Monday, July 20, 2015

What would change if you earn $25k per month?

I saw a newspaper article today here that talks about the difficulties of older aged PMETs who are struggling to find work after being laid off in the last financial crisis. In the article, there are several examples of people earning (to me) an extremely high income. There's one getting $25k a month and another earning $9k per month. On Sunday Times, there are a few woman earning $10k and $9k per month, and wanting their significant other to earn as much, if not more.

When did salaries get so high? Is it so easy to get $10k and above per month now? Are they are the top earners or are they the norm? Wouldn't you want to earn $25k per month too?

But the real question is this: if they are earning $25k per month in the past, why are they still struggling to find a job now? Wouldn't they already paid up their debts, saved up a huge amount and semi retired with that high income? I guess not, hence they are in this current situation they are facing. The basic of being wealthy is really just to spend less than what you earned. That is the base of pyramid - the foundation. Without that, other things like investment or insurance wouldn't be able to come in and build a higher pyramid.

If you start earning $25k per month, what would change? In order to earn that amount, likely you are going to have a different set of friends and contacts who are likely earning around that income too. You'll probably start eating in a higher end restaurant since they are all eating there. You'll also likely to drive a similarly branded car in order to fit in. I think if you're going to earn this amount of income, you'll likely increase your expenses proportionally too.

Unless you don't mind being a social outcast. It's not so easy as saying if I earn $25k and I keep my expenses constant, I'll save a lot more and so on. There's likely going to be a lot of social pressures, likely coming from your new found friends, colleagues and perhaps your family too. To say no to all these, you really have to align what you want with your money. Do not belittle the social pressure of fitting in with your peers.

So, what should change if you start earning $25k per month? A difficult question to answer. Given a choice, perhaps it'll be easier to earn much lesser and fit in with an environment of people who are also lower spenders. I'm not so sure I have the willpower and the social strength to still earn that much and yet remain a social outcast. It's really not that easy.


Singapore Man of Leisure said...


There's one way to remain a social outcast - work 12 to 18 hours days.

Some hawkers are staying in private properties and driving big cars because their working hours are so long they have no time to spend money or mix with atas friends at country clubs...

Property and car are the only 2 "luxuries" they got time to spend money on ;)

When I was working at Cable Car Towers, the fruit juice hawker opposite drives a Big Mercedes on his day off.

Got money and got leisure, that's the deadly combination!

That's when men will get up to "mischief" ;)

cookie said...

Got money n time, go for trips with wife n parents or children lah.
to amass millions then split in high court in messy court case..whats point in such fame?
i now spend 1/2 my time working n the other half..with family or do housework. of consequences first

GiraffeValue said...

I will create a blog with a 2 years financial independent challenge.
keep my expenses at 1k so to save 24K per mth, 1 year = $288,000.
Two years will be $578,000. Then I will quit my job and be a full time investor:)

If annual return is 5%, that will be $2,400 per mth. Not so bad :)

Jimmy L said...

Got money buy terrace buy Audi
Money not enough

la papillion said...


I agree! When I'm at the busiest, I'm also spending the least! That's just no time for anything other than to work. But I guess this depends on how you cope during stress. Some might actually spend more to cope with the higher stress of working longer hours.

Actually a lot of hawkers in my neighborhood drives damn big branded cars. It's just that they won't hve the time to enjoy them, haha!

la papillion said...

Hi Low Paul,

Indeed, I'll also rather spend more time with family instead of earning. I think we must know the point of earning money. If not, the blind pursuit of more and more money is just pointless in the end. Can't bring it anywhere.

la papillion said...

Hi giraffe,

Haha, in my dreams, I'm also thinking what if I can earn this much and spend the same amount as I am now. By xyz years, I'll amass this amount and be rich and free!

Fat hope though :) It'll take some years to reach that income level and by the time you reach there, you might have acquired a few bad 'habits' to raise your spending level too lol!

la papillion said...

Hi Jimmy,

Wah, you enjoy life! Buy big house and big car LOL! If you do that, really no end to the spending you can have haha

Tacomob said...

This reminds me of the quite true saying: "Wealth is what you accumulate and not what you spend."
I strongly believe financial freedom comes not from having great possessions but in having few wants.

Budget Babe said...

Social pressure on financial expenses is probably one of the greatest, and most underestimated, evils. It's a personal choice, but when we're stuck in such a situation, that choice CAN be pretty tough to make. Thanks for the reminder!

cookie said...

I think income 100k n 250k got difference in lifestyle. 250k n 500k less. 500k n 1mil even lesser.
i mean..there's not much more things a 1mil incomer can do which n 500kpa incomer cannot do.
at end of day we can only eat 3 meals n sleep on 1 bed.

K said...

For some people striving to earn a higher salary is a means of measuring "achievement", less about what you can spend it on.

la papillion said...

Hi Tacomob,

Welcome to my humble blog :) It's indeed the basic tenet of financial success. There's no way where can accumulate wealth if we didn't get the basic right - which is to spend less than what we earn.

la papillion said...

Hi budget babe,

It's indeed underestimated. I'm quite sure a handful of those people who thought their expenses will remain constant when their income increases actually overestimated their own discipline and ability to handle social pressures. Sometimes the higher spending is even part of the job in order to earn more.

la papillion said...

Hi Low Paul,

I agree! Huge difference when we comparing low to medium, but not much difference between high and even higher income. There's only so much that money can get you, and the rest is just more numbers sitting in your accounts.

la papillion said...

Hi K,

I agree with that. It applies to me too. Sometimes I just wanted to hit a certain number to show to myself that I can do it. It doesn't have much to do with money, even though it certainly helps to accelerate your goals. That's a different kind of satisfaction, not through the accumulation of money but more for career aspirations. That's to be encouraged, in my view.

la papillion said...

Hi K,

I agree with that. It applies to me too. Sometimes I just wanted to hit a certain number to show to myself that I can do it. It doesn't have much to do with money, even though it certainly helps to accelerate your goals. That's a different kind of satisfaction, not through the accumulation of money but more for career aspirations. That's to be encouraged, in my view.

SMK said...

Earning $10K monthly is pretty common. A mid 30s uni grad would probably hit this amount given the right industry.

A good number of SMU grads are hitting $4K $5K off graduation given the right industry and job scope.

mid 40s will hit $15K in an MNC or upwards $20K once they are in a decent mid management position in an MNC.
Didn't AK also have a high 4 digit?

wage inflation is real.

And MNCs are trying to find ways to reduce it. FTs or leave for neighbouring Jakarta or outsized Shanghai Shenzhen as some already did.

in a world where higher education doesn't mean the difference and there is no differentiating economic and investment growth like in the 70s 80s 90s, I find Cw8888 declaration of income growth being the most important for youngsters all the more self evident but seemingly in singapore unlike our neighbouring fellow human beings, we belong to a new generation which favours benefitting from other's endeavours more than scaling up the benefits from our own.

Eventually people from neighbouring countries may have children who think like us. For now, the struggling and hungry masses think more like our previous generation.

It is almost impossible to stick to a consumption pattern. Because even if you and your spouse doesn't, your children will compare. And who doesn't want their child to be proud of them?

la papillion said...


Wow, I didn't know that. Thanks for the info :) I suppose the right industry must be financial related?

You make a good point regarding consumption pattern. I guess to a certain extent, it's easier for singles or even couples without children to do it. But there are examples of parents raising children who don't really compare and have a sense of what's more important than just having more material wants. I think more importantly, what do you want you children to be proud of you? A provider of material goods? Haha

SMK said...

You will be surprised that though finance is one of them but that requires so much more effort than some others that just require more time and sacrifice.

It may feel comforting to console yourself that it is possible to raise kids who don't compare but place your hand over your heart and ask yourself honestly if you see that as more common amongst the kids you teach or is the kid who compares more common?

Plus I know you are reader. Read books on the 5 languages of love and you will know prescription of the adjective materialistic is not necessarily singularly accurate nor fully fair of this particularly alignment.

cookie said...

Smk reads a lot. My wife passed me this book he mentioned. I am glad i din give this a miss.
alas, spore imho is itself money minded from the top. Everything is money. Look at house prices coe taxes bills fines what have u. Look at the ministers salary. Compare this with other world leaders. I really dont believe anyone can get by a single day without footing a cent. With this on top of everyone, its hard just to find anyone who goes ard by the languages of love singapore.
talk n reading is easy..but in reality its hard..very hard.

SMK said...

I agree. And instead of feeling resigned, we should do something about it. Truth be told, despite the millionaire minister salary which you can do nothing about (and voting PAP doesn't seem the solution, because can you say the new party won't help themselves? And other reasons too long ...) we should focus on what we can immediately do.

Again, I would suggest taking cw8888 advice and start working more on growing your active income. Because other than the fact that investment grows only the portion of active income that you do set aside as savings, any percentage of active income growth contributes to a greater affordability for basic pleasures of life; food, cabs, and also compounds your investment portfolio through new additional input.

Even for an early 40s friend I have, he was able to double his income by just changing careers (nope not financial, industrial machinery)

That makes wonders for your creating a portfolio for yourself.
Imagine doubling your income and setting aside a 80% of that increase towards your portfolio and taking your family out for a 1 time holiday on that 20%!

How long will it last? Not long but the point was never to spend it all.

la papillion said...

Hi SMK and Low Paul,

Interesting dialogue!

I'll definitely read the 5 languages of love. Thanks so much for introducing me the book, SMK. Though the flow of discussion seems to diverge from the article somewhat, but it's all for a good reason! Like what SMOL mentioned multiple times, the real meat of a blog post usually lies in the commentary section. The blog article is just an appetizer to encourage more 'eating', LOL

Sanye ◎ 三页 said...

When one starts to earn 25K a month, whether lifestyle will change is entirely a choice of individual.

11 years ago, I was given a chance to take up a senior position in my company and my earning doubled overnight. Then I reminded myself, what happened to my predecessor may happen to me a few years down the road. So I decided to strive to be financially independent from the job as quickly as possible: I continued to drive a Japanese car, despite many advices that I should drive a BMW like my predecessor, and still eat at hawker centres or food court for lunch. No, nothing much changed, but expenses increased due to higher income tax. LOL.

cookie said...

So your benz is your spare car when u use your camry for

Anyway, u are a wise man. I wonder how many are like u.

I got an uncle who held a senior post at UE. Got axed and now became a stockbroker.

Sanye ◎ 三页 said...

Low Paul,

I never had a Camry. I had a Mazda 6, which I joked that it was more atas then the BMW 5 my formal boss had. It has since retired after serving me for 10 years. I bought the C-Class since this will probably be my last car, and my wife liked it so much. Plus, I can go without my job anytime now...;P

cookie said...

Hi Sanye,
Yes, at ur age n with ur means, u can well afford to live life the way u want.
I might go back to driving japanese car when my coe expires. Havent gone into m'sia for durians for years already. Miss good old days.

gagmewithaspoon said...

I am in my mid-30s and definitely, wage inflation has hit Singapore. Most of my peers are already earning 10k, and some even started out earning 10k when they just graduated - those in the IB industry. That was 8 years ago. Now? I think IB may be earning a cool 12-14k? No kidding.

And that is an issue that Singapore faces, is it justifiable what we are bringing to the MNCs? Nope, and what PMETS does can easily be done via email. You can easily move this over to India, Philippines or greece now. Our advantage (as told to me by a foreigner CEO) was that 1) our english abilities 2) our stable government. But india and Philippines has that english speaking advantage, and not to mention that many other countries are catching up. Whereas for 2), i am not keen to find out what awaits us when our current government change hands.

I certainly have my own luxuries in life, but i try not to have too many. But many of my peers are happily driving a BMW, a condo in Holland and they say its not enough. They need more. at least they need more luxuries than what they were used to when growing up. Maybe i am lucky, my dad only earned 2.5k until he retired and I also BMW (Bus MRT WALK) everywhere i went, so i feel like my life has improved a lot since my parent's time. not so much for some of my peers who have always lived in a centrally located condo, drove cars (yes at least 2 cars) and had overseas trip each year.

Lim said...

I assume that as an investor, your trading/dividend income plus salary exceed 10k already. So maybe you can tell us, when you cross the 10k income mark, how did your spending change? Actually, 10k is probably the point that you can afford a car in Singapore, so moving to 10k is probably a bigger change in lifestyle than moving to 25k.

la papillion said...

Hi gagmewithaspoon,

Sorry for the late reply...not sure why I didn't see this :)

Thanks for sharing your experiences with us :) I really didn't know it's so easy earning 10k to 20k range these days. Apparently the whole of singapore had moved forward and I'm apparently left behind, haha!

I guess in between our generation and our parent's generation, life had improved in some areas and de-proved in others. I believe each generation has their own set of unique problems to overcome. We can always say this generation or the next generation had it easy, but it's never easy.

I guess we just have to be thankful with what we have :)

la papillion said...

Hi Lim,

Wow, you assume too much..

As my income increases, I don't spend proportionately as much. So while I spend more with more disposable income at hand, I save a lot more. I guess that's the ideal outcome i.e. spending increment is less than income increment, leading to savings increment.

What you said is true. I think there's only so much that money can buy. Upon a certain upper limit, lifestyle changes won't be that different anymore.

cookie said...

For me moving from 10k to 25k pm n beyond range does change my lifestyle much. When high tide, i still look for coffeeshops n petrol stations to relieve myself to save than 10 or 20cents toilet fees.
But i have more choices now.