I am in my mid-50s.
When I was a kid, I was taught to always save for the future. And the more you save, the better your future will be. If you have money, put them into the bank, earn interest and your money will grow. And when you are old, you can take out the money to enjoy your old age. So the saying went, back then. That, I supposed, was the very simplistic mindset of my parent's generation. Now, that thinking, simplistic as it might be, was not wrong per se. In fact, there's a lot of wisdom in it. But now, such logic doesn't hold anymore as unstated assumptions have changed. Interest rates cannot, and do not, keep up with inflation rates. But that was how I was brought up. And, I believe, shaped my attitudes towards investments. When it comes to investments, my preference is to do a purchase and leave it for the long term. I do not actively monitor the fluctuations in the value, assuming that over time it will appreciate. And this is what I have done with my current condominium. I had purchased it in 1996, with the view to live in it and to sell it and move into public housing when I am near retirement. The logic behind this approach is that the asset would have appreciate significantly and that I will be able to liquidate it to sustain my quality of life, until I am 70, or 75 (when I expect to expire). The "near retirement" age where I had plan sell my property would be 55-60 years old.
On hindsight, this thinking was a tat naive. The price of my property happened to be on the high side when I first purchased it in 1996 before the financial crisis hit. That was when there was a huge frenzy in purchasing properties cos everyone had expected the property market to spin out of control. When the property bubbles burst and in the depth of the financial crisis that subsequently happened, many got suffered heavy losses as they had to sell their property after losing their jobs. The price of my property dropped to half the price I bought. If i had sold it at that time, I would have been burned terribly badly - even if it was what people called - paper money. Thankfully, I had a stable job that allowed me to tide over the crisis. Things stabilised eventually. With time, the markets recovered, and property prices had gradually increased over time. I have since cleared my housing loans. The price of my property is some 20% higher than when I had bought it (in 1996). But objectively, if I were to include inflation, interests, etc, I will still be making a loss. But well, I started off naively in the 90s when I was in my 20s. I have learned much about the basics of investments but it is still not really my cup of tea.
Today, I need to review my plans to downgrade when nearer to my retirement age of 55 - 60 years old. I am, once again, reminded of other factors such as increase in life expectancy, improvements in medical science, increase in health costs, retirement age, etc. And just like how I need to rethink/ reframe my retirement, I have to do the same with how I can manage my property (or my assets in general). So, whether I can, or want to sell my current property and to move into public housing, or to purchase another property to create passive income in future, etc, needs rethinking. This medium to longer term thinking will definitely impact my immediate plans for my current house - should I renovate it, how much to renovate, or a simple refresh... hmmm, such thoughts is confusing, especially when you don't know when you are going to expire. I certainly don't want to end up as a person who focus on saving for the future and, in the process, fail to live a good life. But where do I start? Frankly, I don't even want to start.
Life was so much simpler when you are younger. Agree?
Or am I just thinking too much?
Hmmm...
