Originally Posted by Unregistered (Post 49632)

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.

Originally Posted by Unregistered (Post 49084)

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

Originally Posted by Unregistered (Post 49638)

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.

Originally Posted by Middle income (Post 49636)

38, married with kids

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

Originally Posted by Unregistered (Post 49649)

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.

Originally Posted by Unregistered (Post 49632)

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.

Originally Posted by Unregistered (Post 49677)

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.