Aiming for S$1 million in Total Assets

It’s my 31st birthday weekend and I’m taking next Mon off with my wife to celebrate it. Maybe a nice steak dinner since the last time we had it was during the US trip. As work is picking up pace again for both of us due to our respective project delivery timelines, it’s good to have 2 consecutive long weekends to look forward to.

June is always the time to do a half-year review of how the first half of the year has gone so far. It helps to work out the points for improvement you can take forward for the second half of the year. Since my birthday is in June, I get especially reflective during this period of time. What with becoming another year older and all the successes, failures and doubts that come with it.

If you haven’t noticed, the title of this post sets out our main target for the next year – to hit S$1 million in total assets (excluding the market value of our apartment). I refuse to include the value of real property in our total assets calculation. Not until our apartment becomes income-producing in some way or I become a real estate investor.

As you can see from our net worth page, we calculate our total assets as the sum of the following:

• SG and AUS Cash
• SG and AUS Equities – ETF and Stock
• SG Corporate bonds
• Surrender value of our SG wholelife insurance policies
• Retirement funds (CPF in SG and Superannuation in AUS)

Why a specific number of S$1 million?

I have been watching our total assets climb slowly in Australia before increasing at a faster rate in Singapore. S$500k was the first major milestone for our total assets and we reached this a few years ago in Dec 2014 after 5 years of working. S$1 million was the second major milestone and after 2.5 more years of working, we are probably still a year away from reaching it.

S$1 million is significant because my belief is that it’s only after that point that you really start to accumulate some financial wealth. The kind that makes inter-generational wealth transfer possible if we decide to have kids. It’s also the level that gives you the real possibility of reaching early retirement and financial independence.

This is the number that represents the decision we will have to make upon attaining it that will shape our life philosophy and approach for the next decade. Assuming we will have kids by then. Should we start to seriously explore transitioning out of full-employment and into self-employment to free up more time for the family? Or should we push for greater heights in our careers just to see how far we can go but at the risk of spending less time with the family?

What does this mean for us?

Given that it might take us another year to achieve S$1 million of total assets, I don’t consider us within striking distance of this goal. Especially when a lot can change in the next year. But it does mean that 2018 – the year my wife hits 30 and when we hope to have our first kid becomes a crucial year.

The fact that this financial target coincides with possible parenthood can’t be a coincidence. When you look back at your life, there are certain points or moments in time when something happened or a decision was made that changed the entire course of your life. The power of hindsight to identify them that does so little to help you prepare for similar events in the future.

There were 4 of them in the past decade for me:

1. Going to Australia instead of London for undergraduate study and meeting my wife in 2007
2. My wife landing a graduate position in a local bank in 2009 that convinced us to stay in Melbourne
3. We moved to Sydney in 2012 after my wife couldn’t find a permanent position in Melbourne
4. We returned to Singapore in 2014 because we wanted a change in our lifestyle after spending 7 years in Australia

I can’t emphasize how important it is when you are choosing a partner to spend the rest of your life with. Just look at the 4 key events for me. It all started with meeting my wife in the first year of university. And the direction we were headed in shifted significantly every few years because of our circumstances. Don’t underestimate the effect and influence your partner can have on you.

What did it take for us to get here?

There is no blueprint or roadmap for this. But I can share with you our real-life combination of factors that got us here:

• Both of our families are middle-class to upper middle-class. Our parents funded our overseas tertiary education and gave us the opportunity to develop ourselves in a different environment. We changed so much because of this experience and most of it was positive.
• We had little financial burden and few things to worry about with our families. Our parents and siblings are generally self-sufficient and got along with each other. This meant we could just focus on ourselves the entire time. And none of us had major health issues.
• Huge doses of luck at just the right time. Studied commerce degrees that facilitated obtaining PRs, which in turn made it easier to be professionally employed full-time, at a time in Australia and subsequently Singapore when they were booming, with jobs in firms/industries whereby the skill sets are transferable across cities and countries. Just look at the number of things that had to line up.
• Being average but be engaged and consistent. People constantly talk about being exceptional, high-flying, etc. It’s as though being average is the worst thing that can happen to you. Look at us. If you knew what we are like at our jobs, we are the most average employees you will find in terms of performance, especially in Singapore. We don’t over-plan our career trajectories but go with the flow where opportunities arise. We don’t like working long hours and don’t enjoy high-pressure/stress environments.
• Be patient and don’t over-think stuff. So many people are in a rush to get somewhere in their careers that they either take on too many responsibilities, too much risk or funnily enough, too little risk. And there’s a tendency to over-think every step of the way. More often than not, it’s better to just take that step and see how it goes instead of waiting for everything else to happen first. Most importantly, stop looking at what everyone else is doing because you are the one that has to walk the path you choose.