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17-03-2017, 07:16 PM
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Quote:
Originally Posted by Unregistered
Quite typical of Singaporean couples in this age group to have around $2m in NW. When we were in our mid 40s 10 years ago, we had about $2.5m NW too.
So just to give you a glimpse of what your NW could grow to, in 10 years time (when you turn 55/56), our NW is currently at $6.5m. It grew roughly $1m+ every 3 years.
The important ingredients to the growth trajectory were:
1. Staying employed continuously (ie no break in income at any time)
2. Annual increase in salary. (Before age of 55, you should see your salaries growing each year. At 55, you may/may not hit your wage ceiling)
3. Invest for better returns (savings alone is a necessary step but not sufficient)
4. Grow your passive income to cover part or all of your expenses. Last year our passive income almost covers our expenses. This year we are expecting our passive income to totally cover our annual expense of $150k. And we are not even talking about the potential capital gain in our investment.
5. Dont lose money. Paper losses are ok during stock market decline, so long as you dont turn them into real losses. Stocks go in cycles. If the companies are fundamentally strong, their prices will rebound.
6. Related to the above point, buy stocks when markets are in decline. I maintain a war chest of $200k for such opportunities.
7. Likewise for property investment. We bought our investment property during market weakness.
8. Be patient. Borrow a quote from Warren Buffet:"The stock market takes money from the impatient and rewards the patient"
9. Another quote, from Robert Kiyosaki: "The 'poor' buy stuff, The 'middle income' buy liabilities and the wealthy buy assets."
10. Thus be frugal - dont buy stuff (eg high end hand bags, watches, handphones), and dont buy liabilities - expensive cars, club memberships, etc, but instead invest your savings - buy assets. It is the same as making your savings work for you!
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Thanks for sharing your experience.
I did a simple projection for me and my Wife to both work till 60yo.
Even at static pay, we will reach > 5m in NW. Depending on whether we rent out the HDB and stay in landed or VV, our passive income is likely to be from 100k - 150k. It is quite sufficient for us. We are very used to living a few notches below our income percentile..
AND we give thanks for the fact that despite having a child with developmental disability, we have been resilient in holding on to full time jobs.
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17-03-2017, 07:34 PM
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We are not bankers, but your typical white collar executives. And we are quite satisfied with what we have. We are leading a very comfortable lifestyle with $150k pa expense.
What we do know is how we got to where we are now and know that many other typical young white collar executive couples will also achieve what we have or even exceed our NW when they are in their 50s. Just ensure no breaks in income (wage/salary) over the years, invest and live within your means.
I am sure you will agree with me that there is no need to have a bungalow to have a happy life.
Quote:
Originally Posted by Unregistered
at 55/56, your NW of $6.5m is nothing much. If you are an investment banker couple, your bungalow alone is worth $20m.
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18-03-2017, 05:34 PM
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single 35 yo
passive income
$10k per year from stocks
$5k per year from CPF accounts
looks miserable as i compare here
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18-03-2017, 05:41 PM
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Quote:
Originally Posted by Unregistered
single 35 yo
passive income
$10k per year from stocks
$5k per year from CPF accounts
looks miserable as i compare here
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The really miserable part is that a 35yo actually need to count interest from CPF as passive income. Seriously!?
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18-03-2017, 06:56 PM
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Quote:
Originally Posted by Unregistered
The really miserable part is that a 35yo actually need to count interest from CPF as passive income. Seriously!?
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CPF interest not passive income Meh?
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18-03-2017, 10:02 PM
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Quote:
Originally Posted by Unregistered
CPF interest not passive income Meh?
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It is a something that can only be taken out like 35 years later for your case. If you like that also count then everyone in sg also got a lot of passive income lor.
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19-03-2017, 12:48 PM
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Quote:
Originally Posted by Unregistered
It is a something that can only be taken out like 35 years later for your case. If you like that also count then everyone in sg also got a lot of passive income lor.
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Agree to some extent. If the passive income can be used to offset daily expenditure, i think that would count. So interest from CPF (in OA) can be used for part of mortgage repayment, so can count as passive. Likewise the interest in MA can be used to purchase insurance.
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19-03-2017, 01:04 PM
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Quote:
Originally Posted by Unregistered
Agree to some extent. If the passive income can be used to offset daily expenditure, i think that would count. So interest from CPF (in OA) can be used for part of mortgage repayment, so can count as passive. Likewise the interest in MA can be used to purchase insurance.
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Good point.
Very logical. Otherwise would have to use Cash.
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19-03-2017, 06:03 PM
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Quote:
Originally Posted by Unregistered
Agree to some extent. If the passive income can be used to offset daily expenditure, i think that would count. So interest from CPF (in OA) can be used for part of mortgage repayment, so can count as passive. Likewise the interest in MA can be used to purchase insurance.
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I don't think anyone will refer to interest in CPF esp. MA as passive income. You can argue with with some sort of logic twist which I will give you that also acceptable, but let's stick with the normal understanding of the word.
Like that almost everyone in Sg can claim to have at least 5-10k of 'passive income' once they work for 10 years or more. I don't think that is the way most people will describe their income.
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19-03-2017, 06:14 PM
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Interest from CPF is passive income. Any income you receive without actively working for it is passive income. Other sources of passive income include dividends, rentals, etc.
Interest from CPF can be used to pay for mortgage, insurance premium, education, buying stocks and other investments.
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