Who Wants To Be A Millionaire By 40?
>> Monday, July 22, 2013
This week’s Sunday Times published the follow up from
Jonathan’s article talking about $100k by 30.
Well, in summary it was to save,
save and save. And since it is taking saving to the extreme, I thought of
marrying finance spreadsheet prowess together and compute millionaire status by
40 years old.
So, $1,000,000 by 40 is based on the assumptions:
- Start work at 25
- Earning $3,000 monthly with 3 months of bonuses, equating to $45,000 annual package
- Average 5% annual salary increment
- Save 50% of income, increasing by 1% every year (while still having 4% increase for luxury expenses)
- Accumulated savings are invested at a moderate average 6.5% returns in a balanced portfolio for the 16 years
Congratulations! You are now part of the 101,000 millionaires in Singapore (if you are Singaporean)!
- Start work at 25
- Earning $3,000 monthly with 3 months of bonuses, equating to $45,000 annual package
- Average 5% annual salary increment
- Save 50% of income, increasing by 1% every year (while still having 4% increase for luxury expenses)
- Accumulated savings are invested at a moderate average 6.5% returns in a balanced portfolio for the 16 years
Congratulations! You are now part of the 101,000 millionaires in Singapore (if you are Singaporean)!
8 comments:
Thanks for this post. I do believe its possible for us to achieve 1 million by age 40. We need to save but investing is a bigger part of the equation. Money compounded over 16 years is quite significant.
Investing through compounding effect is never sure win game.
I guess for this plan to work, we really need to save ALOT and consistently too. But when we are young, how many of us really save 50% of our salary? Expenses may vary. But for calculations sake, this is a good table.
If this guy is single, no car no house.
Then yes, possible.
As I mentioned as disclaimer. Saving to the extreme. :)
1 million ? i think i need more than that. lol
I think i need more than that too. What's 1 million worth nowadays.
that means no traveling allowed and no family to feed. And worst of all, after all these scrimping and saving of 50%, just managed to hit 1 million.
Man, tough to live nowadays
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