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Whats your net worth

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  #1381 (permalink)  
Old 15-09-2013, 06:45 PM
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Hi Jeff,

What's your household income and net worth now?
What's your retirement plans?


Quote:
Originally Posted by Jeff View Post
I am into my 40s, and at this age, I know I am at my peak earning years for the next 10 years till 50 or so.

My biggest fear is inflation. Whatever I own, I need to at least allow my net worth to track inflation. For example, my $1m should be $1.04m next year. This also means the maximum I can use is my return above inflation. If my properties and shares and other investments earn me 5%, then I can only use 1%, else I will be eating into my capital...

Some young people will say it is ok, because in the long run, STI has been moving up 8%p.a. excluding 2% dividends, or REITS pay 6-9% dividends every year. Well, if you think it is ok, then you haven't really experienced the wonderful feeling of shaking in fear each day for months, when your stocks will falling 5-10% per day.

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  #1382 (permalink)  
Old 15-09-2013, 08:38 PM
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Quote:
Originally Posted by Unregistered View Post
Hi Jeff,

What's your household income and net worth now?
What's your retirement plans?

My household income and net worth is ample (to most people); I work at an investment bank. I know the next question will be - which bank, and what my salary is and all that, but I don't want to go down that route, because I just want to share my views on retirement and investment. Anything is enough, and nothing is enough, its just relative to whom.

Someone in this thread was lamenting that investment bankers do not add value, unlike engineers and teachers. I agree. Why is the free market paying so much to bankers and brokers, but not engineers and teachers? There must be something wrong...and there is. But that doesn't solve that person's issue. Because if engineers and teachers were paid like investment bankers, then that someone would still be not able to become an engineer or teacher.

I'm off tangent here.

My household income is ample. But this income will not last infinitely. I still have problems about maintaining my living standards.

My retirement plan...I'm still pondering what is needed to retire. 1997 taught me a lesson, and 2007 repeated a lesson. I don't want to take those classes again.


Last edited by Jeff; 15-09-2013 at 08:42 PM.
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  #1383 (permalink)  
Old 16-09-2013, 08:19 AM
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I have been following this forum for quite some time and now I'm motivated to share my life story.

I worked in the finance industry for the past 25 years. Now I am a SAHD (stay at home dad). Over the past 20 years, I have bought and sold countless number of shares and 8 properties and I earned lots from my job. While my household income was very high, by Spore's standards, we we're not happy. I was practically an absent father due to the long hours. My kids didn't do well in school and were ill disciplined.

One day I realized that life is not all about money and so sat down with my wife to discuss. We had a long talk and we both cried after that. It was the first time in my life that I cried. We decided that since I have made so much money from my investments and made gains in the million range, it would be good for me to stop working and focus on my family. So I took the bold move to stop working. I now have two fully paid properties and a portfolio of other investments, which gives me a passive income of $40k pa. I started to coach my kids and become a great father. Their grades improved significantly and they are now better behaved. My wife still works and earn $100k pa. Since we have no debt, our household expenses are quite low at $80k pa. We save $60k pa. We have also built up education funds for my kids to see them through university education.

Some people say I'm crazy to give up a high paying job but to me, it was worth it. Indeed to give up my corporate life at 45 is tough. My family is much more happier and we cherish each other. But the greatest joy I get is when my kids say "I love you dad", something which they would not say for a long time.

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  #1384 (permalink)  
Old 16-09-2013, 02:46 PM
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Quote:
Originally Posted by Unregistered View Post
My family is much more happier and we cherish each other. But the greatest joy I get is when my kids say "I love you dad", something which they would not say for a long time.
Well done.
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  #1385 (permalink)  
Old 16-09-2013, 04:52 PM
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I've not come across a male banker who is doing well and willing to give it all up. If he is doing well, he had the motivation to go ahead and stay ahead. That motivation is in the blood and hormones of the person - it doesn't go away no matter what.

In my experience, in whatever field you work as, the more senior you are, the more you earn, the more time, and freedom you have to adjust your schedules. You also get to work and lead teams, and develop young people to be better than you once were. There is a sense of job satisfaction. You define yourself and your existence that way. Work is probably most tough if you are at the analyst to VP levels (20-35 years old) when you are learning the ropes.

There is a way, and there are many examples of successful people with successful families. Its an issue of time management.

Last edited by Jeff; 16-09-2013 at 04:55 PM.
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  #1386 (permalink)  
Old 16-09-2013, 06:46 PM
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You are indeed an honourable man and father, almost a saint in my opinion. 99.99% of men in your position would not want to give up the lust for POWER, WEALTH, GLUTTONY, ALCOHOL, WOMEN, ETC. You gave all these up for a higher cause. I salute you. May you achieve true happiness and well being.


Quote:
Originally Posted by Unregistered View Post
I have been following this forum for quite some time and now I'm motivated to share my life story.

I worked in the finance industry for the past 25 years. Now I am a SAHD (stay at home dad). Over the past 20 years, I have bought and sold countless number of shares and 8 properties and I earned lots from my job. While my household income was very high, by Spore's standards, we we're not happy. I was practically an absent father due to the long hours. My kids didn't do well in school and were ill disciplined.

One day I realized that life is not all about money and so sat down with my wife to discuss. We had a long talk and we both cried after that. It was the first time in my life that I cried. We decided that since I have made so much money from my investments and made gains in the million range, it would be good for me to stop working and focus on my family. So I took the bold move to stop working. I now have two fully paid properties and a portfolio of other investments, which gives me a passive income of $40k pa. I started to coach my kids and become a great father. Their grades improved significantly and they are now better behaved. My wife still works and earn $100k pa. Since we have no debt, our household expenses are quite low at $80k pa. We save $60k pa. We have also built up education funds for my kids to see them through university education.

Some people say I'm crazy to give up a high paying job but to me, it was worth it. Indeed to give up my corporate life at 45 is tough. My family is much more happier and we cherish each other. But the greatest joy I get is when my kids say "I love you dad", something which they would not say for a long time.
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  #1387 (permalink)  
Old 16-09-2013, 07:27 PM
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Just some reality check. Is it possible to have worked 25 yrs in the finance industry and still be only 45? And for a male at that with NS obligation?

Quote:
Originally Posted by Unregistered View Post
I have been following this forum for quite some time and now I'm motivated to share my life story.

I worked in the finance industry for the past 25 years. Now I am a SAHD (stay at home dad). Over the past 20 years, I have bought and sold countless number of shares and 8 properties and I earned lots from my job. While my household income was very high, by Spore's standards, we we're not happy. I was practically an absent father due to the long hours. My kids didn't do well in school and were ill disciplined.

One day I realized that life is not all about money and so sat down with my wife to discuss. We had a long talk and we both cried after that. It was the first time in my life that I cried. We decided that since I have made so much money from my investments and made gains in the million range, it would be good for me to stop working and focus on my family. So I took the bold move to stop working. I now have two fully paid properties and a portfolio of other investments, which gives me a passive income of $40k pa. I started to coach my kids and become a great father. Their grades improved significantly and they are now better behaved. My wife still works and earn $100k pa. Since we have no debt, our household expenses are quite low at $80k pa. We save $60k pa. We have also built up education funds for my kids to see them through university education.

Some people say I'm crazy to give up a high paying job but to me, it was worth it. Indeed to give up my corporate life at 45 is tough. My family is much more happier and we cherish each other. But the greatest joy I get is when my kids say "I love you dad", something which they would not say for a long time.
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  #1388 (permalink)  
Old 16-09-2013, 07:53 PM
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Although highly suspicious, the post on the 55,56 yr old retiree couple however highlighted an interesting case study about how much one can realistically invest their life savings to generate income to fund their retirement.

Lets take a hypothetical couple Mr and Mrs Tan both 55 with a net worth of $1M including their HDB 4 room flat retiring today. Today CPF requires them to set aside a minimum sum of $148K per person. Let's say they pledge half of this amount with their property, so that would mean leaving the $148K in CPF. Medisave require another $40.5K each or $81K total to be put aside for the couple. Assume also that the 4 rm flat is worth $400K. That leaves the couple a sum of ($1M - $148K - $81K - $400K = ) $371K

Assuming the couple puts aside an emergency amount of $50K, leaving $321K for investment.

If invested in equities (say reits) they may get 7% return or $21K pa. A good sum but not enough to fund a comfortable retirement for 2. They could also risk losing part of the $321K in the process.

If they require $40K pa for a very frugal existence, they will have to chip away the savings meaning the emergency cash ($50K) will go first (in 2 years), followed by the equities (the $321K) in another 7 years maybe. Remember the CPF minimum will go towards their Annuity Life Plans that will only pay out to them at 65 - a good 10 years away. They also cannot touch their medisave amount - only for medical expense.

The prognosis is not encouraging. It seemed a foregone conclusion that Mr and Mrs Tan would have to downgrade from 4 room flat to survive their retirement well into their 80s or they have to postpone retirement till they are 65.

And here we are talking about a couple with $1M Net Worth!

Can somebody help check the numbers!?


Quote:
Originally Posted by Jeff View Post
There are plenty of questionable posts lurking around here. Some of my observations are:

1/ Too high net worth, based on relatively low salary. This is not even assuming that the person's salary is increasing over the years, so his salaries in previous years were much less than current.
2/ Plenty of people saying that they bought property at the bottom.
3/ Saying they bought stocks at the bottom.
4/ Overstating their stock dividends, without saying that whether the stock price went up or down or whether the dividends are one-off
5/ Overstating their property return, without saying what about repairs (plenty of leaking ceilings you know), maintenance, agency fees, property taxes and income taxes

I think most people should try to be honest here, otherwise don't post at all. Then this thread will be more meaningful and useful.
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  #1389 (permalink)  
Old 16-09-2013, 10:09 PM
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Did another case, this time for a couple living in a condo. More "atas" with higher net worth. Yah yah papaya.

Professional couple living in $1.5m condo. Retired at 55.
CPF minimum sum = $296k (total for both)
Medisave minimum = $81k (total for both)
Net worth : $2.5m
Emergency fund : $80k

cash available for investment : ($2.5m - $1.5m - $296k - $81k - $80k) = $543k
$543k Invested in stocks (Reits) @ 7% returns : $38k pa

Yearly expenses: $80k
Shortfall : $42k pa.*

To make up the shortfall, chip into emergency fund - gone in 2 years.

Start to chip into invested fund : deplete in another 8 years.

Annuity life kicks in at 65. Expected Payout for couple : $36k pa.

Shortfall : $44k pa.

Downgrade from condo to HDB to free up more cash to last remaining years

Bottomline : at the end of the day, cannot hold on to condo, but still got more room to manoeuvre than HDB couple.


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  #1390 (permalink)  
Old 17-09-2013, 08:33 AM
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for this 55 year old couple, to retire is simple. sell their condo, get $1.5m. buy a condo studio unit to stay (cost only about $600k in woodlands, yishun, bukit panjang, changi) and invest $900k in 7% investments (gives $63k pa). annual spending should only be about $40k. no need car, cook simple meals and just spend relaxing in condo gym and pool. problem solved.


Quote:
Originally Posted by Unregistered View Post
Did another case, this time for a couple living in a condo. More "atas" with higher net worth. Yah yah papaya.

Professional couple living in $1.5m condo. Retired at 55.
CPF minimum sum = $296k (total for both)
Medisave minimum = $81k (total for both)
Net worth : $2.5m
Emergency fund : $80k

cash available for investment : ($2.5m - $1.5m - $296k - $81k - $80k) = $543k
$543k Invested in stocks (Reits) @ 7% returns : $38k pa

Yearly expenses: $80k
Shortfall : $42k pa.*

To make up the shortfall, chip into emergency fund - gone in 2 years.

Start to chip into invested fund : deplete in another 8 years.

Annuity life kicks in at 65. Expected Payout for couple : $36k pa.

Shortfall : $44k pa.

Downgrade from condo to HDB to free up more cash to last remaining years

Bottomline : at the end of the day, cannot hold on to condo, but still got more room to manoeuvre than HDB couple.
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