Tuesday, March 10, 2015

How I Amassed More Than $120,000 After 4.5 Years of Work

Is it possible to save up $120,000 in just 4.5 years of work? Just a few days ago, I was doing a financial health check for myself using an excel spreadsheet which has since became my best friend for financial planning. I was surprised that after adding up, I had more than $120,000 (Inclusive of CPF). How did it happen?

In this post, I'll show you what happened over the past 4 years plus and try to think back on what I did to accumulate more than $120,000. If you think that I started with a high paying salary, you're wrong. I started with just $1700 per month back in October 2010 as a diploma graduate and to make things worse, I had to pay close to $20,000 for my part time university course fees all within the 4.5 years.

How did the $120,000 came about?

1. 5 figure savings before I started working full time

I saved up about $10,000 before I started working full time. The money was saved up from the allowances given to me by my parents while I was still a student, saved up from the many part time jobs which I worked as a student, and saved up from the NS allowance which I got.

$10,000 is not a huge sum of money bearing in mind that it was saved up over many many years. But, it is the habit of saving up in my younger days which made it easier for me to accumulate $120,000 earlier than later.

2. Monthly and Yearly Savings Goals

Is it that hard to save $120,000 in 4.5 years? If we break it down, to have savings of $120,000 in 4.5 years, we need to save about $30,000 a year which is $2500 a month. Most of us will not be able to save $2500 a month when we just started working.

Thus, besides having monthly savings goals, yearly savings goals would make more sense for most of us. If we factor in our bonuses and other income throughout the year, it may just work out to an average savings of $2500 a month.

3. CPF contributions helps us to accumulate more

I know there are many negative sentiments on the CPF out there. But, the truth is the money in our CPF accounts are part of what we have. We contribute 20% of our salary to our CPF accounts and our employer contributes an additional 17%. This adds up to a saving of 37% of our income which is quite a significant amount. Currently, I have more than $30,000 in my CPF OA account in just 4 years of work. This will come in handy when I need to buy a house in the future.

Moreover, CPF gives interests in the range of 2.5% to 5%. Right now, I can receive about $2000 in interest on a yearly basis.

4. Increase income and savings exponentially

My salary has increased more than 60% over the past 4 years. This is more than 15% increase every year. I've also built up additional income through stocks investing and writing. As I earn more, I can save more which leads to both income and savings increasing exponentially.

Most of the time, we spend more when we earn more. That is perfectly normal but we have to bear in mind to control such that the increase in spending does not exceed the increase in income. If we earn $300 more this month, we may want to increase our expenses by $100 but should not increase by $300 or more.

5. Save more than 50% of income

We can save almost 100% of our gross salary if we save more than 50% of our take home pay. Confused by this statement" Don't worry, let me show you an example:

Let's assume we earn a gross salary of $2500 per month currently. Our take home pay after deducting 20% for CPF would be $2000. If we save 50% of this $2000, it is $1000 in savings in cash. The 20% we contribute to our CPF is $500 so that is additional savings. Our employer contribute another 17% which is $425 as savings in our CPF accounts. Adding up all of this, we get $1000+$500+$425= $1925. When we save 50% of our take home pay, we can easily have a savings of $1925 per month.

Saving 50% of our take home pay:

Gross IncomeNet IncomeExpensesCash SavingsCPF employeeCPF employerTotal Savings

$1925 is a savings rate of 77% from the gross salary of $2500. If we can save 50% or more of our income, accumulating wealth is not difficult.

I generally save more than 50% of my salary and in certain months, I could even save close to or more than 100% of my income due to the passive income which I've built.

Here's my income and expenditure chart for 2013 and 2014:

Let me summarise on how the $120,000 came about in 4.5 years:

  • Save up early in life even when you are still studying. If you're a student, you can save from your allowance and part time jobs. Aim for a 5 figure savings. 
  • Set monthly and yearly savings goals. 
  • Remember CPF is part of your savings too. It helps us to save for a house so we do not have to worry about it
  • Increase income and savings. Save more when you earn more. Create passive income.
  • Save more than 50% of income to accumulate wealth faster. A 50% savings on our net salary plus 37% savings of our gross salary in CPF adds up to a total of 77% savings altogether on our gross salary. 

Throughout the past few weeks, I've heard a lot of feedbacks that young people are pessimistic for their future. They are worried that they would not have enough money for their lives. I hope that through this post, young people would feel more optimistic for their future. There is no lack of money when we set our path right.

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Related Posts:

1. Save 75% of your income to retire in 7 years
2. Income and expenditure update for the past one year plus


  1. Hi!

    Love reading your posts! MInd sharing tips on how you go about doing your excel? so some of us can have a headstart on how to go about doing it? thankyou!


    1. Hi Art,

      For tracking of expenses, I use an app called expense manager then transfer the values into excel occasionally. I also use excel to predict my wealth 10, 20, 30 years from now. This can be done using simple excel formulas and dragging it down to the rest of the cells. I think I have some posts which shows the prediction on my blog. Will share more again in the next few posts also.

  2. Great job!

    May i also sound a word of caution on not to be too extreme on savings such that u missed out on enjoying life and more importantly your youth.

    1. Hi CSCCC,

      Yes you're right. I always believe in a balance between saving and spending too. Increasing income is needed as well so we don't have to save too much to achieve our financial goals.

    2. look forward to more sharing related to growing wealth and investment experience/skills.. if all the youngsters in Spore are fully inspired by you to go down the path of a thrifty life and serious savings, the companies that we invest in cant grow their business and earnings lol

    3. Hi CSCCC,

      If all of us spend lesser, the world will still move on. In fact it could be good for the society as a whole because as we consume less, we don't have to produce so much also which leads to shorter working hours.

      Saving money also improves productivity. The engine of economic growth is never consumption. It is savings and investment. When we save and invest, it increases the productivity of a nation.

  3. Hi SGYI

    Saying hello here to reiterate again a good and commendable post this is. I hope this article goes viral so more younger crowd can read and be motivated.

    1. Hi B,

      Thank you for your encouragement again. It means a lot to me :)

      If it goes viral then I have to go into hiding :p

  4. I managed to save nearly 80% of gross income (inclusive of CPF) before i have my first baby came along last year. Now after deducting everything, i am only able to save around 30%. Not sure if you are ready to start a family but an insight for you. If you still manage to save such a high % after having a kid, kudos to u!!! Anyway...well done, remb to enjoy life too!! Cos life is short!

    1. Hi,

      Thanks for the insight. That means if I want to have the same savings rate, I have to increase my current income by more than 50%!!

      After all, its not easy starting a family in Singapore. Planning certainly needs to be done.

  5. Hi SGYI,
    Great savings tactics - admire your determination and discipline!

    Shame on me that my salary is much higher but I have not saved so much in the same period!

    1. Hi,

      Actually the savings part does not require too much discipline on my part now. It has become more or less a lifestyle for me. It starts with changing our mindset. Will we be more happy if we spend more money? Sometimes we can really be more unhappy if we have more material stuffs which clutter up our life.

  6. Hi SGYI,

    And people wonder how a 44 year old lao kok kok blogger like AK71 is able to have so much savings. You go tell them for me, ok? Oh, you are doing it with this blog post liao. Good job! ;)

    1. Hi AK,

      Does this post remind you of your younger days? :p

      Thanks for the encouragement and guidance all these while. On a serious note, if it wasn't for your "If AK can do it so can you" phrase, I wouldn't think it was possible for me to believe it can be done. :)

  7. Life is worth more than just becoming a Great Saver.

    Our life can be shorter than expected. We should all be aware of it!

    One day, we wish that we can spend our money freely on our own terms; but we can't! For some health reasons.

    It is a given fact, being married with kids will NOT be able to maintain the same saving rate as when you are still single. A single household income with kids could be worse.

    In life, we reap what we sow. Being singles are no different. Only time will tell the final outcome and depending on which mental state that we are in when the time arrive. We all have parents and grand-parents. If we bother to look very closely at them we will have some ideas of being older and older.

    Being married with kids with higher expenses and much lower saving rate doesn't necessary mean you can't achieve financial independence at your own terms before Singapore official retirement age.

    We may need to work harder than the singles on our human and financial asset and also we may take longer to reach there. Just much later! This is price that we may pay for it if we decide to take path.

    1. Hi Uncle CW,

      You're a great example of someone who's married with kids and still can achieve financial independence. Kudos to you!

  8. Hi SGYI,
    good blog post. I just started working not long ago and wish to follow in your foot step.

    mind to share how your salary has increased more than 60% over the past 4 years?


    1. Hi JX,

      Welcome to the working world. Salary increment is really dependable on your boss base on your performance. To have good performance, we need to have good knowledge on our job and also deliver results fast and accurately. That's what the bosses want. Also, you can try taking the initiative to take on special projects and do more than your other colleagues. Most importantly, you have to get along well with your boss as well as colleagues. People talk about each other all the time and bad things do travel fast.

  9. Stumbled upon your post given the eye catching title. keep up the good work but don't forget to enjoy the fruits of your labour. cheers

    1. Hi KopiO,

      Thanks for your kind words. Actually I've been enjoying throughout the years even when I was saving money. I still eat out at restaurants, go for holidays, watch movies, go shopping. Its just that I always get the same quality for a lesser price. That's what enabled me to enjoy while still saving money.

  10. Does this $120k include your shares portfolio capital ?

  11. Hi. I failed miserably in saving money during my university life.

    Do you thing is it possible to achieve your savings plan? Thanks

    1. Hi David,

      I think its still possible for you since you graduated from university and should have a higher starting pay than what I started with. In fact, your savings plan could be even better than mine. All the best!

  12. how do u get 77% by adding 50%+37%? 87%, no?

    1. Hi,

      37% is of $2500. 50% is of $2000. So it ends up as 77% of $2500.