Tuesday, 6 June 2017

Why should a young Physiotherapist start saving and investing earlier?

Singaporeans are generally good savers, and according to Barclays, Singapore's saving rate of 24% is only behind China and India. Cash and deposits amounted to 19% of total household assets in Singapore in 2013. With the backing of such data, I am assuming that the average Physio in Singapore is a good saver and I want to propose why you should start investing those savings as soon as you can. This is provided that you have paid off your high interest debts e.g. credit card debts, renovation debts.

Would you rather be Jonathan or Joshua?

Which of the two physios would you rather be?
1) Jonathan invested $240,000 and received $1,539,145
2) Joshua invested $720,000 and received $1,324,281

This is a no-brainer. Any intelligent Physio would choose 1. You invest lesser than  and get higher profits.

In situation 1, Jonathan started investing $1,000 a month into the Singapore stock and bond market from age 25 to age 45 and stopped contributing fresh funds into his investments due to increasing financial responsibilities in supporting his ageing parents and teenage children. He did not liquidate his investments, and re-balanced his portfolio yearly and received $1,624,088.11 when he turned 65. 

In situation 2, Joshua enjoyed his youth in his 20's and traveled widely. He even took 1 year off work to travel! When he had his children in his 30's, he sent them to the best childcare and music classes he could afford. However at 45 years old, he realized that he better start planning for the time when he would be too weak to work as a Physio A.K.A retirement. He started investing $3,000 monthly into the Singapore stock and bond market from 45 to 65 years old. Thankfully, he was not too late and managed to receive $1,519,195.04 at 65 years old. The last 10 years were particular difficult for him as he had to contribute to his children's tertiary education along with the medical expenses of his ageing parents.

(The above scenarios is based on an average of 6% returns per annum of a Singapore balanced portfolio and actual returns may differ)

As shown by the area between the two lines in the graphs, Jonathan earned more from investing even though he contributed less. 

Which situation would you rather be in? 

I would rather be Jonathan, controlling my spending right from the start! With fewer children financially supporting ageing parents, it is better to be slightly more prudent with our finances as early as we can.  Do you think that a person should start investing as soon as he or she can?


  1. I would rather be Jonathan as well. But kind of don't know where to start learning stocks and buy/sell.. wonder should I go through trader or something...

    From a fresh grads physio.

    1. Hi Jennis,

      Do read up more. You can read this easy to read book


      All the best!