Many of us have this millionaire dream in our mind. Well, if you think about it, most people in Singapore will make over a million dollars in their lifetime. How? If an average person earns an average income of $3,000 a month over 40 years, then he would have earned a total of $1.44 million ($3,000 * 12 * 40) in his life.

            However, most people spend all they earn, and they end up with almost nothing after 40 years. That is why the Government is making every Singaporean start a forced saving account through their CPF. Unfortunately, CPF has been depleted greatly by many Singaporeans to buy house, pay for their kids’ education. Therefore, depending on CPF savings is no longer sufficient.

            But if you can save $300 (10% * $3k) of your monthly income and invest them into a managed portfolio that can earn you a 10% return a year, you will have accumulated a total of $1.59 million! This is the power of compounding! By just saving 10% of your income and growing them at 10% per year, you will be a millionaire when you retire! And by taking this $1.59 million and buying an annuity that pays 5% p.a, you will receive approx $6.6k per month for the rest of your life!

Start Now!

          Many people procrastinate when it comes into saving and give the excuse that “I will save when I earn more.” However, I found out that if a person can’t save 10 cents out of a dollar, he will not be able to save $100k out of a million. Therefore, I urge you to start small and allocate a fixed percent of your income to savings and investment every month.

            Your wealth is not determined by how much money you made but rather, by how smart and prudent you are managing your money. By starting a consistent and disciplined way of investing, with time and compound interest as your ally, you would have a substantial nest egg years down the road.

            Every day you delay will cost you hundreds of dollars of future money. Here is a calculation to prove the statement.

            If you were to save $300 a month for 40 years at a 10% return, you will have accumulated a total of $1.59 million at the end.

            But if you procrastinate and start 1 year later (39 years), you will have accumulated a total of $1.44 million at the end. That is a loss of 148k!

Meaning to say…

Every year you delay = Loss of $148k

Every month you delay = Loss of $12k

Every day you delay = Loss of $400!

Ouch! Start saving and investing now…

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