Get a million through one lump sum or incremental savings?

How did most people save their first million dollars? Do they get it through lump sum payments such as selling properties, or striking 4D or ToTo? Or do they get it through having a consistent saving and investment plan?

Both approaches work and I am happy to say that I have my hands in both methods.

Having a million dollars through one lump sum

Most folks would think that selling something for a million dollars is tough but it is actually much easier than you though. In my case, there are 2 scenarios when I can have a lump sum of more than 1 million dollars:

  • Selling my condo for 2.5 million dollars: This has always been an important part of my plan to retire early.
  • Selling my business or my shares in the business: I am currently involved in a startup called KooBits. It is focuses on improving the learning of children between age 5 to 12. My hope is that the business can be exited at a high valuation and I can cash out my shares at a couple of million dollars.

Personally, I prefer having a lump sum payment as it does have a couple of benefits.

  • I can enjoy the money sooner
  • The money can be reinvested at a faster rate, thus reducing opportunity cost
  • I feel rich, LOL

Having a million dollars through incremental savings and investment

Even without properties or businesses to sell, there are still ways to save a million dollars. I have highlighted the approach on my post on how to save a million dollars before you are 30. Basically, if you can earn 100k in annual take home pay (which includes bonuses), save 75% of it and reinvest them at the rate of 7%, you can save 1 million dollars in 8 years.

Even if you don’t earn 100k, the approach still works but you need a longer time period. See the chart below on how you can save 1 million dollars with a starting pay of 50k per annual, a saving rate of 65% and an investment rate of 6%. This is the plan that my wife and I are following.

The important point is that almost anybody with a typical office job can save a million dollars.  My wife and I are not highly paid individuals so if we can do it by sticking to the plan above, anybody can.

The failure point always come down to saving rates. Most people don’t save that aggressively because they don’t plan long term. Without knowing how small changes can lead to big impacts, it is hard to control your spending. An expensive dinner here, a new car payment there, a vacation now and there and you will see yourself typically saving about 20% of what you earned. No way in hell will you be able to achieve a million cash savings.

I have a personal example to share that illustrates how careless people are with their money. A couple that I know is earning less than 10k per month on a combined income basis. They got lucky and found themselves being able to rent out their home by staying with their parents.

If I am in their shoes, I would be so delighted to have that extra 2-3k of income to invest in my early retirement. Instead, they bought a brand new car at 150k. Isn’t that madness? How many 10 years does a normal person have to be able to compound their savings and reap the benefits on capital accumulation? If their spending habits continue, they will find themselves with a shorter and shorter runaway to build their wealth. By the time they realise this, it will be way too late.


Regardless of which approach you take, the more important thing is that you MUST be doing something that can possibly lead you to where you want to go. Most friends of mine complain about the lack of money but there is nothing in their plans that lifts them out of their current living standards.

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