Earn $350K a year and on track to financial freedom.

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.

Thinking of moving out of the family home?

Dear AK,

As we know, Singapore citizens can buy a HDB if they are married. If they remain Single, they can get a flat at 35 years old.

Each citizen cannot own more than one HDB at any point in time

My father passed away some years ago, and I co-inherited the HDB with my mum. Hence, I am the half owner of my parent's HDB apartment.

I do not get along well with my mother, and I wish to move out as soon as possible. However, as I am already an owner of parent's HDB apartment, I will not be able to get my own HDB apartment even if I get married, or pass 35 years of age.

This means I have only the following options:
1) Rent forever (or until my mum passes on, and I inherit the entire flat)
2) Buy a private property, with no subsidies

The Dilemma:
I am able to afford both options with ease, but the dilemma I have is I'm not sure which option is the most prudent.

Asian culture tend to favor home ownership, so I feel compelled to select option 1), to buy a private property. However, this option would mean most of my net worth will be locked up in a property, and my CPF account will be exhausted.

If I chose option 2), and rented, then my net worth will be liquid. This allows more opportunities for investments or whatever other endeavors; after all, cash is king.

When my mother passes on, I will inherit the entire HDB from my her. Then I can terminate my tenancy and move back home.

If you were in my shoes, what would you have done? Please start talking to yourself so that I can eavesdrop hahaha.
I really appreciate your help.




Hi ,

I won't tell you what is best for you. I will just raise a few points.

1. You already have a property (i.e. HDB flat).

2. Do you want more of your wealth to be in property or would you rather have more cash to invest with when Mr. Market is feeling depressed?

3. A home is a consumption item and it does not generate income. If you are concerned with having more passive income, buying that private property would probably set you back. As long as you are staying in the property, it is not an investment.

4. If you must use your CPF money if you were to purchase a private property, remember the cost of borrowing money from yourself.

However,

5. If you able to find a good value for money private property in Singapore, buying could be a good choice.

Related posts:
1. Accrued interest.
2. Buy or rent?
3. Affordability or value for money?