Benchmarking Salaries, Savings Rate and Networth

[taylorjr94]

@paisleyann I get that some engineering segments are smaller/less appreciated, so, oh well.

TBF, My dad was in engineering too, and he's also in the specialist track with no management responsibilities. but he was in an MNC O&G where they already have specialist tracks where subject matter experts can progress to manager-level pays.

 

[paisleyann]

@taylorjr94 I currently just changed job and working in MNC too. Previously I work in local SME and actually I had come to a time to decide my future roll.

However I tried and don’t really like the life or feeling of being in mgmt.

Hence I looked new job and get into my current one, where the senior executive cap is higher and doesn’t force into managerial roll.

 

[dazza_73]

@taylorjr94 I'll just leave this here.

An excel sheet I made a while ago mainly in regards to epf and retirement income but seems relevant here.

In my calculation, I used 2% yearly increment and 10% increment/promotion every 5 years.

Edit to add: This is is mainly used to calculate retirement income.

9k after deducting tax and epf would be at most RM7,000.

Based on rule of 4%, you'd need to have another million saved out of 1.8 million (2.4 mil - 600k) earned throughout your lifetime to enjoy the same lifestyle before retirement. Which leaves you only with 800k to spend on everything else, for more than 30 years.

Looks bleak but I believe most would outperform this by a wide margin since I am kind of using worst case scenarios for this.

https://imgur.com/MEX3Jq8

https://preview.redd.it/p5uetzu16ny...bp&s=a4c0768eb248726ed0594adcecbc38c6450fd704

 

[bandiron]

@dazza_73 The EPF employer contribution decreases from 13% to 12% when your salary is above RM5k.

Also note that since the EPF contribution is made monthly, the effective dividend for that year (excluding the previous year starting balance) would only be ~50% of the declared dividend rate for that year. Only the previous year starting balance is subject to the full dividend rate.

E.g assume your total contribution is 1k per month, and the dividend rate is 5%, your dividend less the previous year starting balance would be 12 months x RM 1k per month x 0.05 x 0.5 = RM 300.

Assume your previous year starting balance is RM 15k, your dividend would be RM 750. This brings your total dividend for that year to be RM 300 + RM 750 = RM 1050.

This would mean for the next year, your starting balance would be RM 15k + RM 12k + RM 1050 = RM 28050

TLDR; EPF’s dividend calculation is a b****

 

[dazza_73]

@bandiron Yes. I am aware but too lazy to do proper calculation. Thanks for clarifying. However, I am not aware that employer contribution drops after exceeding 5k. But google shows that you are correct.

 

[taylorjr94]

@dazza_73 you do realize dividends compound, right?

 

[dazza_73]

@taylorjr94 very good point. I completely missed this. Probably skipped my mind when I did this. Ok, seems to be a much better situation overall, gotta rework my calculations

 

[trm16]

@dazza_73 this is more realistic, thanks..

 

[pablob]

@taylorjr94 Your career/salary progression is applicable to maybe 0.1% of the population at best?

May want to look at some median values as a starting point, for a more sobering conclusion.

 

[taylorjr94]

@pablob You can refer to the other screenshot where it's just a flat 3% increment off a base of 2k.

 

[pablob]

@taylorjr94 Thanks, but is it only 8 rows of data? I cant enlarge the picture.

 

[taylorjr94]

@pablob yeah i tot showing the full year-by-year growth while still showing 15/30/45 and 3/5% increments are too many variables and too confusing.

 

[troubledautisticsinner]

@taylorjr94 I'm nowhere near the benchmark. Not even close..

 

[taylorjr94]

@troubledautisticsinner it's not a competition, in the end, its up to you to decide the lifestyle you want to lead, and the sacrifices you choose to make.

 

[ericc]

@taylorjr94 Not applicable to women.

 

[taylorjr94]

@ericc Huh why

 

[niv80]

@taylorjr94 To make it more realistic, you might want to consider a gradually increasing saving rate.

For example, when your salary more than 10K, you really should not be spending 85% of that for expenditure any more. Currently in Malaysia, spending 5K per month is already rather good decent lifestyle even in the city if you do not spend too much on lavish brands and luxury items. Another example, when 2K salary, you may spend 30% of your salary on food. But when you have 10K, spending 3K per month for food means you are spending about RM100 every day on food. Most reasonable people probably won't spend RM100 on food every day for 1 person. Of course, calculation changes significant when you get married and have kids. Family is expensive.

 

[zionpeter]

@taylorjr94 Also learn the rule of 72 for quick napkin math. If your investment returns 7% a year, 72/7=10.29 so that means your investment will double roughly every 10.29 years.

If it’s fixed income the return is probably 4% so 72/4=18. So double every 18 years.

 

[justineflake]

@taylorjr94 wah i am behind by 50% if follow this scale...

 

[ralphalvarezz]

@taylorjr94 Include epf or not?