Lucky you! You look quite young to me and already got lands in Indonesia!ariefm71 wrote:i actually invested in property first (bought a few lands in indonesia) before buying my first scope.
do you guys actually invest first?
I didn't say save...i say invest. Saving your money in the bank is the worst thing you can do to your money over a long haul.cataclysm wrote:we only live once, i agree that its prudent to save for later years, but what is life without experiencing what yearn for!
I like to show this example, how important one should start investing early.
Let's say you are 24, just started working and you think should retire at 55. So if you start investing at 24, you have 31 years to retirement.
Now let's say you start your investment at 24 with only $2000. And every month, you throw in $300 into your investment portfolio for 31 years. $300/month is quite modest here...I am sure a lot of people can save more than that as they grow into their career over 31 years.
Historically, investment returns has been around 10% per annum over a long haul. But let's use 8%/annum just to be more conservative.
Going by the above of $300/month and a return of 8%/annum, at 55, you should have : $512,940 (half a mil at 55, not bad with just $300/month)
However, let's say you decide to delay savings and investment because you want to enjoy life first. So you decided to be serious only at 30 years old. You delay for 6 years because you wanted your Takahashi or whatever.
If you start at 30 years old, and with $300/month and 8%/annum, at 55, you will have : $300,906.
YOUR COST OF DELAYING THAT 6 YEARS : $212,033
Can you see how expensive it is if you want to "enjoy life first?". I bet a lot of people can't even save $212K in 6 years and you have just wasted that away.
And I am only using $300/month and a very conservative 8%/annum. If you increase these two figures, the cost of waiting can be really mind blowing.
Buy your scopes, play with your toys, but make sure you have a certain investment plan in place. Your scopes and toys are not going to feed you when you are old.
Disclaimer: If you have rich parents and gonna get a huge inheritance, then the above doesn't apply to you.
Hey VinSNR,
I think I know where u are getting at! Gavin said you run a portal like www.fundsupermart.com or online investment firm right? hahaha.....
I think I know where u are getting at! Gavin said you run a portal like www.fundsupermart.com or online investment firm right? hahaha.....
rcj wrote:Hey VinSNR,
I think I know where u are getting at! Gavin said you run a portal like www.fundsupermart.com or online investment firm right? hahaha.....
Haha I wish. Mine is just a hobby forum (like singastro). Not companies. So no $$$ one.
err....what has investing 300/month has anything to do with married or kids?fizzy123 wrote:Vinsnr, Ur way of calculation is provided that u do not marry for the rest of your life or not to have any kids.
You mean if marry or got kids means can't even put aside and invest 300/month? Then something must be very wrong.
Fact is, after married, you should save and invest more than 300/month because you have now a double income (unless your wife don't work)
Once married, it is even more important to put aside more $$$ for investment so that you not only take care of your retirement but also your kids future education.
Coming back to this thread, I want to give another reason why investment is so important. One thing that people do not know is this : It reduces your income tax!
Income tax is one of the biggest "burden" in gaining financial independence. One might as well learn how to minimise them.
Let's say you bring home average 50K every year for 25 years. You live pretty frugally and you slashed away 10K every year in investment. Your investment return 8% a year for 25 years (historical data is about 10%/year). End of 25 years, you have approxinately 790K. Your capital is 250K (10K x 25 years). Your gain from investment : 540K.
You will be tax for that 50K you bring home every year. But the government can't tax you on your 540K of gains! They will be sitting in IRAS, looking at your half a million gains and they can't do anything!
Can you see what this means? Chasing for high income jobs (everybody wants that) does not translate to high net worth because your income tax will raise substantially also. And the government loves high earning and high spending individuals. But if you live frugally, put your money aside for investment, the government can't touch you on that portion of money!
Best of all, our government created this thing called SRS. Individual can contribute up to 11K [for 2006] (Sporeans and Permanent residents) and use ths money to invest. The catch is : you can't take out the money from here until 62 (but ou can use it to invest). So voila, you can have 11K slashed away tax free!
Learning how to reduce your income tax while raising your net worth is something that the young need to learn.....and not just chasing high income. Now you know why Steve Jobs willing to take $1 pay a year for his CEO job? First, the government can't tax him and if Apple shares goes up, the government can't get him either.
Income tax is one of the biggest "burden" in gaining financial independence. One might as well learn how to minimise them.
Let's say you bring home average 50K every year for 25 years. You live pretty frugally and you slashed away 10K every year in investment. Your investment return 8% a year for 25 years (historical data is about 10%/year). End of 25 years, you have approxinately 790K. Your capital is 250K (10K x 25 years). Your gain from investment : 540K.
You will be tax for that 50K you bring home every year. But the government can't tax you on your 540K of gains! They will be sitting in IRAS, looking at your half a million gains and they can't do anything!
Can you see what this means? Chasing for high income jobs (everybody wants that) does not translate to high net worth because your income tax will raise substantially also. And the government loves high earning and high spending individuals. But if you live frugally, put your money aside for investment, the government can't touch you on that portion of money!
Best of all, our government created this thing called SRS. Individual can contribute up to 11K [for 2006] (Sporeans and Permanent residents) and use ths money to invest. The catch is : you can't take out the money from here until 62 (but ou can use it to invest). So voila, you can have 11K slashed away tax free!
Learning how to reduce your income tax while raising your net worth is something that the young need to learn.....and not just chasing high income. Now you know why Steve Jobs willing to take $1 pay a year for his CEO job? First, the government can't tax him and if Apple shares goes up, the government can't get him either.
