I'm writing down my goals here as a constant reminder for me and a target for me to achieve.
I'm age 25 at the current time of writing (2013). The calculations are estimated and serves as a target for me to achieve.
I break down into:
1) how much I need to save
2) how much I can spend
3) how much income I should have
4) what investment return should I get.
If any of those cannot be met at any time, I should change my strategy or find means to achieve it.
1) $2560/mth net income by age 28 (After deducting CPF) Gross income $3200
2) $3040/mth net income by age 33 (After deducting CPF) Gross income $3800
3) $3600/mth net income by age 38 (After deducting CPF) Gross income $4500
8% investment return on average compounded
$1300/month savings from age 25-28
$1700/month savings from age 28-32
$2000/month savings from 32-42
2 months bonus per year on average
$100000 by age 28, Year 2016
How do i achieve the 100k target?
Current savings at $1300/month. 3 years saving add up to $46800 excluding bonus. Bonus in total will be $20400.
Total achievable savings in 3 years is $67200.
If i invest my current savings of 30k at a modest return of 8%p.a, total return for 3 years will be around $7200 (assuming no compounding effect).
Total increase: $74400
The calculations are based on my current job and my current savings which i've been able to achieve for the past 1 year.
*The above calculations do not include cpf savings*
$300000 by age 33, Year 2021
If take home pay is $2560, i can have monthly expenses of $860.
Investing with starting capital of 100k at 8% compounded returns, total capital at end of 5th year is $274,728. Assuming bonus of 2 months per year at net income of $2560, total bonus savings is $25600.
Total savings at age 33 = $300328
$625000 by age 38, Year 2026
If take home pay is $3040, i can have monthly expenses of $1040
Investing with starting capital of 300k at 8% compounded returns, total capital at end of 5th year is $594,887. Assuming bonus of 2 months per year at net income of $3040, total bonus savings is $30400.
Total savings at age 38 = $625287
$1 Million by age 42, Year 2030
Maintain savings at $2000/month.
If take home pay is $3600/month, i can have monthly expenses of $1600
Investing with starting capital of 625k at 8% compounded returns, total capital at end of 4th year is $973,242. assuming bonus of 2 months per year at net income of $3600, total bonus is $28800.
Total savings at age 42 = $1,002,042
Passive/Other Income Goals
2015: Target $5000
2016: Target $10,000
$10000/year passive income by age 30
Investment XIRR Achieved