Why Saving $100,000 Before 30 Matters

Genesis Of The $100k Challenge

The first time I was exposed to the $100k challenge was about 15 years ago, when I was a freshman in NUS.

I started reading Christopher Ng’s Growing Your Tree Of Prosperity and I was mind-blown as a 20 year old.

Christopher advocated Singaporeans to save up $100,000 to better prepare for the new world. Assuming a 6% yield, this would allow one to have an average passive income of $500 a month, offering a basic protection against unemployment.

Wise words indeed.

But this movement only took on momentum of its own about 7 years ago when Jonathan Kwok wrote an article published on Straits Times, the national newspaper. It illustrated how an average 30 year old could amass $100,000 before turning 30.

And it inspired a host of Singapore financial writers/bloggers to achieve a 6 digit milestone before hitting the BIG 3. Some notable ones that I have read include accounts from BudgetBabe, Jeraldine Phneah and Ruiming.

One of the latest I have seen is a YouTube version from Miss FITFI.

If you are interested, here’s an account of how the Mrs and I accumulated $250k before we turned 28.

It’s now 2021 and with higher starting pay across the board, this challenge is more and more attainable.

Summary Of How To Do It

Basically, you have to save at least $20k a year after starting work in your early or mid 20s. It’s easier if you have a higher income, obviously.

Investing only helps marginally, since it’s a really short runway unless you are able to find some goldmine like the right stocks or the right cryptocurrencies.

Also, there’s no “failure” in this challenge. If you can’t save $100k before you are 30, how about $80k? Or even $60k.

It’s about not making excuses and striving towards the path of getting rich, at an early age. 

Why It Matters

Time To Compound

Let’s assume that after setting aside this $100,000 at age 30, you decide to YOLO and never save a single cent thereafter.

Interestingly, you can still have a nice nest egg in your old age.

At 10% returns, it grows to $1 million at age 55.

At 8% returns, it grows to $1 million at age 60.

At 5% returns, it still grows to $400k at age 60. That’s still significant from my point of view. To put things into perspective, that’s still more than the current CPF Enhanced Retirement Sum.

Cultivating Good Habits And Building Capabilities

Of course, more likely than not, you will continue the good habit of saving beyond your first $100k.

For me, saving 50% of my income is already ingrained in my life. As income rose over the last few years, I get to spend a little more to indulge myself while maintaining the savings rate. It is a good balance between enjoying life today and delaying gratification for tomorrow.

To get those returns mentioned earlier, you also cannot let $100,000 rot in a bank earning 0.05% interest. So you find alternatives. Maybe you look for higher interest yielding bank accounts, start researching on bonds and endowment plans or attempt to invest in riskier but more rewarding assets like ETFs, stocks or even cryptocurrencies.

As you cultivate the good habit of saving and build capabilities to achieve higher returns, every $100,000 after that becomes easier and easier due to the effects of compounding.

Authenticity And Confidence To Take Risks

I believe most people can only afford to be more authentic when they have stashed away a significant sum of money. Otherwise, in order to protect your livelihood, one is unlikely to confront a boss or a client if there is a disagreement on how things should be done.

Perhaps for a young graduate, a 6-digit sum is the minimum to be considered meaningful FU money.

Using myself as an example, I would not have written a commentary on my JC students as recent as 5 years ago, when my finances were a lot more precarious. There would be this fear that controversy could be bad for business, whether it’s rational or not.

This $100k could also be the safety net for some to take on more risks to achieve more in life. A brilliant case study would be the two co-founders of The Woke Salaryman (TWS), Ruiming and Wei Choon.

In fact, I actually think Ruiming’s $100k post (shared earlier) is what kickstarted TWS. It made them realise how much people value a good story and good comics in this sphere.

I am also quite sure they had saved a meaningful sum before making the transition from employees to working on TWS full-time. That’s basic prudence and I am delighted that they are doing well and monetising effectively without diluting their message.

Being able to work on a project on your own terms = Freedom


So yes, Charlie Munger is right and the first $100,000 is a b*tch. Get it out of the way as early as possible.

Thanks for reading.

7 Replies to “Why Saving $100,000 Before 30 Matters”

  1. Great advice, too bad I didn’t know it 10 years ago. I am well behind this curve as a 35 year old that is still working on my first $100,000.

    Oh, well. Now is better than never.

    1. Hi Budget Life List,

      Money is just one aspect of life. And I am sure you are going to reach a significant personal saving landmark soon.

      You have a really cool job as a park ranger! I am sure many who lives in a city-state like me covets that.

Leave a Reply

Your email address will not be published. Required fields are marked *