Tuesday, 13 August 2019

Increase your income, not cut your expenses is the way to become rich

I do agree to this statement, 'Increase your income, not cut your expenses is the way to become rich. This is especially so when I started work and am able to earn my own money to invest.

The accumulation of money from my income monthly is really slow. I have to wait for pretty much at least half to a year before I can really go on a buy action.

Read more: I thought I will get rich once I start work + Updates on my life 

This means that on multiple occasions, I was not able to execute my buy orders even though the price might be right as I need to build up my my emergency fund first.

Also recently I want to make sure my commission charges are fully justified.

For DBS Vickers, the cash upfront account has a commission rate of 0.12%, min 10 SGD. This means that to maximise the commission, I would need to make at around $9000 to $10 000 on each buy action.

This is because
(0.12/100) X 9000 (Lets just put it as 9000) = $10.80 in commission charges for $9000
(0.12/100) X 10 000 =  $12 in commission charges for $10 000
So this means that for each buy action I should use at least $9000 as either 0.12%, min $10 will be charged and for it to be worth, about $9000 will be minimally the best.

However, to invest $9000 each time is really not easy as building up to that can take me a very long time although one good thing is that it can give me more time to think before rushing in on a purchase.

With a higher income, I believe that I would be able to build up my portfolio much faster than having to cut my expenses.

Definitely, the best combination would be to have a a high income and low expenses.

I have actually taken several steps to increase my income / cut my expenses slightly:

Teach tuition every Sunday (additional ~$150 per month):

I currently teach every Sunday morning for 1 hr 30 mins. I am teaching lower primary and so I earn about $150 each month and this can help cover some of my expenses.

Pack lunch to work every Mon till Thurs:

I pack lunch to work every Monday to Thursdays, it usually is pasta but sometimes I will prepare salad (use iceberg lettuce as the base, it is really affordable at just $1.45 per head and can be used over a few days) or fried rice as well.

It all depends on what ingredients I have in my fridge. This really help save a substantial amount of my pay and some of my colleagues have also joined me as they want to save money too.

I like packing my lunch as I do not waste much time queuing for food or to waste time waiting. This means I can eat and even have a power nap if possible.

But this also means I do not walk as much because I can just eat in the pantry area and I don't get to go out for fresh air. Fridays we usually go out to eat so I don't pack lunch on Fridays.

Tapping my card before 7.45am from Mon till Fri:

By tapping in to the MRT stations before 7.45 am daily, I save $0.50. And sure, $0.50 doesn't sound much but if u were to multiply it by 261 days (no. of weekdays in 2019) = $130.50.

Of course, I tap in before 7.45am also because my working hours starts early at 8.30am, if not I don't think I would tap in before that. haha

Things I could work more on:

Increasing my salary:

I have been working in my current job for about 9 months now. My boss has discussed with me that there wouldn't be an increment after my first contract ends this month as I haven't worked one full year yet.

I am not too sure how much the increment would be and whether it will really happen, but I hope to stay till the end of the year and see what they can offer me.

If by then, what they offer me doesn't look attractive then I would start looking for a new job.

I believe that by the end of the year, even if I were to get an increment, I would still remain as a contract worker so maybe finding a new job would be a better alternative.

Increasing my tuition rate:

I have actually always wanted to increase my rate but to be honest, I didn't graduate from a local university and my degree is a really general degree (not STEM subject).

So I always offer a lower rate. I have been giving tuition for about 3 years now since my university days so maybe if I can increase my rateslightly would also bring about a little more income.

All in all, I hope to increase my main source of income which is my day job currently. With the market looking not so optimistic, job opportunities are also not easy to come by. Hoping that the rest of the year will be good:)

1 comment:

  1. Hi,

    My take is that it will be more worthwhile to start looking for the job opportunities (permanent) now. Job hunting takes time.

    My two cents worth of view.