Meet Azrael: The Blogger Who Saved $500K In 2020 At Age 32

A week ago, I wrote an article on the significance of saving $100k before turning 30. Unsurprisingly, there were some Zoomers or younger Millennials lamenting how impossible this achievement was.

So some shock therapy is needed. Therefore today, I managed to invite Azrael to share with us how he managed to sock away $500k in 2020 at age 32.

Granted, half of this amount (~$250k) comprise of his CPF funds, but hey, that’s his money too! Moreover, he did actively top up and optimise his CPF funds.

What’s even more impressive about his achievement is that his starting pay was about $2,000 and he did not earn massive returns from his investments (<4% XIRR).

For this feature, I have asked him a few questions and I believe we can all learn something from his insights.

1. Accumulating $500k at your age is a feat. Ok, you did not have typical privileges like a great degree to kickstart your career or good returns in the market. But surely, you must have had some “privileges”? What are your biggest ones?

I started working at an early age when I completed my Diploma. So I have already worked for a decade, longer than peers from the A Level route.

My expenses are relatively low. Part of this is due to the fact that I am staying with my parents. I provide 15% of my salary as allowance to my parents but I save even more since I do not have to pay for rent or home-cooked meals.

I do not have any dependents and most importantly, my parents are still working and healthy. This sets the foundation for me to accumulate some wealth. I probably also inherited some thrifty genes from my parents.

2. What are the most important factors behind this successful accumulation?

I have benefited from working in a good industry: Pharmaceuticals.

Although my starting pay was considerably low, there have been decent increments over the years, especially after I completed my part-time degree. I also made a mid-career switch after 5 years of working in Life Sciences R&D. There was a corresponding 33% jump in total compensation too. Moreover, I began to qualify for Overtime Pay and leveraged on that.

I am also blessed that I do not have a very active social life. Besides the occasional gourmet food, I do not have other spending “poisons” to contend with. During the time I was taking my part time degree, I was forced to save half my take home salary to pay for school fees. So I was conditioned further to stay in a lower cost lifestyle and try to maintain and not let expenses creep up. I do also consider the hours I have to work before I spend on something, especially higher-priced items.

My money mindset can also be considered extreme to some. I run my finances like a company with maximum optimisation.

3. How did you amass such a huge balance in your CPF? I mean, you are just 32 yet you have already met your Full Retirement Sum (FRS)?

Firstly, I only manage to hit the FRS if you consider both the OA and SA funds. In the future when I buy a flat, the OA balances would likely be used in the purchase.

I actually only topped up my SA once and did a full transfer of my OA funds to SA after chancing upon this strategy from this blogger AK71. I was not confident of my investing ability and wanted to build a big safety net with my CPF funds.

On hindsight, I should probably have topped up my MA first since the interest is the same and the funds are more liquid. I have invested my OA funds with Endowus, as well as investing some of it in Singapore banks during the recent pandemic, and the returns have been above my expectations.

4. Is your plan FIRE? Do you have an “enough” number and what do you plan to do after achieving it.

For now, this magic number is 33x my yearly expenses, which works out to about $1.2 million.

Once I achieve maybe 25x of my current expenses, there is a good chance I would find a less tiring and stressful role that I enjoy more. Obviously, this might slow down the accumulation rate but I see this as a good opportunity to stress test the portfolio.

Even right now, I am trying to grow some hobbies of mine into potential sides hustles. Hopefully, they can eventually become additional sources of income for me.

5. What is your advice to people (maybe a decade younger than you) who are starting out in their journey? 

It’s about your priorities. If saving money and building wealth is important, it needs to rank high on the list.

You will also have to align your expenses to your values well. It helps to guide and remind you on what really matters and cut out the unnecessary fluff.

In your optimising journey, focus on the 20-30% of your time and effort that generates the most upside. For example, it’s a hassle to shift your funds constantly from bank to bank searching for a 0.1% upside on a low balance. Also, just have one or two credit cards that matches your expense profile.

Always remember that no rebate or special interest credited can offset the X amount that you spend. In your career, work for a job that pays reasonably higher with some runway. Passion is quite the bullshit and try to find something that you are good at. It might help to check the margins of the company that you are joining.

As for investments, I have made quite a few mistakes that affected my returns. Initially, I focused purely on dividend yield, then followed other bloggers blindly, before deciding to take some courses with The Fifth Person and read further to improve my knowledge. It has been better since then. I also recently had a mildly painful experience with Eagle Hospitality Trust.  I thought it was very cheap during the Queen Mary and Tax law incident, but cheap became likely zero.

During the earlier stages of the pandemic, I started buying some “cheap” companies, such as Keppel and Dairy Farm. But the pandemic really fleshed out the huge differences between quality and mediocre companies. Sadly, when the opportunity came to purchase quality companies in April 2020, I had to sell existing holdings at significant losses to switch.

If I could restart my investment journey, I probably would have outsourced the majority of my savings to Endowus. Maybe 50:50 or even 70:30 for a riskier allocation. Then with the rest, I would focus on local REITs and banks before venturing to Hong Kong and United States to learn and expose myself to these markets.

Hope you enjoyed the sharing from Azrael and if you are interested to find out more about him, do pop by his blog, Azrael’s Financial Cents.

Thanks for reading!