Will you have RM 100,000 by 30?

How would you answer this question?

Is it a yes? no? or I don’t know?

How do you feel after being asked this question?

Do you feel excited about it? or, are you pessimistic about it?

I believe we will have different answers to this simple question. Our answers, if you think about, are reflective of our personalities, money beliefs, income level and …. so on and so forth. As you read, if you are not born rich and are working for a salary of below RM 5k+ a month, this article is definitely written to you.

For a start, let’s assume you earn RM 5k+ a month from your job today. Maybe, you’ll find RM 100,000 to be overwhelming as it is a huge sum. Yup, it is indeed a lot of money but it seems to be a lot bigger especially if your monthly income is not high. That’s pretty normal. But, in this article, I’ll like to address this issue by asking this question:

‘Is it possible for you to have RM 100,000 by 30 with humble beginnings?’

To me, I find the answer to be ‘Yes’. But, the road to success requires us to think and manage our money differently from the conventional. Here, I’ll offer 5 food for thought so that you may stand a better chance of having RM 100,000 by 30.

## #1: Can You Save Your Way to RM 100,000?

The answer is again ‘Yes’. But, will you get there by 30?

Let’s do some math.

If you make RM 5k+ a month and are able to save:

– RM 500 a month, it takes 16+ years to reach RM 100,000.

– RM 1,000 a month, it takes 8+ years to reach RM 100,000.

– RM 1,500 a month, it takes 5+ years to reach RM 100,000.

– RM 2,000 a month, it takes 4+ years to reach RM 100,000.

– RM 2,500 a month, it takes 3+ years to reach RM 100,000.

My question is: ‘Are you able to save 30% – 50% of your monthly income for the next 3 – 5 years to raise RM 100,000 by 30?’

If you are above 25 this year, what would you say?

If you find this approach ‘tough’, it is. Saving your way to RM 100,000, if you are making RM 5k+ a month, is excruciating and rather demotivating to most young people today. Thus, here’s a takeaway for you:

‘You need a better plan than just saving money to raise RM 100,000 by 30.’

Agree?

## #2: Why the Middle-Income Couldn’t be Rich?

Let’s do a simple exercise.

Take a pen and a piece of paper. Draw a straight line at the middle of the paper. On the left side, list down the sources of income that you are earning presently and their amount on a monthly basis. Then, on the right side, you may continue by listing down what you have spent on and their amount on a monthly basis.

How would it look like?

For most in the 20s and making below RM 5k+ a month, your sketchings would most likely be:

 Income Expenses – Job: RM 5,000 a month – Food & Beverage: RM X– Groceries: RM X– Rent or Mortgage: RM X– Car Loan: RM X– Insurance: RM X – Phone Bills: RM X – Entertainment: RM X – Holiday Trips: RM X – Clothes: RM X– Miscellaneous: RM X

The point is:

‘You have multiple expenses and rely on 1 source of income to support them.’

You have many ideas to consume money, but have little ideas to produce them. In most cases, it’s a sure path towards financial unsoundness.

So, what can you do?

I agree to this solution, to some extent. Here’s how I view it:

First, I agree that you can immediately boost your savings a month by reducing a handful of expenditures which are not urgent. This includes your holiday trip, latest smartphones, gym packages, clubbing, fine dining … etc.

So, let’s say you are committed to save money and have decided to cut a few of these expenditures.

Awesome!

Out of it, your sketchings above would change to the following:

 Income Expenses – Job: RM 5,000 a month – Food & Beverage: RM X– Groceries: RM X– Rent or Mortgage: RM X– Car Loan: RM X– Insurance: RM X – Phone Bills: RM X – Entertainment: RM X– Holiday Trips: RM X– Clothes: RM Y (Reduce from RM X)– Miscellaneous: RM Y (Reduce from RM X )

Guess what?

You may boost your savings by a few more RM X00 a month but … the truth is:

You still have 1 source of income to pay for lots of expenses.

Does it make you rich? Not really. Cutting down 10 expenses to just 7 is indeed not enough to make you rich. Instead, it is a quick way for you to feel miserable and encourages you to forget about the whole RM 100,000 savings plan. Why?

This is because your mammoth efforts in cutting expenses will not provide you a big enough reward to continue the efforts. In other words, walking 1km each day does not immediately turn a fat boy into Arnold Schwarzenegger and thus, the fat boy quits … although walking 1km is a helpful start to turnaround his health.

Besides, if you make RM 5k+ a month, how much can you ‘save’ anyway? Let’s say, you are damn good at saving money, can you save RM 5,000 per month?

As such, I believe, saving money and cutting expenses would not make anyone of us rich or helpful to us to raise RM 100,000 by 30.

So, if saving money and cutting expenses is not the way, then, what is?

## #4: You Should Focus on ‘Income’, not expenses.

In contrast, you should spend money … wisely.

Take a look at your sketches. Which of these expenses will make you richer? … not make you look richer but leaving your poorer.

If you earn RM 5k+ or below per month, most likely, you don’t have knowledge, ideas, skills, insights, technical know-how, network, influence … etc which could be traded for money to boost your income.

Here’s what I’ll do.

For instance, if I have RM 30,000 in cash and intend to raise my cash to as much as RM 100,000, instead of saving RM 500 or RM 1,000 a month, I believe, it will be faster and more efficient for me to identify the skills I needed to learn which can be traded for higher income, pay to acquire these skills and master them.

What are some of these skills?

It depends on your field of work and industry. There will always be the top 10% or 20% who makes more money with less effort as compared to the rest of 80% or 90% in the industry, be it finance, sales, engineering, medicine, … whatever.

You may want to find out what they do and learn from them.

If you’re into business, then, it’s essential for you to take time to study from the best marketers about sales and marketing. Instead of cutting business expenses (which is not going to take your business to the next level), I think it is helpful, if you are willing to spend money to learn about marketing and further raise your budget in marketing. Why?

This is because marketing brings sales and sales brings income.

Less marketing may lead to less sales and thus, bringing in fewer income.

As such, the takeaway is:

Increasing income is a faster way to raise RM 100,000 than saving money. So, what do you need to learn to increase your income today?

## #5: Your Catalyst to RM 100,000 and Beyond …

Over time, probably 6 – 12 months after beginning to learn a tradable skill, you should experience some form of increase in active income, leading to a raise in your bank account.

That’s great. But, it is not the time to ‘increase your expenses’ just yet.

Why? This is because you still have 1 source of income despite having a raise in quantum of the income.

The good news is: You are ready to convert these cash into investments which will pay you regular streams of passive income (income earned from being an owner of assets, not physical labour).

If you learn how to do that, your sketches would look like:

 Income Expenses – Job: More than RM 5,000 a month– Business Income: RM Z– Rental Income: RM Z– Dividend Income: RM Z– Interest Income: RM Z– Royalty Income: RM Z – Food & Beverage: RM X– Groceries: RM X– Rent or Mortgage: RM X– Car Loan: RM X– Insurance: RM X – Phone Bills: RM X – Entertainment: RM X– Holiday Trips: RM X– Clothes: RM Y (Reduce from RM X)– Miscellaneous: RM Y (Reduce from RM X )

Now, you have more than 1 sources of income to pay for more than 1 expenses on a monthly basis.

They would make you financially stabler, enabling you to reach the RM 100,000 savings target faster.

## Conclusion: The Secret Sauce to Raise RM 100,000 by 30

All in all, it is possible for you to have RM 100,000 by 30.

But, the conventional method of ‘working hard, save money’ is definitely a slow and miserable way of achieving that RM 100,000. Personally, I find that learning how to increase income via learning income-tradable skills and investing is a lot more fun, faster, and efficient.

This, I believe, is the secret sauce to having at least RM 100,000 by 30.

Ian Tai

Financial Content Machine. Dividend Investor. Produced 450+ Financial Articles featured in KCLau.com in Malaysia and the Fifth Person, Value Invest Asia, and Small Cap Asia in Singapore. Regular Host and Presenter of a Weekly Financial Webinar with KCLau.com. Co-Founded DividendVault.com, an online membership site that empowers retail investors to build a stock portfolio that pays rising dividends year after year in Malaysia and Singapore.

### 2 replies to "Will You Have RM 100,000 by 30?"

• Tim Ostwinkle

How well can one live on 5,000rm per month? I’m thinking about retirement and will have perhaps 8,000 RM per month to live on with my wife.

• Foo Lun Leong