Yes. That’s the exact clickbait-y (which obviously works) title of an article I saw on a site sanctioned by our Central Providend Fund (CPF)* and their answer is:

As an ideal, the correct amount to have saved up – at any age – is six months of your income. Any amount beyond this should be redirected into a retirement fund. This is because savings are just to deal with emergencies, whereas investments are for the long-term.

So if you have an income of S$5,000 a month, your savings are good if they are at least S$30,000. Note that your CPF doesn’t count, as it’s not savings you can immediately access.

That’s actually pretty sound advice.

At first pass, I nearly thought they were recommending you have savings of $30,000, period. I was thinking that it’s a pretty low number but after reading it properly, I realise that the article meant that if you earn $5,000, you should have about $30,000 in cash or equivalents.

What I think is more important is that people take heed of the second part of the first paragraph which tells people to invest any amounts above this buffer of 6 months’ income. Where and how you invest should be determined by the amount of financial knowledge and fortitude you have. If in doubt, consult a financial advisor you can trust. (Buffett’s pearl of wisdom about never asking a barber if you need a haircut comes to mind.)

The later part of the article is quite sad though.

Everyone’s financial situation is different. You may have responsibilities that others don’t. For example, some people have parents or siblings with medical conditions, who need more expensive healthcare. Some people have an income lower than the median, which makes it hard to save. There’s also one element that many people in their 30s have in common.

Your 30s are typically the age in which you’re saddled with your first major financial costs. It is probably the first time you buy a flat or car, and you might be settling down with your first child. It’s quite possible that you did save diligently from your 20s, but your wedding has wiped out those funds.

Seriously, if you find yourself agreeing with that part of the article, you have a serious spending problem. If you have an income so low that it makes it impossible to save any meaningful amount, then you really need to be prepared to work really, really hard.

I was looking through my records and it shows that my 30s (so far) have been the greatest period of my wealth accumulation and to be honest, without a proper savings game plan, it wouldn’t have turned out so well.

Don’t be surprised but there are plenty of 30+ year-olds out there holding very ordinary jobs who easily have six-figure bank accounts or stock portfolios. These are the people that you just never read about.

*The CPF is the name of the organisation that handles the compulsory pension savings account every Singaporean resident has.

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