Tan Kin Lian's Blog: Growth in millionaire club

Sunday, June 13, 2010

Growth in millionaire club

Dear Mr. Tan
The Straits Times front page has an article that showed Singapore to have the largest increase in millionaire households last year. I am somewhat disturbed by this article. Was it written to give an impression that our economic progress is the best in the world? I do not see any improvement in my circumstances and for my friends around me. Was this to prepare for the general election?

My reply
I tried to understand how the statistics was compiled and how it should be interpreted.

It showed the number of households that have an assets more than 1 million dollars (USD). This could be due to the sharp increase in property price last year, which is good for owners of multiple properties, but make no difference to those who own only one property for own occupation. Furthermore, I think that the study measures the value of assets and do not take away the liability (i.e. loans to purchase property).

The growth rate of millionaires was 35% in Singapore, but for China and Indonesia, the growth was 31% and 21% respectively. The report does not measure that proportion of the population that can be classifed as millionaires - but the growth in the numbers of these rich households during 2008.

In one respect, it probaly reflects the widening disparity in income in these countries. For each person to be rich, there must be 100 people that has to be relatively poorer.

The report does convey the impression that the economy is doing well, when in reality, more people are suffering from the high cost of living - driven by high property and asset prices.

24 comments:

Anonymous said...: Why read the ST? The have an agenda to put the government in good light, even to present statistics to be favourable to the government.; June 13, 2010 9:05 AM
Anonymous said...: Assets of $1 million excludes property. It means they have 1 million or more of liquid investible assets.

By the way, they said households, not individuals. So I think it may be realistic and accurate.

I think there are many such households that's why PAP is quite confident of getting 66% mandate again at the next election. Through IRAS and URA, they have even more detailed figures of the wealthy and their numbers than the public knows.

Hence Mah Bow Tan said HDB flats are still affordable.; June 13, 2010 9:26 AM
Anonymous said...: If people in the financial industry are allowed to steal from the man in the street DAILY they will soon become millionaires, right?
If the insurance agents and the salesmen and women are daily robbing the people and share the loot with their senior managers the number will increase.
CAD acted on a single complaint and caused so much uproar when there have been so many, countless complaints against these salesmen MAS dragged its feet and reluctantly called for investigation. The investigation report won't be released maybe in the next 10 years' time and hopefully forgotten. Justice????; June 13, 2010 9:28 AM
Anonymous said...: The rich ones may have many properties to rent out. With the influx of FTS, many gains substantially and become very much richer.
However, with the influx of FTs, many more get poorer, and many lost their jobs to the FTs.
When u have no or little incomes, you have little to eat, little to spend and little to enjoy.
And yet u see so many people around u are partying, that is very sad.; June 13, 2010 9:52 AM
Anonymous said...: REX comments as follows

A long time ago, a millionaire is considered a rich person. It has partly to do with linguistics. It's hard to get rid of the subconscious association of the english word "million" with abundance, and richness.

But really, possession of a million singapore dollars of assets is not RICH. Times have changed. The net asset values of an average income person especially those who bought apartments or condo's (which are cheaper about 10 years or more ago) is very easily $1 million. A million dollars is nothing, there are plenty of asset rich cash poor blokes in Singapore. The post war baby boomers, those about 50 years old today, many of them belong to this class of asset rich cash poor. So if Straits Times want to give the impression that there are many millionaires here and many people are doing ok, you have to read it with a pinch of salt.

The real millionaires are those with asset values in excess of $10million or so i think. It would be roughly equivalent to the older version of millionaire.

For a more complete analysis, the straits times should probe deeper to dig statistics of poor people, establish a definition, and then find out how many percent are there.

The income gap is what matters, the income gap is a better measure of the effectiveness of any Goverhment, not the number of rich people!!!!!!!!!!!!!!!!!!!!!

rex; June 13, 2010 9:54 AM
Anonymous said...: If you include the people who have won millions in TOTO, Big Sweep, perhaps it could be true....... HOWEVER, compared to the many many more who were made poorer and even destitute by gambling, what is the point of it all?

We are also told that to retire at 60, we need $1.2 million. Someone in Indonesia needs just a fraction of that. So can we really say many Singaporeans are millionaires when what they have could be just enough for survival?

The rest who don't have the $1.2 million, need NOT survive.; June 13, 2010 10:13 AM
Anonymous said...: I believe the statistics only count liquid assets like cash, stocks, unit trusts etc that could convert to cash fairly quickly. Otherwise almost every household who own 5-room flats in Singapore is millionaire; June 13, 2010 10:19 AM
Lye Khuen Way said...: ST did state that the S'pore millionaire is with with US$1M in assests other than his or rather their house.

Yes, it is a "household". Which, again if you were to use S'pore Statistics Dept def = All living in a single address , less the maid(s). Therefore, a relatively poor chap living in a HDB 4-Rm with say, 1 room rented out to a professional, and with wife & a children working, will :-
1) have a Household monthly Income of > S$5K,
2) have assets very near the magic
US$1M.

Our Mr Leong S H should be able to verify my guess !; June 13, 2010 11:40 AM
Anonymous said...: Come come, you buy my hdb at 1 million, I become millionaire, you also become millionaire.
Wohoo, We can all become millionaire.; June 13, 2010 11:51 AM
Anonymous said...: """新加坡百万富家占全国家户的比重达一一.四％，同样名列第一，香港、瑞士、科威特及卡达则紧追在后。""

11.4% of households in spore have more than $1 million in "assets".
In a household of 4, the average is only $250,000 per person.
The rich get richer. Is it fair??; June 13, 2010 12:16 PM
Anonymous said...: Ref: Rise in millionaire numbers in Singapore.

The pay rise in the civil service must have recently been implemented.

Sincerely
Mr Obvious Man; June 13, 2010 12:28 PM
Anonymous said...: Every week or month there is a millionaire created by big sweep and toto. Is it a wonder the millionaire club is growing? Big sweep and toto have been around for years, imagine how many millionaire arwe there already.; June 13, 2010 12:28 PM
Anonymous said...: Banks consider HNW (high net worth) as rich, i.e. above S$10 million. So S$1.4 million is not that rich.; June 13, 2010 12:53 PM
Createwealth8888 said...: May be some one should change the definition of Millionaire to those having investible assets X times USD$1m e.g. USD$5m and above; otherwise we have too many millionaires in Singapore and made the Government thinks that Singapore is full of rich people and it will be bad for the mass average Singaporeans.; June 13, 2010 2:06 PM
Anonymous said...: my wife and I received the gst rebate letters totalling $250 but in the same day, we also received a property tax increase letter of $280, so net we still have to pay $30!; June 13, 2010 4:14 PM
J said...: Dear Lye Khuen Way, Anonymous 12.16,

I was reading the Straits Times article, trying to find out more about the definition of a millionaire household. The article uses "millionaires" sometimes and "millionaire households" at other times. I also didn't see the definition of millionaire household.

I suspect that "millionaire household" can refer to the combined assets of everyone at home. This seems to be what you believe the definition to be. So if working age children do not move out, then the combined assets tends to be higher. (It seems unnatural, but that's how definitions can go.) Can someone clarify?

Thanks.; June 13, 2010 6:37 PM
Anonymous said...: ""my wife and I received the gst rebate letters totalling $250 ""

The combined gst rebate is $250 per year.
The gst for pub @$250 per month work out to be $210 per year.
Rebate is one time. Is it worth it???

The children have to pay for the gst every year in the future.; June 13, 2010 10:51 PM
Anonymous said...: Mind you each of our Ministers is a millionaire what! at the expense of the taxpayers and of course the poor!!!!; June 13, 2010 10:59 PM
Anonymous said...: As one older singaporean, I much prefer those day before the 70s, when I can saved $20(twenty) to $50(fifty) out of my salary of around $300.

Today a pay of two thousand dollars is hardly enough to maintain oneself much less support a family.

oldy.; June 14, 2010 12:09 AM
C H Yak said...: Is it implying that there are more and more millionaires and so Ministers deserve their $Million salaries?; June 14, 2010 1:03 AM
Anonymous said...: Each Senior Cabinet Member can make few members in their families millionaires in one year.

Many of the Cabinet Members are in the Cabinet for decades, IF they spread their fortunes within their families and relatives, SIN theoretically would have hundreds if not thousands of millionaires just within this group of privilege people. With just couple of millions in population, will it surprise anyone that SIN has high score in millionaires?

patriot; June 14, 2010 9:08 AM
C H Yak said...: % is a relative term.

For this survey, the increase was 34%. What is the base?

If there was 1 miliionaire (base is 1) based on the definition of millionaire used, and this year there is another 1 ...the increase is 100%...smaller the base the % is relatively higher.

It was defined that the first asset "owner-occupied" property is not counted. Hence, quite alot of those with mortgage debt or just having 1 million in asset alone, even if paid up would be omitted from the base...if not alot of upper middle class condo owners would make it to the base.

Hence if there were 100 such defined millionaires based on the definition, there are 34 new ones.

This simply means the rich are getting richer...of course they must have the means to get it (million $; by hook or by crook), whether or the economy is performing.; June 14, 2010 1:27 PM
sgcynic said...: The reprot simply makes me green-eued with envy and alienates me to this aspiring country-state-city.; June 14, 2010 5:41 PM
Anonymous said...: suppose I live in a 2 room HDB flat (valuation 280K) but own a condo valued at 1.3 S$ million in current market. will I be considered a millionaire even if I owe about 800,000 towards my condo. Can someone please clarify.
thanks; June 15, 2010 9:47 AM