How to turn $60K into $332K?

Growing our wealth can be a daunting task especially when our resources are limited.

I think of wealth building as plucking fruits from a tree.

Being a lazy fellow, I try to use as little energy as possible and would go for low hanging fruits.





Why climb higher up to pluck fruits and risk a bad fall when there are low hanging fruits?

I would climb higher up when my tree climbing skill has improved or if there is a safety net to catch me if I were to fall.

Know what I mean?

Hint, hint.

Nudge, nudge.

Wink, wink.





I received this email from a reader:

Hi AK,
Thanks for sharing your knowledge with us young folks.

Saw you previously at investx.

I just did this calculation last night.

I realized if at 25 years old, you put in 40k into your SA and have 20k in your OA. 





Then you do not contribute a single cent from then on. 

Based on 5% interest on the first 40k in your SA, then 4%, and 3.5% on your first 20k in OA, then 2.5%, at the end of 40 years, at 65 years old, 60k would have become $332k.

This is without doing a single thing. It's actually quite impressive returns.

Cpf is good haha.





“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”
― Albert Einstein

Correction by the reader:

The extra 1% from OA doesn't actually compound in OA. It is credited to SA. So for 20k in OA, the interest 1 yr later is 20500 in OA and an additional 200 into SA.

Furthermore, after 55yrs old, first 30k gets another 1%.

CPF has a lot of intricacies, but in the end, the magic of compounding is still wonderful!




This magic is very powerful!

Make it your friend!

If AK can do it, so can you!

Related posts:
1. Upsizing Oppa AK style!
2. $1 million in CPF by 65?