Becoming a millionaire next door.

A person made $10K a month but spent $9K a month.

A person made $5K a month but spent $2K a month.

Who do you think will become richer faster, all else being equal?





The following chart was posted on my Facebook wall by Matthew Seah:

I am impressed!

Matthew is a "Prodigious accumulator of wealth (PAW)": This type of people are frugal. They save and invest. They become millionaires.





"People sometimes think that high income earners are wealthy people. This might not be true..." STE: The Millionaire Next Door.

Related posts:
1. Think you cannot reduce your spending?
2. A fast track to wealth building.
3. How to tell if you are rich?

Time for AK to be paid $12,750.

Who? Who?

Who is paying AK so much money?

Why? Why?

Make a guess?

Pause.

Pause.

Pause.

Give up?






It is the last quarter of 2013 and I am making my yearly contribution to my SRS account. 

So, I am paying myself $12,750.

Aiyoh, who threw something rotten at me? 

Hey, must have a sense of humour mah. LOL.





Although the contribution cap is S$ 12,750, we do not have to contribute the maximum if we don't need to or are unable to.

Don't need to? 

Well, a person who pays relatively little income tax could be tax free simply by contributing a few thousand dollars to his SRS account.

Unable to? 





Everyone's circumstances are different. $12,750 is quite a bit of money for many. 

If a person could only contribute $5,000 comfortably, then do so. 

Although he would not enjoy the maximum tax savings, he would still enjoy some savings.

I hope you will remember to contribute to yours before the end of the year.

The SRS is part of the Singapore government’s multi-pronged strategy to address the financial needs of a greying population by helping Singaporeans to save more for their old age. 

It began in 2001 and is operated by the private sector. 

Writing out a cheque to myself.

NOTE:
From 2016, the max SRS contribution is $15,300 a year.





Download the SRS Handbook: here.

Related posts:
1. Be rewarded for opening an SRS account.
2. A war chest called "SRS".