Hi AK,
I hope this email finds you well!
I have been your loyal reader for the past 2 years and have written occasionally to you. I like to share one additional perspective to achieving financial freedom which have not been written as much in your blog I believe:
Focus on maximizing your earning potential so that you have a nest egg to use to achieve financial freedom
I manage to develop my career in a niche field that is sought after and relevant- currently, I am making S$350K per year and will take 3 years to make S$1mil in income. My previous role paid S$250K per year so it took me 4 years to make S$1mil. Before that, being more junior in my career and making about S$150K per year, it took me about 6-7 years to make S$1mil in salary.
So with a high salary income and keeping expenses to a minimum, I have:
- maxed out CPF SA by 42 years old
- ensured my family is well covered with various relevant term insurance plans
- grown and still growing my SG stocks and REIT portfolio towards S$1mil now generating passive income that covers 70% annual expenses
- fully paid retirement plans (~pay out S$2K per month from 55 yr old)
- fully paid house and car (no loans)
- my two kids who are teenagers each have their own CPF SA accounts and $70K SG shares portfolios
I fully agree on being prudent in expenditure and financial planning for the future. But I strongly believe the FIRST step is to properly build your career if you can, so that it can one of your stable pillars to help you gain financial freedom.
I thought I share this perspective to encourage people to take charge of their careers, whatever that may be =)
Have a very happy Sunday!
Best regards,
L
Hi L,
There is a reason why I don't blog about careers much. I didn't really have a good career and didn't make more than $100K a year. Really.
I share my experience to show that we don't have to be high flyers to achieve financial freedom but I have also said that for some who have a very good career, investing for income becomes optional. Just be better savers. :)
http://singaporeanstocksinvestor.blogspot.sg/2016/08/just-be-better-saver-and-forget.html
I will share your perspective in my blog. Thanks for this. :)
Best wishes,
AK
Related post:
Very first step to becoming richer.
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15 comments:
I like AK's approach, right mindset is key. Having a high income is a bonus. It's hardwork and diligence that gets you where you are. There are some who are however not as 'lucky' in career, hence, mindset is still the most relevant to retaining a nd building wealth.
Duhhh .... why do you think tuition biz still so hot after 40 years?? :) :)
(although I think with such low barriers to entry, tuition teachers are a bit like property agents --- only a few "star" actors but surrounded by thousands of "extras" earning minimal wages)
Every parent wants their kids to get into medicine or law. Accountancy or some finance-related course in a "good" Uni is the backup plan in case cannot get into medicine / law.
The very definition of a high-paying niche job is that it is scarce, otherwise everybody will be earning big bucks and median salary will be $500K. The hard truth is that majority of people will be earning average salaries, and median salary will only be at levels that doesn't collapse the economy.
I remember some senior civil servant colleagues previously. They didn't really believed in investing (apart from maybe buying 1 or 2 condos for rental). But because they could save 60% of their take-home pay & having at that time an iron-rice-bowl job, they didn't need to take on additional risks. Plus they didn't have the concept of early retirement --- earliest was still 55 yrs old. So these people basically could finance 30-40 years of comfortable retirement easily using just savings in the bank.
From FB:
Woo Chee Hoe:
S$350,000 salary per year will be among the top 3% income in Singapore. Is considered high networth/accredited investor so agreed that the play is different. I wonder how come teenagers can have CPFSA account?
AK:
Children can have CPF accounts too. :)
http://singaporeanstocksinvestor.blogspot.sg/2015/01/tea-with-ey-make-cpf-part-of-your.html
From FB:
Jasper Quek:
Hi AK, I like your reply " we don't have to be high flyers to achieve financial freedom"..that is the right objective of your blog.
We see too many on the road commented if I hv this, if I hv that then I will...
But in real life, we do not need to if we hv right approach.
Just talking to myself.
Min Yah:
Thanks AK. Your perspective is very important because - how many of us can make 250 k a year, not to say 350k? You give people like me hope that I can retire in peace. I'm far far far away. But at least if there is anything that I learnt, I am topping up my SA and SRS. Just this year, I have saved a few hundred dollars in taxes. Unfortunately I still don't understand stocks so am spending a considerable amount paying fund managers still....
When I was young, my father looked at how I spend money... He said:"next time u must earn 3k a Mth. Or else not enough".
When I was getting my first job after Uni, an elderly uncle said:"earn 10k a Mth, OK already hor..."
Very interesting views of ppl on earning and saving. :)
I agree that it is the right mindset that is important.
Without it, no matter how much one earns, it will still be money no enough. As chinese saying, there is always a higher mountain. Cheers.
Many roads lead to Rome. And many modes of transportation ranging from straight legs to jet propulsion. And then there are infinite variations in speed. Each of us select our own road, mode and speed based on our circumstances, resources and ability. We can all reach Rome so long as we unwaveringly keep it focused within our sight along the way.
Dear AK<
Your humility and "ordinariness" is the reason why I love your blog. I really don't understand the motivation of this high-income earner. He is probably in his 40s or early 50s. Had a good career.... so, naturally, he can build up his retirement nest. That is a no brainer.
I believe all want to have a good career and put in much effort to build it. But, there is a degree of luck involved. Just ask highly successful people like Jack Ma, or Li Ka Shing, or Wee Cho Yaw. They will agree a degree of luck is involved. If one needs to earn big income to build a retirement fund, then many of us lose hope.
Thank you AK, for being good-old-man-on-the-street AK.
Hi Ana,
I believe that the reader has good intentions. :)
We are all different and even if we cannot have a very good career, we could find ways to make more money and if we are lucky (on top of working hard and smart), we should do much better.
Financial freedom is within reach for most of us in Singapore. We just need to be prudent, pragmatic and patient. :)
http://singaporeanstocksinvestor.blogspot.sg/2017/01/three-attributes-of-wealthy-peasant.html
" I didn't really have a good career and didn't make more than $100K a year. Really."
REALLY, AK?
out of sudden, i feel much better:) hahaha.
in fact, many many people (not just investors) want their entitlement/results too fast.
Hi Bruce,
It took me 20 years to get to where I am with a high 5 figure annual pay. I might have touched 6 figures in some years but those years were few in number.
It is not how much money we make but how much money we save that determines if we are rich. :)
All in good time. ;)
See:
Is AK a rags to riches story?
Hi temperament,
We should inform the Pope of this "miracle". LOL. ;p
@AK71,
yes, the high income earner probably has good intentions..... but I don't find his sharing motivating at all. I feel like I cannot attain financial freedom because I don't earn $350k. But that is just me.
We do know that there are high income earners who spend more than they earn. And then there are low income earners who manage to retire early.
Hi Ana,
I always say that it is how much we save that will help to determine if we are rich. Gambatte! ;)
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