The Big Difference Saving $22 A Day Can Make
For the many of us out there struggling to make ends meet, I get it. I was there once. Back in high school, I used to get $20 a week for all my meals. I would save a third of it because I knew that every little bit mattered especially when I came from a family who struggled financially much through my teenage years. When you choose to eat from the dollar menu while your friends are having ramen in a restaurant, you know you need the money.
Good things in life, do not come easy, at least not for the majority of us. From a young age, I realized how important it was to save. Thankfully, growing up in a Singaporean household truly meant that saving was a value that was preached time and time again. In 2018, the savings rate in Singapore was the highest in the world, a whopping 46% of our GDP (Worldbank, 2018). While this is by no means a competition, it would be fallacious to assume that the country has come so far no part to its high savings rates.
“Why save? Money is for spending”
“You never know when you might go, just spend while you can”
Indeed, I couldn’t agree more. We never know when we might go, but statistically speaking most of us are likely to live till our silver years and perhaps having some due diligence in preparing for our journey there might just be prudent in this day and age. Wealth does not appear overnight, not unless you strike the lottery. Wealth is also created by being consistent. Even the smallest sum of money can become a large amount if used correctly. So what exactly does saving do for you?
If I told you that $22 a day could make you a $100,000 in 10 years, would you believe me? Most people would not, but here’s how the math works out:
Imagine saving $22 a day, that would amount to $8030 a year. Place that $8030 into investments yielding you 5% annually and keep being consistent over the course of 10 years. The end result? A whopping $106,086.34 at the end of 10 years. In fact, 5% a year is a pretty conservative target. The S&P500 returns an annualised 9-10% per year! It sounds crazy, but that’s exactly how compounding works. In fact, most of us can actually save $22 a day. Sometimes it just means cutting down on a few nights out with friends or spending less on that lavish vacation. It just takes effort and sacrifice, both of which are free, yet incredibly difficult to give.
Having no money is often not the problem, financial literacy usually is. It took me years of consistency and toiling hard to get my investments and savings up to healthy levels and I started as a broke 15-year old, struggling to make ends meet. The greatest wealth comes from knowing what to do with it.
Many of us dream about having a financially liberated life, but few of us actually live that dream. If I told myself 10 years back that I would be where I am today, I would have gawked at myself. Trusting the process and letting simple compounding do the work for you truly is what it takes to end up better than you are right now, 10 years on. It’s not going to be easy and it certainly is not going to be fun, but I promise you that it most definitely will be worth it.
Good things in life, do not come easy, at least not for the majority of us. From a young age, I realized how important it was to save. Thankfully, growing up in a Singaporean household truly meant that saving was a value that was preached time and time again. In 2018, the savings rate in Singapore was the highest in the world, a whopping 46% of our GDP (Worldbank, 2018). While this is by no means a competition, it would be fallacious to assume that the country has come so far no part to its high savings rates.
“Why save? Money is for spending”
“You never know when you might go, just spend while you can”
Indeed, I couldn’t agree more. We never know when we might go, but statistically speaking most of us are likely to live till our silver years and perhaps having some due diligence in preparing for our journey there might just be prudent in this day and age. Wealth does not appear overnight, not unless you strike the lottery. Wealth is also created by being consistent. Even the smallest sum of money can become a large amount if used correctly. So what exactly does saving do for you?
If I told you that $22 a day could make you a $100,000 in 10 years, would you believe me? Most people would not, but here’s how the math works out:
Imagine saving $22 a day, that would amount to $8030 a year. Place that $8030 into investments yielding you 5% annually and keep being consistent over the course of 10 years. The end result? A whopping $106,086.34 at the end of 10 years. In fact, 5% a year is a pretty conservative target. The S&P500 returns an annualised 9-10% per year! It sounds crazy, but that’s exactly how compounding works. In fact, most of us can actually save $22 a day. Sometimes it just means cutting down on a few nights out with friends or spending less on that lavish vacation. It just takes effort and sacrifice, both of which are free, yet incredibly difficult to give.
Having no money is often not the problem, financial literacy usually is. It took me years of consistency and toiling hard to get my investments and savings up to healthy levels and I started as a broke 15-year old, struggling to make ends meet. The greatest wealth comes from knowing what to do with it.
Many of us dream about having a financially liberated life, but few of us actually live that dream. If I told myself 10 years back that I would be where I am today, I would have gawked at myself. Trusting the process and letting simple compounding do the work for you truly is what it takes to end up better than you are right now, 10 years on. It’s not going to be easy and it certainly is not going to be fun, but I promise you that it most definitely will be worth it.
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