One of the most common searches that lead people to my blog is asking about how much is needed to retire in Singapore. In fact, I have seen questions on whether is it possible to retire on a lump sum cash of 1.5, 2 and even 3 million dollars. For Christ’s sake, 3 million dollars and you can’t even retire? How insecure are you about your financial future?

In fact, I am making a claim now that most of us can retire on a sum of SGD 500k. If I have 500k in my bank account right now, here is what I will do:

• Invest 100k into buying websites that have passive income. This will generate about 5-7k per month. The money here will be used to finance my current living expenses. Most lower income families made less than that so if they can survive, so can I.

• Invest 200k into buying dividend paying stocks. With a yield of about 3-5%, that will give me about 700-900 per month.  The money here can be saved for your child’s education fund, or for future investments such as buying properties etc.

• Use the 200k as an emergency fund. I will keep it in a very liquid instrument for any of life’s emergency.

Bonus: side income from your hobby or passion

The above doesn’t take into account that I will have lots of free time to try new ventures that might made me money. Since my living expenses are covered, I am not stressed out by needing to be successfully with these ventures. Best of all, they can be based around things that I have real interest in, which tend to increase the chances of being successful.

Downside of saving so much money to retire

Of course it doesn’t hurt to have lots of money in your bank account when you retire. However, that often comes at a price, which is time. For normal folks, it typically takes a long time (20 or even 30 years) to even have one million dollars in cash. The problem with that is the lost time that will never be recovered no matter how much cash you have.

The objective here is maximise time, not cash!

What I am working towards is to retire as early as I can, with as little money as I need. Time is the resource to be maximise here, not cash. We can always generate cash but time is forever lost.

The uncomfortable concern is that cash might run out prematurely. To me, that concern is misplaced. As long as we know how to create income generating assets, that is not going to be the problem. If you don’t know how, then that is where the problem is.

With the internet economy, there is no reason why anybody will have problem earning money. You can learn to build income generating sites yourself or you can buy them as investments. You can also operate as freelancers if you need fast cash. There is literally no limit on how to make a living online. In fact, this is the engine that can power our retirement if leveraged correctly. My whole retirement plan is built on the back of having these Internet businesses to power my living expenses.

It is important to let go of our assumption that we need millions to retire. Once that is accomplished, we can then start to work on the real challenges on how to retire early.