The most important things I had to do to save $100,000* before I turned 30 in Singapore

FOREWORD: Let me just say that saving $100,000 is by no means impossible. SG Budget Babe has done it. So has this other person. Still, I knew when I was 25 and fresh out of uni I found it incredibly daunting. So I wrote this to help all future 25-year-olds figure out how to start.

In July, 2014, my mom had a stroke. It was the kind that sticks with you till the day you leave the earth. She almost died, and she never fully recovered.

Seeing my mom transform rapidly from the spritely (albeit grumpy) woman she once was to someone who needed assistance going to the toilet made me realise two things.

1. Her treatment was going to cost. My parents were ok financially at that point, but I didn’t want to be a financial burden. Like ever.

2. Working 40 years is crazy. I didn’t want a life like my mom’s — working crazy hard and then never being able to enjoy retirement with her kids

Both of those reasons pushed me to read about being financially free early in life. That led me to find this article by the Straits Times.

Is it possible to have 100k by 30?

I thought to myself: why the hell not?

 

“Money saved in your 20s is worth more than money saved in your 30s.” — every single financial website out there

The first thing you need to understand about money and saving it, is that the earlier you start the better. It’s because of compound interest, a concept I am rather lazy to explain, but I’m sure when you google you will find plenty of answers.

TLDR; if you want a 100k, you need to start now. Hopefully when you’re below 24 ( I was 25 when I started saving intensely). If not, you need to step up your income game (more on that later).

I started out saving $1k a month in June 2014. I think I brought home slightly over two thousand after deducting CPF then. Crunching the numbers told me if I kept going at that, I would reach my savings goal in 8.333 years. Too slow.

To accelerate that, I needed to save more. Very often, that meant spending less. While doing the math on what to cut, I found it very useful to think of cost of things as percentages of $100,000.

NOTE: If you still desire your own private transportation, may I humbly suggest getting a bicycle? It’s less than 1% the price of the car (and taxis), provides you with exercise (saves money on the gym) and is good for the environment.

I tried spending my weekends working at a backpacker’s in Chinatown. The owner was my ‘friend’, but I found him a pain in the ass and generally an entitled self-absorbed S.O.B.

This experience taught me two things:

1. It sucks to be poor, because people can push you around. (Also, no matter how you rich you are, never be mean to those less fortunate than you because money can’t buy character and class)
2. You aren’t going to save money with a side hustle that doesn’t develop your skills in any way. i.e other than setting off some living expenses, moonlighting as a dish washer will not contribute significantly to your $100,000. Sorry, it’s true.

I was in the media industry then (still am), so I had already written a couple of articles for travel magazines during my internship. So I sought to expand my skills in other areas — namely video editing, copywriting and Adobe Creative Suite.

I watched YouTube to learn Adobe Premiere Pro and Photoshop. I read up on books on advertising. Then I joined creative competitions. I somehow even managed to win one of them.

Eventually, this made me a far more versatile hire than my peers (this was back in 2014, when most people working could get by with very specialised skillsets).

For the first few years of adulthood, your day job will be your main source of income.

Therefore the fastest way for you to save more money would be to earn more money. There are no two ways around that.

As mentioned above, if your job is going to be your main source of income, then you better make sure you get as much as possible. It pains me that lots of young people these days still accept offered salary with little or no discussion.

Here’s my simple guide to getting the highest salary possible.

I could have saved a lot more money if I decided to pass on the holidays, but that would have been detrimental to my mental health — no millennial saves $100,000 without enduring massive amounts of stress.

For three years after graduating, holidays were my only escape from work.

To save money, I did the following from 2014–2017

1. Avoided going to Western Europe or the US simply because tickets and accommodation were expensive af. Till today I haven’t been to New York or San Fran. Maybe soon.
2. When I did go to Europe for a holiday, I did a road trip and just went camping/hiking/walking that kinda stuff. Pro tip: It’s the most affordable way to travel simply because you save so much on accommodation.
3. I took longer holidays (up to a month to make my flight tickets worth it). Spending $1,000 on tickets over a month is around $32/day. If you spend $500 for a 7 day trip, that’s $71/day. Sad.
4. Explored Asia — a region that’s so near to us yet so vastly underrated just because it’s not exotic to us.
5. Always flew budget. Always. (but in retrospect sometimes full service airlines had some sick deals I could have taken advantage of)
6. On those long holidays in point ‘3’, I bunked with friends to save on accommodation.(hello Craft Tabby)!

Here’s all you need to know as a passive investor.

1. THE STI-ETF is kinda like the average of the stock market instead of the stock of individual companies. It ALWAYS goes up in the long term. We’re talking like 10, 20 years. And if it goes down, it means Singapore is fucked. You can start investing using a broker (Philip’s Poems), you can just go with online banking.
2. It’s not about waiting for the right moment to buy stocks. It’s about having the discipline to dump your money where it can’t be touched every month. Fancy way of saying this: It’s not timing the market, it’s time in the market. Memorise it. Print it out. Then burn it.
3. The Singapore Savings Bonds are a low risk investment to beat inflation, designed for the Singapore government. They are fully backed by the Singapore Government and offer almost risk free investment but the returns are just slightly better than your CPF. Still, almost risk free is not bad.
4. Save six months of expenditure before you start doing any of these. Investments go up and down, and emergencies can happen at any time. You don’t want to be selling your investments at a loss because you really needed that $2,000 to pay for that missing laptop.
5. Because I aim to retire early, I pretend I don’t have CPF. At some point, I’ll use the money there to purchase either purchase a flat, or put it into investments via the CPF investment scheme.

NOTE: This should work for most casual investors, but it is not the only way to invest. There are serious investors who regularly outperform me and make my investments look like a kindergarten project, but they probably also spend a lot more time researching their shit.

TLDR: No time to research your shit? Be a casual investor like me. If you’re an expert in investing you have nothing to learn from me.

You know that six months of expenditure that you stashed away for your rainy day? Let that amount generate interest for you in a good savings account. OCBC 360 was the one to beat back then, not sure which one is it now. Click here to find out.

Insurance agents can be incredibly annoying and sneaky, but there’s no denying insurance is damn important. This is Singapore — all your savings can’t match up to a hefty hospital bill.

To go without insurance is to basically risk everything. Here’s my advice.

Buy it. Then get on with life.

The key ones to get:

Death and disability — If an e-scooter hits you, you land on your head and become incapacitated for life, this is going to be one that gives you some money to get by. If you die, your loved ones get some money.

Hospitalisation — Hospital bills are damn expensive in Singapore. They’ll burn through $30,000 , $50,000 or even $100,000 in no time.

Critical illness — The one that has your back if you get cancer. This can be pricey, but what’s the point of having $100,000 when you’re going to blow all of that (and even more) on chemo.

NOTE: Investment linked policies have their pros and cons, but should not form the bulk of your investments.

You can’t weather the stock market if you have debt. Especially credit card debt, which has an interest rate of 25%. That’s way more than any potential returns you get from investing bonds, property, the stock market etc.

With interest rates higher than the Burj Khalifa, credit card debt will fuck you up. You’ll be bankrupt instead of rich.

Always pay every one on time. (Credit cards themselves aren’t bad, they give cashbacks)

Not only because it’s the right thing to do and you’ll help a lot of people doing so. But also because you’ll get a tax break (see point 3) from the government.

I like the Singapore Heart Foundation (because everyone should have a heart) and SASCO (they look after old people).

I can’t stress the number of times I felt saving this seemingly arbitrary number wasn’t worth it. I’ve argued with girlfriends. Missed drinking sessions. Pang-sehed weddings. Bailed on holiday plans.

At times I even relapsed and splurged piles of money on stuff (READ: bicycles), only to awaken and feel immense guilt later.

But five years on, knowing that I can quit and chill out from work for a year if I ever needed to, I can safely say it’s worth it.

13. I told myself to go easy… on myself

And you should, too.

Especially if you don’t come from a wealthy family.

Especially if you work in an industry that pays doesn’t pay bucketloads.

Especially if you have student loans to pay off.

Especially if you have parents or younger siblings depending on you.

I used to beat myself up every time my savings dipped below a certain level. In fact, I still do, occasionally. I can’t count the number of times I felt dejected because I was falling short of my savings goal.

But let’s face it, saving $100,000 in the world’s most expensive city can be tough.

It demands sacrifices from you. And sometimes, even with sacrifices, the goal is unattainable. And that’s okay.

I managed to do so because of I had a certain amount of privilege. My parents weren’t in debt. I was given the opportunity to excel by some bosses I met along the way.

And sometimes, I just got lucky. ¯\_(ツ)_/¯

14. I learnt to set aside money for the things I love

Sacrificing all your joy to have $100,000 is stupid and unsustainable. I’ve tried it. It’s miserable, lonely and depressing. The trick is to find a hobby that is relatively affordable, or has potential to increase your earnings.

For me that was…

Cycling — which also offset my transport cost, and any costs that I might have spent on a pricey gym.

Writing — I love writing, it’s a hobby. I took on freelance writing projects I actually enjoyed doing.

Travelling and cycling — as mentioned above, you can save a lot of money this way.

Everyone’s different. The real important thing is to get started

If you’re reading at 30 and have zero in the bank, don’t panic.

At the end of the day, having $100,000 by 30 is just another social construct. An arbitrary goal I pursued because I read an article on the internet.

Everyone has the own little goals in life. Mine is to become financially free and retire early. In the time I took to do this, some of my peers have…

• Embarked on some really cool journeys around the world
• Got married, got a flat and are having some real adorable babies
• Started a business and gotten a lot more wealthier than I am (yes, I took the slowest but surest way)
• Found a job they’re really happy to do full time, and I mean, all the way till they are dead.

If you ask me, any of these are a picture of #lifegoals.

That said, I do believe every one should strive to be able to look after themselves. And not live from paycheque to paycheque.

So scroll all the way up.

And welcome to the start of your new life. (And also follow my FB page for more useful and relevant content on how to live better in Singapore)

*$100,000 excludes CPF

[PS: Join our telegram group so social media algorithms won’t keep us apart.]

APPENDIX

These articles were really helpful to me when I first started my journey towards financial independence. I hope they do the same for you:

The Motley Fool — 13 steps to financial freedom

Your Savings Account Sucks — here’s some that don’t — Peter Lin, MoneySmart

How I saved $20,000 a year — SG Budget Babe

Best way to invest $1,000 in your 20s & Why the smart money is on investors, not savers — Ryan Ong, MoneySmart