30 April 2014

Accumulate $100,000 By 30 Years Old?

Today I came across this article regarding accumulating $100,000 by 30 years old, by the way the original article is from Straits Times, you can find it here. Of course it's possible but it doesn't apply to everyone, I hope people don't go ahead and think that it's a benchmark, there are too many variables to consider.

Let's look at the numbers:
1. Accumulate $100,000 by 30 years old.
2. Start work at 25 years old.
2. Earn $3050 per month as starting salary.
3. Get 4.5% increment per year.
4. Get 3 months bonus per year.

The article also says if you save 20% of your take-home pay and depending on whether you invest or not, you can accumulate between $49,000 to $53,700 by 30 years old. But in order to achieve or cross $100,000, you have to save at least 50% of your take-home pay, and the article also mentioned the following which is very important:

"With some effort, young people can achieve this, especially if they do not have heavy commitments such as study loans, mortgages or young children.

They also save on rental if they live with their parents, and it is an extra plus if their parents do not need their financial support."

So please don't stress yourself if you don't happen to have at least $100,000 by 30 years old, I also don't have that amount when I was 30 years old, now I'm 31 and I still don't have that amount and life goes on, but doesn't mean I shouldn't try to accumulate wealth, I always try to save, see I'm still using the stupid Nokia 1280 because I feel that a smartphone with data plan is not a necessity, seriously how many of you use it more for useful activities than for playing games, watch video or Facebook?

And I think that for non-degree holders to hit $3000 a month is a bit tough, I remember in year 2010 my salary was $2200 as a diploma holder, at the end of that year, my employer increased my salary by $100, that time I also happen to submit my degree, after that they revised the increment to $650, a whopping $550 difference. So assuming from $2200 in 2010, every year until now my employer only increase my salary by $100, by now I would only be earning $2600, but actually now I'm earning $3480, see the difference.

However note that I'm not trying to say getting a degree is always good, my company happen to set salary according to grading, and grading goes by paper qualification. I have a friend who has a business degree but he landed on a job that paid him $2200 or $2500, he didn't stay long of course, now he is helping out at his family business.

No comments: