MORE THAN SINGAPORE STOCKS, STRAITS TIMES OR SGX NEWS BLOG. SINGAPORE STOCKS INVESTING (“SSI”): SHARING A DEFENSIVELY OPPORTUNISTIC EQUITY-INVESTING MODEL: STABLE STI CORE, MULTI-BAGGED BY SELECTIVE INTERNATIONAL PICKS!
WE HAVE MOVED!
new website:SGSTOCKSINVESTING.COM VISIT US THERE!
Saturday, May 12, 2018
THREE WAYS TO SAVE 50% MINIMALLY OF YOUR SALARY FOR RETIREMENT?
Dear readers, while Singapore Stocks Investing is about Investing, I would like to advocate that Savings comes first and foremost. It is all about the simple fact that without Savings, we would not have a pool of capital to invest and to make investment profits through wise investing. But savings is not solely just about for Investing, savings is also about ensuring that we have some monies for our retirement. But how much savings is enough and are you saving enough for your retirement? Let me, Tom K shows you how much you should save from your salary each month toward your retirement.
We will take as an example, a young male graduate who enters into the workforce at the age of 26 and retires at 62; that is a working duration of 36 years (for ladies, assuming a typical female graduate entering the workforce at age 22, the working window is longer). And now assuming the life expectancy of Singaporeans as a whole is 80 though life expectancy is expected to increase with modern science (and life expectancy is higher for a typical female), that would give us a retirement duration of 18 years.
If we would like to sustain the same lifestyle as the 36 working years for our 18 years of retirement and assuming we retire fully with no passive cashflows and not factoring the use of CPF funds for our retirement, that means that we would need to use the current 36 years of our working to support our 18 retirement years. That means to say, we need to save 1 year of our salaries to support 2 years of our retirement and hence in a nutshell, we need to save 50% of our monthly salaries.
And this 50% ratio is also probably not reflective since there is the annual inflation which erodes the purchasing power over time that that means we would need a larger retirement amount and hence a much higher saving ratio of our salaries.
Since CPF typically takes up 20% of our salaries, to save 50% of our salaries per month, it means that we need to use only 30% of our salaries for our expenditure. This 30% may be tight for some. To save more, there are a couple of things we could do:
1) First, work towards a higher income. With a higher income but maintaining the same degree of expenditure should have one’s portion of salaries to expenditures reduced; this will increase the savings ratio to more than 30%;
2) Second, I believe many of us will have bonuses. Assuming one gets the thirteen month bonus and a half-month performance bonus, that will contribute 1.2 months of savings (after 20% CPF) to one’s annual savings target of 6 months; that leaves the individual to save 4.8 months of salaries over the year which works out to 40% of savings per month
3) Third, Invest wisely. Through wise investment, with the magic of compounding, assuming a yearly return of 6% and using the “Rule of 72”, one could double his monies in a span of 12 years and possibly more with a longer runway of his investment. That means to say in theory, if one invests his savings of 9 years, he would get his monies doubled to 18 years (the full amounts he need for his monies using the example above) in just 12 years. The caveat is that the investor has to make really wise investing decision to achieve a 6% annual rate of return and also to time his realization of the investment prior to his investment.
Another way of looking at how investments would contribute to one’s saving plan for retirement is via multi-bagger investing. Assume one manages to identify and invest in a multi-bagger stock of 6 times, with just three years of salaries (say $300K assuming yearly salary of $100K), the investment from the $300K will accrue to $1.80 million which will cover the full retirement amount using the example described here. Caveat again: wise investing is very important wlse capital non-profits is inevitable
As someone who has tracked my savings and expenditures since my army days, I would encourage you to track your daily expenditures if you would really want to achieve your retirement goals. For without the diligence of tracking and measuring, how would you measure your success in retirement planning, finacial-wise? Join the emailing list to receive regular Financial and Singapore stocks newsletters too! Like" me on Singapore Stocks Investing Facebook page to receive all posts on your Facebook as well as read more articles. Follow me on Twitter too.
SSI INVESTMENT STRATEGY: STABLE STI CORE, MULTI-BAGGED BY SELECTIVE INTERNATIONAL PICKS! FIND OUT MORE HERE !
Popular Posts
-
Dear readers, what should investors do amidst the inversion of the yield curve? To find out, let us watch the video below.
-
Dear readers, let us watch the video below to know more about the latest development in relation to Singapore Reits now.
-
Dear readers, these are the following posts which explain the Singapore Stocks Investing Strategy :
-
Dear readers, let us watch the video below to find out what we need to know about Blockchain now.
-
Dear readers, with the stocks markets getting rather choppier, stocks markets downturns, a possibility which is fretted by many, especia...
-
Dear readers, there are seven stocks on the Singapore Stocks Exchange which may be that much covered, but on their own rights, some of ...
-
Dear readers, let us watch the video below on what readers would need to know about China stocks now. STABLE STI CORE, MULTI-BAGGED BY S...
-
Dear readers, there were two comments by readers on SSI's Facebook Page which I thought I will reply via a post here as this could ...
-
Dear readers, as you would have known by now, Hyflux stock has been suspended for reasons which I would not repeat here as these are w...
-
Dear readers, it is time to share with all of you my portfolio updates. Against the current stocks markets backdrop as evidenced by th...
Blog Archive
-
▼
2018
(690)
-
▼
May
(62)
- MAYBANK KIM ENG: A BUY CALL ON THIS STOCK WITH A P...
- STOCKS MARKETS CORRECTING NOW! WHAT SHOULD INVESTO...
- CGS-CIMB STOCK: THIS STOCK IS AN "ADD" WITH 25.3% ...
- HIGH SPEED RAILWAY SCRAPPED: WHAT IT MEANS FOR SIN...
- PHILLIPCAPITAL ON SHS HOLDINGS, DAISIN RETAIL TRUST
- US, SINGAPORE STOCKS MARKETS: FUNDAMENTALS AND TEC...
- WHICH SINGAPORE STI STOCKS ARE NOW OVERSOLD? WHICH...
- CGS-CIMB: ADD RATING OF POTENTIAL 18.6% UPSIDE ON ...
- THIRTEEN >$500M MARKET CAP STOCKS WITH HIGH DEBT-T...
- MAYBANK KIM ENG: A POTENTIAL UPSIDE OF 9.6% ON ONE...
- WHAT YOU NEED TO KNOW ABOUT THESE FOUR STOCKS AND ...
- OIL PRICES: WHAT INVESTORS SHOULD KNOW NOW?
- HYFLUX STOCK: LESSON FOR INVESTORS
- TOM K ANSWERS TWO QUESTIONS ON STOCKS
- DBS VICKER: A "BUY" CALL ON THIS STOCK WITH 31.2% ...
- ONE WAY TO PROFIT FROM RISING OIL PRICES WHILE THE...
- ARE REITS STILL WORTH YOUR INVESTMENTS?
- BUILD UP YOUR INVESTMENT WAR CHEST NOW BEFORE THE ...
- SIX ANALYTS, ONE BLUE-CHIP STOCK, POTENTIAL UPSIDE...
- THIS STOCK HAS OVER 50% POTENTIAL UPSIDE "BUY" CAL...
- HOW WILL RISING BOND YIELDS AFFECT STOCK MARKETS?
- STI STOCKS: WHAT YOU NEED TO KNOW RIGHT NOW
- WHAT YOU NEED TO KNOW BEFORE INVESTING IN THE NEXT...
- TIME TO LIQUIDATE YOUR STOCKS NOW? HERE’S WHY?
- THE EDGE SINGAPORE: SINGAPORE STOCKS STRATEGIES PO...
- UOB KAY HIAN: A WHOPPING 65.9% POTENTIAL UPSIDE BU...
- MAYBANK KIM ENG: A BUY CALL ON THIS STOCK WITH A P...
- TOP TEN STOCKS WITH THE HIGHEST NET PROFIT MARGINS...
- CIMB RESEARCH: A "ADD" RATING WITH A POTENTIAL OF ...
- NINE BILLION-CAP STOCKS TRADING AT 52-WEEKS LOW
- SEVEN STOCKS, ONE ANALYSIS AND WHY YOU SHOULD READ?
- IG MARKETS: SINGAPORE STOCKS MARKET OUTLOOK 14 MAY...
- PHILLIP SECURITIES: 23.9% POTENTIAL UPSIDE BUY CAL...
- THERE IS NO REASON TO KEEP LOOKING AT STOCK PRICES
- RHB INVEST: GENTING SINGAPORE STILL A POTENTIAL 10...
- UOB KAY HIAN: 37.1% POTENTIAL UPSIDE FOR THIS STOCK
- THREE WAYS TO SAVE 50% MINIMALLY OF YOUR SALARY FO...
- COAL STOCKS: IMPORTANT UPDATES FROM AN ANALYST
- FACE TO FACE WITH BANYAN TREE CEO
- FREE SEMINAR ON MALAYSIA POST-ELECTION MARKET OUTL...
- MALAYSIA ELECTION: WHAT SHOULD SINGAPORE INVESTORS...
- TRUMP KIM MEETING: SINGAPORE, JUN 12
- MALAYSIA GENERAL ELECTION RESULTS ON SINGAPORE STOCKS
- DBS: 21.2% POTENTIAL UPSIDE CALL ON THIS STOCK
- DO YOU HAVE ANLENE MILK POWDER TO DONATE TO AN ELD...
- [TRUMP PULLS OUT OF IRAN NUCLEAR AGREEMENT]STOCKS ...
- UPDATES ON EIGHT SINGAPORE STOCKS
- ANALYST HAS 10% UPSIDE ON THIS BLUE CHIP STOCK
- SINGAPORE STOCKS NEXT: FROM THE TECHNICAL PERSPECT...
- RHB SECURITIES JUST GIVEN A 24% POTENTIAL UPSIDE B...
- WHAT YOU NEED TO KNOW ABOUT THE STI STOCKS NOW?
- FINALLY FOUND THE SONG WHICH I WAS LOOKING FOR!
- ARE THESE THE TOP SEVEN SINGAPORE STOCKS NOW?
- EZION STOCK: MULTI-BAGGER OR MULTI-BEGGAR PRICE NEXT?
- [IMPORTANT UPDATES] INTEREST RATES AND CURRENCIES
- THIS STOCK HAS THE POTENTIAL TO RISE BY ANOTHER 33...
- WHAT ARE THESE SEVEN UNDERVALUED SINGAPORE STOCKS ...
- SHOULD YOU INVEST IN ENERGY STOCKS NOW?
- THESE ARE THE TOP ROE SINGAPORE STOCKS WITH NEGLIB...
- RECESSION TRACKER AND OUTLOOK ON EIGHT SINGAPORE S...
- ANOTHER POTENTIAL 12.2% UPSIDE FOR A STOCK WHICH H...
- TWO SINGAPORE BANK STOCKS WITH STILL A POTENTIAL U...
-
▼
May
(62)