How much savings do you have?

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.

Originally Posted by Unregistered

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

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

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.

Originally Posted by Unregistered

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

38, married with kids

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

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

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.

Originally Posted by Unregistered

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.

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.

Originally Posted by Unregistered

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.