I often wonder how can i get to my first $100k in SGD investment portfolio if i were to start back in my early 20s. As i evaluate my life over the past 30 years + since i reach 49 this year. The first thing i will do is every year when i receive my hongbao during Chinese new year when i am a kid starting from young from age of 7 that is when i am encouraged by my father to save up for rainy days.
I will deposit the money that i have receive from Hong Bao money to be deposit into the special account. Mine you that is when is it 1984. Assuming i get $100 per year. I save up at leasat 80% of it and it will compound till my 20s.
I also work as a cadie when i was 13 years old in secondary school. Back then i wanted to buy a sega to play games. I saved up from my part time job to earn the extra cash to buy games and sega. That would have cost me $500+ which if i have saved up in my investment account in the special account. Long story short, i estimate i would have saved up $10k + over the years when i hit 19 years old. From there i entered army, and if i saved up 50% of my allowance which is around $150 average per month. From the 2.5 years in the army i would have saved up to $4.4k + and coupled with the part time job i did after my NS. I could have accumulated to $20k in my special account when i am 22 years old.
From there i started to work where my monthly salary goes up to $1.5k , if i saved 50% from my take home pay which is about $600 per month and put it inside the special account. I would have accumulated up to $30k+ when i am age 23. If i continue to do that with the increase in salary and also my contribution, i would have hit the $100k+ in my special account when i reach age 27. If i consider to transfer from my Ordinary to Special, i could have hit it when i am age 25. Such is the power of compounding by making use of the special account and from there look at the various funds that can be purchased using special account. Assuming the long term average of 12% growth compounded. Over a 40 years period, one could accumulate up to 10 million SGD. Such is the power of the 7th wonder.
Now i'm playing catch up at my age. However for my children i have make it a point to deposit their hong bao money into their special account every year and whatever additional money we receive from the government, i also deposit into their account. Both of their special account have grown to $9k+ and $6k+ respectively. And the first $60k of their special account will enjoy 5% which will give them a headstart for their retirement. To me that is a sure F.I.R.E for them as they reach retirement when they are aged 65. Having a 10 million dollar portfolio when they are retired. From age 25 with $100k in special account using it to purchase the index funds and leave it there for 40 years.
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