Monday, September 1, 2014

A normal path to retirement for most singaporeans

Is this possible? Food for thought...

Yes..  the steps to achieving financial freedom is this. Is this still applicable in the current economic climate and singapore have transformed into a developed nation.

1) 30yrs old , Get Married and get a New BTO/EC (No reslae, no DBSS!). - Congrats! You have bought a $1 item for $0.70-80cents. Upside min is 20% within 10yrs(Very high probability! if assume inflation at 2% avg). For property , downpayment is 20%, upside of 20% in 10yrs. So your $100k becomes $200k (100% return in 10yrs which is minimall roughly compounded annual rate of 7% pa (excluding your principal paid down).

2) By 5yrs time, most probably, you will save around $100k real cash(most people pay down bto using CPF) from working. Time to look for 2nd property valued at $500k (100k enough to pay 20% downpayment, exclude stamp duty and miscellany).

3) Work another 5yrs, your HDB should be fully paid off (for most couple with degrees. I know coz many of my friends married paid down theirs within 10yrs).

4) So by 40yrs, you should have 1 fully paid HDB you lived in. 1 rental condo you let out which is compounding the money.

5) by 45yrs old, your $500k condo you can also fully paid(assuming your salary stagnant and you pay down at same rate like your $500k HDB BTO).

6) Congrats.. you can retire officially at 45yrs old ...  But this is the most conservative strategy.. most people within that 15yrs span.. might have acquried another 1 or 2 more property depending on their earning power.


Kyith said...

good plan, but a lot are asking me how to get a 500k condo. right now their flats cost 500k or 300k instead. how do you resolve that.

Richard Ng said...

A lot of assumption there. Having said that I am sure it is possible but might need a fair bit of rigorous discipline in savings

financialray said...

Definitely possible. My life story very similar.
30 years old - married and borrowed 10k from parents to put down as deposit for EC.
35 years old - together with wife, scrimped and saved for a private condo
39 years old - bought a commercial property
40 years old - sold off EC
41 years old - bought another commerical property for passive income
Two criteria :
1. Earned Income rising - as career path mapped out
2. Property timing just right - from bottom to peak
Started out with $1800 in salary and even had to borrow cash to buy 1st property.

Anonymous said...

Definitely can be done.

Anonymous said...

How true ....
1. 30 yr old - bought EC
2. 35 yr old - bought private condo
3. 38 yr old- bought commercial
Two criteria
1. increasing income
2. good property timing

Anonymous said...

Did a much more accelerated path by starting own business which worked very well. High risk and definitely some blessings involved.

24 start business as fresh grad
27 buy EC
30 buy kl condo, sold 3 years later. Waste time,
33 buy private condo
35 sold company. Buy another condo in sg and a lux one in kl.
38 retired for now with a 8 digit liquid portfolio generating over 1m usd income annually and the 3 properties.

Sharing just to show anything can be done. Btw, when I made millions, I got to know people who make 10m a year. Know that there is always a higher achiever out there,

Wealth Journey said...

Thanks all for sharing your success stories :)

Yes, I have to agree starting a business is the pathway to untold riches. Though the probability of success for most normal rank-n-file singaporeans will not be high. It takes a certain kind of mettle to be an enterpreneur , don't you think ? :)

Of course, when we see more, we know we know less. The minute I went to the private banking section, I realised I am a peasant at that level. LOL.

So I can see why a lot of rich people will stay humble.