Net Worth

As the year is going to draw an end soon in a couple of weeks, I had seen quite a few bloggers blog about their latest net worth in The Tale of Azrael, Bully The Bear and Turtle Investor. It was really amazing to see some of them having a positive net worth when their housing loan is not fully paid off yet. It mean to say, they can use their current asset to pay off their remaining housing loan if they want to. Why they did not do so? The only reason I can think of is the interest rate is still below the CPF housing loan rate of 2.6%. They can use their spare cash to invest for better return and also make use of the money in CPF to pay for the housing loan.

So now, what is my net worth? Initially I also feel like calculating my net worth to see how I fare. But after much consideration, I think there is no need for me to calculate as it is definitely a negative net worth. We had bought an Executive Condominium (EC) in 2012 and recently it announced Temporary Occupation Period (TOP) somewhere in mid of this year. Yes, we just moved into our new home for three months. We took a 80% housing loan from the bank and now we paid our installment monthly using our CPF. So with 80% housing loan liabilities, my net worth is certainly a negative one.

Our housing loan interest rate keep going up since last year from an initial rate of 1.05% to now 1.711%. We could pay off 30% of the loan by using our CPF monies. But we didn't do so. Reason being, the interest is still below the 2.5% CPF is giving us annually. As long as the interest rate is still below 3% after the announcement from the Fed on 16 Dec 2015, we will continue to pay off monthly using our CPF. Otherwise, we will consider making a lump sum payment to pay off 30% of the housing loan.   

Although, I have a negative net worth now but I am not upset about it. We are slowly building our asset and one day I believe we will be positive. It's a matter of time. If we can provide a better housing environment for our children, we feel we had done our part as a parent to nurture our children in their upbringing.