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Think we can't save $400,000?

Monday, June 30, 2014

Over the weekend, a friend told me that he found it very hard to believe that a 74 year old cleaner lady could have saved $400,000 in the last 60 years. Well, I don't find it hard to believe and I told him so. 60 years is a long time. It is all about working hard, being frugal and religiously saving the difference, in my opinion.

"For 60 years, Madam Goh Kah Keow, 74, lived a frugal life and managed to save more than $400,000 in cash and jewellery." The New Paper.

Anyway, a quick lunch time blog post:

Been a long time since I had a bowl! $1.10 only!

After waiting for a few minutes. Mouth watering!

My lunch! Sedap!

I used to drink this all up in my younger days. Now, I throw it away.

Some people in the past wondered how I could build up my savings so quickly too sometimes.

Related posts:
1. An essential habit to becoming richer.
2. Don't see money, won't spend money.
3. Seven money habits of AK71's.
"I am always attracted to posts that talk about money-saving techniques because successful saving provides a guaranteed return as opposed to investing which is risky by nature." HYOM, 7 Oct 2012.


Gary said...

Remember to have fruits! Reduce instant noodles. They are pretty high in carbohydrate!

AK71 said...

Hi Gary,

Thanks for the good advice. :)

An apple a day is a standard for me. ;p

Dividend Warrior said...


My parents told me that the interest rates in the 60s, 70s and 80s were pretty high. So, I guess that environment favours the savers. Imagine compounding the savings over 3 decades.

Unfortunately, we live in a low-interest rate era now......

Dun get me wrong. We must still save. But we need to go an extra step compared to the cleaning lady. We need to save AND grow our money.

IMO, savings alone might be enough for the older generations. But it is definitely not enough for Generation Y and beyond.

AK71 said...

Hi DW,

Oh, definitely. Investing for higher returns is important for anyone on a journey towards financial freedom in Singapore. :)

However, in this blog post, I am asking whether we can save $400,000 or not, given time. I am not talking about investing which, of course, is something I talk about quite a bit in my blog too.

In case you or any reader might be interested, here is one relevant blog post: Have a huge amount of savings and work till 70?

Sanye ◎ 三页 said...

Hi AK,

It is indeed possible, with the power of compound interest. Just a simple computation: If one saves a sum of $200 per month, and the interest rate is 3%, he/she will save $400,000 in 60 years. If he/she saves $300 a month, than the savings balloons to $400,000 in 60 years even if the interest rate is 2%.

Of course one can argue that $200 was a lot of money 60 years ago, but then, the interest rate was also much high in those days.

I stop eating instant noodles nowadays. I think eating healthy is important. After all, keeping ourselves healthy is also an important part of retirement planning, isn't it? =>年轻不养生,老来养医生。

AK71 said...

Hi Sanye,

I like that Chinese saying... a lot! LOL. I have been reading up on Chinese sayings lately and I have not seen this one before. Thanks for sharing. :)

Aiyoh, I like instant noodles. Sigh. I have cut down a lot already ever since readers told me how bad they are. Once in a while is OK lah. ;p

This blog post is really to get readers thinking, especially those who do not believe that saving $400,000 is possible for them even now.

Honestly, I do know people in their 30s and 40s who don't have any or much savings at all. It is not because they make very little money either. A common reason? An inability to be frugal.

Passive Income Builder said...

Why be frugal? YOLO! (You only live once!) of course being frugal helps to improve one's financial position.

But I often struggle with this a lot. Sometimes I think I struggle too hard and I wonder how come I want to struggle so hard.

Singapore Man of Leisure said...

Yeah for instant noodles!

Say hi to MSG!

Empty calories some more!

Great for those wanting to build up 1 big pack. Just take a packet every night after 10pm!!!

Don't think about it! Just do it!

You laugh. When you overseas in Europe, EVERY pack of instant noodle is PRECIOUS!

AK71 said...


Thanks for educating me on "YOLO". I have always wondered what it means. ;p

Well, I am not exactly depriving myself of stuff that I like. I have indulgences too. We have our own poisons. ;)

AK71 said...


Hahaha... Thanks for the support, fellow instant noodles buddy. ;p

I have been snacking after 10pm quite frequently lately. Sigh... -.-"

Passive Income Builder said...

I think you new trick. Brush and floss teeth before 10pm. Works for me. :p

Passive Income Builder said...

oops I meant teach. lol, looks like i can't teach hahahah

AK71 said...


That is what I have been doing. I end up brushing my teeth again at 12 midnight. -.-"

Passive Income Builder said...

Oh i see. Can't help you there. I don't have that problem. :p

la papillion said...

Hi AK,

How to save 400k? It's a function of amt saved per yr and time.

Save 50k per yr, then you need 8 yrs.
Save 20k per yr, you need 20 yrs. Save 10k per yr, you need 40 yrs. Save 5k per yr, you need 80 yrs.

Sure, it can be done. But it sure ain't easy LOL

EY said...

Hi AK and SMOL,

Ban ban ban! No instant noodles anymore! Heard that excessive consumption leads to stomach cancer.

Later 人在天堂,钱在银行!

AK71 said...

Hi LP,

I am sure it can be done and I am also sure it is not easy although the level of difficulty will vary for different people. ;p

However, like all habits, if saving becomes a habit, it gets easier over time. It is always the hardest at the beginning. :)

AK71 said...

Hi Endrene,

I like this Chinese saying too! However, it doesn't sound like a classic. Did you make it up? ;p

Jay said...

AK: I read that article in the Sunday Times last night as well and was quite furious about the opinions mentioned there ("how come an unskilled lady like that can save so much money?"). It made me immediately thinking of your blog ;-)

In fact the lady just applied a principle you explained very well, too: live below your means. You had a post a while ago on 7 principles or steps to build a fortune. The first two are: get income (i.e. education and a job), and save (i.e. spend much less than you earn). Only after these steps come the fun parts of investing, speculating, trading, property and who knows what. Of course most people only start there...

Now, saving 60% of one's salary and hence limiting spending to 40% means the extreme frugality for that lady (being unskilled), probably means 2-3K per month for someone like you, and might mean 10-15K for yet someone else. But the fact remains that living by the principle of 'spend less than you earn' can give you a reasonable sum, even if you 'only' save 200$ a month, as Sanye outlined above.

FoodieFC said...

wa, you eat instant noodles quite frequently. Try to avoid eating too much as its unhealthy =)

AK71 said...

Hi Jay,

I think this was the blog post you are referring to: 7 steps to creating passive income from the stock market. :)

Indeed, there are many sceptics amongst us, some stronger than others. Knowing this actually makes me feel quite sad. It also makes me feel quite helpless because I am reminded that there will always be people we cannot reach and it isn't because we didn't try to reach out to them either. :(

AK71 said...

Hi FoodieFC,

Cutting down liao. -.-"

Thanks for the concern. :)

Jay said...

That's the one, AK! Thanks for reposting, I couldn't find it before...

Not to generalize, but some of the sceptics are probably reasonably educated accountants/ engineers/ doctors/ business people who are in their 30's/40's and have saved less than 100K in their FD. They think "how come this 'lowly' person can safe so much more than me?".

No point to try to reach all of those who could benefit from your insights. But, AK: you have done an excellent job for those who care to listen! (I'm sure there's a Chinese saying for that...;-). In all seriousness you can claim to have contributed more than most to financial education in SG! Certainly more than any seminars, 'expert opinions', The Edge magazine etc.. (and yes, that includes the InvestX organizers). A big Thank You!

AK71 said...

Hi Jay,

Aiyoh, you make my blog sounds like it deserves a National Day award! Not so serious lah. :)

However, it does make me happy to know that my blog has made a positive difference. Thank you. :)

Chan jian wen said...

"Now, saving 60% of one's salary and hence limiting spending to 40% means the extreme frugality for that lady (being unskilled), probably means 2-3K per month for someone like you, "

I see what you did there Jay, trying to fish out AK's income per month...

I think that S$7k estimate you gave is just his passive income.


E H said...

Has AK tried Pasoh Porridge at ground floor of Pearl Centre before their demise? Good instant noodles cooked with sliced and minced pork, intestines, liver and egg.

AK71 said...

Hi E H,

No, I didn't. :(

I was just sharing on my FB wall one such instant noodle store in Bukit Panjang. :)

Anonymous said...


I finally get down to saving up on my meals. I decided to try oats for breakfast, save on bar cho mee and coffee si in the morning.

Yucks! it tastes horrible, you power, you can have that for lunch...

I have since found a solution. Instead of using water or milk to mix with the oats, i used Milo. I taste like chocolate. 18 packs of 3-in-1 milo caused 6.5, plus the oats, only $10. 1 ba chor mee plus coffee si is $4.7. 15 times such breakfast would set me back by about $60, so I saved about $50 in a month.

My new workplace canteen super sucks, only 4 stalls exlcuding drink stall, but a meal cause only$2.

hehehe... Think I can save about $60 a month since coming to this new workplace

AK71 said...

Hi Mike,

$50 a month is $600 a year. That is quite a bit of money! :)

Oatmeal is healthier than ba chor mee and economical too. I add soya bean milk to my oatmeal for protein and sweetness. Two 1 litre packs of Yeo's soya bean milk costs $1.95 now. Good for 16 to 20 servings (for me). You can try this if you like soya bean milk. ;)

Very hard to find a good lunch for $2 in any canteen. The JTC canteen near my workplace has found its match. LOL. $60 a month is $720 a year. Coupled with savings in the mornings, you are going to save $1,320 a year! :)

Hippy said...

HI AK and Mike,

I try to cut down my lunch spending by 50% as well, if i manage to spend less than 10 sgd per day , I will save 200SGD per month. In general, I am very tempted to get breakfast and snacks on top of my lunch.

By having breakfast at home and get the pre-make pau from home for later breakfast at the office, I managed to stay full without spending too much money.

Re Oat's side incredient , you can add flavoured seaweed in it, it makes it taste like porridge :)

AK71 said...

Hi Hippy,

Thanks for sharing tips on saving money on F&B at work. Great stuff. :D

$200 a month means $2,400 a year! That is quite a bit of money!

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