What Is The Average And Median Net Worth Of Singaporeans? – Beragampengetahuan

The Global Wealth Report is one of the most comprehensive and updated resources available when it comes to statistics concerning wealth (or net worth).

Published by Credit Suisse and UBS, the latest issue of the Global Wealth Report was published in August 2023 (wealth distribution as of 2022).

This is the 14th edition in this series, and it is always an interesting read to me, largely due to the fact that Singapore appears in the report as well.

I went through the Global Wealth Report and highlighted the most interesting bits in this blog post so you didn’t have to.

Why Bother Tracking Net Worth?

For a start, the tracking of net worth can be a useful financial planning tool because we get a very good sense of our overall financial health and progress over time.

If you have not started tracking your net worth, here are a few good reasons to get started today –

1. Benchmark progress
   Over months and years, we can gradually see how far we have come (e.g. from negative net worth to having financial stability) and the progress we have made instead of relying on memory. This can be a tremendous motivating factor to keep on improving or a wake-up call that change is needed.
2. Monitor financial health
   When constant monitoring, we can actually identify potential problems early on (e.g. net worth has flat-lined in the past two years due to lifestyle inflation) instead of letting them snowball into bigger issues.
3. Ability to make informed financial decisions
   By knowing exactly where we stand financially, we are more confident of our ability to finance long-term big-item purchases such as a new HDB apartment or car by taking on more debt.
4. Set financial goals
   With real numbers to work with, we can set specific goals, such as attaining $200,000 in a dividend portfolio, which can then provide $1,000/month in passive income, assuming a 6% yield.

How To Calculate Net Worth

Net worth is calculated by adding financial assets and real assets (such as property) and then subtracting debts.

It is important to highlight that recent reports put the home-ownership rate among residents in Singapore at 89.3%.

Singapore has extremely high rates of home ownership, despite being among the world’s most expensive property markets.

So, we know that many people own homes, and homes are valuable.

Therefore, real assets’ value tends to be a significant proportion of net worth for Singaporeans.

From the Global Wealth Report, Singapore ranked 8th in the world at USD $382,960 (SGD $509,000) in terms of mean (average) wealth per adult.

When it comes to median wealth, Singapore drops significantly down the rank to 17th at USD $99,490 (SGD $132,000).

What Does Singaporeans’ Net Worth Comprise Of?

Remember what we learned earlier about calculating net worth?

Checking out the chart below, we can see that financial assets (56.3%) accounted for more than half of the personal wealth of Singaporeans.

The high rate of home ownership in Singapore meant that non-financial assets came up to a significant 43.7%

The chart is helpful to get across the point of wealth composition.

However, the chart in the report uses mean (average) instead of median net worth.

What is the difference between average and median?

If you ask me, I feel that it is important to illustrate the difference between median and average net worth.

Let’s assume we have five people in our sample size with the following net worth numbers.

The median simply refers to the middle number in a sorted list.

In this case, it is simple to see that the median net worth is $30,000.

The average net worth, however, is distorted by the single high-net-worth individual (Citizen E) and ends up being $60,000.

Which value do you think is a more accurate representation of the entire population?

There Are 332,000 Millionaires (USD) In Singapore: Are You One?

332,000 millionaires in a small country with merely 6 million population may sound crazy.

If we were to use Singapore dollars instead of US dollars, the numbers would be even higher.

Although SGD $509,000 (average wealth) might seem like an incredibly high number to most people, using the median wealth (SGD $132,000) sounds a lot closer to reality when it comes to representing the general population.

With median wealth at about a quarter (26%) of average wealth, that actually says a lot about the actual situation of people in our country.

The effect of high homeownership further distorts the idea of net worth, and many Singaporean residents may, in fact, be asset-rich and cash-poor.

What do you think happens when we subtract the value of the property we own from SGD $132,000?

On the bright side, we can monetise our illiquid assets by renting out our properties by becoming landlords or via government schemes (e.g. Lease Buyback Scheme by HDB) for cash flow.

Nevertheless, our average and median net worth figures already put Singapore in a significantly better position than most other countries in the world.

Much of the world has net worth figures that are less than Singaporeans, and that is something to keep in mind.

Often, we are so focused on what we don’t have that we forget to be grateful and thankful for what we do.

If you have other reliable and interesting sources of net worth data for Singaporeans, please share them with me! I would be very keen to read about them.

Kevin started beragampengetahuan when his net worth languished at negative $25,755. His desire to turn things around led him to build passive income from investments and side hustles that pay for his daily expenses and vacations. You can learn more about Kevin here.