Want To Have a Better Financial Future? Avoid Agents and Consultants

What is the most prevalent sight at my MRT station are the presence of housing and insurance agents. Everyday without fail, I would see at least one group.

Both seem to have the same angle of marketting, buy a house now, sell higher in the future. Buy insurance for better returns in ILP. But there are many things not told upfront....

Generlisation but That's the Truth

Due to the booming property market arising from the increasing inflow of foreigners who rent, more and more Singaporeans have switched to the property sales line. Their slogan is the same- rent a house to foreigners, next time houses can sell at price higher. 

To me, a lot hinges on the policy direction of Singapore. Singapore has to continuously take in more and more foreigners to feed this frenzy which I feel is an utter bullshit policy direction. Its akin to a ponzi scheme where more and more is needed to join the game. And in the meantime, more and more ponzi (housing) salesman are appearing and positioning a house as a value investment.

This is a house of cards and I'm not sure how long can the current government play along to this scheme. 

To me, both housing and insurance agents have gone too far by not acting in the best interest of clients and instead for the benefits of lining their pockets. Yes, I may have painted them with broad strokes; there are a few good eggs and companies but because of their need to sustain their own salary/bottomline, the (good ones) tend to cater to only the high net worths. 

After all, the high net worths can pay for agents/consultants who work for their best interest given the scale of their wealth. While the poor/middle income gets the 99% of bad eggs. I have seen a few people who were 'hoodwinked'  by agents, financially overstretched, had to terminate their policies because they were finding it difficult to fund the insurance premieums and end up losing 90-100% of their paid premieums. God knows, how the agent managed to sell the ILP when they are required to evaluate the client's financial health.

Most of Us Are on Our Own

My view is that both industries in Singapore are becoming worse with no policy intervention being apparent from the government. Unlike the UK, which has a fudicary duty in place, Singapore has none due to our liberalisation since 2007. 

In the field of insurance, all Singaporeans, their spouses and child are eligible for MINDEF/MHA Term insurance, it is the best insurance out there. So sign up for it and not the nonsense sold by agents. With the reminder of the money, allocate it for the 'investment' component, your bond portfolio can be invested in the AAA-rated CPF SA and shares/property in ETFs. I have done a mathematical illustration to show this method is better than almost all policies out there.

For housing, it is dumb to be buying it for investment purposes when we are dependent on the government to keep increasing the foreigner intake so as to meet the incoming housing supply. Our citizen population is not growing faster than the speed of us constructing new homes (even if it is only BTOs) and this is a cause of concern. In fact, with a drastic reduction in current foreigner intakes, we can solve our housing crunch and affordability issues in less than 1.5 years.

You can read here on how much more foreigners (30% increase in foreigners in the next 4 years) has to come in to sustain the current housing prices.