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.

Home n House simple wealth creation roadmap

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$33,5161 (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

StageAmount
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
$123,7661 (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

StageHome Loan Monthly Installment
Foundation0%$0
Framework8%$291.73
Wall13%$474.06
Roof18%$656.39
Door23%$838.72
Carpark28%$1021.05
TOP53%$1932.70
CSC68%$2479.69

Total Installment Paid (HDB+EC) before EC TOP

StageCPFCASH
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$138,650.901 (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$143,469.501 (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

ItemHusband (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
$370,133.861 (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
$216,933.861 (EC-Staying/Husband)
1 (1BR-Investment/Wife)

Monthly installment breakdown

PropertyCashCPF 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

PropertyEst ValueFully Paid
EC (Husband)$1,560,000Yes
1BR (Wife)$960,000Yes

* 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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