2 in 3 Singaporeans save no more than 20% of monthly salary

[KopiKat]

Percentages lie and distort.

http://singaporemanofleisure.blogspot.co...money.html

If my annual salary is like minister 1 million and save "only" 10% - who's your daddy?

Compared to if my annual salary is 50,000 and I save 80% - you mean I better off in preparing for retirement?

I am sometimes surprised that Financial Planners, whom I assume would know better, still say things like save X% of your salary... Maybe it's to avoid telling the unpleasant truth:

At your salary, no need to do financial planning. You have to focus on earning more! Never mind active or passive kind.

IMO, % is still important.

A person with a Million-$ salary would have gotten used to a Million-$ lifestyle, after 10-20 years. Even if they "downgrade" their lifestyle upon retirement, they'd likely still need $200k/yr. If they'd been saving only $100k/yr (10%), 20 years of savings can only last them aro' 10 years if they don't know how to invest.

Contrast to you, saving 80% of your salary. After you retire, your "downgrade" perhaps requires 80% of your salary. That means your 20 years of savings will last you 20 years and you are better off than the Minister! The best thing is, you only "downgraded" your lifestyle by 20% but the Minister have to "downgrade" by 90%!

Warning : Don't take my above posting too seriously!

[Jared Seah]

KopiKat,

I should be the one saying don't take what I say too seriously! LOL!

Just giving my usual "sing song" to walk in the shoes of those families who earn 2 to 3 K a month (at family level mind you), and then "advise" them to "save" more...

Either we insensitive or very out-of-touch - like the young minister who still thinks we can buy hawker centre char quay tiao at $1.50!?

[flinger]

I do not differentiate them so is total. Not recognizing unrealized loss as losses is cheating.

Is hard to estimate but prior to 2011, is 15% XIRR for the past 5 years.

Cory

Hi Cory,

I'm guessing the 6 figure you mention are mostly unrealized ones. If that is so, then does your portfolio have large swings? or do you have returns of 100,000 every year and are compounding?

The reason I ask is because, my stock portfolio has large swings as I don't realize most of my profits or losses and wondering if I should make any changes to it. Its a diverse portfolio made up of growth and dividend stocks.

Thank You.

[corydorus]

Is compounded。How I wish is yearly。When saving rate is high，sooner or later the Swing will be high。
What i did is to spread into Gold（thru‘ bank）， Fixed Deposits and a little of other Currency。And hold larger Cash portion for lifetime opportunity。
Despite that， i still have high swing due to some penny holdings but i stop worrying about their price as they are very mature business。

I avoid investments that has room for easy frauds though they may sound credible。

[KopiKat]

KopiKat,

I should be the one saying don't take what I say too seriously! LOL!

Just giving my usual "sing song" to walk in the shoes of those families who earn 2 to 3 K a month (at family level mind you), and then "advise" them to "save" more...

Either we insensitive or very out-of-touch - like the young minister who still thinks we can buy hawker centre char quay tiao at $1.50!?

The young ministers are likely out of touch, that's why there was such a big swing last GE.

For me, I've been thro' the lower income cycle (1st job, pay only $800/mth and take home $600 as CPF 25% back then). Eating at hawker centres was a luxury to many people back then so either they pack something from home or just skip lunch. Had to save and "upgrade" myself up (ya, you are right, at such low pay, better focus on earning more, but still, need to save to pay for "upgrading").

Anyway, think about it. If a family can survive on $2k/mth, they also need a smaller amount for their retirement. The key is still to save and invest, if possible focus on increasing your earning power as a priority while still young.

The reason I ask is because, my stock portfolio has large swings as I don't realize most of my profits or losses and wondering if I should make any changes to it. Its a diverse portfolio made up of growth and dividend stocks.

The 'large swings' may be cos' you have a large asset base and you are still looking at absolute figures. If you measure in terms of %, I don't think you'll see large swings (most likely swing in tandem with STI). For eg. if you have $100k, a 5% swing is $5k but at $500k, it becomes $25k (which seems very large when compared to your pay).

[Jared Seah]

KopiKat,

It's forum members like you (and many others) that keeps me coming back!

I do enjoy this exchange

We belong to the same coin; just viewing things from either head's or tail's side.

Yup! I do miss those wonderful CPF 25% days (although I was complaining 25% too high then - silly me!). Just too bad my gross pay $500 per month then... With my last drawn pay, I would have jumped in with both feet if we can opt for 25% CPF to get the corresponding employer's 25% contribution with no salary cap!

I remember skipping the air-con buses to take the non air-con ones - just to save that 10 or 20 cents. Net pay then $375 niah!

I was at Tuas this week, and was grumbling why 193 feeder bus from Boon Lay Interchange to Tuas no air-con bus?

Then I thought it's not right not to have air-con feeder buses just because it's used by factory workers? I was almost screaming discrimination! But I remembered what it was like for me during my early days and calmed down. Perhaps the workers on route 193 prefer non air-con ones too!

How my perspective changes so quickly. LOL!

[touzi]

Either we insensitive or very out-of-touch - like the young minister who still thinks we can buy hawker centre char quay tiao at $1.50!?

If you are referring to Kee Chieu, I think he mentioned Chye Tow Kway not Char Kway Tiao. Moreover he did say "even if".

[Musicwhiz]

I should find out from Minister where he gets his $1.50 Chye Yow Kuay. The one near my house costs minimum $2.00!

[touzi]

$1.50 Chye Tow Kway is still available. Somebody even posted picture of $1.00 Chye Tow Kway at a Jurong East Hawker Centre : http://www.facebook.com/LoveCheapCarrotCake

[hyom]

A person with a Million-$ salary would have gotten used to a Million-$ lifestyle, after 10-20 years. Even if they "downgrade" their lifestyle upon retirement, they'd likely still need $200k/yr. If they'd been saving only $100k/yr (10%), 20 years of savings can only last them aro' 10 years if they don't know how to invest.

It is natural for people to upgrade their lifestyle to reward themselves for upgrading their income. However, I think a person has a better chance at happiness and financial freedom if he takes special care not to upgrade his lifestyle too much as his income goes up. This is the advantage of keeping to a simple lifestyle. The best things in life can be very cheap or even free. Free-of-charge Google search has educated me more than my expensive Bachelor's degree. Youtube can provide entertainment free of charge which can be just as good as the paid services like Singtel MioTV and Starhub CableTV. Closer to home, this free forum provides valuable investment advice and may be just as good as the expensive trading/investing courses out there. It is more cost-effective to get guidance from people who have it in their DNA to share their knowledge free-of-charge. There are plenty of such people on this forum. Some teach you how to fish like d.o.g and many others, some even give you their fish like dydx who shares his stock picks. (Personally, I do not think it is healthy to eat other people's fishes. If an investor wants to be successful, he has to learn to choose his own fish.)

Keeping to a simple lifestyle means a person need not downgrade his lifestyle drastically when he loses his job. His standard of living does not drop even when his source of income disappears. Meanwhile, he will have strong savings built during the period of prosperity to tide out the bad times without neglecting his family financial obligations like cutting children's expenses, parents' allowance. There is nothing more depressing when a person fails his loved ones.

Being able to be contented at low cost means a better chance at happiness because it is easier and cheaper to stay happy.

http://help-your-money.blogspot.com