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12/06/2011

Minus one zero from your Sing dollar

Singaporeans are feeling rich with high property value and high salary. If you compare the wealth of Singaporeans today and 30 years ago, Singaporeans are generally better off, richer, with more asset value to their credit. And the smarter and more talented ones are richer than their counterparts in the past beyond words.

Yes everyone is getting richer, but the real wealth or value is about one zero less from what they have. The real value of a 5 rm today is really the same value of a 5 rm flat yesterday, with a little enhancement. A $500k flat is actually the same $50k or $30k flat then. And only half life left.

An income of $5k is really $500 then. That is the real value of our money’s worth. There are certain items where the prices are about the same as in the past, some may even be cheaper. But for many things, the prices have gone up by more than 100%.

A 10c cup of kopi is $1. A 30c bowl of noodle is $4. A car of $10k is $100k. A flat of $30k is more than $300k.

In order to maintain the same level of living, one should rightly be earning 10 times the income 30 years ago, ie $1000 income should be $10k income. Today this is achieved in quite a number of households by adding two incomes together. While in the past, it was quite reasonable for an average worker to earn $1k. Today, to make $5k is not that easy really and to take home $10k by an employee is quite exceptional, unless one becomes an MP.

So, is it reasonable to say that our real money value compares to 30 years ago is less 10% of the face value? It is actually much lesser. One can’t even buy a decent HDB flat with $400k from the resale market when $40k could get one a semi D then.

There is no need to officially remove one zero from our paper currency yet. Pray that there will not come a day when a few zeros need to be written off. The Americans and Europeans are actually writing one zero off now without saying so.

5 comments:

Matilah_Singapura said...

If we agree to define wealth as "the ability to consume", then despite inflation, REAL WEALTH has increased in S'pore over the decades, and S'pore still remains the economic envy of the world.

You can't blame Sporeans for feeling a bit smug. Let them enjoy lah redbean!

Anonymous said...

That is why the $20 note will be reintroduced soon. Not only add 1 zero but multiply by 2 as well.

Anonymous said...

Not all stuff have price increased. Gasoline price is cheap as compared to 20-30 years ago. It should be at least 3 times more. Generally, all household items are cheaper in real terms, thanks to China global factory production. I do not therefore understand the daft Americans allow their politicians to ask China to raise RMB value which will make the household goods more expensive to consumers. Perhaps, they are so daft that they do not see through the true consequence. US politics and society are now facing declining and soon it will meet the tipping point and deteriorating in accelerated speed.

Matilah_Singapura said...

Wait til the introduce the $50 coin.

Then you'll know the once-upon-a-time world's strongest SGD will be competing with the Rupiah.

Chua Chin Leng aka redbean said...

Indonesia is going to strike 3 zeros from its rupiah notes. It is in the news today.