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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)!

8 comments:

SG Young Investment July 23, 2013 at 10:11 AM  

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.

CreateWealth8888 July 23, 2013 at 1:50 PM  

Investing through compounding effect is never sure win game.

HM Shak July 23, 2013 at 7:19 PM  

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.

Dividend Warrior July 24, 2013 at 9:57 PM  

If this guy is single, no car no house.

Then yes, possible.

Lau July 25, 2013 at 10:07 AM  

As I mentioned as disclaimer. Saving to the extreme. :)

stevenhalim87 September 7, 2013 at 7:42 PM  

1 million ? i think i need more than that. lol

Lau September 8, 2013 at 12:16 PM  

I think i need more than that too. What's 1 million worth nowadays.

caprichososhuz March 22, 2014 at 2:36 AM  

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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