k_bizTimes

Shall we merge this with the longer blogpost Creep [def]: unnecessary finer-things-in-life #R.Teo ? No… this title is still needed. I feel the effort to merge them is not so worthwhile. Perhaps wait for a few years and then downsize one of these 2 blogposts.

Household savings rate is an economic concept and includes the dollars you pay towards your mortgage Principal (but not credit card interests). Basically, the unspent amount from each monthly pay cheque.

As reported by FinancialTimes in 2024,,, “In the Eurozone, people are still saving more than 14 per cent of what they earn — well above the historical average. But US consumers have spent almost all the extra money they put away during the pandemic, reducing their savings to less than 5 per cent of their income.”

Those countries are different… For the Singapore consumer, https://www.tiq.com.sg/blog/savings-vs-investment-differences-explained/ advocates minimum 20% savings rate. https://www.syfe.com/magazine/5-key-financial-areas-of-focus-that-singaporeans-in-their-40s-need-to-plan-for/ is written for the average Singaporeans in their 40’s and 30s :

To prevent “lifestyle creep” and to give you the cashflow you need to invest towards your retirement goals, you need to set and commit to a budget. A popular rule-of-thumb would be to save or invest 20% of your income, leaving 50% for necessities and 30% for non-essential spending like shopping trips and dining out.

“Lifestyle creep” is a useful short phrase, further explained in a related article https://www.syfe.com/magazine/your-30s-are-the-best-time-to-build-wealth-these-5-things-will-get-you-there/. I feel the 30% non-essential is often part of the creep. Even the 50% necessities often show the creep.

20% savings rate is commendable but not good enough for my goal. As a family I typically hit 40-70%. Earlier as a bachelor I hit higher but I won’t elaborate. On a bigger scale, the SG government is much leaner (and saves a lot more) than other rich countries.

— Q: at 20% savings rate, can you achieve ffree?
A: unlikely. Here’s a back-of-envelope calculation:

If you are spending 80% of 5k, I assume you want to continue this 4k burn rate. Then the 20% savings at a compound return of 4% would take a long time to grow to $1200k to generate $48k/Y or $4k/M payout. Inflation would further erode the buying power of this $4k/M.

I will not elaborate in this blogpost. See the other blogposts under t_bizTime.