Came across an article from the Straits Times (albeit an old one) and found myself getting all worked up. The article mentioned that it is possible for someone earning the average salary of $3,000 a momth to accumulate a savings of $100k by his 30th birthday. The following assumptions were made in this case:
1) Starting salary of $3,050 with 4.5% annual increment
2) A total annual salary of 15 months, consisting of 12 months salary and 3 months bonus
3) The ability to save 50% of his salary, with an average monthly expenses of $900
I felt cheated by the article. How could anyone save 50% of a $3,000 salary and live on a pathetic $900 a month (Salary of $3,000 – CPF contribution $600 – Savings of $1,500)? Don’t they have to go out and socialized and shop and buy stuff? Then I started thinking of how unfair it is that some can afford to save 50% of their salary, while others like me have commitments to our parents and have bills to pay etc. How about life events like getting married, going for honeymoon, and getting our first home?
So much negativity in my head. I had to stop myself and asked why am I feeling this internal anger. And I realized why. This guy with an average salary could do it, but I couldn’t. To be fair, I was in a much better position than him to accumulate 100K by the age of 30.
1) I started work way before him at a tender age of 20. I had 10 years to save while he only had 5 years.
2) I earned more than the average increment of 4.5% over the years.
3) I only had to save 20% of my salary to reach 100K, anything more is a bonus.
4) I did have an average of 2 months bonus over the years.
It is a shame that I had never bother to save and build wealth until this year. It could have been easy for me, but I never got started until recently and am playing catch up now.
Kudos to this guy. He is admirable and I am no longer mad at him.