Sunday, 21 September 2014

A savvy saver in his thirties

I was having lunch with a friend last week and we were talking about how difficult it is now to find value stock when STI is near to all time high and US market has been breaking new high. Both of us agree that this is probably not the good time to be aggressive. He shared that recently he has become more conservative, and increasing his cash holding so that he will be able to tap on in the near future when better opportunities present themselves. 
Source: UOB

Just recently, he went to UOB, a local Singapore bank, and placed $100K of fixed deposit(FD) with them. The conversation stopped here and I also stopped eating literally, He is in his late-thirties and he has managed to save more than $100K, I think this is a commendable achievement. He noticed the surprised look on my face, and I then asked how did he manage to do it. 
He told me there is no secret and here's what he shared:


Forced saving - Since the day he started working, the first thing that he did, was to force saved a portion of his salary every month into another bank account which he has no access to. He shared that initially it was very tough but after 2 years, it became a habit to him. Over the years, this portion of the saving has also been increased to more than 20% of his salary now.

I then asked him, is that simple? We were having our kopi now, and he smiled and said yes, but the initial years will be tough and many people gave up. 

He text me this morning about other FD promotions(offering better terms than his) by these banks, and thus I remembered our simple conversation last week. These banks are currently having promotion on their FD as well;

  1. https://www.sc.com/sg/promotion/2014/timedeposit/
  2. http://www.cimbbank.com.sg/index.php?tpt=cimb_sg&tpl=sgdfd

8 comments:

Low Paul said...

For every 100k in bank u lose abt 3k to inflation. The longer u place it there the more u lose.
There is no wrong or poor time for investment.
The time to invest? Its when u have the money.
The longer u delay the less compounding power u have.

Paullowinvestmentjourney

Oldman said...

Please read my post again, what I meant was to invest aggressively now. He might have nimble a bit here and there, I am not sure, probably I will ask him next time over Kopi :)

Low Paul said...

No offense pal. My meaning was to invest agressive now, not nibble here and there. If got 100k spare not including emergency funds, quickily invest the sum in fundamentally sound stock whuch pays dividends year after year without fail.
Over a long time, downside will form.its own base n.whats left is the upside.

Oldman said...

No worries, this blog for learning, good to have different view, and only time will tell. So you will buy a fundamentally good stock now trading at 52wks high?

Low Paul said...

thanks for that quick breakfast reply.

personally, i try not to. I am more of buying obsure and forgotten stocks, not covered by analyst, so that I can buy as much as possible, at as cheap price as possible and just hold on there.



Low Paul said...

Thanks for tt reply.
Unlikely i wld.
On my radar areva list of obsure n.illiquid stocks which are no covered by analysts so i can buy as much as i want at a price which i think is decent and reap dividends at yield which is acceptable.

Anonymous said...

Is your friend married with kids? If he is, it is commendable. If not, he could have done better. Just saying. Haha

Oldman said...

Yes, he has got a young kid. I think its a great achievement with lots of discipline. I know of people who has little savings even though they worked for so many years.