serian OCPD Deputy Supt Jamali Umi said the police have classified the case as sudden death.

He said the victim’s nephew had found the man dead in the hole.

A relative, who declined to be named, said Khoo, who never married, had stopped cultivating his farm upon winning the lottery and had spent the money on a new house and several vacations.

But with no new winnings, the barrel soon became empty.

Many of us dream of making it big, earning bucketloads of money so that we can buy this or that. Many of us work hard day in and day out, and complain about the stress and what not, in search of the pot of gold that can provide us for the rest of our lives. Do we really want that to be handed to us? Or do we really want to have to work for it.

This is precisely what happened to this man. He was a farmer who won RM1 million in the lottery. He got exactly what he wished for. But it is sad for him because he did not work for his money. Because of that, he did not know how to appreciate the fragility of it. Because of the sudden windfall, he let himself go, lost his discipline.

So, after reading what I said, I am sure that many of you would show a snigger of some sort and think to yourself, "I would never do that". But really? Do we really want to be bestowed upon more money than we can truly imagine and let ourselves go, and then gorge down the luxuries of life like there was no tomorrow?

The sad reality of life is, there will always be tomorrow. As it was aptly described in the article, "...the barrel soon became empty". What would we do if we were given RM1 million? Many of us will say, spend part of it, save the rest. That would then keep you in the state of still having to work and earn a living. So what if you now own a Mercedes instead of a Myvi? You would now have to work twice as hard to maintain your Mercedes. So what if you live in a RM500,000 condominium. You now have to pay the RM1,200 maintenance fee every month, instead of your RM500 rent for your current dwelling.

The moral of the story is, there really is no such thing as a free lunch. In fact, we should try to enjoy the fact that we do have to earn our living. In that process, let us all hope to find some meaning to what we do, because there is just no fun in being given something that we all try to work so hard for. And in some cases, that might just kill you.