The Financial Samurai is always very kind to ask me questions that lead to me writing more posts to explain them. Since I am not exactly very prolific when it comes to this blog, I am thankful for any ideas that prompt me to write more.
The latest is his comment asking for more information on how I made the first purchase and how I managed to come up with the downpayment. I wish I had some incredible tale to wow reader with, but the truth is somewhat more boring.
I had the money before I actually had an idea what to do with it. This was what I had been earning since I started work in 2002:
|Jan – Dec 2002||
|Jan – Dec 2003||
|Jan – Dec 2004||
|Jan – Dec 2005||
|Jan – Dec 2006||
|Jan – Dec 2007||
|Jan – Dec 2008||
|Jan – Dec 2009||
|Jan – Dec 2010||
|Jan – Dec 2011||
You’ll notice relatively huge jumps in my income starting from 2006. That was the start of the record breaking years for my company. At the peak, I was getting 9 month annual bonuses. 2008, 2010 and 2011 were peak years for our company stock (we are publicly listed on the Singapore Stock Exchange), where I chose to exercise all the options I had.
My spending levels had been pretty constant throughout the years since I mainly spent from my monthly take home, so all the bonuses and money from stock options were banked. I was also required to contribute 20% of my basic salary to the CPF, our version of retirement accounts. On top of that, I was saving another $600 per month in other long term endowment accounts for my retirement. Low income taxes, living at home, and not having any family commitments (a.k.a. kids) definitely helped. In those years where my income exceeded 100K, I was saving about $80K annually in various saving vehicles.
By early 2011, I had a net worth of just over half a milion, with approximately $380K in liquid accounts with which I could invest.
(I guess this proves that I am good at saving money, if nothing else)
In early 2011, I did a review of my financial situation, and felt that I was sitting on too much cash, which were not generating any returns. I had some money in the stock market, but the performance had been dismal due to the global recession, and too volatile for someone who wanted to manage her funds as passively as possible. So I started looking into real estate.
To be Continued…