Monday, March 30, 2009

fire alarm

It was 8am and I am reading the online version of The Financial Times while sipping freshly-pressed barako coffee. The condominium people are busy figuring out what's causing the fire alarm to go off. This commotion has been going on for 15 minutes now, and they still don't know why. There seems to be no fire, not even smoke.

Most unit owners have already left for work. You see, I live in a building of people who work in cubicles; they drive out of the parking basement (in their shiny Jap cars) before 7am to avoid the traffic along EDSA so they can sit in their middle-management jobs all day, every day.

The average income of single occupants here is P80,000 monthly (roughly $1700); couples and small families earn around P100,000 (this is very decent by Philippine standards). Of this income they probably spend 20% for the monthly mortgage, depending on how big their downpayment was.
These are people living within their means - heck, even below their means. Defaults are unheard of. People here have either paid for their homes in full, or really pay on time.

(I know all this because I saw the marketing intelligence report. Apparently, the developer wants to change the sales approach to cater to this market. The papers were casually left on the concierge table by one lady-agent while she used the lobby loo. I pretended to look at food delivery brochures, but I was really reading her stuff.)

Based on this data, I'm guessing I live amongst the sensible middle class, perhaps even the "silent rich." I saw designer furniture being moved in a week ago, and I once met a fellow owner in Manolo Blahniks. And did I mention that there were exotic Euro cars in the basement, too? Several. Some people here actually have taste.

Why they would live in these outskirts, I can only guess. They probably didn't want to spend too much on a house, and would rather stay liquid. They all have cars anyway, and the business districts are really quite near if you drive.

Or perhaps they see potential, like I do. People who are not investment savvy don't get it; in 10 years or so, this area will be central. The price of units here already doubled from 4 years ago, when a "luxury" mall was built nearby. It should be a really solid asset to have 10 years down the line. You can't really say that for "middle" developments even in the business district. Those units are already overpriced; if you paid 2 million for them now, you will still only get 2 million for then in 10 years. Believe me, I've inquired :)

Foreclosure of luxury homes

Below is the "Melville House," Scotland’s most costly repossession, now priced at just £2.5m, down from £4m.

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I predicted some months ago that luxury developments will sink, and that bargains can be had by those who are patient enough to wait. Well, FT just confirmed my suspicions. There is an apparent rise in luxury home foreclosures, and I'm sure that the Philippines is next. Erase that. The Philippines is ALREADY experiencing it. This explains why the luxe condo MSP and I have been eyeing is still available - and why the development won't be sold out anytime soon.

Correct market timing - that's all we're hoping for. We can wait a few more months. This recession buys us time. We can beef up our savings and come up with more ways to solidify the company to withstand this uncertain market. Maybe we can even travel for a while, while airfares are cheap.

Meanwhile, this little white box in the fringes of the business district is serving it's purpose. No steep mortgage + some money in the bank = no worries :) I appreciate this recession-proof space more than ever before. I can live amongst these penny-savvy, square people who never use the gym or pool on weekdays (leaving all the amenities free for me to enjoy). It feels like home, for now :)

Thursday, March 19, 2009

Two people are in my head right now: the Ambitious Mussolini, and the Hippie Mussolini.

Ambitious Musso is an evolved version of the 21-year-old self – a driven, can't-sit-still, glass-is-never-full type. She likes Prada, drives fast cars, and travels first class. She constantly compares herself to imaginary, fictionalized, super-successful people. Her proudest achievement is ... nothing. Even when she knows she has achieved a lot for her age, she feels (and acts) like an underachiever. You see, Ambitious Musso has the uncanny ability to make substantial successes seem lame. To her, it's not the journey. It's the freaking destination. She is a very active (very noisy) part of me, and I probably owe all my material progress to her.

Hippie Musso, on the other hand, is relatively new. She didn't start talking until three years ago, when I was around 25 and my mom passed away. She is a more relaxed, glass-half-full type. Cautious about spending, she likes to travel frugally. She sold the luxury car to keep liquid, and is perfectly content with the little white flat in the fringes of the city, where she and Ambitious Musso currently live. Her lull days are spent thinking about simplifying and living for the now. She is a passive part of me, but she's there, making me think twice about every decision I ever make.

Together, Ambitious Musso and Hippie Musso make up the CONTRADICTION that is me. Most days, they co-exist peacefully. But there are just days when they confuse even me.

* * * *

Hippie: Don't buy a luxury flat. This flat is perfectly good. We have everything you need – a garden, a gym, and a pool (and we don't even swim).

Ambitious: But we also want a view of the city, fresh flowers in the hallway, a concierge. And can you beat that central location?

Hippie: Who needs central location? You can drive everywhere!

Ambitious: Sure, but in the long run, being in a city center allows us to walk or take the train to everywhere, and that's much cheaper than being in the fringes and driving.

Hippie: But think about the mortgage! It will compromise our liquidity. Why would we want real estate debt over our heads when we can just enjoy the money we have? Don't we want the security of having a big savings account?

Ambitious: Security is subjective. I've been doing the math, and I think that if we just kept half of what we have liquid, we would still be secure. We don't really need this much cash.

Hippie: Yes we do if we want to travel to other countries at least twice a year.

Ambitious: Are you saying that we can't travel AND live in a luxury flat at the same time?

Hippie: Yes.

Ambitious: That's where you're wrong. If we work hard enough, we can do both.

Hippie: There you go again with “WORKING HARD.” Aren't we tired? With the savings you have now, we can afford to take it easy, knowing we will never go hungry even if we took a year off and lived in another country.

Ambitious: We don't want to take a year off. Work is a big part of who we are. Ever notice how bored we get after a week or so in another country? We crave work. It's our nature to work hard.

Hippie: We say that now, but when we hit the big 30, we might change our mind and just want to build houses in Africa, or teach, or do other unprofitable pursuits. We can't do that if we have a mortgage to think of.

Ambitious: You underestimate us. We'll pay off the mortgage in two or three years. Didn't we manage to do that with the other properties?

Hippie: Yes, but this luxury flat is much more expensive. And this bloody recession may keep us from making that kind of money.

Ambitious: Not if we WORK HARD, which we are good at. We just double the effort, and we should be fine. Besides, we're in a good position. The developers are desperate, the rates are pre-selling, and we are YOUNG and HEALTHY. It's not like we want kids. That fact alone already doubles our ability to save more money and quickly pay off that mortgage. Once we have paid off the flat, we can concentrate on building liquidity again, AND THEN we can be hippies.

Hippie: Why wait until we're 33 to become hippie? We can start now! We can die tomorrow, you know? Do we really want to die in a luxury flat, paying a mortgage?

Ambitious: If we get mortgage redemption insurance, we could fake our deaths and have a fully-paid-for luxury flat. There's an idea.

Hippie: You're a freak.

Ambitious: You're a freak.

(I was really hoping someone would win by now, but so far, the debate is still on-going. Maybe I should just let the universe decide. )

Ambitious: There's no such thing as fate, dumbass. We make our own destinies.

Hippie: The world is bigger than you, dumbass. Randomness forces you into situations you don't create; all you can do is cope.


british roots

Keep calm and carry on.

"Back in the spring of 1939, it was an anonymous civil servant who was entrusted with finding the slogan for a propaganda poster intended to comfort a
nd inspire the populace should, heaven forbid, the massed armies of Nazi Germany ever cross the Channel.

For 60 years, the poster had been forgotten. Then, one day in 2000, Stuart Manley, co-owner with his wife Mary of Barter Books in Alnwick, Northumberland, was sifting through a box of hardbacks he had bought at auction when he saw "A big piece of paper folded up at the bottom. I opened it out, and I thought, wow. That's quite something. I showed it to Mary, and she agreed. So we
framed it and put it up on the bookshop wall. And that's where it all started."

And suddenly these days, it's everywhere, from homes to pubs to government offices.

Dr Lesley Prince, who lectures in social psychology at Birmingham University, is blunter still. "It is a quiet, calm, authoritative, no-bullshit voice of reason," he says. "It's not about British stiff upper lip, really. The point is that people have been sold a lie since the 1970s. They were promised the earth and now they're worried about everything - their jobs, their homes, their bank, their money, their pension. This is saying, look, somebody out there knows what's going on, and it'll be all right".

Tuesday, March 10, 2009

late valentine's day post

After eating at Antonio's in Tagaytay, we did this.

Message to MSP:
Let's always be silly :)