The following two articles were originally published in http://personalfinancemaster-guru.blogspot.com. and are reproduced with permission of the writer (aka Guru), a 30-something Singaporean who is married with a young son. He works in a multinational company's sales department. He aims to create passive income for himself through investments and retire in his 50s.
THE CURRENT starting median pay for polytechnic graduates in Singapore is $2,000.
The starting median salary for university graduates is about $2,700.
The average median salary per month for Singaporeans in 2011 was $2,710.
I really wonder how Singaporeans can stay out of debt if they continue to spend excessively.
Take for example, a Singaporean couple who fall in love and decide to settle down. Typically, the man is in his thirties and woman in her twenties. Combined income of about $8,000.
Guy buys proposal ring - $7000. (Larry's brand as girlfriend likes it)
Couple buys a pair of engagement rings - $6000 (It's a Cartier - due to peer pressure).
Expenses for wedding photo package - $6000.
Wedding dinner expenses - $7,000 (for in-laws "ping jin").
Honeymoon in South Korea - $3,000.
They apply for a DBSS (Design, Build and Sell Scheme) flat after countless tries without success with HDB's Build-To-Order - $350,000 ( take up a HDB loan and wipe out their CPF and cash savings).
Couple spend $20K on minor home renovation and furniture.
Man decides to upgrade his car as he cannot resist the latest Continental model - $100,000 (car loan).
(This is getting very common among people in their 20s. Once they get extra earning power, their cars will get extra power too).
Man likes to collect watches, sees the latest Rolex model and cannot resist it. Has no cash but buys it under an interest-free 24-month instalment package since it is affordable per month - total $12,000.
Then man gets anxious, tells himself, if he loses his job, he is finished.
Meantime, stuck in a rat race, and saves pennies on food, entertainment and transport.
He does not drive his Continental car to areas with Electronic Road Pricing charges and takes the MRT instead.
Wife works in the finance industry - with many banks doing cost cutting, she is very concerned as she realises she has nothing much to do during office hours.
Above is a real life story.
The only way a couple can afford all that is if they belong to the high income group or if they have financial assistance from their parents or if they are born rich. Unfortunately, they are not.
We have not even talked about Singaporeans with lower earnings.
10 years on....and looking out 10 years into the future
I job-hopped for a few years. It has not been bad, I thought. I had the privilege of travelling around the globe and exposing myself to different company cultures.
I have been through two company restructuring exercises but, always being the eager and hungry salesperson, I managed to find my way about and continue to earn a decent living.
I settled down at the company where I am still at today after more than 6 years.
I had envisioned working in a big office in the central business district, with a personal room and a sea view. 10 years on, I am sitting in a small cubicle with my female boss sitting in the cubicle right in front of me and we are in some ulu industrial area.
What have I learnt in the past 10 years and what have I accomplished?
I learnt that everything has a price - if you want to earn more, you need to spend more effort.
Finding good bosses are also very important. If you have rapport with them, works gets easier and more enjoyable.
Also, I realised that it is always important to continue to upgrade oneself. I took up an external part-time degree course as I felt inadequate when all my colleagues are armed with NTU honours degrees and MBAs.
I managed to achieve first class honours. But when I presented my achievement to my boss, she told me the company does not adjust salaries based on that.
Patience - I learnt that being patient is an art and we need to cultivate that in our career and life.
During the past year, I finally realised what I love and enjoy doing -- investments -- and learning about personal finance.
My friends have teased me by giving me the nickname of "guru" as I have repeatedly encouraged them to invest for the long term and plan their finances.
You will be surprised that many people are disinterested in personal finance and continue to spend, spend, spend unwisely.
Among my friends, I am probably the only one who is making plans on retirement and generating passive income.
Talking about achievements, I don't have a million dollars yet but I consider it a big achievement to be able to stay on at my company and being being recognised as one of the better employees.
Yesterday, I was presented with a promotion :)
Aside from my satisfactory career, I have achieved a million-dollar wife. I am just blessed and lucky to find a good wife and will be starting a family soon. I will treasure them and they will be my number one priority.
What do I see myself in the next 10 years when I reach 45?
Careerwise, I will continue to climb the ladder, work on my investments, make plans for retirement and enjoy bringing up my handsome baby son and growing old with my wife :)
Comments
I am investing for long term through passive investing in stocks and using compounding method to grow my portfolio. My aim is to achieved enough capital through stock investment so that I can buy my 2nd property for more passive income.
I think there will never be a fixed figure enough for retirement due to inflation and personal lifestyle preferences. My aim here is not to quit the rat race, or rather to work as long as possible to generate more money from my active income so I can buy more income generating assets like stocks/properti es..