Showing posts with label Income. Show all posts
Showing posts with label Income. Show all posts

The Pursuit of the Top 1%: Income Goals Across Different Age Ranges

The income required to be in the top 1% earners can vary based on factors such as location, industry, and economic conditions. However, here is a general overview of the approximate income thresholds needed to be considered in the top 1% in various age ranges in the United States, based on data from the Internal Revenue Service (IRS) and other sources:

1. Age 25-34: To be in the top 1% of earners in this age group, you would need to earn around $260,000 or more annually.

2. Age 35-44: In this age range, the income threshold for the top 1% increases to approximately $480,000 or higher per year.

3. Age 45-54: To be in the top 1% of earners in this age bracket, you would typically need to earn around $650,000 or more annually.

4. Age 55-64: In this age group, the income required to be in the top 1% is around $860,000 or higher per year.

5. Age 65 and above: To be in the top 1% of earners in this age range, you would typically need to earn approximately $760,000 or more annually.

It's important to note that these figures are approximate and can vary based on individual circumstances and fluctuations in income distribution patterns. Additionally, these numbers are based on US data and may differ for other countries.


Do You Earn More Than Singapore's Median Monthly Household Income?

A frequent topic of discussion amongst people in Singapore is whether their household income is more than the median household income.

The Department of Statistics in Singapore publishes a report that is titled "Key Household Income Trends" every year.  The latest report is dated 2013.

Some points to note first.  The paper only highlights income from work received by all working members of the household from employment and business.  This means that it does not include income from dividends, etc.

Some people often mistakenly assume that the figures are the median income of a worker employed in Singapore.  It is not.  It refers to the household income.

So here are the numbers:

  1.  Among resident employed households, median monthly household income increased from $7570 in 2012 to $7870 in 2013.  This represents a 4.0% growth in nominal terms, or 1.6% in real terms (where the Consumer Price Index) is used as a deflator to compute real income changes.
  2. Taking household size, median monthly household income from work per household member rose by 5.6 per cent in nominal terms, or 3.2 per cent in real terms.

I make three observations on the median monthly household income figures:

Firstly, we can see that the median household income amongst resident employed households is almost reaching $8,000.  However, we also note that resident employed households does not equal to the resident households in Singapore.  As many as 9.4% of the resident households in Singapore have no working persons with 6.1% of these considered as "Retiree" households.  That means that the data on the median monthly household income is only representative of 90.6% of the resident households in Singapore. Granted that some of these households might be really poor, 6.1% of these households probably have accumulated more assets/wealth/passive income compared to a household that is earning $7870.   


Secondly, the survey only relates to roughly 70% of the population in Singapore since the focus is only on households that are headed by Singaporeans and PRs (granted that some of the non-Singapore citizens or PRs might actually be under a household headed by a Singapore citizen or PR). This is because the analysis is only based on households headed by Singaporean and permanent resident (PR).  In 2014, the total Singapore population was 5.469 million.  The resident population (Singaporean and PR) was 3.87million.  This means that t

Thirdly, we should also take note that the source of data is from a sample of households surveyed in the June Comprehensive Labour Force Surveys conducted by the Ministry of Manpower. Based on what I googled, it appears that 30,000 households were surveyed.  So this is only a sample of survey results and might not indicate or depict the true picture of the state of affairs.

So if you think that having a household income of greater than $7870 puts you in the top 50% of the Singapore population, think again.

Poll Results: Starting Pay When You First Started Work

I polled my readers on this blog on what was their starting pay when they first started work. This poll was really started after I wrote the article on Starting Pay for Graduates. Anyway, here are the results of the poll:

57% of respondents reported a starting salary of less than S$2000 when they first started work. 27% of respondents reported a starting salary of between S$2000 and S$3000. The remaining 16% reported a starting salary of more than S$3000 when they first started work.

So how do you measure up?

Starting Pay for Singapore Graduates

Well the news about the starting pay for fresh graduates is out. Based on a July 2011 survey by Hay Group, fresh graduates can expect to command a higher starting pay compared to their 2010 cohort.

Engineering jobs command the highest starting pay at S$2,745 per month for degree holders. This was followed by S$2,738 and S$2,728 for jobs in the legal profession and production respectively. The average starting pay for other jobs was around S$2,500. In 2010, the "hot" jobs were pretty similar and could be found in legal, engineering as well as R&D. The average starting pay for diploma holders was close to S$1,800.

And in a separate survey by JobsCentral, National University of Singapore (NUS) was the government employer of choice, beating Singapore Tourism Board to the top spot. STB had held the top spot for the past 3 years. The ratings were as follows:

1. NUS
2. DSTA
3. EDB
4. STB
5. A*STAR

For private companies, Apple retained the top spot. The survey results were based on 3000 over respondents from NUS, NTU and SMU.

When queried about the expected starting salary, most respondents actually picked a range of S$2,500 to S$3000. 33% expected a starting salary above $3,500 and 21.9% expected a starting salary of above $3,500.


I also remember reading the  Straits Times recently and was surprised to realise that there are NTU 2011 fresh grads out there that are earning $20K per month. I don't know what line they are in but $20K for a fresh grad sure sounds like a high figure to most people. I am assuming that they are probably in sales or perhaps working in some investment bank. It is good to know that local grads actually stand a chance of earning such a high salary. One would think that such high salaries were only possible if you study in a good university overseas.

Just the other day, I also wrote about Singapore's 40 Richest. Apparently, the richest people in Singapore have increased their networth again over the past one year as reported by Forbes Asia. I was trying to find out the common points they had and realised that property is perhaps it.

Have started my own little survey regarding starting pay. Feel free to take part in the survey. All submissions will remain anonymous.



Self employed? You need income protection!

If you’re self employed, you’ll be very aware of what your dollars can do. You’ll also be extremely conscious of the possibilities of your income drying up on you if you’re unable to do the work. That does happen, and it’s something you can cover with income protection insurance.

The risks

Even a minor situation can put you out of the loop for contracts and new jobs. That’s the nightmare, and it’s no joke for anyone who’s self employed. Something as simple as a minor injury can take you out of your income stream quite easily. If you’re a graphic artist who’s broken something, you can be stuck with sitting around waiting for things to heal, while your bills come in regardless.

This can hit cashflow in all the wrong ways. If you don’t have any cash on hand, or more likely if your cash is tied up in your business, the lack of cashflow is potentially destructive. Equally important, your clients may be “on hold”, waiting for work while you recover. That situation can often be fixed by subcontracting or outsourcing things you’d normally do yourself- If you have the cash to do it.

Not having the cash is likely to be the sticking point in any version of these scenarios. That’s also not including the domestic expenses, which can also be caught out in the sudden drying up of the income stream. Power bills, rates, you name it, they add up to a situation where plenty of money can be going out and none coming in.

Dodging the financial bullets

These situations are all quite avoidable. A good income protection policy can cover you for your expenses and in many cases even your medical needs. That’s useful cover when you need it, and it’s also a very good way of staying clear of those interesting “surprises” when you find out how much you have to pay for these things.

The cost of the income protection cover isn’t particularly expensive. You can get something like 75% of your income covered upfront, for a small, bearable outlay. You can also get packages that include serious full coverage for things like disability and related benefits.

Important: It’s a good idea to apply directly for quotes from the insurers, and get into a dialog about your needs. There may be a range of options available to you to lock in some good cover for your issues, and this extra effort can pay off very well in terms of providing comprehensive cover when you need it most.

Take the time to really think about this:

What are the risks of suddenly losing your income stream? These things include loss of business, too, so you need to consider a worst case scenario, to fully assess the situation.

What can you afford as an outlay for insurance? Cash outlays can be a little complex for self employed people, particularly if you’re just starting out, so try to pin down a good level of cover, relative to a viable outlay that you can live with.

When you’ve figured out what you need, talking to your insurer will provide a range of options. You can get it all done in a few minutes, and have some added peace of mind.

[The above is a guest post. If you are interested in contributing a guest post to this blog, please email sgfinancialfreedom@gmail.com with your proposed article. The topic of the article should be related to personal finance.]

Median Monthly Income Goes Up

A survey by the Ministry of Manpower finds that the median monthly income of full time resident workers have risen by 4.2% to $2,710 this year. This is compared to $2,600 for the previous year.

The data for median gross monthly income for the full-time employed (less full-time national servicemen) are as follows:

2006: $2,170
2007: $2,330
2008: $2,590
2009: $2,600
2010: $2,710

CIMB-GK regional economist Song Seng Wun noted that real wage growth was "just barely keeping pace with inflation".


Gross Monthly Salary Poll Results

I conducted a poll on this site to find out the gross monthly salary of readers.

56% earn less than $5000 per month.
30% earn between $5000 and $10,000 per month.
13% earn more than $10,000 per month.

Interesting results. It shows me that some of my readers are earning $10,000 per month but they still find my site interesting/relevant enough even though I earn less than them.

Perhaps I should get them to share how they managed to earn such a high monthly income and what jobs or industries they are in.

Salary Poll Results

I ran a poll on this site asking readers to reveal their monthly gross salary. I gathered a total of 30 votes.

Here are the results:

a. 56% earn less than $5000
b. 30% earn between $5000 and $10000
c. 13% earn more than $10000

The poll is now closed. If respondents are willing, they can click on the Ongoing Hot Discussions tab above and look for the Salary Discussion post to reveal their occupation, working experience and gross monthly salary. Thanks!

Salary Discussion

How much does a normal or average Singaporean earn? Based on median income, that is supposed to be $2,400 per month and raised to over $3000 by 2020 (Government's projection). I am not sure whether that is the actual case and have created a poll. Hopefully, more people will take part in the poll and "reveal" their salary.

I guess it will also useful for people who are thinking of switching jobs and are too afraid to ask others what their pay is like. Based on a recent survey published in Straits Times, people looking for jobs tend to view salary and career progression as fairly important factors when considering a job. In addition, they are looking for "work-life balance".

Here are some "statistics"of gross monthly salary that I know of based on conversations with friends and family:

1. Trained Teacher ($4000 plus, degree holder)
2. Stat Board (fresh grad, $3000)
3. Ministries (fresh grad, $3000 ++)
4. Secretary for SME (fresh grad, <$2,500)
5. Engineer (fresh grad, $3000)
6. Teaching Assistant, NUS (fresh grad $2,500)
7. Recruitment consultant (with commissions, $4000-$5000 after 1-2 years)
8. DXO in Mindef ($3200, fresh grad)
9. Tuition Teacher ($1000 to $10000+, depending on level taught and no. of students)
10. Bancassurance in bank ($4000 with experience)
11. Insurance agents ($2000-$15000, depending on commissions)
12. Property agents ($2000 - $20,000 , depending on sales)
13. Pastor ($3000)
14. Taxi Driver ($3,500)
15. Admin staff in MNC ($2,600 fresh grad)
16. Secret agents ($5000, fresh grad)
17. A*Star (fresh grad, $3500)
18. Sales Engineer ($4000)
19. Big 4 accounting firm (fresh grad, <$3000)

The figures above are "hear-say" figures and might not be entirely accurate. These are based on my conversations with people and what they accidentally reveal over the years when they complain about pay or are discussing about changing jobs.
Of course, there are a whole slew of other factors like performance bonus and yearly increment. But I guess the "wisdom" about all these matters are really out there in the market and only known by those who are working in that particular industry.

Perhaps people will feel free to share anonymously on their income and the qualifications they hold (including no. of years worked).


Median Income to Rise by 2020

I haven't had much to write about in the couple of days. Today, when I turned to the front page of the newspapers, I saw the headlines that states that average Singaporeans can expect their incomes to rise from the current median income of $2400 per month to $3,100 per month.

The funny thing about how I read news articles is not on what they report but rather on certain aspects that probably interests noone else but me. In reading this news article, I was more interested in why the goal was to raise the median income instead of the average/mean income. The 2nd thought that formed in my head was this: Will an average Singaporean earn more or less than the median income of $3,100 per month?

The difference between median and mean

This is probably secondary school maths but I guess there is a slight difference between median and mean (or average) when used in statistics. Generally, it depends on the data set and whether the mean or the median gives you the more accurate representation of what "average" really means.

When data is symmetrically distributed, the mean is a good way of calculating the average income. The mean is simple obtained by adding all incomes together divided by the total population. However, when data is skewed either to the left or the right, it might be better to use the median income to give a more accurate reflection of what "average" is in Singapore. So the question that is left to be answered is whether the income distribution curve is skewed to the left or the right. (Of course, to measure income that is not symmetrical, the median is a much better way that the mean).

So there is the tricky part if you say that the "average Singaporean can expect his income to rise because the median income is expected to rise." Here, what it means is that median income actually represents the "average" Singaporean's income more truthfully.

So I basically answered my two thoughts in this posting.

1. To measure income which is often not symmetrically distributed, we use median income which reflects the average income much better.

2. An average Singaporean can expect to earn the median income of $3,100 in ten years time and not more or less.

Other questions that will probably go unanswered are these:

1. Is the mean income in Singapore higher or lower than the median income?
2. Which one is harder for the government to achieve? Increasing the mean income or the median income?

All About Income

In my previous posting, I talked about simplifying financial planning to just 4 variables : Income, Expenditure, Savings and Returns.

Today, I thought that I would just explore a little more on Income.

Earned Income and Passive Income

Many people are only familiar with earned income which is the salary they draw from their day jobs. Others supplement their income by holding part-time jobs (e.g. tuition). Since most people are familiar with earned income, I thought that it might be timely to highlight another source of income which is passive income.

Passive income is simply money that flows into your pocket without you having to work for it. This can be obtained through dividends, annuity payments (CPF Life), or royalties (e.g. from books you have written).

Discovering that one can rely on multiple streams of income instead of a single source of income can be a relief especially in times of job loss or change of jobs. By not relying solely on a single source of income, you sort of diversify your "risks".

Of course, conventional wisdom still holds that you can actually just rely solely on your salary if you are really good at your work and the marketplace values your work highly. This include highly paid atheletes, musicians, directors, etc.

So whether you should rely solely on a salary or on multiple streams of income is a choice you have to make based on your own personal situation.

Protecting Your Income

We all take our salary for granted at times.

It is important to realise that there are certain events in life that might render one jobless. This might include unfortunate events like death, disability, illnesses, accidents or just hospitalisation.

It is thus important to realise the need to hedge against these risk by protecting any loss of future income that might be earned by you. Today, insurance companies are willing to bear this risk for you. You can thus protect yourself and your family from any loss of income by buying insurance.

Protecting your income can also be through simple steps like going for personal upgrading and development courses to ensure that your remain employable.

RETIREMENT INCOME

Perhaps the most worrying trend is that Singaporeans do not plan actively for their retirement.

During retirement, most people will not be earning a salary as they stop working totally. Without an income, they either have to rely on their savings or passive income to support their lifestyle during their retirement years.

CPF Life is an example of relying on one's savings to ensure a stream of income is present for one during retirement. The reason why CPF Life was initiated was to ensure that Singaporeans have enough savings to last them through their retirement years.

If one relies solely on their earned income, it is necessary that they realise this fact which I have illustrated below. Take Mr ABC who plans to retire at age 60 and who has an expected life expectancy of 80 years.

Mr ABC's projected income flow:

Age: 25 - 35 Annual Salary: $50,000
Age : 35 -45 Annual Salary: $80,000
Age : 45 - 60 Annual Salary : $120,000
Age : 60 -80 Annual Salary : $0

For a good twenty years (age 60 to 80), Mr ABC will not be drawing an income. He will need to rely on his savings over the past 35 years of his working life (age 25 to 60) to support 20 years of retirment.

If he is fortunate enough to live till age 95, he will have to depend on 35 years of savings to support 35 years of retirement!

Adding up his total income over 35 years, he can expect to draw a neat sum of $3.1 million dollars over his entire working life. Without taking returns on investment and inflation into account, if Mr ABC saves only 10% of his income, it would leave him with $310,000 to spend over the "worst case" scenario of 35 years in retirement.

That works out to around $8,900 per year or $740 per month.

Can he survive on that amount?

Additional $800 per Month

I have started giving tuition and that will bring in an additional $800 per month. I have realised that a lot of people are giving tuition (in fact almost everyone I know), and that is why I decided to do it too.

The job satisfaction of giving tuition thus far has been great. The parents are so appreciative of the help that I am giving.

I enjoy teaching. There is a certain joy and satisfaction I get when I see students improving.

But there are also times when I do not enjoy teaching. Somedays, it can just get so tiring. And I can feel brain dead sometimes when the session is too intensive.

Anway, I am really glad that I have an additional source of income now. The additional money will go a long way in propping up my family's finances.

Income for January 2010

Checked my bank account yesterday and realised I got some special "bonus" from the government.

The 1st is a sum of $750 for baby bonus. This will come in handy.

The 2nd is a sum of $100 for GST credits. This will also come in handy.

With Chinese new year coming and the need to give hongbaos soon, the total sum of $850 will go nicely to tide us through this season.

I have also expanded on my passive income sources and hope to bring my passive income UP UP and UP for this year. January is over and it is no use crying over spilt milk. February is here and I hope that it will be a roaring good year for all my passive income sources.

I heard the story about apple trees recently and it got me thinking... how can I increase the number of apple trees I have? Everytime I see a tree, it gets me thinking.. Have I planted seeds for another apple tree today? Or am I relying solely on 1 apple tree alone?

Which Is Your Best Income Source?

I was recently at the library when I stumbled upon Sean Toh's 4 Steps to Financial Freedom.

It was a pretty easy to read book and in it, I was reminded of the Rich Dad Poor Dad book that I read when I was in the Army and later on in university....

After reading Rich Dad Poor Dad and his advice to increase my income sources, I embarked on a journey to increase my portfolio and passive income so as to achieve financial freedom

Based on Rich Dad Poor Dad, one can earn an income throught the following methods:

1. Earned income
2. Portfolio income
3. Passive income

Earned Income

This is basically income which you earn using your sweat and toil be it at the desk or in the field growing tomatoes. Earned income is what most people are familiar with and many people stick to this source of income for their entire lives.

In my opinion, earned income is perhaps both Overrated and Underrated at the same time.

There is nothing wrong with focusing on this income source ALONE if you are certain that it will keep increasing and there will not be a day when this income will vanish and disappear.

Unfortunately for most people, earned income is no longer something that is guaranteed especially with the amount of retrenchments, compulsory retirement age and outsourcing that is taking place to countries like India and China.

On the other hand, some rich and well-to-do people get rich just be earned income alone. They get good jobs and get promotions and get paid higher salaries year after year.

I quit my $5K per month job this year and have thus suffered heavily in terms of my earned income. I find that I have less money to pour into my portfolio of stocks to increase my portfolio income which is what we will discuss next.

Portfolio Income

Porfolio income is earned from dividends that comes from one's stock or bond portfolios. Dividends are basically cash that is paid out to shareholders. The amount of dividends serves as a constant stream of income based on the porfolio of one's stocks.

I know of people who are able to earn sufficient portfolio income to retire because they have amassed a large portfolio of stocks that pay healthy dividends each year.

I started out collecting real estate investment trusts (REITs) because of their high dividend yields. Hopefully, this source of income will continue to rise over the years especially if I managed to re-invest whatever dividends I receive.

(I just collected a few hundred dollars in dividends for the month of November but it seems that this money will now be used for a short holiday trip instead of being reinvested...am I being wise?)

Passive Income

This can come from book royalties, renting out of houses, online income, etc. The magic of this income is that it requires little or no effort on your part and that is why it is termed "PASSIVE" income.

With this sort of income, you will be able to continue doing your daily job while earning an additional income that comes in day after day without you needing to working for it.

I started out some blogs to increase my online income as a source of passive income. I have been able to earn quite a steady and decent stream of income using Google's Adsense. Lately, I have been exploring Amazon's Associates Program too. Hopefully, this will start contributing to my passive income for the year 2010.

Conclusion

I am not on track to achieving my goal of $400 per month passive income. I admit that I have failed and that I will have a much higher and steeper slope to climb for year 2010 where I should hit a passive + portfolio income of $600 per month. May God Be With Me.

What are your income sources? Which source of income provides you with the biggest income? Are you focusing only on Earned Income while neglecting your portfolio income and passive income?

Passive Income Update

In the journey to financial freedom, one of the decisions I made was to rapidly increase my passive income. This was done through the acquisition of REITs, bank deposits as well as online income sources.

My updated portfolio for passive income (end September 2009) is as such:

1. 12,000 x Ascott REITs (DPU = 3.55 per half) = $71.00 per month
2. 17,000 x First REITs (Annualised DPU = 7.66cents) = $108.51 per month
3. 11000 x Suntec REITs (Annualised DPU = 11.94cents) = $109.45 per month
4. Maybank iSavvy Deposit = $8 per month
5. Online Income Sources = $30 per month

Total Estimated Passive Income = $326.96 per month


See Related Articles:
1. I Received over $1000 in Dividends for August 2009
2. Passive Income Sources

Income for July 09

The breakdown of my income for July 09

1. Salary = $0
2. Capital gains from shares/rights = $93 + $2300
3. Dividends from PenWest Energy Trust = $11
4. Google Adsense 1st payment = $150.
5. Baby bonus = $750

Total income for the month of July 09 = $3354

Hope that my income for August 09 will be much better.

Income for Jun 2009

My income for this month was particularly low as I wasn't working.

Here is a breakdown (comprising both passive and active income):

Salary = $260.96
KepLand Dividends = $80
PenWest Energy Trust Dividends = $11.02
Capital Gains from Trading = $128.92 + $62.27
GST Credits = $200

Hopefully the breakdown for July 2009 will be much better

Financial updates for March

This is a short post.

Just to remind myself that I added 6000 x Hongguo at $777.73 to my existing share portfolio.

In addition, opened a Citibank step up interest account to earn up to 1% interest for my deposits. Will take 12 months to step up to that 1% interest though.

Making an effort to update my monthly income and expenditure to this blog too.

My income for Mar 09 inclusive of bonuses and CPF contributions = $16, 381.

Hope to update my expenditure for the month of Mar 09 too.

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