Wealth Creation Plan
It always seems impossible until it is done
Wealth Creation Plan
It always seems impossible until it is done
What is Wealth Creation?
Home & House Wealth Creation roadmap share the same concept as Asset Progression Plan. The purpose is to create wealth through real estate (assets). To achieve the desired results, careful planning is required so that you can make informed decisions.
Every individual and family faces different constraints in term of financial ability. Our team will craft a wealth creation roadmap especially for you base on your current financial status and other concerns like staying near parents, travelling time to work place and school etc.
Basically, the roadmap will incorporate risk management to reduce your risk and improve your assets after taking each action according to the plan.
Below is one simple wealth creation roadmap for average Singaporean to own TWO fully paid private properties when they retire.
Lets do a simple break down on how you can achieve the desired result base on above Wealth Creation roadmap.
Before we start the example, here are some statistics on the income that we will be using for our case study.
Median Gross Monthly Income From Work (Excluding Employer CPF)
| Age (Years) | Median Monthly Income |
| 15 – 19 | $1,000 |
| 20 – 24 | $2,329 |
| 25 – 29 | $3,500 |
| 30 – 34 | $4,500 |
| 35 – 39 | $5,308 |
| 40 – 44 | $5,958 |
| 45 – 49 | $5,200 |
| 50 – 54 | $4,500 |
| 55 – 59 | $3,277 |
| 60 & Over | $2,400 |
Above data is from June 2021 statistics published by the Ministry of Manpower (MOM).
An average Singaporean start working at the age of 22 years old. Before we apply Build-To-Order (BTO) at 27 years old, we have 5 years for us to save up for our first property.
1. Start working Stage
Salary at 22 years old : $2,329/month
CPF (OA) : $535/month
Saving (Cash) : $465/month (25% salary after CFP deduction)
2. Apply for BTO Stage
Salary at 27 years old : $3,500/month
CPF (OA) : $802/month
Saving (Cash) : $700/month (25% salary after CPF deduction)
Non-Mature 4-room BTO average price : $290,000
Max House Loan (HDB) : $460,000
HDB Home Loan Interest Rate : 2.6%
Loan approved : $250,750
CPF (OA) payment : $43,500
Saving (cash) (($465 x 36) + ($700 x 24)) x 2 = $67,080
CPF (OA) = ((($535 x 36) + ($802 x 24)) x 2) – $43,500 = $33,516
Available Fund after 5 years at 27 years old for a couple
| Saving (Cash) | CPF (OA) | No. of Property |
| $67,080 | $33,516 | 1 (HDB-Building Stage) |
3. TOP Stage (BTO) (32 years old)
Salary at 32 years old : $4,500/month
CPF (OA) : $1,035/month
Saving (Cash) : $900/month (25% salary after CPF deduction)
Saving (cash) (($700 x 36) + ($900 x 24)) x 2 = $93,600
CPF (OA) = ((($802 x 36) + ($1,035 x 24)) x 2) = $107,424
Start paying HDB Loan monthly installment
HDB Loan Monthly Installment : $1,118.30
Available Fund after 10 years at 32 years old for a couple
| Saving (Cash) | CPF (OA) | No. of Property |
| $160,680 | $140,940 | 1 (HDB-Staying) |
4. Applying for EC (37 years old)
Salary at 37 years old : $5,308/month
CPF (OA) : $1,220/month
Saving (Cash) : $1,061/month (25% salary after CPF deduction)
Saving (cash) (($900 x 36) + ($1,061 x 24)) x 2 = $115,728
CPF (OA) = ((($1,035 x 36) + ($1,220 x 24)) x 2) = $133,080 – $67,098 = $54,018
Standard 3-bedroom EC : $1,000,000
Max House Loan (EC) : $680,000
Average Bank Interest Rate : 1.5%
*Take note to do a 99/1 percent share on the EC
EC Payment Breakdown
| Stage | Amount |
| Booking (5% Cash) | $50,000 |
| Exercise (15% Cash/CPF) | $150,000 |
| BSD | $24,600 |
| Legal Fee | $3,000 |
| Foundation (5% Cash/CPF) | $50,000 |
| Top up (7% Cash/CPF) | $70,000 |
| Bank Loan (68%) | $680,000 |
Total Cash payment : $152,642
Total CPF (OA) payment : $194,948
Husband and wife CPF OA after buying EC
| Husband (CPF OA) | Wife (CPF OA) |
| $0 | $0 |
Available Fund after 15 years at 37 years old for a couple
| Saving (Cash) | No. of Property |
| $123,766 | 1 (HDB-Staying) |
| – | 1 (EC-Building Stage) |
4. TOP Stage (EC) (40 years old)
Salary at 40 years old : $5,958/month
CPF (OA) : $1,370/month
Saving (Cash) : $1,191/month (25% salary after CPF deduction)
Saving (Cash) ($1061 x 36) x 2 = $76,392
CPF (OA) = $1,220 x 36 = $43,920 (Individual)
EC monthly Installment before TOP
| Stage | Home Loan | Monthly Installment |
| Foundation | 0% | $0 |
| Framework | 8% | $291.73 |
| Wall | 13% | $474.06 |
| Roof | 18% | $656.39 |
| Door | 23% | $838.72 |
| Carpark | 28% | $1021.05 |
| TOP | 53% | $1932.70 |
| CSC | 68% | $2479.69 |
Total Installment Paid (HDB+EC) before EC TOP
| Stage | CPF | CASH |
| Foundation | $6,709.80 | $0 |
| Framework | $8,460.18 | $0 |
| Wall | $4,777.08 | $0 |
| Roof | $5,324.07 | $0 |
| Door | $5,871.06 | $0 |
| Carpark | $6,418.05 | $0 |
| TOP | $29,280 | $7,332 |
| CSC | $2,479.69/mth | $0 |
* Assuming stages 1 and 2 need 6 months and stages 3 to 6 need 3 months to complete. (Except TOP to CSC usually around 1 year and HDB usually will be sold within 6 months of EC’s TOP)
Saving (Cash) : $76,392 – $7,332 = $69,060
CPF (OA) : $87,840 – $66,840.24 = $20,999.76
Details of HDB sold after EC’s TOP
HDB Selling Price : $475,000
Outstanding Loan : $290,000 – $62,268.78 (Principle payment amount for 8 years) = $227,731,22
CPF OA refund : $117,651.14 (include accrued interest)
Agent Fee : $10,165 (include 7% GST)
Sale Proceed : $475,000 – $227,731.22 – $10,165 = $237,103.78
Cash Proceed : $237,103.78 – $117,651.14 = $119,452.64
Husband and wife CPF OA at 40 years old
| Husband (CPF OA) | Wife (CPF OA) |
| $69,325.45 | $69,325.45 |
Available Fund after 18 years at 40 years old for a couple
| Saving (Cash) | CPF (OA) | No. of Property |
| $312,278.64 | $138,650.90 | 1 (EC-Staying) |
5. MOP Stage (EC) (45 years old)
Salary at 45 years old : $5,200/month
CPF (OA) : $1,196/month
Saving (Cash) : $1,040/month (25% salary after CPF deduction)
Saving (Cash) : ($1,191 x 60)) x 2 = $142,920
CPF (OA) = ((($1,370 x 36) + ($1,370 x 24)) x 2) = $153,600 – $148,781.40 = $4,818.60
Husband and wife CPF OA at 45 years old
| Husband (CPF OA) | Wife (CPF OA) |
| $71,734.75 | $71,734.75 |
Available Fund after 23 years at 45 years old for a couple
| Saving (Cash) | CPF (OA) | No. of Property |
| $455,198.64 | $143,469.50 | 1 (EC-Staying) |
6. Decouple to own 2 properties Stage (45 years old)
Salary at 45 years old: $5,200/month
Assume: Husband owns 80% and Wife owns 20% of the EC
Husband will buy the wife 20% share over to free up wife’s name for the 2nd property (to save on ABSD)
Let’s assume the EC appreciates 20% which means the valuation will be at $1,200,000
Outstanding Loan : $680,000 – $166,177.05 (Principle payment amount for 8 years) = $513,822.95
CPF OA refund : $129,976.63 (include accrued interest (wife portion)
EC's share break down
| Item | Husband (80%) | Wife (20%) |
| EC Valuation | $960,000 | $240,000 |
| Loan | $411,058.33 | $102,764.57 |
| CPF OA Refund | $0 | $129,976.63 |
Details of decoupling (EC)
Part 1 (Husband as a buyer)
Husband’s Salary: $5,200/month
Max House Loan: $490,000
Average Bank Interest Rate: 1.5%
Purchase Price: $240,000
BSD: $3,000
Legal fee: $3,000
Cash Payment to Wife: $89,323,58
CPF OA Payment : $71,734.75
Total Housing Loan: $411,058.33 + $78,941.67 = $490,000
Monthly Installment : $2,364,47
Part 2 (Wife as Seller)
Selling Price: $240,000
Outstanding Loan: $102,764.57
CPF OA Refund: $129,976.63
Legal Fee: $3,000
Sale Procceed: $240,000 – $102,764.57 -$3,000= $134,235.43
Cash Procced: $134,235.43 – $129,976.63 = $4,258.80
Husband and wife CPF OA at after decoupling.
| Husband (CPF OA) | Wife (CPF OA) |
| $0 | $201,711.38 |
Available Fund after decoupling.
| Saving (Cash) | No. of Property |
| $370,133.86 | 1 (EC-Staying/Husband) |
7. Getting 2nd property under wife's name at 45 years old
Wife Salary: $5,200/month
Max House Loan: $490,000
Average Bank Interest Rate: 1.5%
Purchase price: $800,000 (1 bedroom)
BSD: $18,600 (cash)
Legal fee: $3,000 (cash)
Cash Payment: $131,600
CPF OA Payment: $200,000
House Loan: $490,000
Monthly Installment: $2,364.47
Husband and wife CPF OA at after getting 2nd property.
| Husband (CPF OA) | Wife (CPF OA) |
| $0 | $1,711.38 |
Available Fund after getting 2nd property.
| Saving (Cash) | No. of Property |
| $216,933.86 | 1 (EC-Staying/Husband) |
| – | 1 (1BR-Investment/Wife) |
Monthly installment breakdown
| Property | Cash | CPF OA |
| EC (Husband) | $1,168.47 | $1,196 |
| 1BR (Wife) | $1,168.47 | $1,196 |
Assume a 1-bedroom rental is at $2,000/month.
Effectively, the cash portion from you is only $336.94/month
At 65 Years Old
| Property | Est Value | Fully Paid |
| EC (Husband) | $1,560,000 | Yes |
| 1BR (Wife) | $960,000 | Yes |
* Base on 2% inflation rate.
Above is one of our simple wealth creation roadmaps that most average Singaporeans are able to achieve with proper guidance and understanding of the market.
Contact us if you want to know how we can help you realise your dream.
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