Dear readers, you may have recently read of an article in local media about the time it takes for Singaporeans to scale the so-called “wealth ladder”.
The article was based on a report “Accelerating The Wealth Journey – From Stability to Abundance” by wealth manager St James’s Place. According to the report, the wealth ladder is made up of several stages:
Financial Stability: defined as the “first stage where an individual has sufficient money after monthly expenses are paid to save a portion of his income.”
Financial Security: defined as the stage where “someone in a financially secure position can, on top of being able to save a portion of his income, choose to invest his money.”
Financial Flexibility: defined as the stage where someone “has sufficient financial investments and assets to cover his living expenses for up to a year.”
Financial Freedom: defined as “having sufficient financial investments and assets to generate enough passive income for life”
Financial Abundance: defined as “having more than enough income for one’s lifetime.”
Based on an interview of 1,000 affluent Singaporeans (who had a minimum annual household income of $70,000 to over $250,000) between the ages of 25 and 64 between February and March 2023, it will take 32.3 years to progress from Financial stability to Finance Abundance, the breakdown is below.
Financial Stability to Financial Security: 6.1 years
Financial Security to Financial Flexibility: 6.5 years
Financial Flexibility to Financial Freedom: 8.7 years
Financial Freedom to Financial Abundance: 11 years
Based on the above figures, I would assume for a Singaporean man who graduate from university at age 25, works for 5 years to achieve financial stability, it will take the Singaporean man 32.3 years from age 30 to become financial abundance, that is around 68 years of age. Or the man will be around 52 years old when he becomes financial free.
But with increasing volatility of jobs, economic markets and rising costs of inflation etc, is it that easy for a person to achieve financial freedom, let alone financial abundant?
I would like to know instead how many % of the population here instead is financially free. I understand that this figure may not be available from the report since some of the respondents in the interview are still of a relatively young workforce age.
A related statistic from a Apr 2023 Vulcan post report has the number of millionaires in Singapore (with US$1 million or more in liquid, investable assets) at 240,100. Perhaps, we can infer from the some numbers from the above figure.