If you and your spouse are working professionals making median salaries, it’s not hard for both of you to accumulate $1 million before you reach 45 years old.
Suppose both of you started working at age 25, and always save and invest one-third of your income. If your savings and investments earn just a 3% rate of return a year, you would have accumulated half a million dollars by age 37 and a full million bucks by age 45.
And this is just for median-salaried professionals.
Let’s look at another hypothetical couple who are median-salaried managers. Let’s assume they save more, say 40% of their income. Further assume that they are able to generate a 5% rate of return.
This couple’s savings and investments will hit $1 million before they turn 39. And $2 million by age 46.
When did your savings and investments reach $1 million?
Don’t have a million dollars? Don’t worry. You probably have that upmarket condo, BMW and Birkin bag that you can be proud of. 🙂
169 Comments
Ntu boy, congrats on seizing this opportunity. When I first came out from ntu engineering I was only earning 2.5K a mth. Took me 2 yrs to get to 4K (!!)
Dun worry abt wife, when you have 500K savings they will line up for you 😉
Hi NTU Boy, great to hear that…pls advertise urself to the whole world…i am a NTU alumni (not from engineering school though)…tell the whole world how gd and prestigous it is to go to NTU..that u are being offered in my pt of view a decent pay…..i always think NTU ppl (in general) are more streetsmart than NUS ppl (in general) and more downtoearth than SMU ppl (in general)….
I suspect this may start an entire debate but generally the impression is NUS generates good analysts (guys well versed in theory), NTU – pragmatic guys (more action due to more hands-on stuff in school) and SMU are good marketers (present well but may/ may not have substance)
Still not to digress, Ntu Boy, you have a head start of 2 years as compared to me so I believe your goal may be reached faster 🙂
congrats ntu boy on getting 4k as starting pay. when i started, i did not even hit 3k.
Lucky investor: how do we know the plot ratio? from developer? also how do we know if the current property is using half or less of the maximum area that could be built?
Also does the district/location matter in enbloc –
struggling, since you’re in sales based IT role, your income should be commission, which means fluctuating income. How come you are guaranteed 20K per month?
All: passion and balance lifestyle are critical as well. I’m a NTU alumni too and have worked for 4 years. My starting salary was 4.2k and increment had been fair, >15% annually. I quit without a job this week as I have lost my passion. Hours are long and the things that I’m doing don’t make sense anymore. When I announced my resignation, all my colleagues congratulate me, none asked where I am going.
I spent less than 1K a month, no car and am still living with my parents, while my colleagues bought cars, travel extensively and lived the high life. So they are tied to their job while I have the freedom to leave.
I am active in swing trading as well and given the current market, my weekly profit easily exceed my monthly salary. I could have well be on my way to make 1 million but I just submitted my application to pursue veterinarian in Australia. I considered myself fortunate as I am much happier and I have found what I’m truly passionate about.
I find it extremely painful to be a slave to an increasing number. It makes more sense for the number to come naturally while you are doing something worthwhile.
unlucky, there is a fixed component to my salary…every job has a variable component – an engineer perhaps 20% of his total income. For a banker, the number is much much higher – I dare say 70-80% (they earn 3-4K base + 10-15K comm)
i just give the average based on my total income
struggling, given what you say, 80% base and 20% variable for engineer like you. that means your base is 16K per mth (80%*20K). Does sale job pay so high base pay coz all sales jobs I know are majority or entirely commission?
I did not say my split was 80 -20. That was for engineer. Mine is more balanced of course. And yes, sales roles earning this is not surprising. If sales in financial industry (even private bankers are sales) the number is easily 2-3 times more. If I sell 1 million bucks stuff then I ought to get 5 figures comm. I may spend same effort to sell a security system worth 10K but of course then I would expect comm to be 3 figures.
implicit in the comments of the successful people here is that stocks and property investments are the way to go.
no one mentioned about profiting from any alternative investments like options and forex trading, wine investments, land banking, timeshare, mlm, and the like.
even unit trusts and managed funds got the flak in one comment.
hope this observation will help other beginners like myself. there are just too many how-to-get-rich advertisements and articles in mainstream media that serve only to distract and even mislead beginners.
Hello!!
o_O wow!! Thank you, senpais, for your congratulations!! I’m very inspired to work hard after i’ve played+studied quite hard in NTU. I think the way ‘Struggling’ put it is pretty decent: “the impression is NUS generates good analysts (guys well versed in theory), NTU – pragmatic guys (more action due to more hands-on stuff in school) and SMU are good marketers (present well but may/ may not have substance)”… @Grate senpai, NTU has indeed given lots of opportunity for us to survive in the real world. ppl may call us ‘ulu’ and etc. but because of that, we learn & experience many things which are simply… different… like hearing cannon shots every other morning, seeing a ‘family’ of wild boars crossing the streets from forest nearby, making friends with ppl along school corridors (during FOC especially), never get wet by the rain coz almost every building has linkway and almost every pathway is sheltered, etc… aargh… i’m gonna miss this place >.<
@Struggling: Ur salary skipped from 2.5k to 20k within less than 8 years?! OMG!!! Kudo!!
ntu boy – if you came from engineering then working life may be easier than you expect 😉
I got 20K+ in around 5 years time though like i said lucky and opportunity played a huge part.
I don’t recall wild boars (though there were cannon shots) – breeding problem perhaps? Missed running from one spine to the other.
anyway back to topic – if you also marry a graduate, I am sure your combined household income will exceed 10K in 2 years. With some savvy investing you can get your $1M savings in 10 years i’m sure, though you’ll need to invest more in your future than your lifestyle. I know of some who earn 5K a month but drives a BMW (10 year loan) and finances a condo on maximum loan, and some who earns as much as I do (or maybe more) but drives Kia and stays in HDB. The fruits of your lifestyle will show 10 years down the road.
Struggling- Thank you for your advice. I’m actually a foreign student who has been studying& living in SG for the past decade. I’ll be obtaining my PR soon after employment, and certainly, I’ll live a normal lifestyle I have now and invest more my my future. Also, CPF is a great thing in my opinion. Having savings of close to a million SGD bucks by the time i’m in mid-thirty will certainly allow me to be able to get back home with sufficient funds to live comfortably. So that’s my goal. Regarding possible life partner, I have been in long distance relationship, and I hope things will work out the best way I can hope for.
my monthly expenditure currently is around 400-500 per month, inclusive of phonebills+hall fees, coz i’m still a student living on-campus. Considering i’ll have to rent a room out of campus later on, this figure will probably increase to around 1.5k per month. I don’t think I’ll need a car here. If such need arises in the future, I’ll most likely rent one from Avis or the likes.
Lost and found – The comment above regarding swing trading (does that refer to the day-trading? I’m seriously curious to learn how it works) serves as a great inspiration to me and others, the juniors who’ll be entering the workforce in the later half of this year. I would like to wish you the very best to your pursuit of veterinarian science.
did you say you are a PR and plan to save a million and then retire back to kampung?
be careful cos what you said will upset people. don’t you know that many citizens are very upset about the lax foreign immigration policies that our super capable government has implemented. even the PM came out recently to say “citizens come first”. or maybe the elections are near.
mortgage is the only good debt.
copied from another forum:
1) Person A bought a semi-D in the newly developed private housing estate in Serangoon Gardens
2) Person B bought a HDB flat and kept the rest in FD, continously putting his savings in it.
3)Person C never believing in borrowing money, saved up and bought his first house , a 3 room flat when he retired while staying in Govt qtrs.
After 30 years, Person A now owns a $2M asset that is unencumbered.Person B a 5 room flat valued at $650K and Person C a 3 room flat valued at $300K. Guess who paid the most in interest and came out best in terms of asset – Person A. The person C who was the most frugal had the least valued asset and he never paid a single cent in interest. So what went wrong with Person C?
The trick is put your money in an investment that grows the fastest with acceptable risk. There is only one in land short Singapore – property.
4) D start buying a new 3 room hdb flat back in the 70s, sell it, buy another new 4 room, sell it, buy another new 5 room, sell it.
5) There’s even option E if you care. And that is, if you make enough, you can buy a pte condo and rent it out without selling yr first flat. Stay in HDB, collect rent from condo.
(1), (4) and (5) are all winners.
@mortgage good:
Mortgage debt has a nice characteristic that as long as you can service it, the don’t normally be able to recall the loan even if the price of the property fluctuates (as opposed to equity margin loans which are marked to the market)
However, mortgage is a debt and gives leverage just like any other type of debt. In general of course, land prices go up (due to increased in prosperity and population) over the long term and the caveat are:
(a) One can hold for the long term (no sickness, job losses etc)
(b) You believe Singapore will always be richer and more prosperous as the best in class 🙂
(c) Singapore population will always increase (so yah… while ntu boys should excise more street smart in his comment, his present does help the increased of the property prices). If Singapore population is halfed..it would be obvious what would happen to case (1) Guy…
PR caution- Errm.. i didn’t say i’m from a Kampong. My hometown is just another big city with high GDP and half the cost of living compared to that of Singapore. However, I feel more acquainted to Singapore more than my hometown, coz this is where I grew up. Also, as a matter of fact, I am not a PR yet, and I am rightfully paying more (much more in fact) for my past tuition fees in Singapore, and I also have to balance 3 parts of my life, namely; work, study, extra-curricular activity. If you never have that kind of experience, you ABSOLOTELY have no rights to judge whether I would upset people here, because everyone has choices to make, and I have chosen to come here to be in IT, instead of becoming a doctor or dentist if i had chosen to further my education back in my country, out of passion and interest to see metropolitan city.
All i wanna say is… open up your horizon, Mr. PR Caution (to be correct: foreigner caution). I have a lot of great Singaporean friends, and whatever you say about your government, ask yourself this: if you have respect for your government, then why are you showing such attitude towards someone such as myself, who has become more Singaporeanised than you can possibly imagine. In my opinion, getting a PR later is a form of paying back to Singapore, for allowing to grow as a person, and as a more complete individual. I have to thank Singapore government for that.
Anyway, this is about Graduate couples living&saving in Singapore. What we do with the money afterwards totally depends on the most fundamental thing of all humans: choices.
It’s not about money. It’s about fulfilling one’s life’s worth. Before we lose our last breath and peacefully leave this world, I urge you, narrow-minded fool such as Mr. PR caution, to think about what you have done, and what you would like to do if you have had ‘more time’. If you have read until this point and realized there are many things that you wish you had done, go it them done. Stop blabbering to show your childish-attitude-on-top-of-narrow-mindset to a 22-year-old such as myself who rightfully will contribute to Singapore economy upon graduation in return for all the experiences I’ve had thus far in the past decade.
would give anything to be 22 again. Anyway chill it ntu boy not worth losing it over comments in a forum – i respect your endeavors to make it this far and even further in future.
Take care
you said: getting a PR later is a form paying back to Singapore.
well, getting a PR will also allow you to reap maximum benefit from the lax immigration policies here. stupid of you not to get a PR earlier. but congratulations anyway.
Struggling- you’re right… thank you, once again, senpai.
PR caution- fyi: student PR requires MALE applicants to serve national service for 2 years. Therefore, i’m applying for professional/specialist PR later. I’ll still pay income tax plus contribute CPF. The benefits are indeed appealing, thus my interest to get citizenship later on if I change my plans and settle down here. Thanks for your congratulations. If u gave it with gritted teeth, it’s better if u didn’t give it at all, you know.
Sincerity has its purposes
clever of you not to take up PR as a student. you saved a precious 2 years of your life.
think twice before getting citizenship. haven’t you heard that some new citizens regretted almost immediately after converting to citizens? cos they are no longer a “foreign talent” but a local sheep led by lions who make millions. and as citizens, they lose out to their unconverted counterparts in many aspects, most important of which is having no place else to go back to.
when a PR returns to kampung, it’s called going home; when a citizen escapes to kampung, he’s labelled a quitter and a fair weather citizen.
stay as a PR and balek kampung when you make enough.
sincere advice.
ntu boy: congratulations indeed for being in a position of envy so make full use of the opportunities given.
Climb the ladder and save wisely and you should have no problems retiring comfortably back home when you are still young and able to fully enjoy life.
your article is mentioned in asiaone again:
Millionaire by 45? It’s possible if…
you do not have to invest all your savings, as implied by the asiaone article.
like some of the people above, i invest less than half of my savings in riskier investments, leaving the rest in money market funds earning a guaranteed interest (these funds are almost like holding cash). overall, i make about 5% return.
when you hear people making 100% return, i bet that most of the time they DO NOT risk 100% of their savings. they would say they made 100k from a capital of 100k, but what they did not say is that the 100k capital was only, say, 10% of their savings.
yes have to agree that property is the BEST investment…
wanted to buy a condo in Q4 2005 when got married then, when it was only 550K, but due to worry if we can really afford it, took up a resale HDB and got the 30K rebate.
Now the condo is worth a million, but my HDB is worth only 380K not much increase from the 320K 4 years ago.
result of being too conservative.
After COV, reno (old place, major reno), wedding… we almost wiped out our savings.
we are however grateful for what we have, since started with pays of less than 2K in 2002. The young grads now are so lucky to start with 3-4K! Wow!
We are debt-free (except abt 170K more for HDB), just finished paying the last installment of our car loan. 🙂
We give $1.5K mthly to parents & occasionally we bring them out for meals and coming CNY time for some ang baos.
No kids yet, have a part-time helper.
Now we have abt 50k savings, a far cry from the target 1 mil. Always thought i’ve good $$ mgt till i read this article… I’m 29. Wonder if i can have 1mil in cold hard cash when i turn 45….
yah, perhaps if no kiddo comes along then.
Thank you all respectable seniors for your best wishes.
I wish you the very best for your family too.
To PR Caution: Thank you once again for your sincere advice. I would like to tell you that I’m from a medium-income family. My dad is a contract worker. My mom is a civil servant with a monthly pay of about 700-800 SGD per month (her credit card until today isn’t even a gold card), with not-so-much annual bonus like we’ve seen in Singapore.
I’ve worked+studied+enjoyed doing participating in CCAs here, which many schools in my country can’t afford.
Anyway, though the numbers may seem small, through sheer hard work of my parents, we live comfortably in our 6-storey terrace house with a Honda CRV, with no more debt nor liability. My goal in life is to become like them, hard worker and great parents for my kids, and better them up in terms of savings and financial planning, in order to support my beloved parents as well as my younger bro’s education, and my future family.
Thus, the time to so-called ‘balek kampung’ will come for me only when I can achieve that goal. I can always visit home anytime anyway…
After working for about 11 years after graduation, my monthly gross pay is only about $6250 (include aws and bonuses but exlcude yearly share option worth about $2000 to $3000). However, I manage to
accumulate more than $200,000 in CPF and cash savings and my net worth for my stay-in private property is about $270,000. My net worth for my the other investment private property is about $320,000. Though my private property gain is not
as impressive compared with some people on this forum, but my net worth, excluding stay-in property, is about 0.5 million.
Why I am trying to point out is that you must do investment in order to acheive 0.5 million before turn 40 if you are median income earner.
Moderate pay, I guess you can use cpf as part of your nett worth and kudos to you for accumulating such an impressive amount. May I ask why you did not use your cpf to finance your loan (either by downpayment or monthly instalment) so you can free up more cash for investments?
struggling: Could I know the split between base and OTE for your type of role? Is it 50:50?
Kevin, I can certainly do so but may I ask why? It’s not really relevant to the subject…
struggling: It is for personal reasons. I wanted to see if it is technically risky for me to go into IT sales. From time to time, I get the odd requests from hirers but I usually turn it down without exploring further. But then again, if the base is good enough, and I completely screw up in selling, at least it is an option I can try and get “minimal” wage.
Your 20k monthly average is in line with what I hear as a total package.
Struggling, I did use my CPF for my first private property purchase. As property price was very cheap in 2004, I used part of my CPF-OA for down payment and until now I do not use CPF for my monthly installment – I use cash. For my second private property, I used small amount (about 21K) from CPF and the rest from cash and some from bank loan. I rented the second private property and therefore I do not service the monthly installment from CPF or cash. I also have net income (>$500 monthly) from my rental income.
My net worth from CPF includes OA, SA and medisave, not just OA. I invested some amount from my CPF-OA and SA in unit trusts which gave me good return during boom years between 2004 and 2008. I was lucky to have liquidated my unit trusts investment in 2008.
If you want to invest in property, you save up and wait for property crash.
Kevin, my split is 60-40 and my OTE is more than 300K – this line is always risky. You cannot expect just because you have a high base, you are safe – truth is, if you, as you say, ‘suck at selling’ then you’ll probably be let go off sooner than expected. Most companies aim for 50-50 split to drive the sales guys to push harder – also the rewards will be greater if you hit the accelerators. If you are hesitant about this line then my advice is better not take the plunge. It is not like a technical role where you’ll be safe collecting your base for the next 48 months at least even if your performance is below average.
moderate pay, thanks for sharing – sounds like you did well for yourself.
I seriously doubt that there will be a property crash anytime soon. In the past, everyone’s talking about the cycle repeating itself every 10 years but i think the government has learned from that. There may be a slight dip, yes, but for it to crash like the yesteryears of yore (2005, 2006) is unlikely with higher construction costs and higher demand. To make money, one may have to be like Lucky Investor, go for enbloc jackpot or invest in strategic locations where they are still relatively undervalued.
Struggling, if the sales cycle is long, it is fair to take a while before people judge whether you suck or not. I know of people in my ex company who left after 2 years in BD not closing a deal.
Cutting-edge stuff is not easy to sell, because most of the times it is not yet ready.
Kevin, I agree you can stay longer if the cycle is long but while a poor performing non-sales manager can somehow beef up his resume with projects completed and stuff, a sales guy needs the numbers to prove for it – eg closed X number of accounts or achieved XX% of quota etc. If there are none, then good luck to him finding another job unless he admits to his new employer that he tried out sales and it was not for him, hence he is moving back to the role he is accustomed to. However, if so, he would have lost 2 years – had he spent that 2 years on experience cum skills building he could have moved on to a director / VP position. again, just my thoughts.
>I seriously doubt that there will be a property crash anytime soon.
I’m of the opposite opinion. With countries reining in their stimulus packages, and with louder dissenting voices from the common people against big banks and big businesses leading to political upheavals – we just witnessed a small one in the US – stocks and property may be due for a big correction. Whether you call it a crash depends on definition.
kevin & struggling: what’s OTE? thanks.
good question on OTE. See:
http://www.lmgtfy.com/?q=define%3AOTE
stuggling: Thanks for your advice. At least if I am going in, I will be going in with my eyes wide open.
Everything is Relative. Imagine if ALL of you had 1 million dollars.
What would that 1 million be able to buy you? A house? No. You would only be able to buy clothes and food with it.
A community of rich people = A community of poor people. Because what you can afford, your neighbor too can afford (since he’s also a millionaire). If everyone can afford to buy it, then that object of purchase will rise tremendously in price and inflation will no longer be in single digits. Which means you’ll NEVER see the end of the road, since BOTH or ALL of you are running at the same time. You’ll never be happy but forever panting.
Don’t get entrapped in the lure of riches.
It is not how much you have, but how little you need that determines your happiness.
The good thing is that many people DO NOT even have half a million.
That said, the happiest people on earth are those in POOR underdeveloped countries like Nigeria, Mexico and Puerto Rico.
On the other hand, poor people in DEVELOPED countries, including Singapore, are NOT a happy lot. 🙂
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I am best i have no money
By the age of 45, we might have pay up our expenses up to 1 million dollar in total.
damn, im poor!
….We’re in our mid 30s, earning a combined 300k annually (now), but with a landed property, continental car, 3 kids, 2 aging parents, 2 domestic helpers… and we’re still trying to enjoy at least 3-4 good vacations a year… we’re not actually saving much……. maybe a million in 10 more years…. that is if we don’t upgrade to a larger home (which is on the cards)…
DI3K+2P (= double income, 3 kids, 2 parents)
both of us close to 40 years. making annual close to 300k. 2 kids, 1 old jap car, 1 small condo, 4 parents to take care. trying to live within our means and save up for kids education and our retirement. Comfortable life, but not luxurous lifestyle…