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Fiancé And Fiancée At A Crossroad

This couple aims to achieve their target net worth upon ​retirement and secure their desired 3-bedroom plus study property before ​reaching 53 years old and to fully pay down their property by 65 years old.

Client Profile: Fiancé And Fiancée At A Crossroad

Estimated Net Worth: $2.8M for 3-bedroom plus study condo (excluding ​capital growth and inflation).

Profession: New business start-up (husband) and dancing teacher (wife)
Age: 44 (husband) and 40 (wife) as of 2024
Family: Couple, no children (2024)
Net Worth: Staying at parent’s HDB flat, no property ownership

Target Net Worth (Real Estate) upon Retirement:
Fully paid 3-bedroom plus study condo in South-West region.

Immediate Needs:

  • 2-bedroom condo in the Rest of Central Region (RCR)
  • For immediately move-in as they are getting married in 2025

Budget:
$1.4M, with sufficient cash and CPF monies for a 25% down payment and ​buyer stamp duty estimated at $420k.

Concerns & Challenges:

  • Approved loan amount is low as the husband’s income declaration is lower due to ​new start-up
  • They have a combined cpf of $480k and $100k cash for a higher down payment of ​the $1.4M property i.e. to exhaust all their monies but the monthly instalment has ​to be paid in both CPF and cash
  • They have an agent who has been pressurizing them to buy a 1+study brand new ​condo which made them very uncomfortable (2023)

Solution Implemented (After Audit):

  • I advised them not to over-stretch their finances, especially for a new start-up
  • Avoid the stress of topping up cash for their monthly instalment
  • Purchased a 4-room HDB flat in Jalan Membina for $900k (2023) delayed ​gratification strategy
  • As a first-timer buying resale flat, they also received CPF housing grant of close to ​$80k and a $20k proximity housing grant, totalling close to almost $100k in grants

Shortfall from Target Net Worth:

  • Target Property Cost: $2.8M for a decent 3-bedroom plus study condo in the ​South-West region
  • Required Down Payment and Stamp Duty: $840k in cash and CPF monies
  • Shortfall: $840k – $580k = $260k

Future Solutions:

  • Sell the HDB flat in 5 years’ time to purchase a brand new xxxxxxxxxxxxxxxxxxxxxx ​or xxxxxxxxxxxxxxxxxxxxx, depends on financial standing and stability
  • Savings over the next 8-10 years through CPF/cash savings
  • Raise capital from the sale of xxxxxx to purchase their 3-bedroom plus study ​property. This method aims to bring down the loan amount as much as possible ​for their 3-bedroom plus study condo.

By following this strategy, the couple aims to achieve their target net worth upon ​retirement and secure their desired 3-bedroom plus study property before ​reaching 53 years old and to fully pay down their property by 65 years old.

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