The Most Important and Overlooked Personal Finance Tip

Surprisingly, most Singapore personal finance blog only talk about equity and maybe a little bit more of other things. However, most didn't touch on the secret to achieving financial independence in the "easiest and surest" way. Living your best life, enjoying every single moment of your life, doing things because you want to, spending time with your loved ones...Are these not the reasons for you to have more money? Or it is about showing wealth to others, comparing gadgets with your peers, eating and facebook what overpaid food you just had or that overpaid travelling?


To begin with, you don't really need to have a lot of money to live well and with dignity in Singapore. Knowing what makes you happy and what your family needs will speed up your financial wealth. In another words, more saving from your income. This is provided your income is at the median range or above. Here is the news that reported on median income in Singapore: click here

If you think the amount is high, please note that it could have included bonuses and employer's cpf. Since this is household income, you will have to divide the $8,666 by 2 or 3 persons. For simplicity, let divide by 2.5 and minus off a bit of bonus and employer's contribution. So, it should be about $3,000 per month. If you are reading this blog and you are not a fresh graduate or students, this figure shouldn't be that overwhelming? I was told fresh graduate nowadays earn more than this figure.

I will do a simple calculation to illustrate my points why most people, including financial bloggers, think too much. Of course, there are some assumptions needed.

Age	Monthly Income	Yearly Income with only 1 month Bonus	Total Income for 2 persons	Saved 70% of income	Total Cashflow Saving at 3% Interest
24	2,800.00	36,400.00	72,800.00	50,960.00	52,488.80
25	2,884.00	37,492.00	74,984.00	52,488.80	106,552.26
26	2,970.52	38,616.76	77,233.52	54,063.46	162,237.63
27	3,059.64	39,775.26	79,550.53	55,685.37	219,593.56
28	3,151.42	40,968.52	81,937.04	57,355.93	278,670.17
29	3,245.97	42,197.58	84,395.15	59,076.61	339,519.07
30	3,343.35	43,463.50	86,927.01	60,848.91	402,193.44
31	3,443.65	44,767.41	89,534.82	62,674.37	466,748.05
32	3,546.96	46,110.43	92,220.86	64,554.60	533,239.29
33	3,653.36	47,493.74	94,987.49	66,491.24	601,725.27
34	3,762.97	48,918.56	97,837.11	68,485.98	672,265.83
35	3,875.85	50,386.11	100,772.23	70,540.56	744,922.60
36	3,992.13	51,897.70	103,795.39	72,656.77	819,759.08
37	4,111.89	53,454.63	106,909.25	74,836.48	896,840.65
38	4,235.25	55,058.27	110,116.53	77,081.57	976,234.67
39	4,362.31	56,710.01	113,420.03	79,394.02	1,058,010.51
40	4,493.18	58,411.31	116,822.63	81,775.84	1,142,239.63

Your family became millionaire family at 39 years old just like that. Do you need to stare at the annual report day in day out to get that wealth? Don't get me wrong, if you enjoy doing that, please go ahead. Also, it is good that you are capable to do investment, it is a bonus and it is a great skill. Not to use more time to buy money, and use more money to buy time later. 

There are people who think that being frugal must be living a miserable life trying to save money for that end goals. Actually, it is reverse. I spend my time and money the way I want with total freedom and I don't need to justify to anyone. I could be way happier than buying that new "toy" to show off to friends, you know. And, my lifestyle, is not anything less than an average Singaporean's. If you still think my income is "high" that why I can achieve early financial independence, look at my illustration again.

Here, I am wishing you a happy long weekend and may one day, we don't need to "labour" for our basic needs. Pampered? I earned it, not inheriting a single cent!