We have just come through a genuinely good decade for equities. Markets have climbed, corrections have come and gone quickly, and property prices in Singapore have largely rewarded anyone who bought and held. I understand why this breeds confidence. What concerns me is that I am seeing that confidence tipped into something closer to overconfidence among investors, and honestly, among some advisers too.
I am seeing it show up in properties (residential and commercial), where younger buyers are willing to stretch for bigger loans, sometimes for their own stay and sometimes purely as an investment, betting that prices will keep climbing the way they largely have. The second is financial markets, where people borrow specifically to invest.
What ties these together is a belief I hear increasingly often that markets only go up, and that nothing can seriously go wrong. It is an understandable belief, because for the better part of ten years, it has largely been true.
Part of what worries me is the backdrop against which this confidence has grown. We are living through a period with more geopolitical fault lines than I have seen in a long time. The war in the Middle East and the disruption it has caused to oil and shipping routes through the Strait of Hormuz, the ongoing Russia-Ukraine war and its effect on energy and food prices, and a broader environment of tariff disputes and trade tension between major economies. Any one of these, on its own, might be absorbed by markets as a temporary shock. But we have already seen how they can quickly ripple into inflation, how inflation forces central banks to raise rates to tighten credit, and how this can slow economic growth, which can lead to job losses. And all of these can come together at the same time, which was what happened in the Global Financial Crisis (GFC) of 2008.
In September 2008 and the months that ensued, I saw financial markets collapsed with no visible signs of recovery for a long stretch. It was a market event that became a full economic crisis, with job losses and households watching their debt mount at the exact moment their income disappeared. I remember sitting across a gentleman in my office during that period who was in tears. He owned several properties, had lost his job, and simply could not service the loans on all of them anymore. To make matters worse, property prices and the financial markets tumbled, and his banks were calling him to top up his loans. He had to sell at a loss at the worst possible time. It was not just his financial position that suffered. His whole family carried that stress. And this was just one of the many stories I witnessed.
Don’t get me wrong. I still believe that equity markets will do well in the long run, but you need to have the ability to stay invested long enough to capture the returns. However, staying invested only works if you are not forced to sell to pay for your expenses or service your debt while prices are down in a crisis.
For those of us who have advised clients through the GFC period, we learnt two things: humility and sufficiency. The humility to not be overly confident to think that markets will continue to go up in a straight line without pausing because they do. And when they do, we have sufficient financial ability to withstand the unexpected and we can still be invested when markets recover.
In ikigai literature, there is a concept called ‘yutori’, a Japanese word that is translated to “room in your mind,” “space,” or “leeway”. It means having a relaxed state of mind with time and mental space to spare. It acts as a sub-theory of ikigai, providing the psychological balance and calm needed to appreciate life without rushing. ‘Yutori’ reduces pressure, supports well-being and allows you to live more intentionally. The GFC of 2008 has taught us the importance of having financial ‘yutori’.
To have financial ‘yutori’, there are four simple numbers to anchor yourself to.
First, your Total Debt Servicing Ratio. MAS caps this at 55% of your gross monthly income for property loans, but I think that ceiling is too generous. I’d encourage people to keep it well below that, ideally under 40%. That gives you a real buffer if interest rates rise or your income takes a hit, rather than being stretched right up against the regulatory limit.
Second, look at your balance sheet, not just your monthly cash flow. While I know that the maximum Loan-To-Value (LTV) limit in Singapore is 75% for both bank loans and HDB loans if this is your first loan, to have yutori, I recommend that your total liabilities shouldn’t exceed 50% of your total assets.
Third, for any non-mortgage debt such as car loans, personal loans, or credit lines used for investing, keep those repayments under 15% of your net income. In fact, except for car loans, I won’t encourage you to take the rest because they are non-essential.
Finally, build in an emergency fund, ideally six to twelve months of expenses, sitting in cash. This will help you tide through periods of income loss.
But having financial ‘yutori’ is more than the numbers. It is a mindset that I don’t have to spend just because I can. The word ‘meekness’ means power under control; I will encourage you to have financial meekness.
After a short technical reset in July, August saw both the S&P 500 and MSCI World Indices climbing about 3%. At the time of writing, both indices year-to-date (YTD) returns have been about 14%. Every now and then, you hear of properties being transacted at new record prices. The best time to build your financial ‘yutori’ is when everything seems rosy and everyone is confident. This is money wisdom.
The writer, Christopher Tan, is Chief Executive Officer of Providend Ltd, Southeast Asia’s first fee-only comprehensive wealth advisory firm and author of the book “Money Wisdom: Simple Truths for Financial Wellness”. He is also a Certified Ikigai Tribe Coach.
The edited version of this article was published in The Business Times on 19 June 2026.
For more related resources, check out:
1. Market Regimes and What They Mean for Your Portfolio
2. Stay Invested for the Long Run? Think Again
3. Should Property Be Your Biggest Investment? What 35 Years of Singapore Data Reveals
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