Inspired by blogger friend Kevin of Turtle Investor, whom I hold high regards of in terms of his personality and his writings, I dug into my annual income tax return recently, and started to tabulate my salary and earnings. Over the years, I have seen many financial bloggers posted their Investment returns, but rarely have I seen anyone post their salary growth and be so transparent about it, except Kevin.
Frankly, I have never posted the actual figures of my portfolio. Likewise in this article, I will not share my actual salary figures and total earnings. Alternatively, I will normalised my first full year salary as 100 percent, and with the rest of the earnings benchmarked against it. You can have your own guess.
There are a few reasons for my lack of total transparency in this blog. First, I am still an employee, and it is a bit sensitive in my position to reveal who I am, publicly. Apologies. That said, I am not totally mysterious as I already met with several of the bloggers over the years. Until the day when I am totally on my own, I will reveal myself. Hope it is not too far away.
Secondly, I am quite cautious to reveal actual figures, not solely because I may be seen as proud or big-headed, but I also do not wish to give the wrong motivation to readers. The motivation should never be material success. Instead, it should be the righteous attitude of self-learning, overcoming difficult times, improving oneself and thereby helping others along the way.
MY ANNUAL INCOME CHART 2004 TO c2020
Above is my gross income chart from 2004 to 2020. Investment dividends and profits/losses realized are excluded. This can be covered in a separate post.
2020 income is an estimate (i.e. c2020). It is included as I am more or less guaranteed of my current job and is confident to achieve the forecast amount.
Chart representation:
- Blue bar – Gross annual salary including CPF contributions from both employer and employee
- Orange bar – Extra annual income generated from property(s) rental, giving tuition, writing etc.
- Red line – Total annual income i.e. Addition of salary and extra income.
Normalized to 2004 annual salary
The chart is normalized to 100% of my 2004 annual income. This arbitrarily means,
- If my gross annual income in 2004 is 30K, then my additional income is 0.13 x 30K = 3.9K. And my 2008 total income will be 5.0 x 30K = 150K p.a. And, if my gross annual income in 2004 is 60K, then my additional income is 0.13 x 60K = 7.8K. And my 2008 income will be 5.0 x 50K = 250K p.a.
ANALYSIS
Exponential growth of salary 2004 to 2010
Year 2004 to 2010 saw exponential growth in my salary of more than 600%. This exemplifies the growth of my human capital in climbing the career ladder. In fact, in less than 5 years since 2004, my salary rose phenomenally by close to 5-folds.
I must admit that the sector boom during this period helps. Yet, it is not entirely luck and timing. Behind every success, there is always an unseen hardwork, sacrifice and perseverance. One sacrifice I made was health deterioration accompanied by ridiculously high workhours. I was hospitalized and it led me to learn about priority in work. In turn, it gave rise to my efficient and balanced time management today.
Sustainability 2010 to 2020
From 2010 to c2020, my per annum total income averages at 615 percent (normalized), while annual salary averages at 547 percent (normalized) in the same period. Income fluctuation is also not excessive. This shows the ability to sustain stable income over a period of more than ten years and not just opportunistic growth. I have seen opportunistic peers, lauded with promotion and pay-rise during boom time, but when the crisis come, they were not spared from the catastrophic crash and firing.
Additional income 2011 to 2020
From 2004 to 2008, my additional income is mainly from private tuition, something I enjoy doing for more than decade. From 2010 onwards, I started to grow my additional income, by acquiring additional property to have rental income. There is also ad-hoc income from professional writing. I also started to invest in stocks to have additional taps of income. This income is not reflected in the chart though. The capital to invest in extra property and stocks is only possible because of the exponential growth of my salary in earlier years. Hence, I will like to emphasize the importance of human capital!
MORE RESILIENCE DURING CRISES
The “transparent grey” boxes depict period of crises, namely 2009-2010 GFC, 2015 Oil Crisis, and 2020 Covid pandemic and Oil crisis. In a short span of my career, I had experienced three of the worst crises in the history of mankind and in the oil and gas segment.
Yet, it is interesting to note from the chart, that I tend to do best during crises, complemented with highest earnings. I learn that one important ingredient to be resilient during crisis, is to be very conscientiousness before the crisis or during the good times. This is something that many people fail to realise. In the Bible, Joseph save the entire country of Egypt, by imparting God’s wisdom during their best harvest year, advising the people not to over-spend but to save for one of the worst crises ahead, seven years later.
FACTORS CONTRIBUTING TO INCOME GROWTH
There are a few important reasons on my income trend.
Focus on Human Capital
I wasn’t a financial blogger or stock fanatics back from 2004 to 2010. It allows me to have full dedication to build my human capital in my career without any distraction, thereby growing my salary. During this period, I also traveled around the world for work and gain invaluable experience and friendships that money cannot buy.
While it is good to be financial savvy as early as possible, it is also important not to over-dedicate your early career years into earning extra ad-hoc income, neglecting the building of your human capital for career or for your own business.
You can do the math. Is quickly growing your monthly salary 5-6 or more folds and keep it sustained, a faster way towards financial freedom or just waiting for your dividends to compile, when you have so little to start with?
The lesser you have, the more you accomplish
Both myself and wife have zero family financial support since the nineties. In fact, it is the other way around where we have to support our parents. Even our poorest friends’ parents we know, will at least have a small HDB to divide among them and their siblings. Or they will have at least parents’ CPF to help them in their studies. We have no parental support, not in the past, present, nor in the future. When we have nothing, there is a larger impetus to strive harder. It is the theory of the opposite! The lesser the provision, the more we accomplish! The more we are being provided for, the lesser we work and earn.
The more you give, the more you have
My father and my most respected auntie are both very poor financially. However, the type of people they hated most, when they were still alive, are those who are very “niao” (or stingy), saving on themselves at the expense of others. This is something I remember vividly and always remind myself to be generous to those in need. When my financial ability become stronger, a part of my income will always be giving away to the needy.
CONCLUSION
The explosive income growth during the early part of my career does give me an extra edge, in my financial management effectiveness today. Nonetheless, the importance of it, is not just the money earned, but the knowledge and experiences gained, and the friendships developed, which can translate to long term sustainable wealth.
In the last decade, while the ability to maintain my income level is a good thing, on the hindsight, there is limited growth in my salary. This is probably due to my distributed focus in growing and managing my family, as well as time devoted in my own portfolio investment outside office hours. I hope to change this in the next decade, as I look to grow my total income with a steeper positive gradient.
There are times when I feel that, the more we manage to grow our investment portfolio or dividend income, the more it will impede our salary or career growth and limit our human capital. Somehow, there may exist a hidden arrogance in our work attitude. We will probably look at our boss and think, “I do not need this job anyway. I am rich and have a big enough investment portfolio, and will retire very soon”.
This type of self-aggrandizing attitude will not carry us far in life. It is those who can overcome crises or work-related problems “even when they have a choice” who are really going to excel in life.
While I am an advocate of financial literacy at early age, I also urge all readers (including my own children) and those who are newer in the workforce, to also consider spending more time to invest in your human capital. In the early years of our career, it is better to focus on learning to increase our knowledge and expertise as well as to build our soft skills, that includes good interpersonal, communication and presentation skills, and the ability to develop good relationships even with the most difficult people.
Also, unless you only want to serve the small local market only, it is better to have a job that can give us as much exposure as we can, in a regional or even global level. The regional experiences and interactions with foreigners understanding their countries’ cultures, can broaden our mindset and expand our horizon. These attributes will definitely be useful in the later stages of our life.
Hi Rolf
Oh wow, that's a crazy explosion impact based on what you are earning today versus when it first started, growing by more than 6x. Using your same analogy, mine has probably plateaud at about 4x today since I first started and it is unlikely that I will experience an increase of more magnitude than that. But it is still better than none and like you I do very much agree that it is the early push and hustle in the first 10 years of our corporate life that matters as all of us are likely to start from a lower base at that point.
Hi B,
Yes, the initial push is important. That is when we have the most drive when we are younger.
I am lucky to ride the good times of the Marine and Offshore boom. From 2004-2008, bonuses of minimum 3-4 months in our industry are very common. In shipyards, bonuses are minimum 8 up to a max of 12 months. However I only got my bonuses from 2004 to 2005, and 2006 onwards is more growing of basic monthly salary and my position and ability to manage, mainly from the same company.
I don’t leapfrogged too much.
For you, actually if you can maintain your plateau 4-5x in an industry that is more sustainable, I think you are better off than me. My industry is gloom and doom, and I am extremely lucky to enjoy the boom and still able to survive and maintain my income after so many years.
Those who graduated 2013 onwards in my sector did not experience the boom and with a no future ahead now! I pitied them and it is really no fault of them. I also see some new fresh grad last year, that is even worst.
Hopefully they can find light somewhere somehow….
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Multibagger human asset!
Hi CW,
Multi-bagger only during first 5-6 years. After that, my salary has been pretty stagnant since 10 years ago.
That is not good.
I do not think it’s the industry that is to be blamed, as 2010 to 2015 are golden years and I can still leapfrog higher. However because of my growing family and deteriorating health, I choose to downgrade my position and even my salary back then.
Also the indulgence into investment and financial literacy perhaps also kind of put brakes onto my aspiration to career climb. As I become more frugal and grow my investment, and my loans become lesser and lesser, I also do not have the stress and drive to earn more money!
It is funny. The more you save, the less drive you have to earn from your job!
Yup, all those talking about hitting $XXXk by 30, they talk about all sorts of reasons except the most important one — having high salary or high salary growth. 😛
Well said, haha. Some also forget to mentioned they have strong backup from family.
Hi Vince et al, I have a friend who is close to his 60 now, wife is housewife all along. He worked hard over the years to grow his salary, and does not know stock investment up to today. But he bought into investment-linked-product (ILP) from his insurance agent every month 30 years ago.
What he also did is to grow his human capital and in his earlier 40s, he got retrenched but has a huge amount of shares in his company (listed in US) and a huge payout. He bought another property using the money. He found a job thereafter.
At age 53-54 he retired because his money from ILP payout now is sufficient to last him forever. Bearing in mind that he had 3 children and two of them are in universities overseas (one in medicine). The school and living expenses fees he probably need to cater is 600-700KSGD for all 3 kids.
So growing salary and ILP can also replace our so call self-created portfolio.
Of course if you are super super super cost cautious on everything, and does not want to have kids, frankly I can retire before 30 already without portfolio and without daddy mummy support! The trick is …. My wife works! Hahaha….
Hi Rolf,
You remind me a lot of a mentor I used to have. The generous and insightful sharing helped me to gain a lot of perspectives and understand the considerations, especially before I started doing stupid things plus the consequences of doing so. But I did some of them anyway 😀
Yet another thing we have in common – I paid for my own study loan (no daddy/mummy CPF because they were self-employed) and borrowed from the bank when I didn't have enough.
Anyway, you're too kind with your words – I'm OK to share, largely because like you, I'm semi-anonymous in this space although I have met many bloggers in real life.
I've mentioned that while my sharing included my monthly salary from full-time employment for quite a few yrs, they did not include alternative income streams and therefore, wouldn't paint a complete picture.
A positive outcome from having authentic posts (starting from negative net worth, job changes and making $7/hr) is that people can come on this journey with me and follow along for years.
While I have stumbled along and made mistakes along the way, it was what I needed to do for myself, in order to find my own path. This post is good advice on human capital that many don't want to hear 😉
Hi Kevin,
Sometimes, I can be too direct and not good at sugar-coated words. Hence, the human capital topic which is a “hateful” topic here.
Also because of my directness, therefore it’s the truth for what I have said about you.
I don’t think I am qualified to be your mentor, but maybe mutual mentoring, as I also learn a lot from your blog. I think there is no boundary in learning. Whether old and experienced or rich, should also listen to poor, young and inexperienced. Opposite also true.
Yeah, we paid my own fees! It is actually quite painful for me. Not just TFL (20K+ for 80% loan ) but also 4 yrs study loan (12K+ to pay the 20% TFL and living expenses), and computer loan (3K). I also need to repay my sis a few K because she supported me when I was in university for awhile. Hence, in debt of 40K (excl. exorbitant interest from DBS) when I graduated in early 2000s, which is quite a lot at that time. My first 5 years of graduate years are really work like a dog.
I wouldn’t want my children to go through what I have gone through after I graduated!
I read you “about” in your blog. And like you, all sleep on the floor too!
And, in our small 1-room then 2-room flat rental flat up until we are all adult above 18 y.o. My father only take home $500-600 a month (w/o CPF) all his life until 1997 when he passed away. Mum is housewife. Havent include the gambling advance loans and “piao hui” interests they have to pay.
So overtime, loans become even more, but luckily we have relatives and friends who are not rich, but are generous in helping us! This is the reason why I feel being generous to help those in need is super important, because my family was one of the beneficiaries back then!
Oh yes, you reminded me! My TFL was $20K and laptop loan another $2k. First taste of how interest can work against us and I quickly paid back every cent after working.
It's true. A lot of our experiences we had when growing up, shaped who we are now as adults.
Now when we have more, maybe we'd give more generously.
Now when we have more, not necessarily that we'd splurge on ourselves.
Strange, but true.
Anyway, if you see a "TI" account? That's me, sometimes I'm lazy and forget to change during commenting 🙂
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morning Brolf!
woah. you know after this post, your page views will also grow exponentially 600% normalized too. hah ! =)
"The lesser you have, the more you accomplish"
– this is the trend that i noticed as well. those who started out "harder" background tend to accomplish alot more that those with a "sheltered/easier" background. i really admire the gumption and the resilience of those that fall in your said group. their never-say-die- attitude is respectable!
your very last para is a very valuable soft skills, which i unabashedly honed during my overseas work. something that i didnt have during my early years, as i was an introvert during school. i commented similar on Kevin's blog as well, as we both share similar characteristics. over the years, working overseas, e, interacting with so many foreigners (including rednecks! )you are forced by circumstances to step out from your comfort zone. i would say, i have alot less hesitation now to approach people, and i dare to say, i have sharpen my ability to size up someone's character, based on first or second encounter. this is something that cannot be taught in school, but learnt first hand – thru the School of Hard Knocks
Evening BroFC,
Haha 600% growth in readership! Wow.. meaning lots of ad income! But still, SG readership market too small!
Gumption is an English word. Thanks bro, learning something new.
Yourself and Kevin are two guys I somehow feel connected and have the internet-brotherly feel. Hopefully we can meet soon!
Haha.. rednecks, I never deal too many, except I was on 2 American Rigs before! I remember the Crane operator on the rig, everyday 9pm will go to the Mess Room to play DVD – one episode of Band of Brothers per day!
Working onboard rigs and vessels are tough bro!….. I remember onboard during CNY and also missing lots of important days because the Offshore tests were extended.
Lastly, you are absolutely right, that the ability to “see through someone character” during 1-2 or 3 meetings is really a skill that cannot be taught in school.
haha. i think thats coz we are of similar age group? +/- couple years . if not wrong, im in the middle of both you and Kevin.
i remember coz i was commenting on his last-of-mohican army boots, which we both had; and i wore it from BMT to MR! so i save my emart credits to buy more useful things like green/black socks for work! (and PT shoes for my.. ahem ahem)..
will be nice to meet up. thats a grand thought!
In due course! Perhaps when the world we're in is back to some sort of normalcy, maybe we'd all have the chance to la kopi in real life 😉
Let's all hope that the world will return to normalcy soonest. And love to have kopi together.
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[email protected]: +1(929)390-8581https://www.facebook.com/pg/Total-Investment-221964325813140/about/https://t.me/totalinvestment