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How You Spend Your First $100,000 Will Determine Your Financial Future

One of the most common responses to saving $100,000 in your 20s (apart from “why so haolian?“) is something along the lines of.

“$100,000 is not a lot of money, it will be gone after you buy a house, have a wedding and do renovations.”

My own opinion is that a lot of people out there tend to be incredibly salty or bitter.

So they say sh*t like that to discourage you (more on that later).

To quickly address their point.

Yes, $100,000 (or even $200,000) is hardly enough to retire in Singapore.

Especially if you’re only 30 and you’re expecting to live till 90.

However, it all depends on how you use this first $100,000.

Whether it evaporates in a single day or becomes a strong foundation which you build the rest of your life on, depends on you.

Here are some scenarios to think about…

Scenario 1: You Spend Most of It on a Wedding, HDB Flat, and Renovations

This is what some of your more extravagant friends might spend their first $100,000 on.

 If You Pay For It AloneIf You Split With Your Partner
Home Costs
(appliances, furniture etc.)
Wedding and Other Costs$60,000$30,000
Total Cost$150,000$75,000

The power of $100,000 here is that you’d emerge from the saga with little or no debt.

If you split the costs with your partner, you’d still have some to use as emergency funds!

You could invest whatever salary comes your way from this point onwards.

If you’re a 28-year-old who did this with $20,000 savings?

You would have incurred between $55,000 and $130,000 worth of debt.

That’s gonna take years to clear, and you’ll miss out on any investment opportunities in between.

That’s not good because we all know that your 20s and 30s is the best time to invest and take risks.

Scenario 2: You Spend Modestly and Invest the Rest

Let’s move on to slightly more woke scenarios.

You decide to challenge society’s norms a little.

You manage to keep all of your housing, wedding and reno costs below $50,000.

 If You Pay For It AloneIf You Split With Your Partner
Home Costs
(appliances, furniture etc.)
Wedding and Other Costs$6,000$3,000
Total Cost$50,000$25,000

You also split this amount with an equally woke spouse.

You are left with $75,000.  


Let’s assume you set aside $30,000 as emergency savings and invested the remaining $45,000.

You then decide that for the rest of your life, your financially woke days were over.

“F*ck it. The Woke Salaryman lifestyle is intolerable. I hate these guys. I’m just going to go back to my old ways of spending every single bit of money I get in the future.”

You do that.

But let this $45,000 sit in a passive index fund over the next 30 years.

With the S&P500’s historical return at 7% return per year, you would have accumulated $342,551.

Not exactly a millionaire, but it should be enough for your very, very basic needs.

(Side note: hopefully your CPF will still be there to supplement your retirement)


Now, if you said something like:

“I enjoyed the hustle but it’s now time to take it a little slower. I’m burning out and it’s affecting my mental health.”

If you invested that same $45,000 initially but now only invested an additional $500 per month.

You would have ended up with $927,277 after 30 years.

The power of $100k here is that you are able to immediately put your money to work through investments to earn significant gains and secure your retirement 30 years down the line.

That way, it’s possible to focus on living life instead of constantly worrying.

This will improve your quality of life in huge ways — whether it’s mentally, physically or financially.

P.S. This is the scenario that many of us are probably leaning towards.

Scenario 3: You Use This $100,000 as a Safety Net to Take Bigger Risks

Let’s try something different.

Suppose you didn’t get married and didn’t buy a house.

(Which is very normal, btw. So this is completely realistic.)

You put your first $100,000 into your high interest savings bank account which earns you 3.8% per annum.

Or a measly $316 per month.

That might seem un-woke, but there’s also an argument for it.

Instead of viewing that initial $100,000 as an investment, it becomes the safety net you can count on for other big and risky investments.

How long could $100,000 last you?

Depending on your lifestyle, it could be between three to eight years.

The power of $100,000 here is to buy time and provide safety.

Because when you are able to think years ahead, it allows you to take bigger risks and choose delayed gratification over short term wins.

It also allows you to a couple of other things like:

Invest Any Additional Money You Have Aggressively

Want to learn how to trade using leverage and risk your entire salary doing it?

With $100,000,  you can more-than-afford the learning costs.

Use the time to master the skill until you can make money from it.

As long as you don’t touch your savings, you’ll be okay.

Escape a Toxic Work Environment

With $100,000 you could quit a job you hate and take your time to find a better employer.

Conversely, with no safety net, you’ll be at your employer’s mercy.

You might be forced to accept a pay cut because you really, really need the job to make it through the year.

Buy Time For a Career Switch

Many Singaporeans know that their skills might not be as in demand as before.

They want to upgrade themselves but simply lack the time to do so.

$50,000 to $100,000 is more than enough to tide you over while you pursue higher (or better) qualifications for another career in data analytics, real estate etc.

Start a Profitable Business

Running your own business can be a risky endeavour which provides you with irregular income.

Most people can’t take the irregularity.

In this scenario, the $100,000 will help make things a little smoother until your business stabilises and more income comes in regularly.

If You’re Reading This and You’re on Your Own Way to Saving Your First $100,000… Ignore the Haters

One of the biggest reasons the average Singaporean is unable to accumulate wealth is really because of their mindset and the people around them who have Crab Mentality.

That’s where stuff like:

  • “Why save so much for what?“
  • “Why you so money-minded?“
  • “Aiya 100k only is not a lot of money“, or
  • “Die also money cannot save you”

come from.

The people who say stuff like this, ladies and gentlemen, are the Crab People.

They will go all out to belittle your achievements and discourage you from pursuing financial freedom.

I write about them because I know you will encounter them, whether it’s at work, in school, online or even at home.

When their voices get too loud, all you need to remember is that you need to be different from them in order to succeed.

If we keep doing things the way the ‘average person’ does, we can only expect average outcomes.

If we want to spend like the rich while earning an average income.

You can only expect a slow but sure descent into debt and poverty.

The wealth accumulation journey for the middle class requires a change of mindset and a disciplined reduction in lifestyle inflation.

You saving $100,000 before 30 is a great start.

Don’t let others tell you otherwise, or even worse, what to spend it on.

Only you can decide what is right for you.

There are no wrongs.

There are no rights.

But there will ALWAYS be consequences.

Stay Woke, Salaryman.

This article first appeared on The Woke Salaryman and is part of a content syndication agreement between The Woke Salaryman and Seedly.

For this series of comics that are related to all things personal finance, the Seedly team worked closely with The Woke Salaryman to bring you useful sh*t which you can apply to your everyday life.

The Woke Salaryman is the brainchild of a Singapore-based duo that aims to help people reach financial independence early. It is the quintessential page for people living in Singapore who earn the median salary and didn’t inherit their fortunes from their parents.

If you have any questions with regard to personal finance and retiring early, feel free to discuss them with the friendly Seedly Community!


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