The topic of achieving $100K by the age of 30 seems to be often discussed within the local personal finance community of late, so I thought I could offer my perspective as a Singaporean Malay/Muslim.
Why is there a need to discuss this, you may ask?
First of all, as a born and bred Malay/ Muslim in Singapore, I can relate to how certain choices we make in our lives will impact our financial goals differently from what others aim to achieve.
Secondly, there is a lack of sharing of information amongst the community about our financial journey.
So, let me start the ball rolling.
WHAT DO WE VALUE THE MOST?
This is my hypothesis: Our Malay/ Muslim community values family and kinship more than anything else.
We desire to marry and start a family early.
Don’t get me wrong, other races do value family and kinship too.
But when it comes to settling down, statistics have shown that there is a higher percentage of Malay/Muslim couples marrying before the age of 30.
55% of Muslim men in Singapore married below the age of 30 in 2018[1], while the figure was 68% for Muslim women[2]. These are higher than the national average of 41% and 58% respectively[3].
This set of beliefs impacts our financial goals, whether we realise it or not. Having an awareness of this is important as it enables us to be realistic about the financial goals that we have set to achieve.
What are the key life choices we’re talking about here?
They are:
- Getting married
- Having children
- Owning a home
Getting married
As Muslims, our religion teaches us that getting married is as good as completing half of our deen.
Anas reported the Messenger of Allah (peace and blessings be upon him) as saying,
“When a man marries, he has fulfilled half of the religion; so let him fear Allah regarding the remaining half.”
(Mishkat al-Masabih 3096)
And with marriages and weddings, they come with a cost.
Having children
There is a hadith that mentions the rewards of having children. Abu Hurayra reported that the Messenger of Allah (pbuh) said,
“When a person dies, all action is cut off for him with the exception of three things: sadaqa (charity) which continues, knowledge which benefits, or a righteous child who makes supplication for him.”
(Al-Adab Al-Mufrad 38)
Naturally, as Muslims, we desire having children.
Ideally, we would want to have them while we’re still young to ensure we have the best chance to conceive and nurture our children during our most active years.
Despite the declining birth rate in Singapore, it has been statistically shown that the Malay/Muslim population has the highest fertility rate among the different ethnic groups.
In 2019, the Malays’ total fertility rate stands at 1.80[4], whereas the rate for the Chinese is at 0.99 and for the Indians, 0.98. Overall (including the ethnic group ‘Others’), the total fertility rate stands at 1.14.
Owning a home
Getting married and having children will naturally make us want to have our own abode to grow our family.
As Muslims, particularly for the husbands, we have the responsibility to provide shelter for our families.
The Prophet (pbuh) said,
“All of you are guardians and are responsible for your wards. The ruler is a guardian and the man is a guardian of his family…”
(Sahih al-Bukhari 5200)
Hence, having a house that we can call home is something we tend to look for as soon as we settle down.
The big question here is: Is it still possible to achieve $100K despite these life goals?
If getting married, having children and owning a home are life goals you desire by the age of 30, is achieving $100K at the same time still attainable?
To explore this, I will lay out six different scenarios, for six different fresh graduates. They are:
- Singaporean Malay/Muslim man (degree holder)
- Singaporean Malay/Muslim woman (degree holder)
- Singaporean Malay/Muslim man (diploma holder)
- Singaporean Malay/Muslim woman (diploma holder)
- Singaporean Malay/Muslim man (ITE graduate)
- Singaporean Malay/Muslim woman (ITE graduate)
For simplicity’s sake, we will make the following assumptions:
1. Has started his or her own savings from scratch (i.e. $0) upon starting work
2. The men have gone through the mandatory two-year National Service (NS)
3. Has placed savings in a default savings account collecting interest, instead of a Shariah-compliant savings account with a good hibah rate
4. Has not started any investments
5. Receives an annual wage supplement (i.e. 13th month bonus)
6. Saves 50% of his or her take-home salary each month
7. Has started work upon graduation (i.e. no sabbatical year after graduation )
8. Receives an annual salary increment of 3% annually, taking into account 1% inflation[5]
9. Sets aside a maximum budget for marriage at about $40,000[6]
10. Buys a matrimonial build-to-order flat, with home renovation and furnishing expenses of about $25,000 (i.e. assuming total cost of $50,000 is shared with spouse)
11. Has a child, for whom expenses of $22,500 are incurred in the first two infant years[7] (i.e. assuming total cost of $45,000 is shared with spouse)
Next, I will deduct the lump sum of expenses to start a family at the end of the 30-year age mark.
Obviously, this is a simplistic way of calculating as starting a family at 25 and starting at 30 differs due to inflation and opportunity costs.
But here is a good start.
Singaporean Malay/Muslim man (degree holder)
Assuming he went through the Junior College route and a typical four-year local university degree programme, he should graduate by the age of 25.
Based on the 2019 median salary reported by Channel NewsAsia[8], a fresh university graduate can earn a starting salary of $3,600.
As an example, here is a possible six-year financial journey till he turns 30.
However, in considering the total costs of starting a family, he will be left with almost $43,000.
Not too shabby, but achieving $100K here is pretty far off.
Singaporean Malay/Muslim woman (degree holder)
As she does not have to serve NS, she will start earning two years earlier than her male counterparts.
Assuming she earns the same $3,600 monthly salary at the age of 23, she will save around $179,000 by 30.
With the total costs of starting a family, she will eventually be able to set aside about $92,000.
Pretty close.
Singaporean Malay/Muslim man (diploma holder)
Upon completing NS, a typical diploma holder will join the workforce at around 22 years of age – a three-year head start on a degree holder.
Assuming he is given a starting monthly salary of $2,500 as per the 2020 Graduate Employment Survey[9], he should be able to save $142,000 within nine years.
However, in considering the total costs of starting a family, he will be left with $55,000.
An improvement from a degree holder, but still not there yet.
Singaporean Malay/Muslim woman (diploma holder)
For a typical three-year polytechnic course, she will graduate by 19.
Assuming she starts working at 20 and earns around $2,300 per month without serving NS, as per the 2020 Graduate Employment Survey, she will save around $164,000.
With the total costs of starting a family, she will be left with $77,000.
Once again, this is a sizeable shortfall of $23,000 to that elusive $100K.
Singaporean Malay/Muslim man (ITE graduate)
Assuming this individual goes through the two-year NITEC route, he should graduate and finish his NS by the age of 20.
So let’s say he starts at 21, earning around $2,200 as per the Graduate Employment Survey, he will save around $129,000.
With the total costs of starting a family, he will eventually have $41,000 left.
That’s a pretty comparable savings to a degree holder I’ve calculated earlier, but far off from $100K.
Singaporean Malay/Muslim woman (ITE graduate)
Last but not least, let’s assume this individual goes through the two-year NITEC route, graduates by the age of 18 and starts working at 19.
As per the Graduate Employment Survey, she will earn around $1,800 on average, and accumulate about $112,000 by the age of 30.
With the total costs of starting a family, she will eventually have $24,000 by the age of 30.
In summary, it is not as easy as it seems when you start adding up all the costs you are likely to incur in that stage of your life.
As you can probably see, the profile that gets the closest to the ‘$100K by 30’ mark is the female degree-holder.
Unless you’re running a successful business or earning a substantial side income, it will be an uphill task to achieve the financial goal.
And here’s my final thought…
Despite all these, I would like to end off by saying that financial goals are not everything.
There are family goals, relationship goals and spiritual goals that we would like to seek too, which are not easily quantifiable.
If your goal is similar to mine, and you would like to start a family young, do so.
You must adjust your financial goals accordingly and not be pressured by the arbitrary goal of achieving ‘$100K by 30’.
Everyone’s journey is different.
You’re the only one who knows best how to lead your life in the best possible way. ⬛
1 Department of Statistics Singapore. Marital Status, Marriages and Divorces – Marriages under the Administration of Muslim Law Act (Grooms). 2021, July 7. Retrieved from: https://www.tablebuilder.singstat.gov.sg/publicfacing/createDataTable.action?refId=14156
2 Department of Statistics Singapore. Marital Status, Marriages and Divorces – Marriages under the Administration of Muslim Law Act (Brides). 2021, July 7. Retrieved from: https://www.tablebuilder.singstat.gov.sg/publicfacing/createDataTable.action?refId=10040
3 Department of Statistics Singapore. Marital Status, Marriages and Divorces – Total Marriages. 2021, July 7. Retrieved from: https://www.tablebuilder.singstat.gov.sg/publicfacing/createDataTable.action?refId=14141
4 Department of Statistics Singapore. Total Live-Births and Resident Total Fertility Rate (1990-2021). Available at: https://www.singstat.gov.sg/find-data/search-by-theme/population/births-and-fertility/visualising-data/fertility-dashboard
5 Lim, K. Singaporean workers’ salaries to rise at a slightly slower pace in 2020: Report. TODAY. 2019, November 11. Retrieved from: https://www.todayonline.com/singapore/singaporean-workers-salaries-rise-slightly-slower-pace-2020-report
6 Ruzaini, K. [Ultimate Singapore Malay Wedding Guide 2020] – How much do I need to save? Smart Mamat. 2019, December 31. Retrieved from: https://www.smartmamat.com/malay-wedding-guide/
7 Feng, M. Saving $100K by 30 Years Old… Is It Even Possible? Seedly. 2021, September 22. Retrieved from: https://blog.seedly.sg/how-saving-100k-by-30-years-old
8 Cheng, I. Higher median starting pay for 2019 graduates: Survey. CNA. 2020, February 28. Retrieved from: https://www.channelnewsasia.com/singapore/university-graduates-2019-higher-median-starting-pay-survey-781346
9 Smart Mamat. 2019 Polytechnic Graduates Continue to be in Good Demand. n.d. Retrieved from: https://www.smartmamat.com/wp-content/uploads/2020/06/GES2019PR-Final.pdf
Khairul Ruzaini Jasmani currently serves as Head of Partnerships at ShopBack. He is also the founder of Muslim-friendly guide to personal finance, www.smartmamat.com. He graduated with Bachelor (Hons) in Accounting and Finance from the London School of Economics, University of London.
