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
Did It: Something still do not work out right. Of the remaining 700k in bank, if you divide by 15 years of savings it will still be ~45k savings a year. Did you really save 45k a year?
Kevin: in the initial years, no. but in recent years, more than that. our expenses increase at a much slower rate than our income, so the more we earn, the higher is our saving rate.
to cpf?: just curious, what are you investing your 680K in? are you just holding cash? personally i don’t hold > 150K in cash, as it will be eroded by inflation. i prefer to invest in stocks or property.
about 100k in stocks. wanted to invest in a condo last year but chickened out. :p now waiting for the right time to invest in either ppty or stocks. we would rather hold cash than invest at the wrong time. we don’t think holding sgd cash is a bad thing as inflation has always been well controlled here and sgd has already strengthened against usd. also, the government is now trying to rein in asset inflation (i.e. property prices).
and a double-dip recession can happen anytime soon despite what our trade minister said yesterday. donald tsang in hk has said hk may enter recession again in mid 2010.
don’t forget our economy contracted q-on-q in 2009 Q4. one more contraction, and we’ll be in a technical recession (i.e. double dip!), though i’m very sure our media here will play down the fact even if it really happens. it’s very obvious why.
cpf: combined net worth excluding residence is 940k if we count cpf – THis is amazing!
Me and wifey at the same age, earning power and family unit as you are and nowhere near your net worth. Care to share how you did it? any outsized gains from investing in properties/stocks?
I must admit may stock gains have been modest – I’m pretty risk adverse.
My net worth (assets including primary residence + cpf, minus all liabilities-mortgages etc) is approx 980K.
I mean me and wife’s net worth
having witnessed the opportunities during the asian financial crisis, we waited a long time for the recent global recession. and we pumped in a lot of money near the bottom, more than 300k. took back capital at end of last year, plus cash profits of about 250k. still holding 100k in stocks. we wanted to invest in a condo last year, but worried about our jobs and holding power (having already vested in stocks), and chickened out.
care to share some info on your net worth?
vitae: thanks for sharing. ours is around 1.2m to 1.3m including residence.
vitae: yours is quite close lah. almost a mio already! jia you 🙂
Sigh, youve made a bundle. Good for you.. Haven’t really made any serious money from my investments, hence the shortfall.
Assets
Cash – 250
Misc(SRS, Educn accounts) – 40
Stock – 16
CPF – 225
Primary Res- 600
value of car – 25
Liab
Mortgage – 165
Car loan – 7
COF: thanks for your encouragement! 🙂 Will look out for opp. One good benefit for being so risk adverse is i have sidestepped a few investment minefields which has exploded for a couple of my friends.
But, no risk no gain right?
here’s ours. i usu don’t count the car as it’s a depreciating asset, but included it here as well. we also hold some insurance policies that have significant surrender value, but they are not included.
Assets
Cash – 580
CPF – 260
Stock – 110
HDB – 550
Car – 70
Liab
HDB – 340
Thanks! Keep it up! 🙂 It’s encouraging to see a couple who’s good at saving and managing their money.
hi cpf?
not counting the car is a very good conservative way of looking at your finances.
That’s why I use the scrap (parf) value, and yes, din account for my insurance values, but mine are mostly on term life.
Btw, if we ever need to communicate, here’s my particulars: aquavitae74 on Nimbuzz
32, me sole breadwinner (wife not working) 🙁
i don’t play stocks so all in property
namely one freehold and leasehold
leasehold valuation: 800K
freehold: 1.05M
mortgages: 520K + 800K = 1.32M
so my net worth is 530K nia 🙁
somemore including residence…(the freehold)
struggling: your mortgage amount is scary big, are you earning a very high income? if not, it may be a good idea to dispose 1 of your properties if you can get a good capital gain from it, cos rental yields are not very good now and prices are hitting resistance.
anyway, just to share mine (not counting cpf, my kids’ education plans, car):
Cash and stock : 270K
Condo (paid-up): 1.45M
No other liabilities
A big chunk (around 1M) was because i was lucky to buy property at the right time. I’m 34, monthly Household income just over 18K.
Lucky, you are fortunate to buy at right time. Yes I am earning in top 3% percentile (I earn more than 20K per mth) but even then my instalments cost close to half of what I earn (including property tax and maintenance)
Moreover I pay more tax as single income owner – I am planning to rent one out to subsidise some of the costs. Do you mind sharing how much you bought your property and the gains? Thanks
Hi struggling, are u a high-flier or scholar in admin service? Coz >$20K per mth is extaordinary high for 32 year old.
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Nic, I am not a high flyer, just lucky. I was earning close to 20K a mth since 28 – and you’ll be surprised at how many people younger than me are earning more. It depends on 1) luck 2) profession (sales, especially those in financial industry earns a lot) 3) company you work for (local companies just can’t pay) 4) your own ambition
Even then, lucky investor is much better off cos with a combi of luck and smarts, he is living in a paid off luxury condo with extra cash and stocks while I am only earning rental income and paying mortgages 🙁
It’s not what you earn, but how you save and what you use it on 😉
struggling, i bought in end-2003 and sold in 2007 (cost 600K, realised gain 850K) and mid-2009 (1.15M, paper gain 250K). both times was urgent sales from the owner.
yes, you should definitely rent out one of your condos to help with your instalments for a start (not sure why you haven’t done so). as your income is high, it’s probably ok to continue holding on to the properties as long as you have sufficient cash for 6 months of instalments.
also, maybe you can consider refinancing and increasing your loan tenure as it sounds like you did not take the maximum loan period.
U’re very modest, struggling. Luck is important but without capability, it’s also tough. Mind me asking what your profession is?
Hi Lucky investor, it’s unbelievable to make 850K profit on just 600K capital (>100%). No development gives that kind of upside. The only development I can think of is The sail. Is that what u bought given the timing & pricing?
Lucky – 850K gain with 600K starting price? Wow – sounds like you bought carribean by keppel bay! I did not rent out yet as the sale is not complete. I am paying for one property (leasehold) in 10 years (I took adv of the low interest rates and did a refinance) while for the freehold I stretched to max of 35 years. hard to be like you in 2 years time but with some luck the market may shift upwards a bit and I can add another 100, 200K to my net worth :p
Nice – thank you but you flatter me. I am not modest – the real humble pie eaters are those who earn more than a million bucks but choose to observe this forum silently, with relish (and perhaps some glee)
I used to be an engineer who switched to sales and climbed my way up to sell in a MNC – you know the drill. If you sell big buck items you get big comm. If you sell washing machines then you get washing machine comm. I say I’m lucky cos not many gets this sort of opportunity – there are easily thousands out there better than me but simply because they didn’t get the chance. Hence I am grateful 🙂
you mean the ministers? 🙂
Lucky – one more question. You are 34, so in 2003 you shld be 27. How did you manage to invest in a condo worth 600K back then? You must have had some huge amounts of cash prepared from sources as I don’t think you would have that much cpf at that tender age. Did you get any help? Your advice can help many young ‘uns here become millionaires in 2014 🙂
struggling, are u a sales engineer in a tech-reelated MNC selling expensive technological instruments like those used in hospitals?
I got offered a position selling insurance in a bank but I turned down. I dunno whether it’s a wise decision as i
thought few walk-in customers would want to buy insurance. What do u think?
Nic, I’m not – I’m in the IT industry dealing with CRM interface. I’m not an expert nor very successful – all I can say is selling insurance by relying on walk-in customers is futile unless you are a super salesman (which then you wouldn’t want to do this)
But I don’t think there are posts where you sell insurance only – all PFCs I know sell a myriad of products. Best way would be to work in a smaller bank where competition is lesser and easier for you to move up to premier banking or get a back office job that specialises in niche technology / operations / processes and it will be very easy for you to jump ship with minimum 25-30% increment each time ( a friend of mine is doing just that – 3 years in the industry and his pay blossomed from 3.5K to 8K)
These are, of course, my amateur thoughts to share 😉
nic, i bought the condo in a prime district in 2003 for it’s en-bloc potential, and it really happened in 2007 during the en-bloc madness
i think lucky investor used financing. paid about $100K downpayment and financed the rest. At age of 27/28 should have that if he’s highearner or family loan
struggling, i bought it with my wife. in the first 3 years of working we had quite good salaries (combined around 6K), were quite frugal and did not have any financial commitment, so we could save > 100K in cash and cpf, and used most of it for the downpayment
No wonder u call yourself lucky. Either u have super good foresight or lady luck loves u or both.Which district btw? 9,10 or 11?
i guess my case is an example of “good debt”
Lucky investor, how do u spot a property for enbloc potential? Are you now also staying in old development that u see enbloc potential, the one at $1.45mil?
Wow, you guys are such high-net worth individuals that I am stunned and impressed! I’ve learnt a lot from the comments, thanks.
For me, accumulating my first half a million is an ambition for me before I hit 40. Call me slow, but hopefully I can say I am steady! Definitely very tough for me to hit $1 million before 40 (I am 34 now) as I do not invest in property, but plough quite a lot of my net worth in equities.
I think it’s important to save and invest, too bad my monthly income cannot compare with some of the people here who earn like 12K or 20K a month. Mine is less than $5K a month.
Cheers!
Read Malcolm Gladwell’s ‘Outliers’ and you’ll see luck indeed comes first 🙂
On the other hand luck can also be define as preparedness meets opportunity.
Unless you have the other kind of luck born into rich families or struck lotteries I would say that these guys have done extraordinary well either through good ability, planning, execution and vision.
Congratulations and indeed good inspirations for a lot of people.
for those interested in properties with en-bloc potential, you need to look at something called the plot ratio, which i think is the ratio of maximum allowable built-in area to the land size. so, if the current property is using half or less of the maximum area that could be built (sometimes plot ratios get revised upwards), there is potential. also, it’s easier if most of the units are not owner-occupied and if the place is more than 15 years old.
Not meant to be a wet blanket but of all these “lucky” inspirations, there may be 5 or more “unlucky” inspirations.
Do take a read at “Fooled by Randomness” – Taleb.
Hi Kevin,
You’ve got a point. Meaning that maybe only those who had found “success” are willing to post here. Those who failed miserably or lost a lot of money may be too ashamed to tell of their experience, thus skewing the population who leave comments. Someone who visits this comments area may well believe that a large propotion have met the $1 million mark, when in reality it may be just a small niche segment.
Regards.
Musicwhiz: So far, I think the only thing that is I can try to control better is my emotions, which is less dependent on luck (always an element of luck there like a pleasant experience). And I try to be less frustrated and upset, and be more happy and satisfied. I am a “happy” preacher.
Comments are without a face and qualifications. Anyone can write in to sell their life stories. Just take with a pinch of salt. Work hard and be contented. 🙂
@pinch of salt,Musicwhiz…
Those could well be just stories, but there are things to be learnt from it. Singapore is awash with SGD Millionaire (as above – ML/CapGemini Asia Pacific World Wealth Report 2006). Around one in every 1 in 20 / 5% of the couples have a net worth excluding principle residence of SGD1m.
But do remember that the life of the millionaire are not that much difference from the other folks on say 3k/month. They still eat 3 meals and sleep on 1 bed and drive 1 car at a time. They probably still take MRT at times and eat in Mcdonalds too.
@Steven, I think that statistics is probably correct, but Singaporeans don’t have to fret about it. A lot of that millionaires are corruptors from neighboring states especially Indonesia, and perhaps Malaysia, and Thailand, so they don’t earn the normal way. Also take a look at the front page of salary.sg where there’s a quote that income disparity in Singapore is like Kenya. What the Cap Gemini could have said is also probably something along the lines of 1 out of 20 Singaporeans is as poor as Kenyans (one example is the Sing Idol runner up, just read up her life story) so count your blessings.
you’re in wanbao and omy:
http://showbiz.omy.sg/News/Local%2BNews/Story/OMYStory201001141517-120243.html#
Hello all..
Please allow me to call all of you as my senpais/seniors who have experienced the world longer than I have. I am into my last semester at NTU engineering. I just received a job offer, with monthly pay of 4k a month. i would never even dream that I could have started my career with such high pay. What ‘struggling’ wrote is proven here. It’s about being given the opportunity. Also, luck is preparedness meets opportunity – ‘Middleclass’. Looking at the above discussions, I realized there’re a lot of inspirational senpais here, like ‘Lucky Investor’ who is very far-sighted about his real-estate investment, ‘struggling’ who earns 20k a month since 28, ‘Kevin’ who reminds us of the real application of probabilities we learn since sec school.
My goal is to be able to hit 500k savings before I turn 35. The only loan liability I have is currently 18k+ for the tuition fees loan. However, now comes the worry of a lifetime. WHERE’S MY WIFE-TO-BE?! T.T