Sunday, 6 December 2015

My First Million

No no no no no. I have not struck the jackpot.

I was just wondering how long it will take for me to earn my first million given my current rate of saving. 

I'm not day-dreaming by the way. Having my first million is not a dream. It is my goal. Albeit a longggggg-term goal.

Afterall, it's always good to have a long-term goal in mind right? And who doesn't wants to be a millionaire!

Counting money all day long~~

Hence I decided to run the figures just to see just how long it will take me and what can be done to propel me towards being a millionaire earlier!

First, let's have a look at my current financial standing to determine when I'll be a millionaire:

Age: 27 years old
Current Assets: $45,715.53
Current Monthly Saving: $600
Estimated Annual Return on Investment (ROI): 5% (Quite achievable I believe, since my main holdings, STI ETF and VWRD, are giving returns of 7.21% and 13.87% on an annualised basis respectively)

So with the above parameters, I ran the figures, starting from when I'm 28 years old. Any gains I made during this period will be poured back to be compounded.

And here we go~~


Uh oh. Doesn't look too good. I initially thought that I'll be able to hit a million when I'm 50 years old. But it seems that I'll only be a millionaire when I'm 64 years old! Noooooo~

Time to revise my rate of savings then.

In my earlier estimation, I adopt a constant rate of saving, putting aside $7200 on a yearly basis. However, in reality, my rate of saving and salary will fluctuate accordingly to the different stages of life I will be going through; single, married, being a dad, being made obsolete at work, etc.

Hence,  I tried my best to picture which stages of life I will be at, as the years goes by, and calculate my estimated rate of saving accordingly.

And so, here we go again~~

28years old to 30years old: 
The rate of saving will be low as the bulk of my salary will go towards the clearing of an estimated $50,000 renovation loan when my house is ready next year.

31years old to 37years old:
My salary will have increase during this period and I will be able to save more if I am a SINGLE. But I am planning to start a family during this period and household expenses are expected to rise correspondingly.

38years old to 48years old:
I expect my salary income to peak when I am about 40 years old. Thereafter, due to my increasing age, I might face a 5% reduction in my salary on an annual basis. Hence, my rate of saving will decrease once I hit 41 years old. 

Additionally, my rate of saving will also be reduce when my kid/kids enter school. This is after witnessing how all the children are getting more materialistic nowadays, especially when they meet their peers in school. 

For those with kids, is this not true? :(

49years old to 52years old:

My kids will have gotten pretty old by now and I am going to make them work for their own upkeep and any materialistic wants they have! I am serious.

After all, I did the same thing too when I was 19 years old.

And with this burden of providing for my children gone, I believe I will be able to increase my rate of saving.

53years old to 60years old:
I will be old. And again, my salary income will probably be cut by 5% annually as my company finds me more and more of a liability:(

But hey! Guess what? 

If I continue to stick to my plan of investing wisely and systematically, I will finally be a millionaire at 60years old! 

Old but rich :D

So there's that. With sufficient patience and perseverance, coupled with some sacrifices along the way, I would think that any young adult who is not born with a silver spoon has a pretty good shot at being a millionaire eventually.

By the way, recently, I started to get into the hobby of iPhonegraphy, which is the taking of photos using the default iPhone camera.

Dear readers, if there are any readers at all:p

Please let me have your honest view on each photos that I post at the end of each blogpost, starting from today. Are they good? What could be further improve, etc.

Much thanks!

Growing old. Both buildings and man.

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