Wednesday, 17 May 2017

How I managed to save $100k before hitting my 28th birthday

Now this calls for a celebration. After scrimping and saving and working hard saving everything I could afford, I have finally achieved my target of $100k before the age of 30, with 2 more years left to spare. I shall make full use of these 2 extra years to continue to build my savings and wachest to the next target, which is to achieve $200k in savings and investments before my 32nd birthday.


Why 32nd birthday?

Well, some readers may ask this question, so I might as well answer it first. Well, its more like an extrapolation of my saving abilities. When I started working after graduation at age 25, I took 3 years to achieve 100k in savings and investments, so I had simply added 3 years + additional 1 year buffer for unforeseen circumstances. So voila, the number 32 comes to my mind. Furthermore, I had a headstart after graduation as I had already saved around the region of $20k before starting to work full time.

How I did it

I am going to spoil the surprise by saying there is no magic involved. All it takes is sheer hard work and discipline. I cannot emphasize it any more, discipline in delaying instant gratification goes a long way to achieving your goals before you even know it.

In fact, I didn't even realise I achieved my target until I recently checked on my investments and saving accounts. I had multiple saving accounts which makes it harder to keep track of the total amount I had saved.


My income 

I am not going to reveal my income, but I have to say my gross income is definitely less than the median income of the employed people we see in Singapore. Yes, even though I have been working for 3 years, I have not experienced a phenomenal increase in salary to even assist in my saving goals. So this shows that, increasing incomes do matter, but even without it, it is still possible to achieve it if we have the perseverance and focus, we can achieve it.

Investment returns

Next, people may point to my investment growth. Well, my returns coming from my investments are almost similar to the returns we get from the STI. It is simply because my portfolio had been weighted heavily to the local banks and telcos. However, due to the weak telco sector, my returns have been staying even below the performance of the STI, so that also means I didn't make more than say from a regular investor who had invested in the STI ETF at similar times I had entered the market. Thus, it is clear that there was no stellar returns to assist in boosting the growth of my savings towards the $100k level faster than anticipated.


My advice

What I am trying to drive here is, simply sheer perseverance and discipline goes a long way to achieve the savings goal we all have always dreamed of. We always see in sensational facebook feeds of making tons of money from the stock market, and this person relaxing at the beach as a result without lifting a finger. This is definitely a scene which this advertisers would like you to believe to buy their product, be it their hugely expensive courses or products they are looking to sell to you to make that commission. Don't fall for it to make another person reach their savings goals a lot faster!

So I am going to give a simple reminder. Stay focused on your goals. Make it a game, a game you would want to unlock the achievement. The achievement of financial independence, the dream of all financial bloggers out there. It is a lot closer than you think, as you let the power of compounding do its work, while you work hard to save more from your income.



Now you just need some motivation, and I hope this can motivate others seeking for some affirmation of their belief or simply looking for a way to grow their wealth. Stay the course and may we have a good weather ahead!

23 comments:

  1. Does the 100k include CPF OA / SA ?

    ReplyDelete
    Replies
    1. Hello there,

      The 100k excludes CPF funds, if I were to include them, I would have a ballpark figure of $150k-ish.

      DS

      Delete
  2. Hi Dividend Simpleton

    Congrats on achieving your first $100K.

    The next $100K would get much easier from there. I bet you'd hit $200K before you turned 30 ;)

    ReplyDelete
    Replies
    1. Hi Brian,

      Congrats on getting into the Sunday Times!

      Thanks for the encouragement, it is people like yourself whom provided me with the motivation to save and invest like the way u did.

      I'll get this chance to thank u for ur part in this too!

      Best of luck in ur investing progress too!

      DS

      Delete
  3. hopefully i can learn how to invest like u :)

    ReplyDelete
    Replies
    1. Hi there,

      Thanks for the kind words, but the gist here is not the investments. It was the disciplined saving which led to the achievement, as I had noted in my blog post.

      Best of luck in your journey!

      DS

      Delete
  4. Saved 100k over 3 years ie 33k per year ie about 3k per month. This is impressive for a young working adult
    Congrats

    ReplyDelete
    Replies
    1. Hi Starlight,

      Thanks for the encouragement.

      Hope it is going to well for you too!

      DS

      Delete
  5. Hi there I guess we have something in common. I also achieve that at your age. 5 years ahead and probably you will be where I am now. FYI my income is on the low range too. Feel free to read https://singaveragejoe.blogspot.sg/

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    Replies
    1. Hi evilbdboi,

      Congrats of achieving that earlier on!

      I am sure you net worth is a lot larger now!

      DS

      Delete
  6. Hi DS,

    Wah, your savings power is ... power! Well done, quite certain you'll reach your goals :)

    ReplyDelete
    Replies
    1. Hi LP,

      Thanks for the encouragement!

      I hope things are going well for you too!

      DS

      Delete
  7. Thanks for sharing. I'm in a similar situation as you, also lower than median income. It's truly all about the saving. Let's keep it up! :)

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    Replies
    1. Hi owq,

      Yes indeed, but having an increasing income is actually much more powerful than disciplined saving. We must first find ways to boost our current take-home income and then next focus on cutting down expenses.

      DS

      Delete
  8. Congrats! I wish I started as young as you and can achieve as well as you :p

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    Replies
    1. Hi Desmond,

      It isn't too late to start now! Keep up the saving and compounding effect to work its charms. Starting by taking action late is better than not taking action at all.

      DS

      Delete
  9. Whoa... $100K every 3 years ... no need take risk in stocks liao. Just go for investment-grade bonds, SSBs and higher-interest savings accounts. Unless you want to retire at 35 or 40, haha.

    I have older colleagues who are also quite thrifty and can save 60-70% of their take-home pay. No need to invest. Well, they just invest in FDs, haha. All can retire easily at 55, but usually continue until 60.

    ReplyDelete
    Replies
    1. Hi there,

      Yes indeed. If you are the conservative sort or simply the bond kind of person then yes by all means, do what is comfortable for oneself. For myself, I'm a stocks guy and likely remain so for many years to come.

      DS

      Delete
  10. 200K @32 should not be tough for you ! :)

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    Replies
    1. Hi Cory,

      I really hope so, I will try my best and update on my blog when the time comes:)

      Best of luck on your side too!

      DS

      Delete
  11. Hi DS,

    Congrats! How I wish I save more in my early days!

    Cheers,
    Farmer.

    ReplyDelete
    Replies
    1. Hi Farmer,

      It is never too late to start 'farming'!

      DS

      Delete
  12. Hi DS,


    Congrats to you!

    I wish i started save more in my younger days too! I only started to save a little when i was 30 years old (but then my first child arrived :p).

    I think i only had abt 3k when i started to invest 6 years ago.

    Then i selected the correct stock and my investment grows to be closer to 400k now (my profit is abt 250k). I am 37 years now. Hope i can continue to do better!

    ReplyDelete