Category Archives: Facts

Interesting facts worth sharing

How the financial crisis started

Hey Ratpack!

The next few posts will be dedicated to informing you about something that has recently happened that shook the entire world in its foundations. That was the

2007-2008 Financial Crisis

I shake my head in disbelieve that people even till this date have no clue how this financial crisis started. Worse still, many people out there are still repeating the same mistakes that will cause the crisis in the first place. Therefore I feel it is the duty of Ratpack to duly educate its members of how the financial crisis started and what you can do if it happens again.

The oblivous vs the bankers

First off, this is an introductory video on how the crisis started. Enjoy.

More will be posted on this topic in future posts. Stay tuned!




How much do you need to survive on comfortably?

Hi everyone, I am back to update on this blog after a break. Sorry for the recent gap as I have been on a short vacation and University camps. It’s time for me to refocus on the topic of financial education.

After introducing the concept of money and inflation in the previous posts, I want to focus on the amount of money, aka nest egg, one needs to accumulate to survive after retirement.


ImageSure, some of you may say that raising kids to take care of your golden years might work, but for how long would this be true in a society where filial piety is losing its presence?

To find out how much money one would need to accumulate for retirement, we would firstly determine how much one needs to survive on.

Let us take a look into the expenses of a typical non-married person by using reasonable estimates at current market prices.


Transport – $200

Food – $300

Utility and Phone/internet Bills – $400

Entertainment – $100

Miscellaneous ( Hobby, clothes, home necessities ) – $100

Annual Expenses:

Luxuries ( Vacations and gifts ) – $2000

A typical person would be incurring $15,200 in expenses annually. That boils down to $1266 in monthly expenses on average. In other words, one needs to have an inflow of at least $1266 per month to maintain a basic lifestyle.

However, it is virtually impossible to live off with only this amount of money as we have yet to set aside contingency funds and savings for a rainy day. It is also assumed that you aren’t married, and there is no need to give money to others (alimonies, giving to parents, IOUs, etc) After factoring in all this, let’s just say $2000 per month is a comfortable figure to look at for retirement at current prices.

Let me re-emphasize the previous point. It means that we need $2000 per month coming into our pockets at retirement age to let us continue living comfortably into the golden years. Most of us in Ratpack are presently in our twenties, if we are able to have this amount of money inflow as passive income, we would be financially free. However, let us take the common workforce to illustrate for this example and in this case, age 60 would be the consensus retirement age, which most people are contented with.


Taking inflation of 2% into account, $2000 would have the same value as $4500 in 40 years’ time. We would need to look at the amount of capital needed by age 60 to be able to generate you $4500 per month to live with. Surely after all the years of being in the workforce and saving, you would have amassed your nest egg to invest with. How big your nest egg is during retirement depends very much on how much you save, how early you start investing and how you invest. A good financial advisor should be able reap at least 4% returns on your capital invested on top of inflation. Hence, assuming 4% return is what you get from your capital, $1,350,000 is what you need to build from now onwards to retire.

You may use this format to suit your own needs and eventually obtain the capital you would need to set as your goal. To calculate the value of money after n number of years, simply use the CPF retirement calculator online.


As I move on to the next part of the calculation, it gets more personal. After knowing how much we need to build to retire comfortably, we need to look into our own lives currently to see if we are saving and investing adequately. A simple way to calculate this is by taking your annual inflow ( salary, bonus, CPF ) minus your annual expenses. For those of you who are paying for insurance premiums, check if theres a cash value to it after a certain number of years. If there is, you may take into account the premiums paid as part of savings and investments. After which, you may take the total amount of savings and investments annually multiplied by the number of years you have left to your intended retirement age. This sum added on to the amount of savings you currently have would give you the amount of money you have at retirement age! In other words, the earlier you intend to retire, the more savings and investments you would need because you have fewer years to accumulate that capital!

Now put the above exercise into your own life. Are you having a shortfall under or a surplus over the required capital?

If you are having a surplus, congratulations! But don’t forget the kind of assumptions you are currently using. Expenses increases as you grow up, buy a house and start a family.


If you are having a shortfall, then you need to look at increasing your inflow or decreasing your outflow. It is simple Mathematics here. But trust me, focus on increasing your inflow because I believe in expanding your means of living and not living below your means.


In the posts ahead, I would be looking more into how to amass more capital, which I think is the primary concern for young people. Without capital, there is no way anyone can invest or buy opportunities. As a teaser, saving more of your salary is definitely one sure way to success, but it is not the only way. There are more channels out there that allow us to build a passive income.

If you guys prefer an excel sheet format for these calculations, feel free to contact us or leave a comment below. I do hope this post allows more of us to determine our current financial standing and discover each of our own financial needs.