Whats your net worth

Unbelievable but true. Even if I assume zero inflation, I will need to save $720k !!!

I think I will need to give up my car, maid and holidays. Force save $36k a year.

Thanks for the advice.

Originally Posted by Unregistered

Assuming you and your spouse are 45. And you want to retire by 65. That's 20 years to go. And assuming you will live to 85. Another 20 yrs. Here's what you will need during your retirement years if you want to maintain the $3000 pm purchasing power throughout the 40 years. Assume inflation rate at 3.5%. Dont say I say, but $3k for two persons is really really basic. Definitely no car, and cannot go for holidays also.

Value today -- $3000 pm
20 years later when you are 65 (to have same purchasing value) -- $5,969 pm
40 years later when you are 85 -- $11,877 pm

Here's the bombshell - the amount you will need to maintain that very modest lifestyle of $3000 per month.

To last 10 years (from 65 to 75 yrs old) : $941,392
To last 20 years (from 65 to 85 yrs old) : $2,168,275

What!? So much? you say. Ok, let's say zero inflation every year. Just based on $3,000 pm
1 year will mean $36,000 already.

Let's say you retire at 65. With zero inflation, you will need:
To last 10 years (from 65 to 75) : $360,000
To last 20 years (from 65 to 85) : $720,000

To be save, also assume there will be inflation, and save and invest as much as you can while you are still working! Better still, dont retire at all if possible.

[whizzard]

Originally Posted by Unregistered

Unbelievable but true. Even if I assume zero inflation, I will need to save $720k !!!

I think I will need to give up my car, maid and holidays. Force save $36k a year.

Thanks for the advice.

I was waiting for such a discussion to emerge. When I mentioned in my previous post in another thread that having $1 mil (even excluding the value of your primary residence which does not generate any income but costs money to maintain) does not make one a millionaire, there were some strong objections.

https://forums.salary.sg/investments-...html#post41155

In today's high inflationary environment, where there are many young graduates entering the workforce and earning good salaries, the price of goods and services would necessarily get pulled up by the generally high level of affordability. And it will continue to rise if you believe in the Singapore story.

It is indeed wise to start saving and investing as early as you can. Everyone of us have different circumstances which may impede our ability to save but sometimes, not always, it is a matter of making a lifestyle choice in order to overcome some of these obstacles and start somewhere.

I have attended Stephen Covey's "The 7 Habits of Highly Effective People" several times when I was working at different organisations. Each time I attend a refresher course, I find something of value to take away. I find that it is a good and logical system (I don't sell the system nor am I vested in any way in the system).

The "habits" I personally find highly applicable are:-
(1) Be Proactive
(2) Begin with the End in Mind
(3) Put First Things First
(4) Think Win Win

If you are not acquainted with Stephen Covey's work, you can probably google or buy his book if you wanna find out more. Putting some of his ideas into consistent practice can significantly enhance your life.

His last habit is to "Sharpen the Saw" which is to regularly improve and contribute. Sharing in this forum is one of the ways I try to cultivate this habit.

I have ran a business unit before and the only way to meet growth objectives is not by cutting people or cutting costs but to continuously find ways to grow the business and grow your employees' wealth, experience and confidence as the business grows. There will always be a limit to cost cutting and I find managers who practise this method totally unfit to be managers. Bereft of ideas, they have no choice but to resort to this to survive. In our personal life, we will have to do this too if we are not able to find ways to continue earning money hence my strong interest in personal investments and accummulating sufficient capital to continue generating returns even long after I retire, I hope!

I stumbled on this forum so thought I ask a question -

1 commercial property fully paid
2 condos (1 for own stay) 1 fully paid
1 car (3-4 years if not wrong) fully paid
Housing Loan - $650K
Household Salary - at least $100K p.a.
2 schooling kids.

I told my best friend she's on good track for retirement. Am I right?

wonder why ppl only think of working and saving money and invest in stock and property (which may not bring you much return, just may be) and not thinking of starting own business to earn more rather than stuck in an underpaid job for the rest of their life and couldnt even retire at age 65.. to me, we should work until 55 max and enjoy the remaining of your life since many couldnt even make it to 60 nowadays... to be frank, how much can you save if you are earning let's say 5k a month? 1k amonth may be? how much can you get end of 30 years of saving? Why cant you think of someways to earn more money rather than admiring ppl with big cars and house.. a business can be as small as online store, flea market, hawkers, selling whatever you are good at.. doesnt mean that you need to loan few hundred k from bank, mortage your house, and rent a good location shop, get 3 workers and sell sthing..

[lazyplane]

Originally Posted by Unregistered

wonder why ppl only think of working and saving money and invest in stock and property (which may not bring you much return, just may be) and not thinking of starting own business to earn more rather than stuck in an underpaid job for the rest of their life and couldnt even retire at age 65.. to me, we should work until 55 max and enjoy the remaining of your life since many couldnt even make it to 60 nowadays... to be frank, how much can you save if you are earning let's say 5k a month? 1k amonth may be? how much can you get end of 30 years of saving? Why cant you think of someways to earn more money rather than admiring ppl with big cars and house.. a business can be as small as online store, flea market, hawkers, selling whatever you are good at.. doesnt mean that you need to loan few hundred k from bank, mortage your house, and rent a good location shop, get 3 workers and sell sthing..

I tried biz. I can only say it sucks up your time so much and you may not get any returns. Being a salaried employee with kids, u have only so much time left. And if u are chasing corporate ladder (meaning overtime, additional paper qualifications etc) , then even less time left for biz. And if u dont put your time into a biz, it really cannot fly because if it is any good , it will soon be copied and done better by the one whom can put the time.

My own motto now is to decide which financial bucket i want to retire.
It is true that biz , the sky is the limit, and u can end up with a wealth that feeds generations... But i dont think i have the energy to do that,
hence hopefully, job , investing stock/property is enough for me to reach my goal.

The main problem is the cost of setting up a business in Singapore is quite high and Singapore is only a small market with lots of branded stuff & competition, so not so attractive for businessman to venture here no matter how easy it is for the gov to give the business permit. That's why entrepreneurial spirit of most locals peoples already fade away as compared to many emerging economic countries, as most already pampered by many MNC company that comes to Sg in early 80s/90s.

But the era of manufacturing in Singapore already gone by with raising of China economic power and some other neighbouring countries giving away most of the jobs to them. They only job that will remain in Singapore for the future is only service industry, just like HK where no more engineering job, most are moved out to China.

Originally Posted by lazyplane

I tried biz. I can only say it sucks up your time so much and you may not get any returns. Being a salaried employee with kids, u have only so much time left. And if u are chasing corporate ladder (meaning overtime, additional paper qualifications etc) , then even less time left for biz. And if u dont put your time into a biz, it really cannot fly because if it is any good , it will soon be copied and done better by the one whom can put the time.

My own motto now is to decide which financial bucket i want to retire.
It is true that biz , the sky is the limit, and u can end up with a wealth that feeds generations... But i dont think i have the energy to do that,
hence hopefully, job , investing stock/property is enough for me to reach my goal.

42, 44, year old couple. Two beautiful children.
Earns $200k pa, spends $160k pa. Saves $40k pa.
Owns condo, european car. We go for nice holidays twice a year.
Total family net worth, including condo, $2.3m.
Not sure how we are doing. Any advice?

Originally Posted by Unregistered

42, 44, year old couple. Two beautiful children.
Earns $200k pa, spends $160k pa. Saves $40k pa.
Owns condo, european car. We go for nice holidays twice a year.
Total family net worth, including condo, $2.3m.
Not sure how we are doing. Any advice?

how did you accumulate $2.3m with just $40k of savings pa? did you have some windfall in some investments? property?

Originally Posted by Unregistered

how did you accumulate $2.3m with just $40k of savings pa? did you have some windfall in some investments? property?

The bulk of our net worth is in our condo, worth $1.6m, no more loan (we bought very cheaply in 2006). The rest of our assets are our CPF savings (OA, SA, Medisave), stocks (bought during 2008 crisis), cash.

Originally Posted by Unregistered

42, 44, year old couple. Two beautiful children.
Earns $200k pa, spends $160k pa. Saves $40k pa.
Owns condo, european car. We go for nice holidays twice a year.
Total family net worth, including condo, $2.3m.
Not sure how we are doing. Any advice?

You have a high family net worth at a young age. I think you and your wife are doing just fine. If you continue to save over the next 20 years and keep your condo (which should be appreciate over the next 20 years or get enbloc), then by the time you retire, say at 64, your net worth should be about $4m. You can then downgrade to a cheaper home and use the rest of your money for retirement.