Your combined income is high, a lot higher than Spore's median household income. You must have graduated from a good Uni. Which one?

Why do you rent out your condo and live in a HDB flat? Is your rental income 3x the rent you are paying?

Combined income of $180k pa is high? It is higher than the median household income, but I would not say that $180k pa combined income is high.

If you divide it by 2, each is earning $90K pa. Assuming bonus of 2 months, the monthly pay works out to be $6k pm.

$6k pm for a 40 yr old is not that great.

Only counted included basic pay x 12, as bonus is, well, a bonus. So yup, not great at all for someone my age..
Which is why I seek other aves to make money, not just from work income.

Higher then median, but not high as someone kindly pointed out. Graduated from local uni.

Rental income is in fact > 3 X what I pay to rent the flat I live in.

If you have accumulated 5m by now, this means on average, you would have saved $167k per year, or $14k per month. I don't know how much you earn to achieve this level of savings, but I think it can be done if you are earning $20k to $25k per month consistently from graduation to now. $20k is a lot by today's standards, but it was even more by 1980s standard assuming you started working in the 80s. I can understand why people are sceptical to be honest. It is different if you are a businessman of course.

may i know how much of your $5.2m wealth is from investment returns? i read somewhere that an investment return of 10-11% per year (on average in the long run) is already considered very good.

using excel, i calculated that you would need to save $46k a year consistently and consistently achieve 11% per year in order to accumulate $5.2m after 25 years.

if a more modest return of 4% is assumed, you would need to save $125k a year.

When we retired at 55, my wife and I had saved a total of $2m in our CPF. We were both senior people in a Stat Board all our lives.

I have been reading some post of that seem to indicate that you can accumulate wealth of $3.5m by age 50 and it seems some younger people are questioning this.

I think the bigger question to those older and enjoying your retirement is - Can the young job entrant into Singapore still hold the same dreams to accumulate such wealth and what has changed since then and now ?

My own experience, it has become a lot more tougher these day. Why ? Let me state 5 points from my own view

1. There was clear investment and growth opportunities previously. Less so now.

I believe there were certain clear market and investment directions (eg Singapore property market, commodities boom , Singapore/Asia/China blue chip equities). These days, the market is so globalised that such opportunities for arbitrage is not easily found.

2. There was a lot of room for self improvement previously
In terms of education, looking at those above 50, you will find the %tage of those holding of degrees/tertiary eduation (around only 20%-35%) compared to fresh entrants to job market (60-70%) now.

Ideas like go to university and get a degree doesnt work anymore. We need more innovation and new breakthrough business ideas. And that seriously doesnt come from university books, course or self help books. (And those trading classes as well).

3. Cost of living has gone increasing higher compare salaries (though higher than before)

Singapore was 60 place is the most expensive city to live in 2000. Now we have an ongoing debate if we are the most expensive place to live in.
Jumping 60 places in 15 years shows how expensive things has become.
University grad/fresh job entrants take longer time to pay down their liabilities , home, and reach financial freedom.


4. Our expectation of a leader has changed
I think the pioneer generation selected a leader, and since it was about survival, expectations were also rather basic. Now leaders are selected to address not only our basic needs, but also to be "politically correct". The modern leaders does not tell and/or scold . They are "counselling" and democratic leaders.

Imagine if you are running a race . Previously, it was a do or die, and try to win a race. Now, your leader tells you to slow down so that others can catch up , or run together. In an extremely competitive game or environment, we need equally competitive team players to win.

5. The rich -poor gap divide is so obvious in land scarce Singapore
A key issue with being so land scarce is that the rich has to play in the same playground as the poor. This creates a hunger /desire in people to succeed in life.. but when they dont, it also creates a major depression block. In Singapore , most of us are employees as opposed to business owners. From that perspective, I can perfectly understand why we can be the most happiest people in the work yet the most unhappiest employees.

It is obvious that one cannot attain a net worth of $5.2m just based on savings from salary incomes, even after 30 years of continuous employment. I am referring to ordinary folks without the benefit of an inheritance. As you rightly pointed out, to reach there, one would have had to earn $20k - 25k per month consistently for that many years. That is not possible, as anyone just entering the job market cannot expect to earn that kind of salary.

So how did we do it? Looking back, our net worth of $5.2m came about from the four main sources (in order of contribution)

1. Property. No, no. We were not property investors. Here I am referring to the various homes that we progressively upgraded to. Like most everyone, we began with the HDB, then upgrading to a small private property and now a bigger condo. Each time we locked in considerable gains. For eg. Our current home was bought during the subprime crisis and it has since appreciated by $800k!

2. Savings. Our disciplined saving throughout our working life has laid the foundation for the growth in our net worth. In the initial years of our married life, our annual saving amount was laughable compared to what we are saving today, but saved we did. Then in our mid 30s, as we established our careers and family, the savings grew to a more respectable $50k annually. That was also the time we went into stock investments - we mainly bought blue chips regularly with the annual bonuses and have never sold. Now we are able to save $300k pa with the help of passive incomes.

3. Shares. As mentioned above, our journey into shares started with small but regular buys. We bought blue chips mainly both for their stability and dividends. We never sold. Like many other investors then, we benefitted from the many splits, bonus shares that were issued along the way. SIA, Semb Marine, ComfortDelgro, SPH etc.. all splitted, gave bonus shares and even one off substantial cash payouts! Of course along the way we have seen our share value mirrored the wild swings in economic cycles. The first major one we went through in 1997/8 was frightening, but after that, we are not as bothered. Partly because we believe the cycles are cycles, secondly, we have other sources of savings, our home is fully paid and passive income.

4. Passive income. At our last tally, we have the following passive income streams:
a. Dividends from share - $40k pa
b. interest from CPF - $30k pa
c. Rental income (gross) - $35k pa

39, 37
Combined employment income plus bonus for 2013 = 740k pa
Combined savings= $1.7m (and adding around $300K per year not counting the returns from investments)
CPF OA / MA / SA = $383,000
Live in a 5-room HDB (paid up, worth around $800K)
half-share in 2 condos (partner with relative) = equity stake around $700K
1 Japanese second-hand car (paid up)
Combined networth at end 2013 = $4.3m

Feels contented but still have young kids to support so can't stop working till at least 55 in my opinion.

If you really earn that much, why do you still live in a HDB flat? A flat is meant for the lower income in society, so please to not hoard it. Sell it off and donate the proceeds to charity.

With such high income, you should buy a big bungalow costing at least $10m.

I do not think the posting is true as they would not have qualified for HDB in the first place unless you believe they were low income earners and their salaries shot up so exponentially which is quite unbelievable. And if they are earning such high salaries why would they still stay ina 3 room flat? It does not befit their status.

Agreed that the posting was likely a troll posting without any truth in it. Having said that I have colleagues who could not qualify to buy new HDB flats because their salaries far exceed the limit, but they chose to buy resale flats for whatever reasons.

Some gave the reason that they want to buy a condo to rent out while staying in a HDB flat, because they cannot afford to have 2 condos. Others cited the reason of wanting to be near their parents.

everything in my last posting is true.

My HDB is in Bishan, bought in year 2000 for around $4xxK, resale. At the time my wife and I have started work for only 2 years and had to borrow $20K from our parents for the down payment. Combined salary then was slightly lower than $8k which was the cap.

Through aggressive savings along the way, and fortunate to be both working in the financial sector and with salary increases, got to where we are. Every cent earned was blood and tears.

Having said that, we don't think of ourselves as "real" millionaires, we take the mrt to work (car is red-plated, only drive on weekends), go to neighbouring countries for holiday, eat at foodcourt / hawker centre, etc. We are just your normal HDB heartlanders who want to earn a decent living and hope for a better life for the next generation.

We do count ourselves fortunate to be in a fairly comfortable financial position, and take effort to give back through donations and other means (but not to the extent of selling my flat and donating the whole sum).

A lot of what we achieved it through the lessons thought in the book, The Millionaire Next Door, where we strive to be frugal but not miserly.

It's up to readers here whether they choose to believe what I said. If you think our situation is good, I can tell you there are many financial services folks who earn much more than me and are equally (or more) nondescript.

If what you wrote is true, my sincere advice is to upgrade to a D9 condo or a landed which cost $5m. With salary of $700k pa, you will have no problem at all. You must sell your HDB flat as it is a big sin to hold on to a flat, which is meant for lower income Singaporeans and PRs. My wife and I only earn $150k pa combined and we already own a condo and we drive a car. We are younger than you.

Thanks for the advice. I have not looked upon myself as inferior because I live in a HDB and I don't intend to upgrade to a condo merely because I can afford it. The reasons why I'm in HDB are:

a) convenience - J8 and mrt are just minutes away, my kids learn swimming at Bishan complex, my parents can just walk to a kopitiam for coffee, etc.

b) learning one roots - I grow up in a HDB and have lived in HDB all my life. I want my children to grow up (at least their first few years) in a HDB so that even if we upgrade to a private pty in the future, they know their roots are in HDB and to not take their privileged life for granted.

c) risks - both of us work in the financial sector which is inherently risky - every few months there will be RIFs going on. Now I may be earning $700K the next day it could be zero. No one owes me a living, and no one is going to pay for my condo mortgage if I can't pay for it one day.

It's your personal choice on where you live, and whether to own a car. To us, what's important is a home that is suitable for our needs rather than the type of dwelling. A car is a good to have, but as we work in Raffles Place it does not make sense to drive into CBD with the ERP / season parking etc, so we take the train and use the car to drive the family out on weekends.

Agree that the risk for you and your wife is SUPER HIGH. You both can be next in line to be retrenched due to "organisational restructuring", esp since both of you are getting older and very expensive to keep. Unless the bank owners are your relatives, be ready for the D Day.

Yes, you make the right decision not to upgrade.

The underlying theme of the responses to my posts so far is that if you earn $XXX, you must be living up, you must be in a D9/10/11 condo, you must be driving a conti car. I have never known a causal relationship between the two.

It all depends on how durable the income is. If the income is high but risky, then it is prudent not to lavish. For instance, if you are working in your dad's big company, you are confident that your pay will remain high and you can live it up. But if you are just a cog in the wheel, then don't do your sums with the assumption that the high pay will remain forever.

I have a friend who used to earn $200k per year, he led a lavish life. Then one day, without him expecting it, he was let go. He couldnt get a new job. He had to sell his condo and bought a HDB flat. His rich friends left him. He is now a different man, he is humbled to the core.

Retiring at 67
 

Yesterday's Straits Times reported that the gahmen may raise the re-employment age to 67 allowing people to work till 67 if they chose to. That is, companies are obliged to continue to employ these older workers till they are 67.

This changes my thinking and plan suddenly. Before, I was planning to retire when I am 57 or 58 when my youngest child enter the workforce. That would be 3 more years to go. But now, suddenly I can work for another 10 years after that!

10 more years of work means 10 more years of income. How will it change my plans?

1. I can plan to buy another new car. Before, I was planning to use my current car till the COE runs out (in 3 years time) and be car-less.

2. Can still invest in another property. 10 years is a long time to accrue a lot of savings especially when the children are no longer financially dependent on you.

3. Can renovate current home and upgrade household appliances. Previously, was resigned to be stuck with current condition of home and appliances.

4. Instead of wondering what to do in retirement, now that worry will be pushed further down the road.

5. Can spread the holidays instead of cramping them up in the few years of retirement as previously planned. In fact, if we go visit those places during our working life in the next 10 years, we will not need to visit them anymore when we retire eventually, further saving us more money.

6. Medical bills will at least be covered by the company for another 10 years!

My profile is something like you except my wife is a housewife.
Also work in banking industry total compensation is 400k as head of risk management, lives in hdb too, owns two condo studio unit bought in 2010 currently rented out, currently in +ve carry. Takes mrt to work but owns a 2009 edition toyota wish for my wife to fetch kids. 200k savings every year
I am in process of investing a london apartment with 50% downpayment.
Expenditure to go up once my kids go uni in 10 years time, but expecting the condos will be fully paid to fund their education

Hi, I used to be like you, working in high finance, but in FO. I also stayed in a HDB flat, in fact our first flat and still living in it. After years of big salary and bonuses, I managed to clear my HDB mortgage loan and accumulated a sizable amount of savings. I am now retired and earning passive income from my investments. I have also set aside enough for my kids' university education, if they don't get scholarships. I'm now 50, how old are you?

It's actually quite amazing for you to save $200k when you have total comp of $400k as a sole breadwinner. Our past savings is around $250-300K but off a higher base ($740K) so I must say you are very disciplined. Keep it up!

I am 42, hoping to ride on this current wave of increased regulations/sanctions/risk in banking to survive in my role for another 8 years or so before office politics, political struggle or organisation reorg put me to redundancy hopefully with a golden handshake

Yes it takes alot of discipline and delayed gratification.
50k will go to paying income tax, 10k for other insurance, left 140k to feed 3 kids, 1 wife and a domestic helper

50K to pay income tax seems like a lot given you have 3 kids and will be eligible for child reliefs and other reliefs. 10k for insurance seems reasonable, 12k a month for household expenses also is reasonable. What about mortgage instalments? You have fully paid up your residence and investment properties?

As a low income family, we do not save much. We stay in a small flat and take public transport. We can only save $10,000 per year. How can we survive? Can any clever people here advise us?

Can you tell us more about your situation like is yours a young family? How many people in your household, your income versus your expenses? Are you the sole bread winner?

$10k pa savings is quite commendable if your income is low and you have a big family. And it is also quite typical for young family just starting out to either not save anything or just a small amount each year.

I recalled the first few years after we were married, we couldn't save much because our salaries were low and we had housing loan to pay. It was like that for nearly 10 years of our married life because although our salaries went up, we had car loans and then the babies came along.

As our family matured, our savings then grew - from $0 pa to $10k pa, to $50k pa etc...

So if yours is a young family, be patient, the situation will get better. It also helps (a lot) if both husband and wife work. For many years we were able to depend on just one salary, that means that we were saving the salary of the other person yearly. Now we can save much more as the loans got paid off.

With higher savings we also dared invest in shares which gave us additional income through dividends

Low income refers to people who can barely make ends meet, by being able to save $10K a year you are already luckier than most people.

Even though $10K a year is not a huge amount but if you invest in government-linked companies i.e. stock market (singtel, singpost, sph, sembcorp), 4-6% return each year is very realistic, just don't be greedy and gamble in penny stocks, those are for experienced traders who can afford to lose.

And never keep all your money in the bank or in fixed deposit, set aside an emergency amount and invest the rest.

I understand how you feel. We are in the same predicament. My wife and I earn a combined income of $150k pa. We have a $1m condo mortgage, car loan, car maintenance, road tax, petrol costs, personal loans, household expenses, holidays expenses, children's tuition fees, piano and ballet lessons fees, etc. After deducting all these, we can only save $10k pa. Life is tough. We just persevere.

38, married with kids

Cash savings: $500K
Stocks and unit trusts: $400K
Home value less outstanding loan: $1.8M

Singapore is an expensive city to live in. But if you and wife are in your 30s or 40s life can only get better as your children grow up, your salaries increase and loans get paid down. Your perseverance will get you through.

However if you are in your fifties, it is a different story altogether. Your upside is limited. Where people are looking at retirement at this stage, your $10k pa savings will not lead to much. Downgrading to a small HDB flat is advisable. Cut down your expenses to $100k pa or less if you can, and start saving and investing with more urgency.

Thanks for your post. It is very inspiring and shows that wealth is achievable with some discipline. I am 31 now and have been rather careless with my money, but now I would like to whip up my finances and start investing in dividend shares and property.

Thanks for the advice. We are in our fifties, we married late and got kids late. Yes, my wife and I agreed that we need to downgrade to a small HDB flat when we retire at 65 since we do not have much savings. We plan to sell our condo, which is valued at $3m now, and then apply for the BTO HDB studio flat for the elderly (which costs $100k).

We estimate that we will have cash of $2m in hand by then and will retire with the $2m. Assuming we will live for another 25 years after the age of 65, we will spend about $80k per year. We hope to spend less than that as we will enjoy rebates (for those living in HDB flats). We will also get the monthly CPF Life payouts of $2k per month. Maybe our kids will also give us some allowance. So, we have about $120k pa to spend if we need to.

You don't have much for your age. Many people in your age group would have a net worth of at least $4m. But do not worry, upon retirement, you can sell your condo and downgrade to a resale 2 room HDB flat which may cost only $300k. You can then use the rest of your money for your retirement.

enough of this. Your suggestion, statements and conclusion shows that you are one of those guys who has been listening to what others keep saying without really using your own brain. Please use it - do not save it further.

You are only looking from 1 point of view - net worth, to reach your drastic conclusion. You need to look at the other very important end - expenses. Only then, and then only, one can suggest whether the money that a person has (net worth) is enough for him or not. Without this important piece of information, all you are doing is just stating the typical things you keep hearing. Or, making assumptions that are totally random without validation.

A family with a net worth of $500k but living in moderate setup with expenses being less, will be far more better than a family with a net worth of $4m but living lavishing with high expenses.

I accept that with inflation cost of different items will increase in the future. But you need to realise that humans adapt to their environment and circumstances. That is why, in the present situation, when you go to a grocery store, you will find bread for $1.10 and go to a different grocery store (with organic) - bread will cost $3.30 (same number of pieces, but ofcourse, different brands). There is always a choice. Depending on ones income, affordability, tastes/likings and other monetary commitments, one will make a decision and a choice if they want to buy a $1.10 bread or a $3.30 bread. This is how one will manage their expenses. And this in turn will help the family understand whether they need to save more or less for future.

Many of us here are 'salarymen'. Our salary forms the bulk of our income. I have disliked my job years ago but I hang on because of the paycheck. I have been trying to diversify my sources of income over the last 3 to 4 years but salary still accounts for 80%. Looks like there is no quick fix to this but perseverance and endurance.

We don't really need to save too much. Just live a simple life. Enjoy the benefits of living in cheap BTO flat. If you are not a successful, high powered individual, just be happy and contented with a HDB BTO flat. If you feel sad, just think of the millions around the world who live in slums, count yourself lucky that you were not born in those slums.

If you are a highly energetic, smart, high powered, highly successful individual, by all means, buy a nice luxury condo for you and your family to enjoy. Buy a nice luxury continental car if you want and go and enjoy your holidays. Be thankful for what you have. But do not be arrogant, feed the poor, protect the orphans and make a better life for those in need.

I am lucky to live in a beautiful, brand new luxury condo in a good district. I also own a nice luxury car and enjoy holidays. But I now devote my time to charity work, after working so hard for many years accumulating wealth, I now spend my time for others. I'm now retired at age 53, and earning passive income from my investment portfolio.

Secrets of saving:

1. Buy a home you can afford. Be happy with a BTO HDB flat. This is very cheap. If you are a graduate couple who bought your BTO flat for $200k, you can easily pay it off within 5 years from your annual combined bonus. If you have a $150k loan, if your take home bonus combined is $30k pa, you can clear within less than 5 years.

2. Do not buy a car, take MRT and bus. You can save as much as $2000 per month.

3. Do not eat at expensive restaurants. Just buy $3 meals from hawker centers. Take away and you will save on drinks.

4. Do not gamble. Gambling is stupid as you will definitely lose money, for sure.

5. Do not smoke or drink. Total waste of money as well as incurring medical cost in the future as you will get lung cancer, liver cancer, etc.

5. Do not womanize. You will be in a costly divorce. You will also get all sorts of sexually transmitted diseases, AIDs, and you will spend so much money on medicines and doctor fees.

6. Do not sodomize and be a gay. You will get AIDs and will incur huge medical bills and will die young.

7. Do not be a glutton. Eat in moderation and fast. You will get diabetes, heart diseases, etc.

Your "advise" or "secrets" don't really apply to the many millionaires here. Many are not qualified to buy BTO flats by the time they got married because of their high incomes. Also many are too busy earning big bucks to spend their time on those frivolous vices you mentioned below. And how many people are really gay?

Taking public transport is fine, but try telling it to a family with young kids, elderly parents and who earns a few hundred $K a year. It is actually more cost effective to have a car when you frequently ferry your family members around.

What is important is to work hard, earn, save and invest, and to live a meaningful and useful life for yourself and society. Do not fall for the excuse that lazy people use - to live simply and therefore no need to work hard or worse, don't work at all.

I find the underprivileged derived more help from generous people who are successful in life than those who are not.