Stagnant Wages versus Rising Inflation Year after Year since 2020

 

This is the scary news coming out of the Office for National Statistics UK. Since 2020, average salaries of office and general workers have not risen AT ALL with the exception of 2020. In fact, the average salary FELL in 2021 TO 2022. 

Couple that with the cost of inflation year on year and you get a double whammy. 

Salaries remain stagnant while costs of things from basic necessities, to petrol and education, everything is biting into the average Briton's pockets.

Only a small percentage of Britons fully own their own homes. At last check, it was 36%, and another 30% have outstanding mortgages on their homes.

The typical fixed mortgage is 5.7% per annum for 5 year tenure. 

Over the last 5 years, the average house price rose from GBP 249,309 to GBP 268,000 or at a nominal appreciation in total of 7.5 % over 5 years or about 1.4% compounded each year.  

This means that even if you own a property (flat or house) the increase in the value of property cannot offset the costs of inflation of 4 to 8% per annum. Added to the fact that there is mortgage interest to pay too. 

At the end, the people who own houses, when they need funds (if they do not have emergency funds) when they sell ; they will liquidate and either :

a) rent

b) move to a lower cost country

c) downgrade to a more inexpensive property.

It is a rather frightening situation to be in.

Practical Steps to Offset Cash Capital Decay

        Here are some practical steps to ward off the inevitable cash decay over 10, 20 and even 30 years. I did some research using some tips from Perplexity and here is the post. To be very honest, we have been actively spreading the investment of liquid cash over these instruments below so this is not a theoretical speculative post, by any means. 

       Lets think about building a 'cash ladder', not 'investing all cash'. Cash decays mainly through inflation, low deposit yields, and currency depreciation. However on the flipside, it does give you safety and options. 

Keep Emergency Cash 

     Standby 12 - 18 months funds

    Depending on your monthly expenses, this may range anything from $5K per month to $10K per month. These funds are for emergency use, for survival and opportunity - like business and perhaps a surprise anniversary trip with your wife. 

    For business opportunities, be careful, always use your risk return calculation mindset to see whether the business is viable and the returns are worth whatever sum you put into.

   I have a small business, so recently we are asked to venture to sell equipment in Penang Malaysia to a top multinational pharmaceutical company. I did my math, flew to Penang, spoke with the stakeholders, and did my best pitch.

   The risks ? 

    About $1K in return airfare, hotel stay, expenses for 2 days and some opportunity costs (marginal since I have my staff covering for me in my absence). 

   The return ?

   If we secured the project, we would have earned approximately $100 K in gross profit.

   So the risk return is low investment cost and high return.

   I took it and flew to Penang,

   Outcome ?

   We lost the deal ; because we were bidding against an established incumbent supplier in Penang.

   The verdict ?

   Its a risk worth taking given the upsides are very high in light of our :

a) relevant experience in this industry of 3 decades

b) established and familiar supplier of the equipment whom I have personally visited in China and have 5 years prior experience selling their products. 

c) Downside of $1K is definitely manageabale from my point of view. 

   Put Idle Cash into Short Term Instruments.

  Safest options are 

> Singapore T Bills (was high 3.+ to 4.+ % per annum just 2 - 3 years ago)

>  High yield savings accounts 

>  Trusted funds managed by competent financial advisors.

>  REITs (dividends of 6%) ; however, the share price has eroded these last 2 years from geopolitical movements, the recent Middle East War and the formation of the multipolar world order leading to capital flight which cannot be forecasted accurately.

   I am honestly not savvy and have not ventured into ETFs, so I can't comment or write about my experience.

> Stay away from gambling either through casino, social media and cryptocurrency 

> Singapore Savings Bonds - use for mid term cash.

> Own real assets selectively ;  Property, REITS, infrastructure funds, and some commodities can offset inflation but they carry cycle, interest - rate and liquidity risks.

> Avoid over insurance and opaque products

   Time Horizon

   0 - 6 months                          Bank Cash

   6 - 12 months                        T Bills, Fixed Deposits, money market funds

   1 - 10 years                           SSBs, SGS bonds, conservative bond funds

   5 +                                         Global equities, REITS, Property, business reinvestment. 

 

 

An important Life Skill. How to manage cash capital decay - what they never teach you in school and while working

     In life, we learn things from school, and the main things we learn by interacting with people who have gone before us and 'won' in the game so to speak. I have been very fortunate to meet such a person and he was my best friend, and mentor, Roland Teo. He passed on this year on 31st January 2026 from complications of COPD or Constrictive Obstructive Pulmonary Disease.

   One great takeway he taught me over the 16 years I have known him and had the pleasure of dining with him is this below. Many people in Singapore, who have had compulsory Central Provident Funds CPF stashed away till they are 65 will get to utilize this through by regular payouts until they pass on. There will be many, who on top of the CPF monthly payouts will get a lump sum, either through inheritance from their parents by way of a will. 

                                Master and student during one of our regular weekly lunches 

                                                         with  Roland Teo Cheng San 

    This is where the problem comes in. Many people will lose this golden egg within months or a maximum of 5 years, all through wanton spending on expensive trips, lavish dinners, toys like designer bags, the latest EV SUV or sports car - its not wrong at all - it is their money after all - BUT what happens when there is so much life at the end of the money ?? 

    That is when the misery will set in, imagine you are 80 and cant afford even a decent meal in the restaurant, or go for a short holiday to (for example) Australia or UK to see your grandkids (quite a number of Singaporeans have family all over the world). Worse still, many have to work at 75 to 80 just to pay the bills.

Cash Capital Decay

What exactly is this ?

This is a situation, which happens when your cash loses real value or earning power over time. This is the loss of purchasing power overt time. A very real scenario for many people about to retire or already retired from the workforce. They would have accumulated some money, and possibly had some family inheritance endowed upon them. 

What are the main causes for this decay or decline ?

> Inflation : In Singapore it is about 2.5 to 3% per annum.

> Currency depreciation : We are fortunate that SG dollar has appreciated, over many of the major currencies like USD and RMB. But against the MYR or ringgit, it has dropped quite significantly.

> Low interest rates : If you put your inheritance money in fixed deposits, which garner only less than 1% per annum and the inflation rate if say 3%, you lose 2% in purchasing value per year. 

   Multiply than by 20 years and in theory your (for example) $1 Million today is only worth $600,000 in today's purchasing power terms IF you continue to keep that $1 Million in the bank. 

> Opportunity Cost : There are many businesses looking for funds. Its true many go bust, but it might be beneficial to put your spare liquid cash in mutual funds, TBills (it was 4% a few years ago), or investments such as property (of course the entry barrier for property is $1.5 million for a new condominium of  a miniscule size of say 800 sq ft). 

> Fees or Taxes : Bank charges, witholding tax or account costs, all can slowly chip away the balance of your inheritance.  

   So what is the strategy to counter and grow out of this problem whereby 90% of people feel trapped by the sinking value of their liquid capital ?

   Watch out for the next post while I try to give some ideas 

  (I am still tweaking my own model). 

 

Trip to London (and Greece) in June 1974 - 5 months before the PSLE !

 

Trafalgar Square June 1974

The month and year was June 1974. I was 11 going on 12 years of age. My Dad (Papa as I called him) had this brilliant idea of bringing me to experience life in Europe. My plane ticket was still considered as a child seat, so it was economical for him to take me along to see his Auld England or his 'motherland'. He was a real Anglophile, so thought the world of the British Empire of Winston Churchill and the rest of them.

London Tower Bridge in the Background - June 1974.

We headed to Greece first, and I recall sitting beside my father atop one of the columns with pride beside the ancient Parthenon in Acropolis, Greece. We spent something like 1 week in Athens before spending another week in London.

I was doing pretty well in Primary 6, it was the Primary School Leaving Examination year (Nov 1974) and in June, during the mid year holidays of one month, had the privilege of taking 2 weeks to fly to Greece and England - just like that. The year end PSLE exams were just around the corner, and no parent of today would dare allow their children to enjoy 2 weeks in Europe - I am sure. 

I was a privileged and an extremely fortunate son. 

Feeding Pigeons June 1974

I believe, this was probably my first or second time I was taking a plane. Perhaps the first was in 1973, maybe to Thailand, though I couldn't be absolutely sure. To be clear, in those days, practically no one took flights overseas, Singapore was still a pretty poor and backward country. Most of our Sanya Samaki trips overseas, (like to KL, Penang, and even Bangkok) were all by coach, and the trips those days took easily 1 to 2 days.

With the Bobby in the Background

England was a revelation for this young impressionable kid. I recall my Papa bringing me to see some of his old friends from Uni days, as well as I think we watched a classic play called, "No Sex Please we are British !" which ran at the West End for years and years. We also were invited to some of his friends estate houses and ate some peculiar curry which his wife made for us. I think we also watched another famous play by Agatha Christie called "The Mousetrap" which was also world famous.

Outside St Paul's Cathedral

We stayed a few nights at the Bed and Breakfast and had the last 2 nights at a hotel called "The Strand" which my father had insisted on taking me. He wanted me to try all the different levels of British hospitality from warm English simple houses rented out to tourists and the last few nights we were to stay in a 5 star ambience.

11 Year Old Me at St Paul's Cathedral 

The final memoery I had was that I liked the European experience very much and when I returned home, I remember telling my mother than the peas she made in a dish reminded me of Jolly Old England !

Carpe Diem 

Singapore In the 1970s, Couples had 2, 3 4 kids.What Changed between then and now ?

In Thailand in 1974 I believe, Konrad Wee centre and Ms. Mabel Wee (Konrad Mum)

In the 1960s, 70s, 80s and 90s, Singapore was a brand new third world country. People were literally living 'hand to mouth' and average monthly salaries in the 1960s (as a brand new independent country in 1965 having separated from the Federation of Malayan States),  was in the region of USD 100 to 400. 

In the 1960s, salaries were a pittance, compared to the then Great Britain (One GBP was 7 SGD and 1 USD was 4 SGD). People were eking very hard lives. There were people doing manual labour, from carrying rice sacks from the bumboats to the godowns in Boat Quay for example. Many people were trishaw riders, taxi drivers and construction workers. Gangster troups were aplenty, and there were numerous murders, crime, and rampant petty thievery in general society. Singapore had emerged from the British colonial past bruised and with an uneducated workforce hungry for work. The EDB was newly formed and the top administrators were in the process of conducting roadshows in the West enticing many companies to set up shop in Singapore. That I believe started to take shape in the mid to late 1970s. 

Yet, when I look back at my paternal and maternal families, I am happy to note that all of my uncles and aunts,had at least 2 children (many had 4) in their lifetime. Why ? 

On my mother's side, there were 4 sisters, and they each had

Anna (Dai Yi) : 2

Dona (Yi Ma) : 2

Mina (San Yi) : 4

Mona (Sai Yi) : 2

Kau Fu (youngest brother) : 3

On my father's side there were 

Paul (Eldest) : 2

Geoffrey        : 2

Alex              : 2

Felix             : 3 

Esther          : 2

Diana           : 3

Nowadays, many young men and women are putting off marriage altogether, let alone having children, and the alarming news is that the Total Fertility Rate (TFR) for Singapore in 2025 is a pathetic 0.85. That means, we are not replacing our Singaporean base.

While it is easy to open the doors to people of similar cultural backgrounds (like Malaysia and possibly Indonesia), this phenomenon of offering 'free passage' to citizenship riles many ordinary Singaporeans who have to serve mandatory National Service and the feeling of intense competition fighting for places for jobs (and reservist) leaves people with a 'fight for your own lunch' mentality.

So why were there many more children per couple way back in 60s, 70s 80s and possibly the 90s ?

Healthcare in 1960s and 1970s was quite poor.

Well for starters in the 1960s and 70s, Singapore was a poor 3rd world country. Our medical care and hospitals were overworked, understaffed and with poor health outcomes. As a result, our infant mortality (children dying from disease below the age of 5 years old) was high. 

Couples wanted to ensure some heirs to either take on the family name, and possibly one or 2 girls to 'balance' the equation in the family. Added to the mix was that if any one child died, there would be ample replacement(s). As a result, many parents had 2, 3, 4 and beyond. Also in the third world, 'many hands make light work' (Confucius), so the reasoning was that it was better to have more offspring to help out in the a) farm b) foodstall or c) provision shop.

This population spurt alarmed the then Government so much that the Ministry of Health had a 'Stop at 2' promotion to 'encourage' parents to reduce their productivity so to speak. (It was a bad decision in hindsight, looking at our current need to import foreign born people to shore up our service, manufacturing and financial sectors year after year).

Assets and Government flats were very affordable then

Assets like landed houses back in the day (1960s and 1970s) were very affordable then. I recall my mother going 'house hunting' with another good lady friend Nina Cohen and she told me some people were selling preowned terrace houses for as low as $4,000 in the late 60s to early 70s. While it is true that the average salary was around $300 per month, the affordability of the landed property assuming 20% of average take home pay goes to service the mortgage so $720 per year would go to paying off the mortgage, it would take all of less than 8 years to pay off for a terrace house in the 1960s to early 1970s based on the average salary of $300.

So the aspiration to find a nice partner, settle down and purchase either a Government flat (it cost only something like $6,000 or so for a 3 room flat) or even a private land house was realistic and achievable. 

From Left : Audrey, Tan  Gillian Khoo, Tan Xian and my brother John 

One parent stayed at home 

Thirdly, for most families, only the father or male parent worked. It was a good time, mothers (a good 80 to 90%) stayed and home and minded the kids. Hence, with a parent minding the child, why not one or two more ?  

Raising Children in those days was cheap. 

There was hardly any tuition centres or personalised tuition to catch up. Things like ballet, piano, swimming, badminton, coding courses and all manner of holidays were practically unheard of. 

Society was pretty much on a level playing field. We were all similarly poor yet so much happier then. 

Fast Forward 50 Years Later. 

What has happened to young couples after COVID 19 ?

My opinion is that young couples choose to want to 'have it all' ; a nice starter flat, an enviable lifestyle with holidays, possibly an EV car. That does not leave very much to having a kid or two ?  

Our Government has for so long gone down the path of accepting foreign workers as domestic help that I believe this fact is one of the reasons why couples choose to chase sought after private property (condominiums and to a certain extent landed property) where the cheapest property would cost $1.5 million and above.

Imagine a big chunk of the duo's earned income of (for example) $12,000. Say using my 20% rule again $2400. If they could fork out (for example) $500, 000 (using CPF and savings), and take a loan at today's rate of 2%. Even forgoing the interest component, they would end up paying the full amount in 35 years !

So, they put up 40% which is $4,800 per month. A hefty sum no less. They end up paying slightly over 20 years to repay only the principal. So it is likely to be 25 years.

The young couple are betting on a few things :

a) they will continue to upgrade their careers and earn more for the next 20 to 30 years 

b) the property prices will hopefully rise up and they can offload it in 5 years time with some capital appreciation.

c) the economy will be 'hunky dory' and not contract, and there will be no retrenchments.

d) there will be no health or family issues impacting the couple financially.

Of course, I exaggerate. The couple can always start with the Government Build To Order HDB flat, the selling price ranging going from $300,000 to over $600,000 new after subsidies.

The bottom line is this, they still need to fork out and repay for the flat for easily the next 15 to 20 years depending on their average take home salaries.  

Posing in Thailand swim Pool in 1974. 

So, with the price of the basics sky high, thats where the inertia and the apprehension lies.

Whats lurking in the horizon ?

> Perceived job loss from AI for many front line and repetitive work ; this means job security is very insecure.

>  Asset prices do not seem to come down ; since COVID, Singapore has seen the asset classes jump and stay there.

>  The Middle East Conflict is causing high oil prices and inflation is rearing its ugly head. The big worry is if the economy stagnates, and if there is no growth either through foreign direct investment through setting up of new companies, industries then we are facing stagflation. 

In summary - reasons why Singaporeans are having fewer or no children are :

1. Sky high asset prices 

2. Uncertain job climate 

3. Major economic restructuring with new jobs requiring AI skillsets

4. Young people's aspirations to own good class assets and fantastic life experiences over  raising family. (my opinion)

There it is. My humble opinion on what is leading to the low TFR in Singapore. 

 

We should Lead by Example.

Kids Aplenty in the 1970s. 

The recent brouhaha about the "Marriage and Parenthood Reset" by our Government and spearheaded by an interagency workgroup chaired by a Minister is laudable. However, the assignment of leadership of this workgroup needs to be reconsidered. The choice of the chairman is also rather puzzling,and I question the powers that be in selecting a chairman with no prior experience in both these aspects (Marriage and Parenthood)

People can and sometimes do a better job  than people who have experience. Look at football managers in the top flight. Many of the top managers (Pep Guardiola, Nuno Esperito Santo, and Juergen Klopp) have limited top class playing experience, but that did not stop them from helming top clubs, like Manchester City, Nottingham Forest (OK, they are second tier) and Liverpool respectively. 

Marriage is a union between 2 people, a holy matrimony in whatever religion people choose and it also a legally binding contract between 2 people in the eyes of the law, a husband and a wife. Singapore still chooses to be conservative and their is no same sex union recognized in Singapore at this point in time. 

Parenthood is another tough task, a lifetime of sacrifice, struggle, comittment and love for one's offspring. Today's world is very different from the Baby Boomer's time, (1946 - 1965) when raising children in the 70s, 80s, 90s had vastly different challenges, and opportunities than today.

I question whether the Committee can truly succeed, and how can they firstly emphatise what is front and centre of the Millenials, and Gen Zs minds, which is - high housing costs, long wait times, high cost of living, disruptive work with no guarantee of long term employment in this convoluted world ?

Better to sit down and talk to all the young folk out there, aggregate their fears and desires and come up with a workable blueprint and put it out and run with it. Better still, the working committee should be composed of people who are themselves married, and parents themselves.

Choose a few young influencer couples, divorcees, and singles (not the flashy in your face) to be the poster boys and girls.

Then GO WITH IT.

Tweak when there is resistance or bumps in the road.

Our Government is not omniscient, certainly they are no experts. 

They should accept whatever the new generation feedsback to them in this area. 

    

Road Deaths hit 10 year high in 2025 - ST news today. It takes 2 hands to clap.

Singapore Roads 

Today's headlines highlighted the fact that in 2025, the number of road deaths hit a record high for the last 10 years. Any person reading this would assume that the motorists are the sole problem. I disagree. There is another actor involved. 

LTA. You are also part of the problem. Let me cite just 3 stretches of road, which I commute regularly and, frankly, the road repositioning or roads, without proper early notification to motorists is deadly and an accident waiting to happen.  I reckon there are easily 20 stretches of road all over the country, which are undergoing massive road works due to MRT underground works, road widening and many so called 'road improvements' which cause massive irritation to drivers like myself, not to mention the chances of accident happening when there is road diversions (the traffic crossing is at another place some 30 m and to the left of the original road is an example).

When I say early notification of road diversion, there MUST BE some sign on the road clearly displayed as far as 500 m ahead for stretches of road, indicating that one lane will be closed off. In Singapore's case, it is at best 200 m ahead. This is poorly thought out and executed.

Many drivers like myself, keep to speed limits and we drive defensively. BUT if the road is totally new and there are new detours, many a times, we drivers are lost and following road and signal signs which sometimes are confusing, so sometimes, we get into some minor confusion while looking at the signs and not looking at the car to the left or right of your car.

New road signs pop up (Friendly Roads is one), and all kinds of road diversions (keep left and right as there is some road works at the centre lane of the Expressway), all add to the confusion of the driver.

New road diversion, new signs, not enough early warning in terms of road cones only put up less than 100 m to where the traffic truck is stopped, all these in my opinion fall far short to (for example) West European road safety protocols, which I was used to when I drove many times in Europe and Germany (from 1997 till 2010).    

Over last  4 years, post COVID, I have noticed that there are NUMEROUS road works in practically every town centre, or suburb. Thomson road area is a massive worksite for the last 3 years, pity the residents living along the stretch of Thomson Road leading to Scotts Road.

Thomson Road from Balestier Road Junction - United Square 

The area outside Velocity and Square2 is especially bad in terms of road diversions. This are has been in this state for 3 years at least, so much so that the entire area has for the last 3 years become something of a worksite with roads traversing through it.

Ang Mo Kio Central

In Ang Mo Kio, there are many roads which have also moved, due to some MRT underground tunneling and hence there are road diversions.

Ophir Road stretch from Jalan Besar to base of Sheares Bridge

There's so much road diversion, and with the diversion, sometimes, the road winds, and the lane markers get narrower between lanes.

Surely this will give some problems to drivers, cars or vehicles eating into each other's lane unecessarily. 

The Government should look into some of the points raised. 

     My suggestions are 

a) Do road enhancements (as much as possible) during the hours from midnight to say 6 am.

b) Keep top heavy vehicles such as cement mixers, low transporters and low loaders off the vehicular roads, especially expressways (like in Germany) and limit there usage to between midnight and 6 am.

    

c) Be mindful of are major high density roads leading to major office blocks (like MBC and downtown), and plan road works AFTER the rush hour (like 10 am to 4 pm) 

d) Drivers pay so much in terms of COE and still, we live the problem of many road diversions, the occasional congestion, and now, sky high number accidents resulting in road deaths. 

d) Private Hire cars (I will get a lot of flak here), need to slow down, and pace their routes carefully, if that is practically possible.

(I am just a driver reaching elderly driver status, this is just my opinion). 

   Conclusion

> There must be a nice balance between road upgrading timelines, scheduling of resurfacing and repainting of road to night times, (not during peak hours of getting to work and end of the day commute) 

> Give us motorists a break !!!