How many of you really become richer when there is a pay hike? I am referring to the normal average Singaporeans, not those whose pay hikes are in the hundreds of thousands or millions. Many will feel richer for a moment but whether they are richer or poorer will depend on the subsequent events that follow the pay hike. Are there more hikes in fares, charges, rentals and services? If they do, then the pay hike could all be absorbed by the subsequent hikes of goods and services, or in short, inflation, unless of course the hike is much more than real inflation. Many could be poorer after the pay hike when the higher cost of living eats up more than their hikes.
There is also the reverse, when no pay hike can make one richer. If the cost of living can be lowered like the cost of goods and services, the same dollar can buy more, and thus makes one richer.
Many people have been robbed of hundreds of thousands or even millions of dollars by the runaway property prices. Buy a property at $300k instead of $500k, or $600k instead of $1m. The amount of instant losses is huge beyond comprehension and would wipe away years of savings and stinging.
Don’t be too happy with your pay hike.
In the early 70s, a $2k income could buy a 5 rm flat, a car and bring up a family quite comfortably.