34M, currently sitting on an investment portfolio worth SGD $336k. I’ve been aggressively saving and investing 60% of median salary every month and selling cash secure puts as side hustle. Hoping to FIRE at 1M mark. Would love to hear from others on a similar path and whether retiring at 1M is possible? Lucky enough to already own a BTO and have a newborn coming.
Retiring with xx amount actually requires more planning than you'd think. If you plan to not work. Is $1M enough for you forever? If you need $4,000 a month. Its not as simple as $1M/4000/12=20years. You have to account for inflation for the expense in those 20 years. So likely it wont be enough. If you have $1M invested, then the portfolio matters. Are you expecting that "oh my portfolio should grow an average of 10% p.a., i use 4% per year, it should work with 6% buffer". It also doesn't work this way due to sequence of returns risk. Im not sure if youre familiar with the SWR discussion one of our mods Kyith have posted before on his blog, but if you haven't, do take some time to read it :)
I haven't heard of Kyith, thanks will look into his blog.
Can I get the link to the blog? Can’t really find what u are talking about, thanks :)
https://investmentmoats.com/financial-independence/unpacking-william-bengens-4-rule-or-his-safe-withdrawal-rate-research/ This is 1 of many articles he wrote about the SWR.
It is but you’ll have to continue being frugal after that. And you haven’t said what your housing situation is. If you’ll live with your parents forever and will inherit their HDB, and even if the lease won’t last your whole life, you can sell and buy a smaller one, ok. But if you’ll either need to buy a flat after 35, or be stuck renting a room with the 3k/month or so you can afford to safely withdraw from the 1M, that’s difficult.
Currently have already BTO, won't be considering upgrading.
Remaining mortgage at 40 if you don’t accelerate payment?
Yeah, installment $500 per month 2 of us. Will need to factor that in.
Yeah, installment $500 per month 2 of us. Will need to factor that in.
Whip out a mortgage calculator, find out what is the remaining loan left at age 40, and add that to the 1 million you think you need. That’s your real goal. Even if you don’t pay off the mortgage instantly (to take advantage of leverage), maths-wise you can handle it this way. Instead of adding the $500 to your expenses, and then that inflates the amount you need even more (at some point you can stop paying the mortgage but the simple SWR formula doesn’t let you).
Whip out a mortgage calculator, find out what is the remaining loan left at age 40, and add that to the 1 million you think you need. That’s your real goal. Even if you don’t pay off the mortgage instantly (to take advantage of leverage), maths-wise you can handle it this way. Instead of adding the $500 to your expenses, and then that inflates the amount you need even more (at some point you can stop paying the mortgage but the simple SWR formula doesn’t let you).
Thanks! That really helps a lot! Didn't consider that.
Write a comment...