Being at a glass film company that deals in films for buildings and vehicles, windshield repairs, car wash, parking lot, and all things car related, it’s a given that many people at the company have a love of cars. Some of the people working there are independent contractors who have their own businesses and I got chummy with one of them who deals with second hand vehicles.
So much so that, he always tells me about new arrivals and checks if I want it before letting it go for someone else. A couple of months ago, he brought in a 13-year-old Honda Stream that only ran for under 60,000 km and looks to be in great condition. It costs around SGD$2,500 and disregarding petrol, owning the car would cost me approximately $250 a month. But a Honda Stream is too large for my use. Why would I need a 2.0L MPV when I walk to work. I decided to give it a pass thinking that it’s too expensive.
Recently, he brought in an 11-year-old Nissan Note that clocked a little over 30,000km costing only $650 because it was without the mandatory inspection certificate valid for 2 years. But even including the inspection fees would only bring the vehicle to around $1,500, and with the tax and insurance and stuff, minus the petrol, it would only cost me around $100 a month. Coming from a country where second hand vehicles can cost $40,000, this Nissan Note is crazy cheap. It’s less than my monthly salary, unlike in Singapore where it can cost your annual salary times two. I thought about it and said, “No.”
Yes, it was cheap. But when I calculated the monthly fees including gas and parking when I go out, it would cost me more than what I spend on transportation now.
Do I want it? Yes.
Do I need it? No.
I’m glad I’ve reached a point where I don’t have to make a deliberate effort to look at things like that.
Sometimes I rent vehicles to travel far, but even the occasional rental wouldn’t cost more than if I owned a car. While there’s a car sharing service by DeNA, called Anyca (something like the Airbnb for vehicles), which I could use to reduce my cost, I don’t want to go through all that trouble to own something I don’t need. Imagine how much more money I can save by not owning a vehicle. That’s at least $1,000 more every year that I can funnel into investments.
I recalled the time when I just left the army and started working, I was getting so much pay, I thought I could afford a Merc SLR. I actually couldn’t but I had thought all my money could be used to fund the car and I would be left with nothing at the end of the month, which in my mind was “STATUS.” Especially when I had a boss who was encouraging me to buy a car. At that time, he was pushing me to get a Swift or Bb. But I hesitated even though I had thought about all the “good” that I can get out of owning a car. But in Singapore, there really isn’t much good about having one and I knew that I didn’t need one. Also, having had my bank account often down to under $1 before I started working, I didn’t want to splurge on something that would bring that figure back on my bank statement.
Thinking back, if I had gotten a car then, I would’ve been trapped in the rat race. I wouldn’t have had the money or the option to move to Japan, and would’ve unwittingly thrown away the life I have now. When I was back in Singapore during the Chinese New Year early this year, a university friend took me home in his car after dinner. I asked him how much he’s paying for the car and he said it costs him around $1,000 a month. In my heart, I cringed at the thought of having to lose $1,000 every month that could be used to build a better future (i.e. retirement). Perhaps as a teacher with the Ministry of Education, he feels secure about his future, but for me, I don’t feel secure which is why I can’t splurge on unnecessary stuff.
Interestingly, I enjoy this kind of insecurity although I don’t necessarily like it. I know it sounds contradictory but when you enjoyed the freedom of freelancing, it’s hard to go back. But that doesn’t mean the instability doesn’t scare you.
Super happy for you that you didn’t throw away your life like this and join the rat race. 😀 but having said so, the car is really cheap. Now I’m not sure if living in Japan (Tokyo) is more expensive than living in SG. I don’t think car pricing wld differ much across states? (Am assuming you are not based in Tokyo)
I’m in Kawasaki but it’s pretty much Tokyo since it’s the next biggest city immediately next to Tokyo. Even Yokohama is slightly further out. But car prices don’t vary much across the country although petrol prices do vary somewhat depending how far out the city you are. While parking in the rural parts of Japan is almost free everywhere, the 23 wards of Tokyo can easily charge you $7 for an hour of parking. It really depends on what you spend on to decide if Tokyo (or Japan) is more expensive than Singapore. If you only look at buying houses and cars, then Japan is definitely cheaper. If you look at public transport, it’s much more expensive than Singapore. I’ve never lived alone in Singapore so I can’t comment about making your own meals 3 times a day back home, but I can keep my groceries to under $500 a month if I cook every meal here. Actually, if I really try, I can keep it under $300, but why make myself miserable? As long as I don’t spend on unnecessary stuff, I think that’s fine. The occasional treat to myself also helps relieve the pressure.
Tax is very high in Japan the more money you make. Let’s take an average employee who receives $40,000 a year as an example. In Singapore, he pays 0% for the first $20,000 ($0), 2% for the next $10,000 ($200), and 3.5% for the next $10,000 ($350). That makes a total of $550, which is under 1.5% of $40,000. In Japan, the same worker (based on the current exchange rate of about $1 to 80 yen) would be paying $4,000 , which is 10%. And we haven’t even factored in other funny taxes. So, someone who makes $125,000 a year would pay $8,700 in Singapore (about 7%), while the same person would be paying $41,250 in Japan (about 33%). That’s an extra $32,550 you could use to do so many other stuff.
Like I said, I never chose Japan because of money, which is why I’m still here. A lawyer friend based in Singapore received many very good offers to work in Japan but he turned all of them down because the taxes would make him earn less than if he remained in Singapore. He’d rather visit Japan on holiday 5-6 times a year than work here. So it boils down to what is high on your priority list.
Food for thought.
Right right. That’s a very detailed breakdown! Hate how ppl usually rant on about high income tax in another country without doing proper calculation. So really appreciate that breakdown you provided (and the even more detailed blog post!). However, I’ve also wondered if perhaps such high income tax is worth it? Given that medical is covered. I find that in SG, though the tax is generally lower, we have to pay so many other taxes and at the end of the day, many struggle with medical cost, esp our aged parents. Wouldn’t a welfare state that makes you pay higher taxes throughout your youth but give you a peace of mind when you are aged be better?
Medical is technically not covered by your income taxes but covered by the mandatory health insurance. With the health insurance, you are covered 70% of medical costs, so you only have to pay 30% by yourself. But the insurance is not cheap, and costs from 20,000 yen upwards per month. But the benefit of the insurance is that you are typically covered by a high-medical cost coverage scheme that limits the maximum amount of medical fees you have to pay every month. Again, the value would depend on your annual salary and other factors. But for a quick reference, for an average worker, the maximum monthly medical cost is between $700 to $1,000. And if it’s a continuous treatment that goes on for many months, the limit will be reduced to around $550 from the 4th month onward. Note, however, that you’ll have to pay those fees first and then submit an application for the reimbursement later.
I’m not so sure about which is better but I would definitely feel less stressed if I know I don’t have to worry about medical bills.
really like how you always systematically and factually list down the calculations and conditions when replying. Thanks so much!
I guess that’s just how my brain works. Despite holding a BA, I’m more logical than creative. If I hadn’t decided to do a huge switch from my Diploma in Internet Computing, I might have ended up holding a BSc instead, which isn’t a bad thing either. I’ve always been stronger at Math and Physics than most other subjects, and that is also why I can explain English from a structural point of view better than most teachers who are more gifted with the words. And probably also why Japanese students find my explanation easy to understand since they are used to being taught that way. And I could’ve just replied with a “You’re welcome!” but I chose to blabber on =\