Start Early

An article on Yahoo Finance gave me inspiration for this article. Columnist Ben Stein rightly argues that time is neutral and cures nothing. For those of you fellows who think that they can afford to start saving up for their retirements when they reach about 40-50 years of age, they had better get their bottoms away from the TV couch, and open their exercise books to scribble their workings.

Take myself for example. After I sold my car, I still have the following yearly bills to foot (in Singapore Dollars):

1.	Utilities	$150 x 12	$1,800
2.	Groceries	$1,000 x 12	$12,000
3.	Entertainment	$400 x 12	$4,800
	Total		$18,600

If I retire at about 60 years old and expect to live for another 20 years, I will need about 20 years x $18,600 = $372,000 in today's money. Suppose the value of money falls by 2.0 percentage points every year (that is, the cost of items inflates by 2.0 percentage points every year) for 30 years, I will need at least $600,000 to last me through 20 of my twilight years without having to worry about making ends meet. I haven't yet included possible medical bills because of old age, but I will touch on that on another post.

Apparently, not many people in the US knows this. A startling report released two years ago by the US goverment revealed that savings per household had fallen to below 0% of their income.


(Image courtesy of The Daily Reckoning)

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To be frank with you, I am broke at 30 years of age. I have less than $20,000 in my name, and I am about the get married; peers at my age would have at least $100,000 in that pink little piggy bank. So I have every reason to worry. Thus all the drastic actions that I have taken, and am taking to boost my wealth.

When you have nothing at all, investments at about 6-8% annually earn you very little return. Setting aside a fixed (and substantial) amount every month is the only way to increase your wealth fast. (And please don't take the short cut and dump your life savings into Chinese stocks. When the bubble pops, so will you.)

Here are some books with tips on planning for retirement, and they aren't too expensive. Some are written by Mr. Ben Stein himself. Getting Started in A Financially Secure Retirement (Getting Started In.....), Yes, You Can Still Retire Comfortably!: The Baby-Boom Retirement Crisis and How to Beat It,
Yes, You Can Get A Financial Life!: Your Lifetime Guide to Financial Planning