Money Advice To Malaysians In Singapore: Post from Dr Wealth

Recently I came across a post from Dr Wealth, written by JP, a Malaysian staying and working in Singapore for the past 7 years.  In the post, he shares 7 money advice he would have given to his younger self if he could turn back time.  As a Malaysian myself, who has been her almost my entire life since primary 1, I would like to share my thoughts on this post from my personal perspectives, and hopefully it may be fruitful and helpful to other Malaysians in the same situation.

1)     Know Why You Are Here

I am in a very different situation as JP.  Personally I started my education since primary 1 in Singapore, all the way till university education.  As such, I am very much more growing up in a "Singaporean-way" more than the "Malaysian-way".  One prominent difference is the proficiency in Malaysia's national language, Bahasa Melayu.  Many Malaysian Chinese are proficient in English, Mandarin and Malay, but I am not.  Having my education in Singapore means I am just proficient in English and Mandarin, and almost zero knowledge in Malay.  The lack of proficiency in the national language, and having spending almost all of my time in Singapore just naturally made me stay in Singapore and work in Singapore.  

Although Malaysians in Malaysia are also proficient in English language, nonetheless it is very inconvenient for myself when I need to attend to matters at Government offices, where every official documentation is written in Malay.  I do not blame the system, I just blame myself for the laziness on my part for the inertia towards learning the language.  Nonetheless, all these meant it is impossible for me to work in Malaysia, and above that, the current exchange rate of SGD 1 : MYR 3.4 doesn't help.  Therefore, it is more of a natural progression for me to stay and work in Singapore, and the appreciating exchange rate is a bonus. 

2)     Maximize Your Earning Power

For Malaysians working in Singapore and would potentially like to pursue any form of FIRE, with the option to retire back in Malaysia in future, it is best for individuals to partake in more side hustles, or climb the corporate ladder a tad more aggressively when young.  This is to maximize your earning power when one is still energized, and save and invest a larger proportion of your income in the early years.  

This is a benefit for Malaysians working in Singapore because one will just need to accumulate a third of the absolute amount required for retirement, and currency conversion will amplify your efforts.  For instance, if a single Malaysian would like to retire comfortably with a passive income of MYR 6K per month, or MYR 72K a year.  Assuming a 4% dividend yield or 4% withdrawal rate, it accounts for a portfolio size of MYR 1.8M.  This translates to a SGD 530K portfolio, which is significantly easier to achieve.  It is important for Malaysians working in Singapore to grab hold of this advantage and speed up one's journey towards financial independence.  

3)     Get The Basic Insurance

Regardless of nationality and where one works, it is always prudent for one to get health insurance/ hospitalization plan as soon as possible, when one is still healthy.  This is me speaking from experience, and paying a high price for it due to the endless delay.  Health insurance will never seem important, until one needs it.  By then, it would be too late and the effects are detrimental to one's finances.  As such, do get a basic health insurance soonest possible!

4)     Consider Apply for PR 

This was not a concern for me because before 2010, it was rather easy to get PR status.  For myself, a couple of months before I officially graduate from NUS, I have received a letter from the government, offering me to apply for Singapore PR.  I applied without any hesitation back then as to me, there were plenty of benefits, the main one having access to Central Provident Fund (CPF), and partial subsidies for medical bills.  Based on what I know, it became very difficult for Malaysians to apply for PR after 2010, as back then, a Malaysian fresh graduate from NUS who joined the same company that I worked in was unsuccessful in her application for PR.  Hence, I do urge eligible Malaysians working in Singapore to try your best to get your company HR to assist in the PR application, regardless of your plans to reside in Singapore for short term or long term.  Having options is always better.  

In addition, with a PR status, it is much easier if one intends to switch jobs.  This is because without a PR status, one has to ensure they have secured a new job before they can resign from the current company.  This is because if one resigns before they have another job, they will lose their work permit, and from that day, there will be a limit to the duration they can continue staying in Singapore to look for a new job.  In the event that job search is unsuccessful, they have to return back to Malaysia to continue their job search in Singapore.  However if they are PR, there is no issue with the duration that they can remain in Singapore.

5)     Delay or Even Cancel All Considerations Of Getting A Property Back In Malaysia

I have to admit, I largely agree with what JP has wrote.  I bought a property back in Malaysia in 2017 with the intention of it being a retirement home for myself in future.  All these years, the property was managed by an Airbnb management company (Airbnb is allowed in Malaysia), and recently I converted it to long term rental.  From experience, I have to agree with JP that the ROI of rental in Malaysia is not good, and most of the time, the rental income is insufficient to completely cover the monthly instalments (but do ensure that the rental must at least cover the interest component of the monthly instalment).  In addition, JP mentioned something very real:

"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?"

So this brings me to the point of location.  The main reason why I bought that particular property, despite having many other cheaper alternatives nearby, is due to the location.  It is walking distance to the immigration and just opposite the popular city square mall.  As an individual who doesn't like to drive, and basically travel around by public transport, the location is good for me to travel in and out of Singapore easily during non-peak hours (my working hours are usually during non-peak hours).  So if the location is extremely important, I would suggest that you can go ahead to buy the property within your means.  However, if location is not the most important consideration, I would suggest to hold off any purchase till a few months before you decide to relocate to Malaysia, so that you can move in immediately.  Nonetheless if you have already bought one, you can refer to this earlier post on what you can do to it instead of leaving it empty. 

6)     Consider Investing In The Singapore Stock Market If You Have Not

If one is interested in Growth investing, the US market is nonetheless the best place to invest.  However if you are interested in dividend investing, I would agree that Singapore stock market is an ideal place to invest.  REITs and Financial Institutions are great dividend payers, and such investments provide a regular stream of dividend income.  Such an investment is ideal because this investment not only provide increasing dividend income, the appreciating Singapore dollar against the Ringgit will supercharge the value of your investment too.

7)     If Your Heart Is Set On to Going Back to Malaysia to Start A Business, Go For It

If one is intending to return to Malaysia because they had enough of the stress, hustle and bustle of the Singapore life, by all means, go.  However, if one intends to go back to Malaysia to start a business, I would recommend one to reconsider.  I have a very different perspective on this matter.  Starting a business, in my opinion, is very different from working for others.  If one has no prior experience in starting a business, I would advice not to do that if your main objective is to go back to Malaysia for retirement, with the business as a new venture during retirement years.  It may be loss-making due to the lack of experience, and that may burn through your retirement pot sooner than expected.  

On the other hand, if you have many years ahead before retirement and you choose to go back to Malaysia to start a business, do go for it.  As the individual is still young, if they succeed, great!  Even if they fail, all is not lost as they have time in their hands, to continue to strive and work out something for their own retirement.

All in all, I largely agree with what JP has discussed in the article, and I wished that I have come across such an article when I was much younger.  I hope these perspectives will be helpful to younger Malaysians who just started to work in Singapore.  When it comes to financial planning, it is best to start young and prepare early.  If I have known all these earlier, I may have achieved financial independence much earlier.  Nonetheless, life and experience is part of the journey, and most importantly is to look ahead with no regrets.  Barista FIRE, here I come...!