Before we start talking about how to make our money earn money for ourselves, we must first ask ourselves, how much money do we need in a lifetime? For those of us who lived our lives running on treadmills like rodents running in their spinning wheels, and have never given two seconds to think about it, the answer will be quite astonishing.
It will be around S$600,000 to S$3,000,000 for most Singaporeans. (Don't fall off your chair!)
Based on my simple and yet totally unrealistic calculations, assuming that you need S$600 to survive per month multiplied by, say, 60 yrs, this comes up to S$432,000. Assuming you live in the cheapest available HDB flat, which is around S$200,000. So you need S$632,000 for one lifetime. For an average Singaporean, with a monthly pay of S$2k, and assuming that they work 40yrs, in one lifetime, they can earn S$840,000. So there is a buffer of S$208,000, this will be needed to pay for insurance, children's education, parents' allowance, car loans, restaurant dinners, presents, medical fees, annual tours, gym fees (so that we can continue to run on treadmills) etc. Assuming a more luxurious life (i.e. living in a condo and running on condo treadmills) will give you the S$3mn lifetime spending.
So that is the sad truth. Maybe we should start spending 2 hours to think about how much we need and get totally depressed by the fact that we will never have enough money, even if we strike Toto, twice.
But is it important to know how much you need in a lifetime? Yes. Knowing one's own spending capacity is probably the most important aspect in personal wealth management. It is both the basis and goal for investment and wealth management. It allows you to understand your financial needs and how you should go about fulfilling those needs.
0 comments:
Post a Comment