Staring at your monthly pay-slip can sometimes be as depressing as opening your fridge to find you only have half a scoop of ice-cream left in the pint. You want more, your NEED more. Yet sadly, that miniscule slop of Cookies and Cream isn’t going to regenerate back into a full pint of creamy goodness on its own, it is not a lizard’s tail. And neither is your monthly paycheck.
Many of us deal with the reality that as a salaried employee, the amount of money you can make, save and invest is predictable on a yearly basis. And we don’t always like what we see when we do the math. Yes, there are some who make tons of money as an employee either through vocation or perhaps commission based work where the upside is not capped.
However, if you do not fall in that category and are the majority who make a fixed amount every month, cross your fingers for a higher than predicted year end bonus, and just put your head down to work everyday, what can you do to better your situation?
$3500 always adds up to $42,000 at the end of the year by sure math, no matter how you slice and dice it. And the truth is you won’t be able to hang on to even half of that in liquid cash, try as you might.
Well fret not, here are some tips from Alfred Chia, CEO of SingCapital and all round nice guy, that may help you see things in a different light.
A salaried employee, with a stable job gives you the freedom to:
- Leverage on the stability of your income
- Control your spending and accumulate more cash
- Making the right financial choices when the opportunities arise.
Here are 4 things that you can then do even if you are someone with just a stable monthly paycheck:
1. Gain a foothold on property with your first HDB flat
Assuming you get married, or cross the age of 35yrs, you can invest in a HDB flat, which contrary to what some believe is a great springboard for things to come.
The various subsidies and grants you can apply for, especially for first time buyers, means that you are living in a subsidized investment that is appreciating over time. Check early on what subsidies you can qualify for and plan ahead. Mortgage rates are also still somewhat depressed and are considered low, compared to many other countries.
2. Be protected with insurance and invest in the right investment tools
The earlier you start with this the better, as premiums get more and more costly as time goes by. Making sure that you portion your salary to cover these investments adequately is more important than your monthly facial (which could be of similar cost). Trust us on this. Insurance gives you peace of mind to know you have more money than just your piggy bank, when bad things happen to good people.
Investments also need not be in the thousands per month as some presume. Check out some of the low cost options you may not have thought of, and with minimal risk, you can turn that spare $400 per month you have, into a handsome return that works in the background, when you aren’t working.
3. Leverage on your CPF for both investments and savings
Yes, it is locked away in a vault guarded by a white knight with no conscience, but you can still tap it for specific investments that not everyone considers. Salaried workers get an additional 16%, thus the combined 36% set aside in your CPF accounts for a sizable sum in the long run. If invested correctly, in various options such as bonds, gold, shares and of course payment of your property, you can use the system to benefit you. (Yes, even you Roy.)
4. Let your powers combine!
You may not be Captain Planet, but by combining your cash savings, CPF savings and all the related investments and insurance policies you buy, you can actually attain a comfortable life, especially in your later years. This of course requires discipline to stick to your long term goals and make sure that you are well covered.
Of course, it’s fine to splurge once in a while (if not you may go mad), but maintaining a long term focus will also help you to make the bigger decisions when it comes to your finances.