An undergrad projected portfoilo

[deathman91]

So I did up an excelsheet up to get a sneak peek of how would my portfolio be like when I graduate in 2.5 years time. I assume a safe starting gross pay of 3k and projected a annual increment @ 5%.

Google Drive to see my formula
Google SpreadSheet

To keep things simple, I will not take into account the extra 1% interest rate on the first 60k of CPF.

Assume that Dividend investment will yield ~5% and liquid cash on a savings account ~2% on OCBC 360% PA. Dividends will be strictly reinvested.

While I do know that there is a ceiling on the MA. I will just leave it on the row as it earns the same interest even if it's channeled to SA. Not sure if this is correct though. OA figures will not be practical as it will be used for housing purchase.

Objective is to build up a side passive income and to retire at age 55 or best, 50 with a comfortable passive income and retirement funds(include both CPF and stocks)

Not sure if I did any calculations wrongly, do correct me if there is! Feel free to share with me other tips and recommendation and whether is my plan feasible!

 

[pcmdan]

So I did up an excelsheet up to get a sneak peek of how would my portfolio be like when I graduate in 2.5 years time. I assume a safe starting gross pay of 3k and projected a annual increment @ 5%.

Google Drive to see my formula
Google SpreadSheet

To keep things simple, I will not take into account the extra 1% interest rate on the first 60k of CPF.

Assume that Dividend investment will yield ~5% and liquid cash on a savings account ~2% on OCBC 360% PA. Dividends will be strictly reinvested.

While I do know that there is a ceiling on the MA. I will just leave it on the row as it earns the same interest even if it's channeled to SA. Not sure if this is correct though. OA figures will not be practical as it will be used for housing purchase.

Objective is to build up a side passive income and to retire at age 55 or best, 50 with a comfortable passive income and retirement funds(include both CPF and stocks)

Not sure if I did any calculations wrongly, do correct me if there is! Feel free to share with me other tips and recommendation and whether is my plan feasible!

Not too sure if I am pessimistic or what, but pardon me if I am wrong. I was lucky, I got a decent starting pay job with first year increment of 25% followed by 10% and then 5%. However, many friends that I know upon graduation, did not even fetch 3% (except the auditors and people in banks). Hence, I think 5% increment per year is high, unless u fall in the industry where it is known for high pay.

I think annual increment of 3% is more decent.

Not sure how you calculate your interest, but CPF OA, if I am not mistaken should be

N = 12
I/r = 2.5%/12
PMT = 690
PV=0
FV = 8,375.54

Of course you can be much more accurate by calculating based on number of days. However, do note that CPF contribution always drag by 1 month. I.e. you work in Jan, you will only get the contribution in Feb.

Do you have to pay school fees? Give Family allowance?

Insurance?

I myself personally find that one have to

Step 1. Buy Insurance
Step 2. Save 6 months of emergency funds
Step 3. Start to invest

I will never put investment as priority as investment is for long-term horizon. Since it will be considered as "illiquid" it should be place last.

 

[Darkzi0n]

20 years no inflation?
No family commitments?
No need to pay for children education?
No need to pay for mortgage loan?
No need pay for wedding expenses?
No unexpected expenses? (Water heater breakdown, large medical expenses for family members etc)

No point projecting one lar, there are so many unknown variables in life. Have short terms goals instead, and review them periodically.

 

[deathman91]

Not too sure if I am pessimistic or what, but pardon me if I am wrong. I was lucky, I got a decent starting pay job with first year increment of 25% followed by 10% and then 5%. However, many friends that I know upon graduation, did not even fetch 3% (except the auditors and people in banks). Hence, I think 5% increment per year is high, unless u fall in the industry where it is known for high pay.

I think annual increment of 3% is more decent.

Not sure how you calculate your interest, but CPF OA, if I am not mistaken should be

N = 12
I/r = 2.5%/12
PMT = 690
PV=0
FV = 8,375.54

Of course you can be much more accurate by calculating based on number of days. However, do note that CPF contribution always drag by 1 month. I.e. you work in Jan, you will only get the contribution in Feb.

Do you have to pay school fees? Give Family allowance?

Insurance?

I myself personally find that one have to

Step 1. Buy Insurance
Step 2. Save 6 months of emergency funds
Step 3. Start to invest

I will never put investment as priority as investment is for long-term horizon. Since it will be considered as "illiquid" it should be place last.

You are right about annual increment of 5% is rather optimistic, will probably adjust it to 3%. But I would expect at least an increment of around an absolute amount of ~$100.

Not sure why need so much trouble to find the interest earned. I just took what I contributed - the amount I have on year end.

I found out one major negligence on my part, my expenses doesn't change! LOL. Will probably need to factor in increase in expenses. Marriage, kids, housing etc...

For insurance, IDK about it. But I will just wanna buy those that covers me for CI, TPD, death and H&S. Basically those that will aid me when I falls sick, not sure how much would that cost me.
The SAF Group Term Life Insurance by Aviva definitely is in.

Not looking at those savings insurance... better use of the money elsewhere. Those are called term insurance right?

 

[pcmdan]

You are right about annual increment of 5% is rather optimistic, will probably adjust it to 3%. But I would expect at least an increment of around an absolute amount of ~$100.

Not sure why need so much trouble to find the interest earned. I just took what I contributed - the amount I have on year end.

I found out one major negligence on my part, my expenses doesn't change! LOL. Will probably need to factor in increase in expenses. Marriage, kids, housing etc...

For insurance, IDK about it. But I will just wanna buy those that covers me for CI, TPD, death and H&S. Basically those that will aid me when I falls sick, not sure how much would that cost me.
The SAF Group Term Life Insurance by Aviva definitely is in.

Not looking at those savings insurance... better use of the money elsewhere. Those are called term insurance right?

My proposal must have insurance
H&S

Since you require those TPD CI and stuff, you may consider Life insurance and lock in the price

SAF Group term life insurance is cheap when young...so get it if you can

Savings insurance are called endowment not Term insurance. They suck $$ and don't give you reliable returns. Don't bother investing your hard earn money with the insurance who might not know how to do so. the Deductibles will probably eat your savings faster then their guaranteed returns.

Yes...agree with Darkzion, so many expenses you did not factor in..and no inflation as well

You want to do projection, shouldn't you go as accurate as possible? Otherwise your projection is just anyhow humtum, might as well don't do..LOL