Having a high savings rate early on

The day I received my first paycheck was memorable. At 23, I remember feeling I was financially independent, and I didn't need to spend my parents money anymore. So I spent about 80% of my salary for the first 3 years, enjoying food, drinks, partying, whatever the Singapore food scene and nightlife had to offer. A 20% savings rate is alright, but looking back I could've gotten by with 50%.
That would have given me an extra 30% boost in savable cash, to use for blue chip dividend investments.

Below is a simple expense/savings chart, of someone who commutes to work regularly, and does not pay rent (lives at home, but contributes to utilities).

The difference is very glaring. If both scenarios invest in the same 4% bond or dividend stock at the end of Year 3, the results after 12 years with interest reinvested is as follows.

About $28k of extra interest gained, due to a high savings rate in the first 3 years. Enough said.

Comments

Hotel Review: Le Meridien Kuala Lumpur

As I travel quite often for work, I’m going to keep a record of all the hotels I’ve stayed in, to serve as a reminder of what works and what doesn’t. It’ll make future bookings much easier. Location: Connected right to the KL Sentral main station, with easy access to the KLIA. There's a NU Sentral mall on the other side of the station. Room: It's modern and tastefully decorated like most Le Meridiens. The bed is really comfortable and offers great back support. I really like the chair near the window as it's like a reading corner that overlooks the mountains and expressway. The room gives me a sense of tranquility, which is great after a long work day. Breakfast: The spread is massive! The food is comparable to the Athenee Bangkok standards but the spread is much much wider. I can eat here all morning, and then hit gym/pool all afternoon. Gym: This gym is massive! Have you seen 2 sets of everything in a hotel gym before?...

Why i will be investing in the Astrea IV private equity Class A-1 bond

Astrea IV is a wholly owned subsidiary of Azalea Asset Management Pte. Ltd, which is wholly owned by Temasek Holdings. They are issuing bonds for their private equity funds, so this is the first time the retail market has access to the private equity space. BOND DETAILS Name: Class A-1 Bonds 10NC5 Interest: 4.35% pa, semi annual payment. If not redeemed after 5 yrs on Jun 2023, will step up to 5.35% pa Maturity: 10 yrs, on 14th Jun 2028 with scheduled call date on 14th Jun 2023. "Scheduled" is not "optional". If there is sufficient cash set aside for the class A bond to be redeemed, it must be redeemed. It's not an option. Application for IPO: Min $2k, with integral multiples of $1k thereafter Period of application for IPO: 6th Jun 2018 9am to 12 Jun 2018 12 pm Rating: A by Fitch, and A by S&P Extra features: There is a bonus redemption premium of an amount not exceeding 0.5% of the principal amount. This means that if the par value if $1.000, the ...

Trade wars, Hong Kong riots

Be greedy in times of fear. That's the investment mantra I live by. Recently there's been a huge spat on trade wars and the Hong Kong riots, which took a toll on the stock markets. This was a great opportunity to load up on my existing positions as their prices have come down to more favorable levels. There no reason to explore other stocks unless a super attractive opportunity arises, like hongkongland. That counter was hit extremely hard by the riots, since they derive 50% of their revenues from HK. Other than such events where opportunities present itself, I prefer to average up or down into my existing positions... No need to perform the due diligence again, unless fundamentals have changed. I'm enjoying the opportunities that the markets are presenting in the past few months. Simply keep calm and aim to collect more dividends by increasing your stake when frivolous sentiment changes. Market entry is a psychological battle against yourself. Another post on this ...

Eyes On Retirement

Search This Blog