Saving $100k by the time you are 30 years old

Today the Straits Times Published an article showing that it is possible to save $100k with roughly 6 years of work.

The key thing is

  • You have to save at least 50% of your annual pay
  • You got to live within your means and make sacrifices

What I felt it misses out are

  • Young adults have many other liabilities that make it practically hard to achieve this
  • Housing, Wedding, Honey Moon, Student Loans
  • Hence the need for sacrifices!


How I did it

I did a check on my Quicken (see another good reason to do budgeting!) and  it showed that I was able to achieve that amount by 30.

In fact seems a lot of folks can judging from what you read around.

Then again I probably fit the profile of what this experiment did

  • Single
  • Cheap Hobbies
  • Some sacrifices
  • Near 50% saving rate

I think I have it much harder since for 3  out of the 6 years my salary was less than the  median salary provided.

One note is that I only consider the amount that goes into Wealth Building Account as what the article considered.

Other saving goals probably out of the equation.

Some kids are even more absurd

I know many smart young adults nowadays that are sensible enough to do one or more of the following

  • Scholarships (study well!)
  • Start  working part time and accumulate
  • Tuition and accumulate
  • NS pay accumulate
  • Start learning about money

Some crazy dudes I know with that combination, will have $100k before he starts work at 25 years old.

Why does this matter?

If you would want to grow wealth

  • By spending less building wealth
  • Leaving more of your salary for escalating expenses

You got to let time value of money help you.

Here are 2 guys. One guy saves $1k per month from 25 to 35 years old then stops.

The other guy starts late and only starts saving from 35 to 65 years old (30 years)

At the end of the day, the guy that save for 10 years only uses 120k  while the guy that starts late uses 3 times the amount. The difference is the guy starts late only manages to come out 40k ahead.

Have a plan when you start working

I can understand why folks had a hard time because some things weren’t taught in school but  in life (sadly)

If you managed to come across this article then hope this helps

Its good to have a map that provides you a map how you want to spend your money. If you don’t have you can use the following as a guide.

Start Thinking how much to funnel to savings and wealth building

For me,  the duration of each goals are different and there are advantages of splitting them up. A few guides that you can take a look are here:

  • z

    this projection is too rosy. Firstly, the 4.5% pay increament every year plus 3 months bonus, In this cost cutting era, many cos have not given out yearly increments. not even say 3 months bonus. many banks do not even give out 13th months. How many co pay their staff 3 months bonus now. Next, most couples would have a housing debt when they apply for btos. there is already a debt, and need to factor in renovation cost… etc. this will wipe out our savings and cpf $. this projection IMO is just too rosy, just my 2 cents

  • C

    The civil service does pay about 2-3 months of bonus, though it may not qualify as a co to you. I wont be surprised that govt-linked coys follow bonus structure similar to the civil service. As for the pay increment, Singapore workers pay have grown a CAGR of 3.8% over the past 10 years

  • Kyith

    Hi z i think you have to vary that figure. I have friends working in bank so i know their basic they got so much more from it that although they dont have aws or bonus, it just equates to our bonus if not more. their increment is also crazy.

    i know the increment is abit rosy but i suppose thats how the outside world works! thought the 4.5% increment is yearly increment really.

  • Kyith

    Thanks for shedding light on this matter. Does the 2-3 exclude aws?

  • Dividend Warrior

    The table and graph of the guy who started earlier really shows the power of compounding over time. Thanks for the data.

    So, my advice to the average joes in Singapore is to start young. You can start small, but better start young.

  • Muhd Hilwan

    Depends on industry.. This table is inaccurate and does not reflect the general public. Im working in an advertising firm and being in a creative agency, we do not earn 13 mth bonus, we do not get yearly increment, we do no get overtime for staying in office till pass midnight.. So for the most of us who work in the creative industry, such table do not apply.. And our salary is below 3k for a good 3-6 yrs before it crosses the 3k mark

  • Kyith

    Hi hilwan,

    Thanks for sharing, I think I speak for many that they do jot have 13 month anymore and the increment is not as attractive.

    Your progression is as good as mine and I don’t get any ot allowance as well.

    I’m not comparing but yes using that median data is good if it’s reflective. Sadly so many tell me it’s not

  • joey

    starting pay $3050… tell me which company is giving that kind of sum… i will go for an interview right after i graduate-.-

    author, be realistic!

  • Kyith

    I do know dbs offer grad starting 3800 last time, dsta 3900, SAF 3300 and teachers around that range

  • Koh Lewis

    How to get 6% annual return consistently??

  • Kyith

    I think the author is predicting based a diversified portfolio of equity and bonds. 6% is rather possible but it is not possible for a lot because of their absence of equity and bins knowledge.

  • Koh Lewis

    Not sure what ST is trying to do. If 6% is not possible to a lot, they should not use it as an example like it is so easy….

  • Kyith

    It is text book based. But it is not entirely impossible.

    If you look at my portfolio yiu would see much stocks able to achieve that.
    If I am correct a global unit trust 10 year average return is around 5-6%
    But note there, the author is correct that it is the saving rate that is important.

    The time period off 6 years you won’t see a large growth. The wealth growing effect is an explanation to you guys that there is another aspect.
    To be fair, if I were to write an article like that, I would be quite close to the author

  • Vanson

    I managed to save $100k through thrifty lifestyle. It’s definitely not easy and require lots of patience and discipline. Nevertheless, it can be done. Fyi, I’m just an average Singaporean getting a normal pay.

  • Kyith

    Good sharing vanson,

    It will be even more remarkable if you are married.

    Could you share what is the most difficult things while you are doing it?

  • A K

    Just do whatever we can given our respective circumstances. Treat the article as an encouragement for us to move in the right direction. :)
    Having the right attitude is more important than the right numbers sometimes. Gambatte! 😉

  • Jackson

    I think this served as a guideline. regardless of our pay, we still can work around the minimum of 20% or slightly lesser depending on your financial commitments monthly. And we also tend to spend more when our paycheck started to grow. I used to save 30% of my NS pay. And after i graduated with my degree in comp sci, I started with a gross pay of $2.2k at age 25 and saved around $200-$250. After 1yr i got a promotion and gross pay was $2.5k, i can only saved $260 – $300. Most importantly, I think that we should at least start somewhere, even if it’s only 10% of your gross pay. As Kyith mentioned, saving your increment is definitely 1 of the ways. Dividend investment can start once you have save up a decent sum. =)

  • Kyith

    Hi Jackson,

    thanks for the sharing. i also worked my way from that salary range. sadly it hasn’t climb much. hope you have a better time then i do.

    you don’t have to do dividend investment, had you invest in a Vanguard world stock market ETF, i think you would have done better haha.

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  • Vanson

    Actually I’m happily married with a girl coming soon :)
    Well you have to get used to the lifestyle, and integrate it to your life. After that, it’ll just flow.

    Nice knowing you too Kyith!

  • Kyith

    Same here Vanson! thanks for sharing!

  • Kyith

    anyway i wouldn’t consider 6k of pay to be a normal pay.

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  • ThinkerNActions

    Is load of bull shit.. is like saying you should be a robot, work and go home eat dirt cheap food. no entertainment nothing. just work and go home to eat dirt cheap food.. don’t visit anyone or go anywhere, don’t even think about getting anyone anything either. u cannot fall sick and cannot have additional expenses like phones bill, internet bill, utilities or even pay anything like childrens, wedding or etc..

  • Kyith

    its not totally that. as a working adult at that age, you should be allocating more towards wealth building.

    its about being frugal in your selection not cheap food.

  • Leah

    Cheap but good. Not expensive but junk. Possible here if you use your brain more. If you keep saying it is impossible, then of course it is impossible.

  • T L

    I am single, no housing, wedding, honeymoon, student loans, and have saved slightly more than 50% of my take home for the past four years. Of the other 50%, 40% goes to my parents and 15% to medical bills for a chronic condition not recognised by medisave. The rest is transport and food, and a few luxuries like books and Christmas and birthday presents, and one weekend trip to Bali for which I found every discount and cheap option possible. After all this scrimping and saving, how much do I have? …. $30,000. Why? Maybe because no one I know starts at $3050, and certainly no one I know gets two months’ bonus on top of 13th month. On the other hand I know people making $1200 and less gross, who have not had an increment in years and will probably never get one, and people who don’t get 13th month, and who get $100 bonuses. Oh, I’m sure SOME people do, just like some people make $6000 a month and are capable of spending it in such a way they can’t afford bus fare, but when the news publishes things like this, that makes it sound like “oh, everyone can do it, if you can’t you just have poor saving habits” – it makes me want to scream and punch someone. For the record I do make more than $1200, and tbh I thought my gross starting pay of $1700 was only slightly less than average, but I see I was wrong. I dunno where I got this impression – might have something to do with having the same kind of qualifications as about 70% of Singaporeans, as well as being turned down – sometimes with incredulous looks – whenever I try to apply for assistance.

    As for the people earning $6000 and not having enough for bus fare – I think the problem there is they know they have good income. If you know you have $6000 coming in tomorrow, and $18000 (holy cow, that’s more than half of all I’ve managed to save in 4 years) in bonuses will just float in at the end of the year as a reward for not quitting and every year they’ll get $300 extra every month (which makes for almost $1000 extra in bonuses every year)…man, if I had that kind of income, I’m sure I’d be a bit more careless too. I might have even not flown budget to Bali, and maybe even *gasp* gone on two holidays in 4 years! Maybe even to Phuket! The solution? Let’s put all these people on $2000 salaries and see if they figure it out. If they can’t, they clearly don’t have the kind of brains that merits $6000 salaries anyway.

    Seriously, if this is the kind of thing the news is printing, no wonder no one is having kids anymore. I know I don’t dare even date in case I actually meet someone I like, because then I’ll have to either break up with him or spend the rest of my life doing what I’ve been doing for the last four years, only with even less savings to show for it, since we’ll be servicing a 25 year housing loan, assuming we elope (which would incur the wrath of our families) and don’t bother with a honeymoon. And God forbid we have children! And then retirement…. actually I’d probably just jump off a roof rather than have to figure out how to live on the pittance in my cpf at that point.

    Incidentally, that $30,000 in my savings? I’m about to burn it all and add a student loan on top of it so I have a chance at touching $3050 with outstretched fingertips by 40. I’m 30 now. I don’t think my chances are very good, and even if I do get there, I’ll be starting my savings over from scratch. Four years of sacrificing for nothing, and to be obliquely told I’m not saving right because I don’t have $100,000 already. I dreamed of investing once, when I got my first job. Considering how long it’s taken me to get to a paltry $30,000, I don’t think I’ll ever be in a secure enough financial position to do so.

    So yes. A good income may not be enough to make you solvent, but good saving habits without a good (read: much better than average) income will not make you solvent either, and you won’t even have the nice things the $6000 people spend their salaries on to console yourself.

  • Man

    How did you get 6% from investments?

  • Kyith

    hi, the nominal rate of stocks investing over a long time is rather 6-7%

  • Kyith

    Hi there, first of all you write well. You seem to have some hidden message in your comment. The writer have to state a baseline, and thus he chose a degree grad, which is prevalent nowadays.

    The common comment i get on facebook is that this amount is rather high. I used to agree its rather high, but my grinding in one of the not so well paid place tells me using 2,800 is not really that far off. And more conversations tell me 29 years old with 5000-10,000 could get more common.

    Its just gonna be not for everyone. The writer’s intention is good, but it comes across as unsteady because there is a section that will struggle to get that. I know. Because my colleague today told me to help find a job for the GF to get $2,000/

    I do have to applaud you for saving that amount, and the decision not to date is somewhat similar to what i felt sometimes consider i also suffer from chronic problems not claimable by medisave.

  • Alan Tan

    Define normal pay. I’m earning gross $1.6K. With 20% goes to CPF, I have a nett salary of $1280. Of these $700 is dedicated to my education, $100 to my other savings account. So I’m left with only $480 to survive for a month. Nearly impossible to survive on this meagre sum in one month in Singapore. How to create wealth when I have only $480 on me?

  • Kyith

    Hi Alan, after you have finish your education, shouldn’t that free up $700. assuming you gain a higher employment, that should provide you with more cash flow as well. on a $120 transport and $200 eating out, you should still technically have 160 to build wealth.

    If you look at T L in the comment below, a person working on that amount was able to save 50% of it.

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  • lewis

    Hi, do we not need to include inflation over the years?

  • Kyith

    That is not necessary because we are only talking about a target to hit in a constraint time frame. not talking about retirement or some big topic

  • jonkersboy

    2-3 months? The civil service pays on average 4 months bonus a year for a fresh grad these days

  • Kyith

    hi jonkersboy,

    i cannot just use a figure an expect everyone earns a 4 months bonus. from what i heard from my civil service friends that is not always the case.

  • jonkersboy

    hey kyith, haha ok i am a civil servant myself. The reason why is this – 4 months minumum for Division 1 (MX scheme)

    MX 13 & 12 – Fresh grads:

    Lets talk about the average per year:

    Mid year – 0.5
    End year – 1
    AWS (13 month) – 1
    SVP – 1 (Only when there is good economy and GDP growth)
    PB – Depends on your grade. Lets talk about the average worker – C grade 2 months, B grade 3 months and A grade 4 months. The higher your grade the more. Eg: MX 11 in a few years time- C grade would be 2.5/3 months)

    So if you add up excluding the SVP which only occurs when there is exceptionally good growth – 0.5 + 1 + 1 + 2 = minimum 4 months for a C grade performer for a fresh degree grad.

    As we promote and gain increments annually, our bonuses get higher since an A grade for MX 11 already fetches 6 months itself only for PB.

    2-3 months that you mentioned: its for division 2 (MSO) and 3,4.

    The calculations above already are quite underestimated, since sometimes end-year bonuses can hit 1.smth month and get a A grade at age 25 for PB (4 months) – 4 + 1 + 1 + 0.5 = 6.5!

    Just sharing whats happening in my ministry and stat boards!

  • Kyith

    hi jonkersboy, thanks for sharing. it seems everyone should aim to be a civil servant and not work so hard.

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