How to have 1 million savings in Singapore by 30

This is a tough question. I have not reached it myself so I am not in the best position to answer that question. However, I CAN tell you what to focus on that you don’t repeat my mistake of not being able to save a million dollars by age 30.

Before we proceed, let’s look at a simple savings table that I put together

The assumptions are in the blue section of the table. They dictate the strategies you need to employ if you want to save a million dollars in savings before 30.

The rest of the columns show the calculation based on the assumptions.

  • The column ‘Interest’ refers to the amount of investment income you earn
  • The column ‘Savings’ is the amount you saved from your salary
  • The column “Balance” shows the sum of the interest and savings columns

You can play with the numbers in the spreadsheet here.

Based on the table, this is how you can save a million dollars before 30.

#1: Have a high income first job

The table assumes a starting salary of 100k. If your first job doesn’t have an annual income of 100k (including bonuses and allowances), you are already behind. Banking and finance offers the best chance to earn that kind of money. Good real estate agents are also capable of earning that. Pilots as well but they need a longer training time which eats into the time they have to save the 1 million dollars.

Without a high starting pay, the salary of your next job cannot jump higher. To reach a million dollar savings, you need to clear 150k by age 26 and 200k by age 29. You can’t do that if your first job commands only 60k per annual.

This is why your starting pay is so important. My starting pay is a miserable 50k, which means I am way behind my peers who went on to lucrative finance jobs.

If you cannot achieve such a high pay, then you need to have a side income. These can be from an online business or working 2 jobs. Either way, you need to hit 100k per year if you want to be a millionaire by 30.

#2: Save hard

If you can get a high pay, then the next step is to learn how to save enough of it. 75% is a lot but it is entirely doable if you avoid consumerism. Saving 75% out of 100k means you still have 25k per year, which works out to be 2k per month for spending. As long as you don’t buy a car and don’t over pamper yourself, you can do it.

Remember, reaching a million dollar savings is not as easy task and is something that 90% of your peers can’t achieve. However, if you can take the pain of saving hard that these 90% wouldn’t, then you will enjoy a life after 30 that these 90% will not be able to.

#3: Find a good investment vehicle

If you look at the table, you will see that interest income accounts for nearly 200k in your savings. That is only achievable if you find an investment that gives you 7% per year. Traditional saving account will not cut it. You need to learn how to invest in assets such as Singapore REITs or corporate bonds. Start to learn about them so that you can invest smartly when you have the money to do so.

I failed all three when I was young. The only thing I can do now is to stick to what I preach so that I can hit a million dollar savings at least when I am 40!

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