The Magic 6.9 Million

Happy Lunar New Year!

With the festive visiting throughout Chinese New Year, the hottest topic was about the “passing motion on white paper”. It is without a doubt something close to the heart of every Singaporean. It is something everyone is feeling the effects of: roads are congested, trains are packed, buses overcrowded and nothing short of a miracle to walk around without knocking into anyone.

Well, let’s not get into politics further. Airing unhappiness and voting one small SMC opposition into power is not going to change everything overnight. Let’s face it, 6.9 million is going to be a reality whether one likes it or not. Instead of complaining, let’s take advantage of the opportunity that is presented.

There is only so much land in Singapore. How is she expected to house these 6.9 million people? As we all know simple economics, supply is limited but demand is surging – what will happen? Prices will continue to climb up. This is an almost risk free assurance from the government that property prices in Singapore will only go up. So, you are either holding on to some of them for capital appreciation or waiting to lose out by getting them at a higher price in future.

No matter what, these 6.9 million people will require the basic necessities. As already mentioned, the transport network is at its brim. What does that mean? It means more profits for the same amount of operation cost - more passengers per trip. The government does not want to nationalize these operators and allows everyone to invest in them. Instead of complaining that their profits been increasing year on year while fares are also moving up, invest in them and enjoy the profits as well.

Communication is also essential and there are only the three main operators here. Do they need to build significantly more infrastructure like base stations to cope with the additional people? Probably not much more, again, it translates to more usage and hence more profits with little increase in cost.

Compared to countries that may have stagnant population growth like Japan, these industries will suffer from renewal cost without additional users. Hence, this projection has effectively given the endorsement of reducing the risk for these industries. So, just sharing my thoughts on where my ang pao money is going for this year of the Black Water Snake.

Cheers! Huat ah!