Wednesday, May 16, 2018

Singapore Property: Freehold vs leasehold condos

Freehold vs leasehold condos – Which is the best choice?

An investor would do better to focus on the key principles. What are the prices of surrounding properties, what amenities do the URA master plan suggest, and what is the rental yield? Those issues matter much more than whether a unit is freehold or leasehold.

For home owners, do not make too many assumptions about where you and your grandchildren will be living. Family structures and places change. Family members migrate, children move out, and you may well want a change of scene 40 years from now. So before paying the premium for a freehold unit, remember this: 99 years is not forever, but you don’t need forever. You just need long enough.

99 years, 999 years, and Freehold: Defining the terms

A freehold property can be held by the owner indefinitely. A 99 year leasehold property reverts back to the state, upon the expiry of its lease.

A holdover from the Colonial era are properties with 999 year leases. This is, for all intents and purposes, similar to freehold.

Note that in any case, there are provisions that allow the government to reclaim the land for vital infrastructure or security purposes. If your house is in the way of a major highway, the fact that it’s freehold is not going to save it. There is also the possibility of en-bloc redevelopment. If a developer makes an en-bloc attempt for your freehold condo, and the other residents agree to it, you’re still going to be moving out.

As a (very loose) rule of thumb, the initial sale price of a freehold unit (new sale) tends to be 10 to 15 percent higher compared to a leasehold unit in the same area.

Freehold vs leasehold condosNow that’s out of the way, let’s look at the never-ending dispute of prices:

Which is worth more, 99 years or freehold?

This question is not easy to answer, as it is difficult to isolate individual causes of property value. For example, a unit with 70 years left on its lease, but is located in the Central Business District (CBD), will probably still be be worth more than a freehold unit on the outskirts of Punggol. Likewise, if a freehold property is situated closer to a MRT station, it can be hard to tell how much of the higher valuation is due its freehold nature, and how much is related to its accessibility.

Number of condos by tenure
So it should come as no surprise that, for the past two to three decades, analysts and investors have been arguing about the price effects of leasehold versus freehold. There are a few common conclusions that we can arrive at however:
  • Price differences occur at the 78 and 30 year mark
  • In theory, freehold fetches a better price during en-bloc
  • Leasehold is better for rental yields
  • The advantage of freehold is more theoretical than practical
  • Price differences occur at the 21 and 40 year mark

As a rule of thumb, a freehold unit will be priced at about 10 percent higher than a leasehold counterpart. This pricing difference is seldom immediate; it is usually apparent when comparing a leasehold unit down to around 78 years left on its lease (at 21 years old), to a freehold counterpart. This is on the assumption that everything else about the properties (location, amenities, accessibility) are more or less equal.
The most significant difference is at the 40 year mark. Most banks will restrict financing for leasehold units that are 40 years old. It is also not possible for buyers to use their CPF, if they want to purchase a property with 30 years or less on the lease. As a result, the value will fall drastically compared to that of a freehold unit.

However, few properties in Singapore reach such an age before being redeveloped. To our knowledge there are no condos at this point in their lease, given that the oldest (possibly Lutheran Towers) was completed in 1974. It’s unlikely that residents will not give in to an en-bloc when their condos have just 30 or 40 years left.

(For public housing, HDB flats tend to be renewed by the Selective En-Bloc Redevelopment Scheme (SERs) before their lease runs too low).
  • In theory, freehold fetches a better price during en-bloc

The en-bloc value of a freehold development should be higher, as the owners are giving up more. A leasehold unit near the end of its lease should be priced lower, since in a few decades the owners could end up making nothing from it. That’s the theory anyway.

But if it worked that neatly, we could just compare the en-bloc price of a freehold unit and a leasehold unit, and declare “Development X is cheaper because it is leasehold”. In reality, that would be a misleading comparison.

Average prices -99 vs 999 vs freehold
En-bloc offers are affected by a range of factors, such as the state of the market, the zoning laws, and the amenities that have been built up. For example, if zoning laws dictate that a freehold development cannot be replaced by a condo of the same height (we believe this may be the case with Peace Mansions), then the en-bloc price may be lower even if it’s freehold; less vertical space means fewer units to build and sell.

Likewise, it is nearby amenities – such as construction of train stations, malls, and schools – that developers factor into their en-bloc bid. And of course, it’s hard to factor in all that at the initial time of purchase (you don’t know what will be around 30 or 40 years down the road).
  • Leasehold is better for rental yields

Leasehold units are better for rental yields because they tend to be cheaper, and tenants are not affected by whether it’s leasehold or freehold.

For example, say you buy a leasehold condo that is $1 million, and generates $3,000 a month in rent. This is a rental yield of 3.6 percent.

Now say you buy a freehold counterpart, in the same area, and it costs 15 percent more. That’s $1,150,000. Now will your rental income increase? Unlikely, as it does not matter to the tenant whether you have a 99 year leasehold or a freehold. You will probably still get $3,000 in rental income.
The total rental yield is thus 3.1 percent, making it less attractive to a landlord.

This is one of the reasons landlords like to look for older leasehold properties, which may lead to lower capital to purchase, and higher yields. You can browse for some of Singapore’s best valued listings on
  • The advantage of freehold is more theoretical than practical

When it comes to property as an investment, the difference between freehold and leasehold is an academic distraction for professionals. It’s not a dispute that can be settled because (1) most of it is hypothetical, and (2) whatever you come up with, there are a thousand examples in the real world that will prove otherwise.
transactions by district - freehold transactions by district - 99 year
An investor would do better to focus on the key principles. What are the prices of surrounding properties, what amenities do the URA master plan suggest, and what is the rental yield? Those issues matter much more than whether a unit is freehold or leasehold.
For home owners, do not make too many assumptions about where you and your grandchildren will be living. Family structures and places change. Family members migrate, children move out, and you may well want a change of scene 40 years from now. So before paying the premium for a freehold unit, remember this: 99 years is not forever, but you don’t need forever. You just need long enough.


Friday, April 27, 2018

4 Steps to Help Your Child Defeat Procrastination

“I’ll clean my room tomorrow!”

“It’s not due until next week!”

“I’ll do my chores later!”

They insist. They persuade. They don’t act.

Watching your kids go through the self-destructive process of procrastination can be extremely painful. Your options are to either do nothing, watching the whole, all-to-familiar scenario unfold, help out, by doing some or all of the work for them, or play the “parent card” and make them do it, causing stress and bad feelings.

But none of these is a good option. Not one will improve your child’s life, increase their resilience, or empower them to take control.

The research in brief.

We live in a society where, according to research (click here), 20 percent of adults self-identify as chronic procrastinators. Casual procrastination affects an even larger group.

If you evaluate the studies (click here), or frankly just spend time with someone who chronically procrastinates, you will see the issue is not one defeated by simple logic. In other words, procrastination goes far beyond helping your child fix their schedule and prioritize better.

Chronically delaying tasks goes hand-in-hand with feelings of shame, guilt, and anxiety. So while your child may actually really want to accomplish their goals, mood and emotion play a role interfering with the execution. In short, negative emotions can derail self-control. As such, a key to reducing the procrastinating behavior has in large part to do with improving emotions.

Try Mood Repair

Among others, Dr. Pychyl (sounds like Mitchell), author of the 2013 book, Solving the Procrastination Puzzle has been exploring and promoting the use of mood repair, using psychological strategies to defeat procrastination where it starts. Simply put, you can learn to recognize that you are procrastinating, acknowledge its negative consequences, and employ one or more of a variety of simple techniques to pass it by and get back to being productive.

This thought-pattern overhaul works for adults, correcting an established problem. If we can teach these skills to our children when they are young, imagine the potential we can open up in them. Imagine how much unnecessary stress we can remove from their lives.

So, how do we do it? Try one of these four simple ideas:

1. Teach Your Child Self-Compassion

“A moment of self-compassion can change your entire day. A string of such moments can change the course of your life.” ~Christopher K. Germer

Let’s say your child delays a task. While they may feel temporary pleasure from the procrastination, in the end, there are often lingering feelings of anxiety and then self-criticism from the job left undone. Here’s the thing, beating oneself up for procrastinating only makes the situation worse as negative emotions inhibit self-control.

As an alternative, teach your child to forgive themselves, to be kind to themselves, and to treat themselves as they would treat their own best friend. Let them know this is a process of self-awareness. They realize they are procrastinating and it’s time to make a change. Children will understand that the point of not procrastinating is simply to make their lives better.

2. Encourage Your Child to “Time Travel”

“Visualize this thing that you want, see it, feel it, believe in it. Make your mental blue print, and begin to build.” ~Robert Collier

A fun way for kids to think about how procrastination affects them is to “time travel.” Have your child take a trip into the future and using visualization. Ask them to close their eyes and imagine how they will feel once the task is complete and how they will feel if it is not.

Sometimes this is all they need — the realization that “if I don’t clean my room now, that mountain of socks will be even larger when I have to clean it tomorrow and want to go out with my friends.”

By imagining how much better life will be for them tomorrow, they realize that what they have to deal with now is really not so bad.

3. Show Your Child How to “Just Get Started”

“You don’t have to see the whole staircase, just take the first step.” ~Martin Luther King, Jr.

A large part of the problem of procrastination comes from feeling overwhelmed about the entirety of the task. A science fair project takes hours of work — but the first 20 minutes only take 20 minutes to complete.

Just getting started means taking a baby step. If your child knows that they only need to do 20 minutes of work, they are much more likely to start. You can help your child set up mini-goals in their overall quest to complete a larger goal. Achieving each milestone can give your child a mood boost, making them more likely to continue, or return to the task positively in the future.

4. Make Sure Your Child Starts with the Easy Things

“If you want to change the world, start off by making your bed. If you make your bed every morning, you will have accomplished the first task of the day. It will give you a small sense of pride, and it will encourage you to do another task, and another, and another. And by the end of the day that one task completed will have turned into many tasks completed.” ~ William H. McCraven, U.S. Navy Admiral

Starting a project or a task can often be the most stressful part. Perhaps it’s a side-effect of the “work before play” mentality, but we often feel the need to start with the hardest part. This creates unnecessary stress, inviting procrastination.

Release your child from the grasp of this thought. Help them find the parts that they like, and make sure they know that they can start there! This level of control is empowering, and it makes starting anything much more enjoyable.

Getting the ball rolling with an enjoyable part of a task often acts as a gateway to further, more complicated work.

Learn more about helping your child beat procrastination and stress less at

Go Review Gozen (click Here

In order to offer our children as many opportunities to be successful in navigating the complexities of modern life, we have to gain greater awareness of how we can best meet those same challenges. In this talk, Isa Gucciardi, PhD, covers important topics to help parents meet their children with as much love, discernment, and capacity as possible while offering strategies to help parents gain greater confidence and enjoyment raising their children. 

About the Speaker 

Isa Gucciardi, PhD, holds degrees and certificates in psychology, cultural and linguistic anthropology, comparative religion, hypnotherapy, and transformational healing. She is the creator of the highly effective therapeutic model Depth Hypnosis and author of Return to the Great Mother, a book on birthing. Isa is the Founding Director of the Foundation of the Sacred Stream, and teaches nationally and internationally. She has two children, and an active counseling practice in San Francisco where she resides with her partner. 

I watch Youtube video (click here

Why Kids Procrastinate and How to Help

If you’re a parent, the likelihood is you have a child who procrastinates. Why? Because procrastination is part of the human experience. Most people procrastinate because they are not enthusiastic about a task, or because there’s no shortage of more interesting, exciting, or pressing things to do.

is a verb, action word.

delay or postpone action; put off doing something.

"the temptation will be to procrastinate until the power struggle plays itself out"

synonyms: delay, put off doing something, postpone action, defer action, be dilatory, use delaying tactics, stall, temporize, play for time, play a waiting game, dally, drag one's feet/heels, take one's time; hesitate, vacillate, dither, be indecisive, be undecided, waver; haver, hum and haw; swither; informal dilly-dally, shilly-shally; informal kick the can down the road

"fear of failure is often the reason why people procrastinate"

Origin: late 16th century: from Latin procrastinat- ‘deferred till the morning’, from the verb procrastinare, from pro- ‘forward’ + crastinus ‘belonging to tomorrow’ (from cras ‘tomorrow’).

Procrastination is the avoidance of doing a task that needs to be accomplished. Sometimes, procrastination takes place until the "last minute" before a deadline. 

“Everybody procrastinates, but not everybody is a procrastinator,” says Dr. Joseph Ferrari, Professor of Psychology at DePaul University. For 20 percent of the population, procrastination is a chronic problem. “These are people who have a maladaptive lifestyle,” Ferrari says, “individuals who are chronic or habitual procrastinators. They don’t pay their bills on time, their refrigerator is empty, they lose jobs because they don’t get their work done on time.”

The good news is that when it comes to children, procrastination is only worthy of attention from a therapist or psychologist when it permeates every aspect of their lives—“when they’re doing this at home, at school, with their friends,” Ferrari says.

Dr. Sean McCrea, Assistant Professor of Psychology at the University of Konstanz in Germany, recently released findings from his procrastination study that show the significance of the way in which tasks are presented: people act in a timely way when given concrete tasks, and they dawdle when they view the tasks in abstract terms. “The focus of much of my research is on examining reasons why people undermine their own performance,” McCrea says. “I think the most interesting aspect of the findings is that subtly putting people into a more concrete mindset has such powerful effects.”

Perhaps parents can help their children by presenting tasks in concrete terms (for instance, picking up the balls versus cleaning the playroom). More importantly, though, parents can help by recognizing that parenting style is significant. Ferrari, who has been researching procrastination for more than 20 years, says there is no gene for procrastination; it is learned. “We have found that chronic procrastinators report having parents who were cold and demanding—authoritative,” Ferrari says. “It’s the child who can’t really rebel, so the only way to rebel is to delay doing what the parent is asking them to do.”

Ferrari suggests that parents reward their children for being early rather than punish them for being late. “We often expect 100% or 0%,” Ferrari says. “No, no! If the child meets 80% of the goal, you reward them for that!”

Dr. Timothy Pychyl, Professor of Psychology at Carleton University in Ottawa, Canada, agrees that parents have to be careful not to be too hard on children who procrastinate. “We understand that there’s a certain amount of cognitive development that has to go on,” Pychyl says. “We see a young person that’s not regulating his or her behavior very well, and we become so punitive.”

Pychyl cautions that children of authoritarian parents are in for a tough time later in life. “It’s important for parents to be gentle and encourage the development of self-regulation,” Pychyl says. “It takes time and maturity.”

Pychyl’s recent research examines the relationship between identity formation and procrastination. The study found that young people who hadn’t achieved their identity yet were more likely to procrastinate. “Ego identity is all part of just having ego executive functioning,” Pychyl says. “You have to be able to monitor your own behavior and choose to commit your resources to it.” Pychyl points out that people who don’t know themselves are not going to commit.

Metacognitive skills such as goal setting, breaking down tasks, and monitoring progress are all skills that parents can teach and model for their children—skills that can be learned. Pychyl says it’s more than just a matter of developing will: it’s also necessary to develop skill. “Skill and will together lead to self-regulatory success.”

Teaching Kids Not to Procrastinate: 10 Tips for Success

1. Reward the achieved marks, don’t punish the marks not achieved.
2. Have realistic expectations. Don’t expect too much.
3. Change your parenting technique as your child gets older. (Don’t be stern with a 12-year-old in the same way you would be with a 3-year-old.)
4. Give your child choice and responsibility. Don’t always tell your child what to do.
5. Model positive, self-regulatory behavior. Teach goal setting, breaking down tasks, and monitoring progress.
6. Be understanding of your child who is still trying to find his or her identity.
7. Let your child fail or learn the consequences of his or her actions: don’t rescue your child.
8. Help make your child’s tasks concrete.
9. Recognize that procrastination is not laziness; people who procrastinate are generally very busy doing things they’re not supposed to be doing.
10. Remember that procrastination is learned behavior.

Tuesday, April 24, 2018

Singapore HDB 99 year lease expiry: Potential time bomb for home ownership?

Some homeowners are disgruntled with the fact that HDB flats only have a 99 year lease.
About 82 per cent of Singaporeans live in HDB flats. Many of them also see their flat as more than a home – some Singaporeans assume that their flat will provide for their retirement. The idea is that, when they get older and need less space, they can sell their flat (which would have appreciated in value), and buy a smaller one. Coupled with their CPF, it should see them through their twilight years. But is this really a safe assumption with all HDBs having just a 99 year lease?

The 99 year lease

Some would argue that HDB flats are not so much owned as they are rented. The reason is the 99 year lease on these units. During a Parliamentary session on 20th January 2014, then Minister of National Development Mr. Khaw Boon Wan confirmed that, at the end of their 99 year lease, HDB flats will revert back to the landowner (HDB). The land will then be turned over to the state. This means the value of a HDB flat at the end of the lease is zero.
To most Singaporeans, this is an abstract principle.

To date, no HDB development has reached the end of its 99 year lease. The government has always intervened before this happens, through the Selective En-Bloc Redevelopment Scheme (SERS.)

Is SERS the answer to the time bomb?

SERS was launched in August 1995, and is – by official definition – a programme to rejuvenate aging housing estates. We note that neither HDB nor the Ministry of National Development has explicitly stated SERS is meant to renew housing leases, although it has served that function in its implementation.

SERS provides residents with compensation based on a valuation of their flat, as well as rehousing benefits. These benefits vary according to each resident’s situation. Some of these include:
  • Guaranteed availability of a flat, at a planned “replacement site”
  • A subsidised price for the replacement flat, with discounts ranging between 20 percent and 40 percent
  • Compensation equal to the market value of the resident’s flat. To our knowledge, this has included Cash Over Valuation (COV)  
Before 2004, residents affected by SERS could choose new units only at a given “replacement site.” After 2004, residents could choose flats from other estates, without losing their rehousing benefits. As of 2011, residents affected by SERS also receive priority when applying for a new flat anywhere.

This is based on our observation of SERS at Rochor Central, Upper Boon Keng Road, and Strathmore Avenue. Around 39,000 flats in 79 locations have been reclaimed under SERS, since its inception in 1995.

HDB often rolls out SERS when an estate is about 40 years into its 99 year lease. As of 2014, about 300 HDB blocks (approx. 31,000 flats) across Singapore fall into this range.

So there is no need to worry about the 99 year lease time bomb right?

To be blunt, we would worry anyway. The two reasons are:
  • No guarantee of SERS happening
  • No guarantee of adequate compensation

No guarantee of SERS happening

The locations targeted for SERS are not disclosed until the final announcement, in order to prevent speculation. This means you cannot buy an old flat (one with 59 years or less on the lease) with any confidence that SERS will happen. The fact that it has often happened is not a guarantee that it will happen, and the government does not seem to have any obligation to use SERS.

Singaporeans who buy old flats – 40 years or more into the lease – should be wary of assuming it provides for their retirement.
Say you are 35 years old when you buy such a flat. By the time you retire at 65, there will only be 29 years lease left on the flat. Most of your CPF money would have gone into servicing the loan for this flat, but you would be lucky to make even half of what you’ve paid upon resale.

In our experience, few buyers are interested in sinking hundreds of thousands of dollars into a property that will only last another 30 years or so.

Even if there are interested buyers, the prospective pool is limited due to loan limitations – several banks will not give out loans for property with less than 60 years left on the lease, or will provide only minimal financing (e.g. Less than half the valuation.) In addition, note that Singaporeans cannot use their CPF to purchase a property if the lease has less than 30 years remaining.

How then can you sell the flat to supplement your retirement?
Your only hope will be SERS. But as we’ve pointed out, this is not a guarantee.

It is a clear lesson to buyers: do not fork out high prices for flats with expiring leases, even if the location seems great. If you insist on buying a flat with 30 or 40 years left on the lease, do not count on it to supplement your retirement. SERS may not come around to save you.

No guarantee of adequate compensation

HDB conducts a satisfaction survey for each SERS event, which is posted on their website. The latest survey, in 2013, shows an 87 percent approval rate. While this is not solely related to financial compensation, we can safely assume that being adequately compensated (i.e. At least able to purchase a replacement flat) is reflected in this.

However, there is no guarantee that overall compensation will suffice. Even if market valuation is paid for the flat (and we assume it has not drastically declined at the time), it may not be sufficient to pay for a new property in the given market.

We assume that HDB will do everything in its power to mitigate this, such as through the subsidised prices for new flats. But for retirees who are thin on savings, a low valuation – or an inflated property market at the time – can eat into their already meagre funds.

What can be done?

HDB and MND are often criticised for not having a clear compensation plan, for when leases expire. This is unfair. There has been a clear plan for when leases expire to date; SERS has helped so far, but it something that exists by the grace of the current government and should not be relied upon indefinitely.

It falls to each Singaporean to be financially savvy, and to pick their property investments (or home purchases) with foresight. It is clearly our culture of self-sufficiency, rather than our welfare policies, that form the underpinnings of our nation.

Leasehold property

What happens when 99 years runs out?

Land in Singapore is held under three main leasehold types: freehold, 999-year and 99-year leases.

For properties built on freehold land, the land belongs to the leasehold owner indefinitely so there’s no need to worry about the lease running out (save for the dreaded government acquisition of course). This extends, to a certain extent, to 999-year leasehold properties as well, since 999 years is certainly long enough to house many generations with ease.

No leasehold property in Singapore has ever run its full course of 99 years.
The most worrying of the lot though is 99-year leasehold properties. What rights do owners of this asset class have at the end of the tenure, when the title to the land reverts to its original owners?

For this article, we’ll be focusing on the effect of the lease expiry on private property owners (like condominiums and privatised HUDCs). If you’re concerned about HDBs, we’ve written about that here.

Who does the leasehold revert to and what happens then?

More than three-quarters of the land in Singapore is state-owned and held by the Singapore Land Authority (SLA) which acts as custodian of the land. The remainder is comprised of the few pockets of freehold land held by other government departments such as HDB, JTC, PSA and private owners.

On the expiry of a 99-year leasehold, ownership of the land reverts back to the state, and the rights of any property owners are effectively extinguished.

But surely property owners will be entitled to fair compensation for their homes that remain on the property Unfortunately not. The tough (and some might say unfair) reality is that the SLA has no obligation to reimburse or pay any sort of compensation at all.

What options do 99-year leasehold property owners have then?

There are two choices available to 99-year leasehold property owners, both of which involve paying the government a premium to extend the tenure of the lease.

They can either top-up the lease on their land with SLA directly, or sell their property to a third-party developer (known as a collective or en bloc
sale). Both of these options must be done by all of the owners collectively, and cannot be accomplished on an individual basis.

Lease Top-Up

Here, the property owners apply to the SLA to top their lease back up to 99 years again, with the payment of a land premium. So for example, if there’s 50 years left on the land, owners can top up another 49 years so that the lease reverts back to 99 years.

This premium is assessed by the SLA’s Chief Valuer on a case-by-case basis, taking into account factors such as the number of years remaining in the leasehold.

At this point, it’s in SLA’s discretion whether to approve or reject the application. In making its decision, SLA considers various factors of the lease including whether the extension would fit in with the government’s long-term intention with the land and whether the proposed use would optimise the land’s use.
In the case of a successful lease top-up, property owners may continue occupying their property for the duration of the renewed 99-year tenure.

This would, of course, be the ideal option for most owners of 99-year properties, but unfortunately, the exorbitant land premium charged by the SLA makes this option far too expensive for everyday individuals, and is usually the route taken by companies or other privately-held entities that are able to afford it.

Examples of properties that have successfully received lease top-ups include the former Shing Kwan House and ICB Building (now the SGX Building), the former Overseas Union House (now 50 Collyer Quay) and the former HMC Building (now Lumiere).

Collective (or En Bloc) Sale

The collective, (or as it’s popularly known, en bloc), sale is the option favoured by individual homeowners as it pushes the hefty obligation of the land premium payment on to the private developers or companies who are better able to afford it.

The downside is that, unlike a lease top-up, the owners will no longer be entitled to stay in their property as the rights to the lease transfer to the private developers instead.

What they do get, however, is compensation for their property, which they wouldn’t have been entitled to had their lease simply run its course.

2007 was the peak year for en bloc sales, including the largest en bloc sale to date: the sale of Farrer Court apartments.  Its 618 units were sold for a total of $1.339 billion dollars, netting each homeowner a cool $2.122 to $2.238 million dollars (after overhead costs). 2016 also saw the collective sale of two privatised HUDC estates (Shunfu Ville and Raintree Gardens) and we predict this trend of HUDC estates going en bloc to continue unto 2017.

If you’re looking for a rundown on the en bloc sale process, be sure to check out our article on that here.

99-year leasehold properties: Yea or Nay?

If your aim is to purchase a home that you can pass on from generation to generation, a 99-year leasehold property is definitely not for you.

But if you’re content to simply own the home for your lifetime (hey, your kids can fend for themselves), or you’re buying it for purely investment purposes, then it’s seriously worth considering.
We’ve discussed the issue of freehold vs. leasehold properties previously, so be sure to check it out here for a more in-depth comparison.

While the leasehold of a property undoubtedly affects the potential for its appreciation, there are other factors that come into play as well. For example, whether you’re buying freehold or leasehold n,  choose a development that’s located near an MRT station, good schools and other amenities (you can do this with’s search filters that let you narrow down results according to its proximity to various amenities). These make the development more desirable to private developers, upping your chances of securing an en bloc sale down the road.

What’s your take on 99-year properties – smart investment or money pit? We’d love to hear your thoughts, so sound off in the comments below!

Saturday, April 21, 2018

MLM Cryptocurrency Scams: Stopping the Brand Killer and Protecting the Direct Selling Channel – by Jeffrey Babener

MLM Cryptocurrency Scams: Stopping the Brand Killer and Protecting the Direct Selling Channel – by Jeffrey Babener

The article below was first Published in the World of Direct Selling. I'm sharing a post authored by fellow attorney, Jeffrey Babener. The article is so well written, I wish I wrote it myself. This is a very important subject. Babener provides solid education and proposes some ideas on ways to counter the groundswell of fraud developing in our industry. I'm sharing the article below, unedited, with his permission. 
Jeffrey A. Babener, of Portland, Oregon, is the principal attorney in the law firm of Babener & Associates. For more than 30 years, he has advised leading U.S. and foreign companies in the direct selling industry, including many members of the U.S. Direct Selling Association. He has served as legal advisor to various major direct selling companies, including Avon, Amway, Herbalife, USANA, and Nu Skin.

-------------- By Jeffrey Babener
In March 2018, Google followed Facebook in banning cryptocurrency ads. Why? It was too hard to identify the legitimate from the illegitimate advertiser and that out of control speculation and fraudulent financial schemes were creating confusion for the consumer experience. Given that more than 80 percent of Google revenue derives from ads, Google was rightfully concerned that rampant fraud buried in its signature product, online advertising, could dilute its “brand” and poison the receptive market of its readers and product consumers, its advertisers.

The Google/Facebook actions follow alarms going off at all levels of government. Almost simultaneously, the FTC took one of its first major actions against a cryptocurrency pyramid scheme, upon the heels of a yearlong demonstration of similar actions by the SEC, states and foreign governments against fraudulent cryptocurrency Ponzi/pyramid cloud mining investment schemes.

Just as Google and Facebook realized that cryptocurrency scams could be a “brand killer,” the direct selling industry may have awakened to the prospect that the cryptocurrency scheme species is mutating into various MLM offerings that threaten the “brand” of direct selling itself, poisoning pools of potential customers and sales people. Time for direct selling to join the war on these “brand killers?” Absolutely.

Tulip Mania Redux

From January, 2017 to December, 2017 to March, 2018, the price of one Bitcoin, the acknowledged leader and prototype of various cryptocurrencies, gyrated from $1,000 to $20,000 to $6,000. The recent experience hearkened back to the Dutch Tulip Mania “financial bubble” collapse in the 1600’s in which the value of a newly introduced flower bulb skyrocketed from a mere flower price to a point where one tulip bulb sold for the equivalent of 10-15 times the average annual salary of a skilled craftsman, and then plummeted 99.99 percent back to mere flower pricing.

Will this be the fate of Bitcoin and other blockchain cryptocurrencies? The jury is out. Many financial analysts describe Bitcoin as a fraudulent financial device. Some argue that the majority of cryptocurrencies will crash to zero and disappear in the next few years. At the same time, many, in the financial community, grudgingly acknowledge that Bitcoin is increasingly recognized as a valid storage of value for which financial markets have established its place. Only time will tell.

Cryptocurrency: A “Front” for Ponzi and Pyramid Schemes

Although the ultimate future of cryptocurrency is not clear, the hype and rampant speculation has brought out the “get rich quick” con artists to promote a variety of Ponzi and pyramid schemes, many of which are spread via a MLM-type salesforce. Actually, to call the MLM cryptocurrency salespeople a sales force is a gross misbranding. As a general matter, those spreading the word are over-zealous investors who intentionally or unintentionally “suck” in their friends and contacts into a future collapsing pyramid. All of the MLM schemes have flashed the “New Age” technical terms, “cryptocurrency,” “digital currency,” “cloud mining” as if these were “magic” terms that bestowed some sort of legitimacy on what was, in reality, a scam, trying to defy the proverbial Texas wisdom, “you can put lipstick on a pig, but it’s still a pig.”

The criticism from the direct selling community is not so much about cryptocurrency, itself, as it is that cryptocurrencies such as Bitcoin or others, are the “shiny object” that deflects the viewer from the reality of many MLM cryptocurrency programs, ie., that the presence of cryptocurrency is merely an excuse to cause investors to part with their money in exchange for promises of passive income from appreciation of cryptocurrency, and to cause others to do the same. And the ugly truth is that the source of the stream of passive income/appreciation to early adopters derives from funds contributed by later investors. In short, one is describing a Ponzi and/or pyramid scheme, or both.

One website that tracks the emergence of MLM cryptocurrency Ponzi/pyramid schemes,, has unearthed more than a score of such scams already, revealing one or two new ones per week globally, a virulent scourge growing in number and intensity.

MLM cryptocurrency scams come in many iterations. A few approaches pop up with regularity.

1. Out-and-out pyramid. In a classic “airplane” scheme, participants buy into positions in a “cryptocycler” with either cash or Bitcoin, and are rewarded for getting others to do the same.

2. Disguised pyramid. Investors contribute to the support of a pseudo cryptocurrency trading platform or trading services, and are rewarded for recruiting others to do the same. Sometimes, a passive “return on investment” (ROI) is promised to traders from appreciation of purchased cryptocurrency. The source for commissions comes from funds invested by new investor/consumer/distributors, and the only reason “consumers” pay money is to buy into payoffs in the MLM opportunity.

3. Ponzi/pyramid cloud mining investment scheme. Investors purchase shares or memberships in a company which claims to mine cryptocurrency with thousands of computers that are programmed with algorithms to yield “digital coins” and are promised outrageous passive returns on their investment. Investors find others to do the same. In fact rewards and returns merely come from investments by new investors.

This scheme is obviously a pyramid. It is also a Ponzi scheme. Says the SEC, the investment in cloud mining ventures is also the sale of an unregistered security.

4. Ponzi/pyramid ICO or Cryptocurrency purchase scheme. Investors are urged to buy coins in an ICO (Initial Coin Offering), or buy existing cryptocurrency coins, in which they are promised substantial returns on their investment, sometimes guaranteed returns. Investors make money by finding new investors. The return on investment invariably comes from new investor money.

In short, MLM cryptocurrency offerings represent:

1. Sale of unregistered securities.
2. Ponzi Schemes.
3. Pyramid Schemes.
4. Fraudulent financial schemes.

Regulators Speak Out in Action and Words

The SEC was sufficiently concerned about the proliferation of ICOs that in December 2017, it issued an SEC alert on the dangers of this new phenomenon. It also clarified its position to announce that the SEC regards an Initial Coin Offering (ICO) a securities offering that must be registered with the SEC. Of course, in the context of sales people, this would prohibit sales persons, whether compensated through an MLM format or not, to be licensed sellers of securities, a virtually impossible task for 99.99 percent of MLM businesses.

Similarly, on March 13, 2018 IMF (International Monetary Fund) Managing Director, Christine Lagarde noted the global promise and peril of cryptocurrency, including rank speculation, financial fraud and use in criminal money laundering:

Whether Bitcoin’s value goes up or Bitcoin’s value goes down, people around the world are asking the same question: What exactly is the potential of crypto-assets?

The technology behind these assets—including blockchain—is an exciting advancement that could help revolutionize fields beyond finance. It could, for example, power financial inclusion by providing new, low-cost payment methods to those who lack bank accounts and in the process empower millions in low-income countries.

The possible benefits have even led some central banks to consider the idea of issuing central bank digital currencies. Before we get there, however, we should take a step back and understand the peril that comes along with the promise.

The peril of crypto-assets

The same reason crypto-assets—or what some people call crypto-currencies—are so appealing is also what makes them dangerous. These digital offerings are typically built in a decentralized way and without the need for a central bank. This gives crypto-asset transactions an element of anonymity, much like cash transactions.

The result is a potentially major new vehicle for money laundering and the financing of terrorism.

And in February 2018, China unveiled a new set of regulations to ban cryptocurrency by blocking access to exchanges that trade cryptocurrency. Sooner or later blockchain technology will be recognized in China, but, for now, the government, like so many others, is trying to catch up with a phenomenon that also carries great risk of “out of control” speculation and financial fraud.

MLM Cryptocurrency Scams

Among potentially dozens of MLM cryptocurrency scams is the poster child, One Coin, which originated from Belize and Bulgaria, issuing its own “coin” which was promoted globally from 2015 using a MLM compensation plan. Ostensibly, purchasers did not buy One Coins, but instead purchased educational packages that explained trading in One Coin which were accompanied by “mining contracts” that created One Coins.

Through a stormy history One Coin was prosecuted, shuttered or placed on observation and warning lists as a Ponzi/pyramid in many jurisdictions, including India, Vietnam, Croatia, Norway, Finland, Sweden, Latvia, Thailand and other countries.

U.S. states are also in motion. While the typical MLM cryptocurrency program is based in, or emanates from, foreign jurisdictions that may include Hong Kong, Dubai and European countries, these programs are often active in the U.S. with distributors and management of contacts occurring in America.

On March 2, 2018 the North Carolina Securities Division issued a cease and desist against a MLM cryptocurrency scheme originating from web hosting in France, Power Mining. Power Mining collected funds from investor/MLM distributors who were promised a return on investment from “cloud mining” of various crypto currencies.

The state cases are piling up. On December 20, 2017, the Texas State Securities Board shut down USI-Tech, another MLM cryptocurrency cloud mining firm.

And the same sort of cease and desist issued from the South Carolina Securities Commissioner, on March 9, 2018 for MLM cryptocurrency scheme Genesis Mining and Swiss Gold Global.

Onn March 7, 2018, the New Jersey Bureau of Securities joined other states with a cease and desist order against Bitcoiin, another MLM cryptocurrency program for which famed actor, Steven Seagal, is the official global brand ambassador.

And so on and so on… and Into the Fray Stepped the U.S. FTC…

In February, 2018, the FTC followed MLM cryptocurrency scam concerns by the SEC, states and foreign governments, in its first prosecution, FTC vs. Bitcoin Funding Team/My7Network/Jetcoin.

Said the FTC:

The defendants claimed that Bitcoin Funding Team could turn a payment of the equivalent of just over $100 into $80,000 in monthly income…

According to the FTC, Bitcoin Funding Team and My7Network participants could only generate revenue by recruiting new participants and convincing them to also pay cryptocurrency. For example, Bitcoin Funding Team participants were required to make an initial Bitcoin payment to an earlier participant and pay a (platform) fee to Bitcoin Funding Team. With these payments, participants were eligible to recruit new members and receive payments from them. Promoters claimed participants could earn bigger rewards if they paid additional Bitcoins...

The FTC alleges that a fourth defendant, Scott Chandler, promoted Bitcoin Funding Team and another deceptive cryptocurrency scheme, Jetcoin. Jetcoin also promoted a recruitment scheme and additionally promised investors a fixed rate of return on their initial Bitcoin investments as a result of Bitcoin trading. In a series of promotional calls, Chandler claimed Jetcoin participants could double their investment in 50 days.

In fact, notes the FTC, few investors made money and the revenue for payment just came from recruiting new investors. The Bitcoin Funding and My7Network models were alleged to be out and out cash pyramids. Said the FTC, the Jetcoin model, which promised substantial guaranteed returns on purchase of Bitcoins, was both a headhunting recruitment pyramid and a Ponzi scheme, in which guaranteed returns would come to early investors from later investors.

Enough Said… We’ve Reached the Tipping Point of “Brand Dilution”

Everyone understands that the emergence of blockchain digital currency may be a serious positive development in the world of finance. But, in such a short time, the number of scams, financial frauds, unregistered securities offerings, crazy speculation, Ponzi schemes, pyramids and money laundering may taint and poison any legitimate activity with which it becomes associated. Hence Google and Facebook ban cryptocurrency ads on their platforms. And similarly, the brand of “direct selling/MLM” is endangered if MLM cryptocurrency scams are viewed as somehow being part of legitimate direct selling and MLM.

Time for Direct Selling Industry Involvement

The direct selling industry needs to step up to the plate. Google sees the brand dilution. Facebook abhors the brand dilution. The SEC, the FTC, the IMF, U.S. state and foreign governments abhor the fraud. It is time for the direct selling industry to protect the livelihood of its sales persons and the financial security of its consumers before the public begins to mistake these MLM cryptocurrency scams as belonging to the same gene pool as legitimate Direct Selling/MLM.

This should be done in a unified manner with an industry voice. One viable starting point is for the U.S. Direct Selling Association (DSA) and the World Federation of Direct Selling Associations (WFDSA: Membership of direct selling associations of approximately 60 countries) to each establish and fund a Cryptocurrency Task Force.

Among other goals to protect the integrity of the direct selling “brand,” this and other industry task forces should monitor, study, analyze, educate, inform and thwart financial fraud. They should become one of the “go to” sources for the public on these issues.

And One More Thing… Time to Join with Government

In November, 2017, Acting FTC Chair, Maureen Ohlhausen, presented to the U.S. DSA, and graciously invited the DSA and all its members to be “stakeholders at the table” to forge a new cooperation to help ensure the dual goals of success of the direct selling industry and protection of its sales force and consumers. Simultaneously, the industry invited the FTC to be a stakeholder in proposed federal anti-pyramid legislation, H.R. 3409.

It is time for the industry to return the hospitality, and offer all its U.S. and global resources, expertise and full-throated support to every governmental agency that is combatting cryptocurrency pseudo-MLM/direct selling financial fraud. The task forces, set up by the industry, could become tremendous and valuable partners to the SEC, FTC, IMF, and U.S. state and foreign consumer protection agencies. It is time for the industry to step up.

Friday, January 5, 2018

Heart of the Business Plan

This is the heart of the modern business plan. The only reason to launch a project is to change something, and I want to know what you're going to do and what impact it's going to have.

This is the heart of the modern business plan. The only reason to launch a project is to change something, and I want to know what you're going to do and what impact it's going to have.

This is the heart of the modern business plan. The only reason to launch a project is to change something, and I want to know what you're going to do and what impact it's going to have.

This is the heart of the modern business plan. The only reason to launch a project is to change something, and I want to know what you're going to do and what impact it's going to have.

This is the heart of the modern business plan. The only reason to launch a project is to change something, and I want to know what you're going to do and what impact it's going to have.

The modern business plan
It's not clear to me why business plans are the way they are, but they're often misused to obfuscate [verb; make obscure, unclear, or unintelligible.], bore and show an ability to comply with expectations. If I want the real truth about a business and where it's going, I'd rather see something else. I'd divide the modern business plan into five sections:


The truth section describes the world as it is. Footnote if you want to, but tell me about the market you are entering, the needs that already exist, the competitors in your space, technology standards, the way others have succeeded and failed in the past. The more specific the better. The more ground knowledge the better. The more visceral the stories, the better. The point of this section is to be sure that you're clear about the way you see the world, and that you and I agree on your assumptions. This section isn't partisan, it takes no positions, it just states how things are.

Truth can take as long as you need to tell it. It can include spreadsheets, market share analysis and anything I need to know about how the world works.

The assertions section is your chance to describe how you're going to change things. We will do X, and then Y will happen. We will build Z with this much money in this much time. We will present Q to the market and the market will respond by taking this action.

This is the heart of the modern business plan. The only reason to launch a project is to change something, and I want to know what you're going to do and what impact it's going to have.

Of course, this section will be incorrect. You will make assertions that won't pan out. You'll miss budgets and deadlines and sales. So the alternatives section tells me what you'll do if that happens. How much flexibility does your product or team have? If your assertions don't pan out, is it over?

The people section rightly highlights the key element... who is on your team, who is going to join your team. 'Who' doesn't mean their resume, who means their attitudes and abilities and track record in shipping.

And the last section is all about money. How much do you need, how will you spend it, what does cash flow look like, P&Ls, balance sheets, margins and exit strategies.

Your local VC might not like this format, but I'm betting it will help your team think through the hard issues more clearly.