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numerical prjn

[21]nestEgg enuf2preempt stressful return2U.S.

Posted on by tiger40490

How does CAD and additional potential health declines affect my answer?

As of 2021, we have a fully paid home enough for 4. I will also earmark enough for two FRS cpfLife accounts. Such a high_ground is an achievement, but might be harder to maintain after SBH.

Q: Beyond those assets, what level of nest egg would preempt/eliminate the need to migrate to the U.S.?
A: I used to (and still sometimes do) feel the cautious answer is $3M. However, based on the below assumptions, we need SGD 800-1600k to justify shelving the U.S. migration idea.

  • Assumption 1a: in terms of SGD monthly burn rate [excluding tax outlays, including bx], I will assume S$5-6k total outlay is “comfortable” even after the recent (2022-24) elevated inflation
  • Assumption 1b: in terms of Singapore salary.. for simplicity I will pick a nice number of $100k/Y from age 47 to 55, but $0 afterwards (in Singapore) -> 700k work income.
  • ^ ^ Those are the big assumptions ^^
  • Assumption 2: after kids grow up, we really don’t need more than $1500/person (inflation considered), so FRS cpfLife can be sufficient
  • Assumption 3: Unlike [1], I may choose to set aside an elastic S$100-200k/child for college -> up to S$400k.
  • Assumption(methodology) 4: Count cpfLife but Ignore NNIA + inheritance + grown-up children’s contribution + ..
  • No assumption about lease spread on HDB flat, even after 2035, since grown-up children may stay with us.

— the calc done in Nov 2021, before selling the #1173 home. I have the spreadsheet in github.

  1. Nov 2021 to 2035 when meimei graduates, we need 6k * 12M * 14Y = 1008k, marginally higher than [1]
  2. 2036 to Jan 2039 wife+I need 36k * 3Y ≅ 110k, matching [1] 100%
  3. Sometime before Jan 2039, top up 200k to my cpfRA to the max, ignored in [1]
  4. 2039 to 2043 we need only $0 assuming my cpfLife ERS starts paying around $3k/M (as I would max out on my cpfLife). This amount is explicitly ignored in [1].
  5. Sometime before Aug 2043, top up wife’s cpfRA by an increment of [$0] to generate $0/M payout. Together we need only $3k/M payout. This amount is explicitly ignored in [1].
  6. ^ ^ ^ Adding 400k [Assumption 3] to the above ≅ 1720k total outlay ^ ^ ^
  7. 700k total salary according to Assumption 1b
  8. nest_egg_needed = S$1020k, excluding our CPF balance as of Nov 2021

However, I stand resolute against lifestyle creep, so S$5k/M is more than enough, and S$200k/child is unnecessary luxury.

— Some implications
Looks like my nest egg is barely enough to justify staying in SG for good !?

Need more analysis from different angles before I would feel assured.

Based on the above analysis, the #1 j4/advantage of U.S. migration is … dev-till-70. Right now with my MLP job I can extend my Fuller Wealth quite fast thanks to low burn rate, acceptable health conditions …. So I would go to U.S. only when I could “extend” faster in the U.S.

— Q: why most of my middle-class peers don’t feel so self-confident if they are in my (financial) shoes?
A1: Assumption 1a amount needs to balloon to 10k+ for them
A2: Assumption 2 amount needs to balloon to 6k for them
A3: Assumption 3 amount may not suffice for them

— Q4: what type of portfolio adjustments would improve my high ground and help obviate/preempt forced flee to the U.S.?

  1. term insurance for occupational disability till 65?
  2. more NNIA with limited appreciation, such as SgCP on mtg? Hig ground would sink. Poor liquidity , heavy debt.. TBD.
  3. USD 100k into SP500 .. no loan. Better buy-n-forget, more like rEstate, but lower DYOC than some rEstate.
  4. more NNIA with USD 100k into div stocks .. (hard to imagine myself persuaded) with some growth potential? Too risky. My high ground would sink.
  5. USD 100k into growth stocks? even more risky.

25Y worth @ living expenses #Fuller wealth

Posted on by tiger40490

Update: ffree analysis is dominated by black/white swans, not Fuller Wealth.. See ffree^carefree^cashflowH/L ground

https://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-hero-in-one-blog-post/ and many other FIRE discussions mention that a portfolio of “25Y worth of burn rate rate” would basically last you forever.

ERE author said his 7k/Y burn rate will deplete his (800k) savings in 114 years , and his wife’s 7k/Y will last 62Y.  The two of them maintain separate personal assets. If I were to do the same, I can last somewhere between 62 and 114 years. I do have my wife and kids to support, so I’m about 33Y. However, if I ignore my net asset value and simply match my nonwork income to my burn rate, I could last a million years i.e. forever.

Anyway I like the simplicity in this 25Y estimate, a concrete illustration of Fuller wealth.

— minimum reserve size in SGD

  • assuming a basic validity in the 25Y calculation, as a widely held estimate. I won’t verify this calculation.
  • assuming reasonable liquidity of the portfolio, so you can withdraw on an annual basis
  • assuming healthcare cost is taken care of largely by Singapore government.
  • assuming kids education cost doesn’t skyrocket through the roof
  • assuming net housing cost is below $1k/month in the long term
  • assuming you have the option of selling your home in X years (perhaps when your kids grow up and move out), but in this discussion you decide to keep it for wealth preservation or other reasons.
  • assuming you don’t have NNIA like CPF-life

25Y = 300Mon. At SGD 4k/M, we need a SGD 1.2mil portfolio, without counting the home net equity value. This amount is very hard for most people. It’s not easy for me.

At SGD 3k/M, we need SGD 900k. More realistic.

At SGD 2500/M, we need SGD 750k. I think this burn rate is still realistic. See burn rate: 80%@median family income: wbank^BT #Khmer and the blogposts on BizTimes article

Each monthly wage extends Fuller wealth by2M

Posted on by tiger40490

See also blogposts on

For the next X years in Singapore, my family burn rate is predictable (no college no mortgage) at around $4k/M excluding transfers, $5k/M total burn rate. I sometimes tell my wife “Every time we squirrel away $60k from (work/nonwork) income, we extend our Fuller Wealth by a year.” This /prognosis/ is almost too good to be true. Simplistic but motivational thought. Long-term forecast is naturally less reliable, subject to multiple upsets but still, some guesstimates can help us plan better. Just remember not to put too much trust in the guesstimate numbers.

This prognosis is a useful yardstick for comparison with other families. Some families can “add a year” quickly (a couple of paychecks), while others need a decade to “add a year”.

— going from strength to strength, from strong to stronger .. In 2018 I had a numerical projection showing barebones ffree. Then in 2020, I wrote to wife another numerical projection showing that salaries are not really needed.

So my Fuller wealth already exceeds those targets. Every new month, my nest egg is now more fortified/resilient [2], growing (by $5k+) towards a new target of “no need to flee to U.S.”

[2] Keystone of the “nest egg” idea is … defense — against hazards, missteps, contingencies, uncertainties.

How does this prognosis differentiate me from my cohort? Many people also grow their nest egg every month, but they don’t have a FIRE target amount like 25Y worth @ living expenses. I have multiple progressive targets.

— Let’s /substantiate/shore up/ some weaknesses of this prognosis.

  1. college cost will become relevant in about 8 years. Fuller Wealth is not about luxury or higher aspiration, but aiming at a basic healthy level of lifestyle.
  2. medical cost?
  3. inflation? Addressed in several blogposts. I believe SG CPI inflation is much lower than …