Low income population in Singapore

I have tried to live within $250 this month. It was hard. Transport alone already take up 33% due to travelling from the north east to the west of Singapore. Food, just lunch only in school within a cost from $2-3 takes up 33% of the original amount.

Food - 33%
Transport - 33%
Haircut - 4%
Stationery - 4%
HP Bill - 6%
Others - 20%

For a low income family with a breadwinner earning $1500 and below a month, life is hard. They have to include breakfast, lunch and dinner money. They have to include rent or loan payment + bills. If they have children, everything increases. Overall they have little or no savings. If they go unemployed, they are as good as dead.

In today's Straits Time - Govt aid for the needy triples to $140m
Is the amount absolute on the total that the needy will receive or does in include expenditure? What I see is it is not absolute. I do not believe that the organisations are efficient in the handling of funds to maximise the amount it will benefit the needy. All may be due to cost of restructuring in the short run that they cannot afford to undertake. Just an opinion.

Transportation System in Singapore

Today, the government announce that it will spend $20b to build 2 new subway lines.

Differentiation of government roles
From the existing method of running a country either by free-market or by centrally planned government, there is a "division of roles" within the government itself. The government can let the country run by itself via free-market and have centrally planned elements. For example, Singapore can be said to be a free market although restrictions definitely exist, it's transportation system is centrally planned.

This also means that the duopoly of existing transport companies - SMRT and Comfortdelgro cannot fully exploit passengers. Because the 2 companies' main goal is to maximise profit and account to their shareholders, while the government's goal is to improve the efficiency of the transportation system and of course the welfare of the people.

Currently, the government is planning to reduce their operating licenses from 30 years to 10-15 years.

Travelling Efficiency
In the short term, the government will get subway operators to run at a higher frequency. This would definitely reduce operator's profit margin in both the short and long run until new lines are completed.

But the main problem is that everyday, majority of the people are travelling towards the same destination which is the cbd area. Everyone who wants to interchange trains have to cramp at Raffles Place or City Hall. From the NEL, people also travel to Outram Park or Dhoby Ghaut and then to RP or CH, thus increasing the inflow.

However, all may be fine when the Circle Line finish. Although the circle line will divert passenger flows, the impact will also depend on fares the circle line will cost relative to the existing lines.

Futuristic View
In an optimistic view, future Singaporeans will depend on the public transportation system than the cars. This will inturn improve domestic growth as less money is spent on cars and fuel that can be considered as imports not relating to domestic consumption. This will inturn create more jobs.

There will be an increase in Off-Peak-Cars(OPC) through the years when new lines emerge. The trend has already been growing.

This however can be refuted as cars are not only means of transport but are status symbols that boost man's ego.

The government has to keep the fares down or else those in the low income group will not be able to survive because their wages are relatively stagnant and with rising inflation, all is not good.

Blog Title

After so long, no one called me if they saw the car plate. Now I know why - because I didn't provide any number. LOL.

Retirement?

Why the big fuss about to plan for retirement?

I think that the government has a forecast on what would happen if no one plan for their retirement. How long the timeline, I do not know. It should be when majority of local middle income Singaporeans, who will be retiring at around 65.

Most probably, everyone in that income group may have to work until they are medically unfit to work in order to survive.

This is not to encourage the people not to spend at all, but to prepare for their retirement so that the government would not have to plan undesirable actions which may lead to loss of foreign investments and social unrest.

This is an assumption if no one saves enough money. However, Singaporeans are one of the top savers in the world, for now. There may be a change in spending characteristics. The baby boomers who are now near or at their retirement age are mostly savers perhaps due to their hardship when they are involved in rapid change. After that generation, there may be a progression in the increase in spending of the population. Which in economic terms, is the marginal propensity to spend.

Hopefully in the future, Singaporeans will not go on debt like what is happening in the US. However, the easy access to credit these days is just a spark to a forest fire which may happen. A pessimistic view in my opinion is that materialism of people is growing at a positive curve. This will further widen the rich poor inequality whereby in the future, there would not be the poor, middle and the rich. The spendthrift middle income would shift towards the poor (material rich but cash/asset poor & perhaps in debt) and the saver middle income who invest for the long term will most probably be the lowest tier of the rich.

For the saver middle income class, they have a chance to be rich and retire comfortably because of the compounding effect when they invest. If they teach their future generations the virtue of frugality, they would most probably climb the ranks of the rich.

How rich you want to be will depend on your risk appetite. (Not to encourage TOTO & 4D - That is gambling.)

For the spendthrifts who spend over their means, they exist today in Singapore.

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Please note that $1,000,000 in 30 yrs time is only worth $308,318.67 today assuming inflation of 4%.

Assuming the government maintains it's efficiency for the next 100 yrs, generally I think all would be fine. But this is not to encourage dependence on the government.

Progression
Stability is the key for smooth progression in Singapore. Volatility is a market's best friend but not for a country's growth. That's why countries are starting to take Singapore as a role model in economic terms.

Disclaimer: This is just my personal opinion and there are no statistics that support this idealistic view. I would not take any responsibility for any damage caused by this article. Thank you.