Last week, there was an article in the Straits Times titled “Moving from financial stability to financial abundance takes Singaporeans 32.3 years.” The article sparked online discussions and many found the numbers to be unrealistic. It was believed that achieving financial freedom or abundance in Singapore, apart from winning the lottery, was nearly impossible.
According to the survey mentioned in the article, it took 6.1 years to reach financial security, which meant being able to invest and save a portion of income. It took an additional 6.5 years to reach financial flexibility, defined as having enough investments and assets to cover living expenses for a year. It then took another 8.7 years to reach financial freedom, which meant having enough investments and assets to generate passive income for life. Finally, it took an additional 11 years to reach financial abundance, which meant having more than enough income for a lifetime.
Social media comments raised a few key points. Some argued that the survey only targeted high-income individuals and was not representative of the average Singaporean. However, considering the survey’s range of participants, which included household incomes of $70k to $250k, it can be argued that the survey population was reasonable and not restricted to only wealthy individuals.
Another point raised was why many elderly people continued to work well into their 60s and 70s if it took an average of 21 years to achieve financial independence and 32 years to attain financial abundance. It was suggested that the older generation grew up in a different time and faced different challenges, such as lower literacy rates and a focus on survival rather than education. However, the younger generations have more opportunities and access to financial knowledge, making it easier for them to achieve financial freedom. Additionally, surveys have shown that millennials and Gen Z aspire to retire earlier than previous generations.
It was argued that achieving financial freedom today is actually easier than it was for previous generations due to higher financial literacy, lower barriers to entry for investing, and the availability of investment products. While the cost of living is high in Singapore, it is still possible to work towards financial freedom without major expenses like private properties and cars.
The article did not provide specific figures for each level of wealth, but the author shared their own perspective. They believed that financial security meant having at least six months of emergency funds and starting to build an investment portfolio. Financial flexibility meant having emergency funds that could last at least a year, possibly supplemented by passive income. They introduced the concept of “Barista FIRE,” which required $1m to $1.25m SGD. Financial freedom was estimated to require $1.5m to $2m SGD, while financial abundance was considered to be $3m SGD and above.
The author emphasized the importance of mindset in achieving financial freedom. Those actively working towards financial independence have ambitious goals and believe that they can achieve them, even if it requires some trade-offs along the way. On the other hand, those who believe that achieving financial freedom is impossible will likely never achieve it. The author encouraged readers to surround themselves with like-minded people and to get rid of limiting beliefs that may hinder their progress.
Overall, the article sparked discussions about the feasibility of achieving financial freedom and abundance in Singapore, with some believing it to be attainable with the right mindset, financial literacy, and early investment.