little toy brush: Saving your first $100,000 could be easier than you think!

After I graduated and started on my first job, I did some calculation in a spreadsheet to extrapolate my salary after 5 years. All was rosy until I actually received my increment letter - $144 or 6% of my then $2,400 salary. Bonus was 1.5 months, which was considered relatively good in the company. I typed the numbers into the spreadsheet and I decided to find another job after looking at the projected number after 5 and 10 years.

Working backwards, I calculated how much increment I would need year on year to achieve a salary of an arbitrary $7,000 after 10 years. $7,000 was the 90th percentile from the Department of Statistics Income distribution curve then. 10% year on year increment was needed to achieve that from a $2,400 starting pay.

Every year I calculated how far I was away from my required increment. When the "extrapolation" numbers looked unfavourable, with a heavy heart each time, I make my move.

Every year, every day, every hour, every second, I make sure that every single action I did was contributing towards building relevant skill sets to increase my market value.

I would not recommend this approach of job hopping as its detrimental to the economy, but I thought I should share some ideal examples for the fresh grads jumping into the market. The starting pay is VERY important. It is your bargaining power for the next hop and future hops. I regretted not bargaining for more.

More importantly, saving your first $100,000 could be easier than you think! Once you hit that milestone, I am sure you are all set for more milestones.

Poly Grad (F) 5% Inc

Poly Grad (F) 10% Inc

As you can see, a 5% increment and 10% increment will result in 50% difference in pay after 10 years.

In this example, you can see that the amount one can save is also a lot, just based on a 5% increment, which is closer to the market average, provided your company pays you 3 months bonus a year. What this means is that if your company pays you less than 3 months bonus, and you think you are capable of getting more, then you are probably better off hunting for a more generous employer.

I had also put a very reasonable monthly expense of $900. If you save less than what the spreadsheet says, it is CERTAIN that you will not save the projected amounts. Simple.

I had also done up the same tables for different starting average pays for poly grad M, uni grad F and M just for completeness. Make the right step!