Friday, October 07, 2011

Winter is coming

I'm seldom stressed about my financial situation because I don't really spend a lot and I save a major portion of my income. However, recently I've been trying to think out of my financial situation. Without giving specifics, I think I might have spent too heavily on both the COV of my resale and the renovation part. The COV of the resale cost me 40k and I don't even know what I'm paying for. At least for the renovation, I can see something tangible. COV? It's just an excess value above whatever valuation they come up with. It's something that I can do without. But this is Singapore - to get a flat fast in a matured estate, that is the price to pay.



The renovation bit is finally closed. Works out to be around 77k. Wah, jaws dropped... The bad thing about getting resale is that the condition of the flat is not that good. Hacking and planing the walls flat itself cost a few xxxx. I really really hope it's worth it after spending a big fortune on my house. If all things go well from next year onwards, I will be staying at home to work and making the best out of the money spent on the renovation. With such a big capital sunk into the home office, I've burnt my bridges. There's no turning back. I'll have to make it!



There's a couple of household appliances and furniture that still needed to be sourced out before the flat is livable. The major items include fridge, oven, dining table and a dining table for the study room (which is used for my work), sofa, a few tables (bedside table, coffee table, desktop for work), some lamps, a few fans, bowls and plates, cutlery, washing machin , cleaning equipment like broom, vacuum cleaner, mop etc. Did I put in TV and dvd player? No, I purposely left it out because that's going to be the last thing I'm going to need right now. That can wait...I'll have to do a few important things first in the proper sequence, so that my income stream can settle the cashout flow.



By end of this month, the bulk of my income stream would have run dry for this year. Hopefully my savings are enough to last me through the winter months as well as to settle whatever is necessary for the furniture and appliance part. I might need another 5k to tide me over, so perhaps I'll have to increase my saving target to 55k for this year. Just another 5k more to tide me through this extraordinary month, though 10k would seriously be nicer. If I can't hit that amount, I'll have to take off whatever bullets I have reserved for investments out. That would leave me with no emergency cash, though I still have quite a bit of holdings in equities that would serve as the emergency of the emergency. I don't think I'll come down to that though, unless I didn't stagger my purchases for the furniture wisely.


4Q plan:


1. Save up another 5-10k to bulk up my cash reserves before the winter month.

2. Work harder through the winter month instead of taking break. That would generate a low but still helpful cashflow in the winter months.

3. Stagger purchases of bulk items. More use of 0% credit installment, perhaps over 1 yr to ease out the cashflow bottleneck.


Wanted to put (4) Rely on help from family and (5) Buy cheaper and low quality furniture. No, I'll not do that. In life, one has to learn how to be independent, because ultimately, it's the way we can outgrow ourselves. It's also for the best because I'll be debt free - not those financial kind but the relationship kind. It's important for me to stand straight and walk tall among my family, so I'll best rely on my own. What about (5)? I'm thankful my journey learning the ins and outs of investing/trading taught me this very important lesson. Rather than buy cheap and low quality counters, it's better to be patient and wait for high quality counters to become affordable. Price shouldn't be the concern here - it should always be the quality. Get the best that money can buy so that time and energy would not be wasted hunting for new, cheaper ones again.



Alright, I feel better now. I just got to get it out so that it clears my mind. I know what I have to do now.


"Don't let the noise of others' opinions drown out your own inner voice." ~ Steve Jobs

18 comments :

Createwealth8888 said...

COV is the way you distribute part of your wealth to another investor.

Wealth Journey said...

For furniture, buy the ones on discount. Don't buy the full retail price version no matter how good it looks.

Lorenzo is a good place to buy quality furniture at great price! The Discounted ones!

AK71 said...

I am going to provide some noise but you can take Steve's advice. ;p

I furnished my 980 sq ft home with furniture from IKEA:

Sofa
TV Console
Dining Table/4 chairs
Single bed + spring mattress
Queen size bed + spring mattress
Numerous side tables

Grand total: S$2,000

I bought my washing machine, fridge, LCD TV, DVD player and other appliances from Audio House. All for S$2,000. You can get much better ones for the same price tag now.

Soooo noisy. Sorry. ;p

Temperament said...

Hi LP,
If you can wait a bit, buy what you want when there is a sale. i think a lot of sales are coming very soon.-Wish you a EXTRA EARLY MERRY CHRISTMAS.

When i sold my flat i did not ask for COV. It seemed it was not market's practice yet. Just a few months only when i bought, i had to pay for COV. i think 8 or 9 K. i wonder what's the purpose of a property valuer then?

Anonymous said...

Hi LP!

My first flat - I spent quite a bit. which was silly as it was nicely done up.

2nd place - improved a little. Supposed to design to my liking but designer made some mistakes here and there.

The tuition centre was converted in 2003. I spent much less for what I feel ok ok, only insist on better sanitary fittings.

For the home office, 2008 - u saw it yourself. Its really "cheap" but I like it. I like it better than the apartment. Some students take short nap around the place when they come over to study for long hrs. We also ate prata together in that blue room. haha..:) spend more on disinfectant air-refreshener n vitamins C.

With 77K reno, Ikea furniture not so suitable.. Oh, I love the Ikea tables. (50% display ones!)

Can't wait to see your place!

Blessings,
HH

Anonymous said...

Wow... renovation of 77K ? that must be a huge renovation, I bet you have a lot of built in furniture....

my flat purchased 2 years ago, was below COV $5K, and I spent $40K for hacking the whole home and re-do everything from scratch... :)

la papillion said...

Hi bro8888,

Not for my seller. He bought another place with the same cov, but downgraded from his 5 rm to 4rm.

Hi wj,

Thanks! I'll check it out for sure. Thought of going to sungei kadut to take a look too :) No lah, I don't buy furniture at retail these days, unless it's IKEA. They usually offer discounts once I showed some interest, interestingly.

Hi AK,

I'm gng to get some stuff from IKEA as well, but not all lah. Some of their smaller items are pretty good and I love them, but for those things that I'm going to use for long, I'll not get from IKEA. Perhaps I don't trust my own worksmanships, haha

la papillion said...

Hi temperament,

Thanks thanks :) Hmm, I guess if you ask for cov when you sold your house, most likely you're gng to pay for cov when you get another hdb :) No difference lah, like my seller.

I really agree...the property valuer seems to be so off the mark these days since there's so much 'excess' value above their valuation. Still have to pay them to valuate your property too...no choice. This system is faulty.

Hi HH,

Wah, you're saying the more houses you move, the lesser you spend eh? haha :) Oh, I got my tuition table already, it's a nice oak table sold at 20% off :) Think you'll like it when you see it :)

Hi anonymous,

Me and wife decided to settle for marble, which cost a certain part of that 77k. I guess without the marbles, it'll be around your 40k too. I do have quite a bit of built in furniture since my resale flat doesn't come with a storeroom, so I'll have to utilise those odd corners to put in more storage areas.

Renovation isn't that cheap these days...esp when it deals with carpentry works :/

Grey said...

LP, actually you can ask the IKEA ppl to assemble the furniture for you; But I've not tried that option before;

AK71 said...

Hi Grey,

I asked IKEA to help assemble all my furniture. They charged $150, if I remember correctly. They were done in less than half an hour! Really efficient. :)

Guru said...

Hello all,

I am a great follower of your blogs.
I have recently created a new blog and will be honored to exchange a link with you.

http://personalfinancemaster-guru.blogspot.com/

fyi, I am a part time estate agent, my thoughts are renovation cost should be kept as low as possible, coz the mark up is really crazy by contractors.

also, furnitures are depreciating assets, try not to invest too much as well.

cheers

la papillion said...

Hi Grey,

Thanks for tip, I knew about it as well, just not sure of the cost. Well thankfully AK had it done before. Thanks AK!

Hi guru,

Oh what a name :) I went to your blog and noticed you only had a post. Would you mind if you come and look for me again after a few more months? You've no idea how many people gave up blogging after one post and I've to tidy up the blog list again and again. Thanks for your understanding.

Hmm, what do you think we should do with the money that we saved if we do not use it on frivolous things like furniture and renovation?

Singapore Man Of Leisure said...

Hello LP!

Marble like for the Greek and Roman gods. Cool!

Most important is that you and your wife happy in your own "castle". Simple/extravagant; small/big - all that is relative.

10 years from now, people may say: "What? You paid so little for the COV and your renovation?" LOL!

Rustling of the leaves in the wind,
SMOL

I said...

winter is coming indeed

FF said...

Hi LP,

Your experience reminds me of my experience. Buying a house and renovating it are indeed really big ticket items.

la papillion said...

Hi SMOL,

Haha, indeed...my brother paid a price for his flat too, but after a few years, I envied him because he got it so much cheaper.

Things are so different when looked backwards :)

Hi FF,

But is the experience worth it? Is the value that you get more than the cost of it? It's well worth it for me :)

EnSabahNur said...

Wow, that's alot for reno! I recently renovated my new house and I am leaving the "optionals" like coffee table, side tables etc to when sales come. Closest etc from Ikea and you really should ask them to assemble the big items, unless you are the kind who are good at drilling etc.

Anonymous said...

Ok, I know what to buy you for your house warming gift. (a TV)