My Money Advice to Malaysians in Singapore

I have been working and living in Singapore for the past 7 years. Looking back, I wished someone gave me advice on money management and finance planning when I first set foot here.

If given the chance to turn back the clock, there are many decisions that I would change. Since money matters evolve as time goes by, I still find myself seeking advice or second opinion today.

Here, I reflect on my experience and share 7 pieces of money advice I would have give to my younger self, if I could go back in time:

1. Know why you are here

Most of the time, we sugarcoat the real reasons we come over to Singapore. Career progression, advancement, and the opportunity to experience working life outside of Malaysia are legit answers. But if 1 Malaysia Ringgit equals 3 Singapore Dollars, would we still make the move?

Let’s face it, most of us are here for the stronger currency, and most of us have our reasons for making a sacrifice to be away from home and loved ones.

Some of us, who are lucky, have a game plan to stay in Singapore for a finite amount of time. The rest of us, have overstayed and find it close to impossible to go back to Malaysia, despite life in Singapore getting tougher with the atrocious room rental rates and inflation.

(if you’re weighing the pros and cons of Renting in SG or Commute from JB, read this!)

If you are here just for a short stint (less than 5 years) just focus on the bare minimum, and minimize or even eliminate mid to long-term commitments (endowments, savings plan). Chances are, you’ll only need to plan for short-to-midterm financial goals and intermediate career progression.

If you plan to be here for more than 5 years and possibly forever, you need to plan much more from a financial perspective.

2. Maximize your earning power

Since the Singapore Dollar is a strong push factor, then one should find ways to increase their earning power.

Your main occupation will play the biggest role in determining your earning power. And most of us start our first job below the market rate.

If your job has a fixed and predictable schedule (9 am – 5 pm), you could spend some portion of your free time hustling.

I have friends who are weekend Grab deliverymen or manage an e-commerce business on the side on top of having a daily job. Sure life will be busier, but so long as it does not affect your well-being, it is a viable option to eke out more earnings.

Having acceptable writing skills, and a passion for food, travel and even investing might land you a gig that pays as well!

If these opportunities do not come to you, be proactive to approach for gigs and jobs. But be prepared to show your work!

3. Get the basic insurance

I remember getting my basic insurance sorted out within the first few months after I started working in Singapore.

Yes, some of you might argue that some of your employer does provide health and insurance benefits. But I still think that it is smart to get one on your own. Unless you are pretty sure that you will be working with the same company for the rest of your life.

Insurance, particularly medical cards, have premiums that go up pretty steeply as we age and delay subscriptions. There will be potential risks and accidents, which would require you to be treated in Singapore, rather than having the time or choice to be ferried over to Johore to utilize your Malaysian medical card.

The worst thing any Malaysian would ever want, is to see his or her savings evaporate, due to a mishap that requires hospitalization or surgery. My Malaysian PR cousin had a tumor that he needed to remove in Mount Elizabeth Hospital during the COVID-19-induced border lockdowns.

Thankfully most of his SG$20,000 bill was covered by insurance, and not from his hard-earned savings!

4. Consider applying for PR if you have overstayed your planned tenure

I have a few friends who have been blessed to return back to Malaysia to lead a fairly comfortable life after short stints in Singapore.

But I would guess many of us who are here right now, especially in your 3rd year onwards and you find yourself overstaying the initial tenure. Thus, you have to plan on an assumption that you would be spending your prime years in Singapore.

Converting to become a Singapore PR has only 1 downside – it will take up a maximum of 20% of your monthly income as CPF contribution when you celebrate your 2-year-old PR. Your immediate disposable income and spending power could be affected.

Other than that, you will get additional CPF contributions from your employer, and the job-seeking pool becomes wider as most, if not all employers are seeking Singaporeans or Permanent Residents.

Those who are quite certain they would stay in Singapore for a long period of time, can choose to convert to an SG PR as soon as possible. There are yardsticks that suggest to do so only after your first year working in Singapore, but there are plenty of individuals I know of who obtained their SG PR within the first few months in Singapore.

You would be surprised how CPF can outlay a simple yet solid foundation to your future financial plans in Singapore, be it in terms of obtaining a residential property or funding for your retirement.

5. Delay or even cancel all considerations of getting a property back in Malaysia

The power of the Singapore Dollar might lead you astray when it comes to making big purchases like a property back in Malaysia. After some personal experiences and even observing the Malaysian property market, I can honestly say that it is not going to be easy to land on a property that would appreciate for the next 10-20 years.

And I am going to debunk all the reasons to buy a property in Malaysia, for a Malaysian working in Singapore but does not travel back to Johore daily after work. If you are staying in Johore and traveling across the border daily to work in Singapore, this advice is not for you.

• Thinking of buying a Malaysian property now for retirement 20-30 years down the road? Even if your spanking-new property remains vacant, the paint and luster will still fade off. Would you really choose to retire there when the time comes?

• Thinking of buying for investment purposes?
  Can your property’s rental income cover all the monthly financing in excess? And can the property valuation grow after more than 5 years? Do note that even if you are cash flow positive on rentals net mortgage, depreciation or devaluation of your property will also drag your property investments into losses.

And who knows, by the time you retire after a successful corporate life in Singapore, you might even afford a landed bungalow, should you opt to retire back in Malaysia.

If you’re getting a property for your family back in Malaysia as a commitment rather than for investment purposes, by all means, exercise your filial piety. But think hard twice and think thrice if it’s for pure investment purposes.

6. Consider investing in the Singapore stock markets if you have not

The beauty of knowing how to invest and analyze stocks provides me with a pretty unbiased lens to see through both the good and bad of a company’s business model and valuation.

Similarly, there are both pros and cons of both Malaysia and Singapore.

Malaysian street food and local cuisine are still kickass in terms of quality, taste, and pricing. But when it comes to the stock market, I would choose to invest in the Singapore market without hesitation.

I still own a Malaysia portfolio of stocks, but I have not added anything to and am looking to trim it down slowly. But as for my Singapore portfolio, it has outgrown in terms of weightage and capital allocation over the years.

Singapore banks are in many ways so much better than Malaysian banks, in terms of NAV per share and dividend per share accretion. This simple annual accretion will almost guarantee share price appreciation and also a steady increase in dividends accrued without opting for Dividend Reinvestment or additional capital allocation over a long time horizon.

And when it comes to REITs, Singapore has more choices than Malaysia, and the quality is miles apart.

Malaysia does have its fair host of lucrative dividend counters. But with the consistent trend of the Ringgit devaluation against most major currencies, what is a 6% dividend yield in Malaysia today be worth in 20 years time?

7. If your heart is set on going back to Malaysia to start a business, or you have enough of the hustle and bustle of Singapore, go for it!

Malaysians in Singapore often downplay the sacrifices we make to obtain a salary denominated in Sing dollar.

The work culture, speed, and intensity are nothing like in Malaysia. Call it 3 times more intense for us to be worthy of the conversion rate.

On top of that, we often missed out on special occasions with family, friends, and loved ones.

All these sacrifices, on top of being recognized, competing with global talents and being chosen to be employed, culminate and justify why we are worth our pay. It is all sacrifice, hard work, and what we can bring to the table.

We fly the Malaysian flag high when we compete for jobs with Singaporeans on their home turf. Not to mention multinational talents from other countries as well.

Meritocracy at its finest!

But if over the years, should you grow weary and tired and opt to go back for a career switch or to set up a business, go for it!

Some of us have the vigor and strength to carry on until retirement, while some of us may opt to drop off halfway. There is no right or wrong. If your finances are well taken care of, and whatever you are going back for can finance your lifestyle or brings joy to you, by all means, give it a shot.

But should you do so, never ever forsake what you have built in Singapore.

Sincere advice will never sound good to the ears

One man’s meat is another man’s poison.

I know that my advice above would not sit well or even irk some of you.

However, I believe that my advice holds ground, and offers little to no room for rebuttal. It is also what I have realized and am currently adhering to.

That said, if there are any policy changes down the road, some advice may be rendered obsolete. Should the day come when property prices in Malaysia are robust and can yield appreciation value with surety in tandem as Singapore properties, then we might relook into this post.

Do you agree with me? Or do you wish to counter my arguments?

The comment section is all yours! Take it away, and I am ready for it!