What’s your savings rate? If you added up all the money you ever earned from working and counted how much of that you saved what would that number look like?
That’s what I did recently. Interesting enough even though I have been working in Singapore for over a year and half now I still need to lodge an Australian tax return. I’m must say I was surprisingly impressed with the online system, it was very quick and efficient. My tax return basically said I have zero income as expected!
Doing this tax return online I realised I was able to access most of my previous years’ tax returns. So I went on a journey, listing my taxable income, tax and net income for each year to date. I obviously know the amount of wealth I have now and roughly how much of that is savings and how much of that is investment returns. This was easy because I haven’t really made much from my investment which is quite saddening.
My Lifetime Savings Rate
So in turns out that I have been savings roughly over 50% of the money I have made so far in my lifetime…that’s before tax! After tax the number jumps to about 60%. To be fair, I haven’t really been paying that much tax because I have relocated to Singapore where the tax rates are so low.
I really happy about this achievement and didn’t expect I would reach the golden 50% savings rate. I don’t feel like I missed out on much to achieve this either. I was able to travel to a whole bunch of countries, buy a couple of cars (with an engine mod too!), eat at restaurants, and enjoy my hobbies of scuba diving and fishing. I was even able to take my parents to the Gold Coast and fly them to Singapore!
Listing all those things, I’m amazed at how much I was able to achieve while still saving most of the money I made. If I can do it, I’m sure you guys can do it too if you really wanted to.
Saving over 50% over your income is a great achievement. We should all aim for it. It’s really awesome and if you don’t feel like your are missing out on much even after saving 50% of your income you are well and surely on your way to financial freedom! Savings over 50% a year means you are buying a year of freedom. You should let this really sink in.
I will try to track my savings rate more closely from now on and it’ll be include both my wife and I’s income and expenses. Keep you posted!
I would love to know what savings rate you guys have been able to achieve. Please let me know in the comments below!
Disclaimer: : I wrote this article myself, and it expresses my own opinions. I am not receiving any compensation for it. Please note that all investments carry some risk. You should be aware that the value of your managed investment may not increase as quickly as expected, if at all, or that the value may go down. I have no business relationship with any company whose stock is mentioned in this article.