Singaporean Entrepreneurs

Although it is part and parcel of my work, I still loathe having to spend my evenings chatting with business associates and potential partners. For one thing, I don’t drink and everyone else does. This reduces the conversation to the most boring of levels except for those who are intoxicated. In their chemically altered state of mind, everything and everyone is interesting.

So it was with great surprise that I found myself completely ensconced in conversation with an investment banker on whether, in this day and age, it is still wise to buy real estate. He was of the opinion that liquid assets, while much riskier, also make more sense, because their very volatility means that you can have massive gains within a very short period of time. Fixed assets like homes, on the other hand, become a financial burden for many people, and few actually make money because so many people travel/move these days and therefore end up selling their homes at a less than ideal price/market.

“You have to enter and leave the market at the right time, just as in the stock market. But it is incredibly difficult to find a buyer at the drop of a hat which is what many employees have found themselves in. Look at the markets today, the make up of the big cities have never been more cosmopolitan and uniform at the same time. Shanghai looks like New York, looks like London, looks like Hong Kong, looks like Singapore.”

For most of the night I simply found myself nodding in agreement as I considered my own plight. I am “home” less than 6 months of the year. The rest of the time is spent travelling from one country to the next. Although people like me are few in this world, our contingent has been growing steadily for the past 10 years. And he was right, the cities he mentioned are the cities I travel to all the time and they have never looked more alike. For those of us how have to travel to make a living, we are truly global citizens and the idea of nationhood, I am sure, is lost on us.

But what about the old investment advice, I asked, “the only thing they don’t make more of is land.” Doesn’t it stand to reason that buying real estate still makes sense? He smirked and said, “Dubai”. I had forgotten about all the reclamation work in Dubai where the land looks like palm fronds or even islands that form the current political boundaries of the world. “Even Hong Kong and Singapore,” I chimed in negating my own assertion. Much of Hong Kong and Singapore’s real estate, its most expensive, sits on reclaimed land.

Nevertheless, if you’re living in one city, and renting, it’s as good as money down the drain unless you are investing wisely with the rest of your savings. Also, for those in the USA especially, owning is essential to save money- on taxes!

So should you own or should you rent? We never really answered that question. And no one in our table could satisfactorily answer it, thus our little dinner debate.