Another theoretical exercise on Property Calculations -- is it good for financial gains now?

In recent times, there are many ads on Facebook, on property forums, on developer residential condo launches, how one can profit from buying properties, or specifically, ECs, and have it as an asset in which you could cash in to retire. Specifically, sell and downgrade to a HDB and retrieve cash for retirement.

The question is, in terms of financials, is this really a much better move?

So I decided to do a theoretical exercise on how this really works out. As there are multiple variables involved for different people over different time period, I decided that since this is my blog, I shall take myself as an example, on my own scenario 7 years ago and how it may pan out. Specifically, back to HDB vs Esparina condo again. 

To simplify matters, I will set some variables for my theoretical exercise. 

Starting amount for property = $160k. That was approximately the amount we put into HDB from our CPF at that time, in addition to the renovation we did for the HDB back then. This excludes additional furniture and electrical appliances.

Target timeline: 30 years later. That's the typical bank loan time, plus I would have been 61 years old by then. I highly doubt I will like to go through the hassle of moving house around 70 years old, so I think 30 years timeline should be good. 

Assumed average interest rate over 30 years: 2.5%

I am taking the CPF OA floor interest rate here as a comparison. 

Stagnant Networth / Portfolio... And my excuses for a married guy

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As per some recent blog posts, these are for re-organising my thoughts for myself, for self-reflection and to hold myself accountable for events that has transpired in recent years.

Feel free to comment and point me out.
Thanks uncle cw88 for reminding me to think of lessons learned.
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Quite some years ago, I decided not to track all my expenses, and just spend as I want to. I have already lost count of the number of years, but for me, at least I made sure I spend only what I have and paid up all credit card bills every month (credit card for ease of purchase and discounts). Nothing on debt.

One of the main thing that was nagging me on my mind, was my rate of growth of my networth. In the early years, the growth rate was rather good, but as I checked my portfolio recently, I realised I had not had much portfolio growth.

Honestly, I was puzzled, confused, and little bit unhappy. I know I have been spending a lot more, made some big investment blunders, but I thought it would have been better. And the main reason why was because I did not put a figure to everything I have been doing.

So I decided to do a reflection exercise to track back on myself past few years. It was easy to track myself on some older posts as I had not been actively posting past few years.

As I looked back at some older posts, I realised that was a point in time in Nov 2016 where my portfolio actually touched $350k. I had reached $320k at age 32 (2015), and $350k at age 33 (2016).

As it stands, my portfolio is still at around $350k in the year 2019 with about $25k++ warchest, which means there was minimal to no growth. There are still funds here and there in different bank accounts which I am too lazy to really sum all up.

So from 2016 to 2019, I only grew on average by $8k+ a year, even though my dividends is ~$18k annually. What actually happened? Since I was not spending any effort in tracking where my money went past few years, I was actually a little at a loss.  Within the 3 years, I should have had dividends of around $54k. And maybe extra savings from work. But where did they go to?

Having been too passive in those few years, I have to think back slowly in time, discover the reasons, and see where I can improve on myself.

Based on my self-reflection, there were 3 major reasons
(1) Quitted full-time job in 2012
(2) Increased expenses due to house and children
(3) Poor decisions in the stock market

Marginal safety with dividend counters -- SPH and Starhub

This is a mathematical exercise I did with my holdings in Singapore Press Holdings.


A short history of my relationship with SPH
Around the 2008~2009 era, I bought in 6000 shares of SPH at an average of $3.65
Mid of 2014, I bought in 2000 shares of SPH at $3.98 but booked in as $3.65 on my portfolio as I used "profits" from sales of other shares to offset the difference.

So, I took it as 8000 shares of SPH at $3.65 average.

With Starhub, it was quite simple. Majority were bought in 2009, with some in 2010. In summary, the average cost of Starhub was $1.90.

2015 came, and all the way till this year, I have been busy with wedding, with family, with children, with business, etc, such that I have not spent much time to look at equities. That's up till recent months, where I took interest again.

It was really eyes off market for majority of the time. I knew SPH was in a sunset industry. I knew. But I did not take any actions to sell.

Starhub was being disrupted by MNVOs. I knew. But I did not take any actions too. On my old blog post, I was considering to sell at $4.70. But I did nothing. [That was $47k on hindsight.]

I mean, it was "buy for the long term" right?
And SPH declined to $1.98 while Starhub declined to $1.34.

With that, I have actually discussed with friends before, on how the dividends from SPH and Starhub actually helped buffered the drop in price for me, and how "lucky" I was. But it was just a feel. There was no actual calculations until I did it today.

My HDB property -- should I have gone for an EC back in the days of 2010?

Years have passed since I collected the keys to my HDB. And having already reached the minimum occupation period along with two more additions to the family, and maybe considering one more, I was looking for a bigger property, specifically an executive condominium since I have a 5-rm HDB already of 110 sqm.

And with the massive increase in private property prices, I can't help but wonder if it would have been a better move back then to squeeze all my savings out for Esparina condo vs my Fernvale flat.

  

So I went to do some mathematical calculations as follows: