Wednesday, October 19, 2011

$50,000 by end of June 2012

A few days ago, I applied for another bursary valued at $2900. If I am awarded this bursary, my net worth will be at least $50,000 by the end of June 2012. This is also partly due to my internship starting on Jan 2012 which pays $1100 per month. I previously mentioned that my parents will still be giving me my $500 allowance when internship starts and I will be able to save around $1000 cash each month. However, I overlooked the CPF ordinary account, which is part of my net worth. To calculate how much money will be credited into my CPF OA, we have to first look at the CPF contribution and allocation rates.

Currently, for an employee at age 35 and below, the employer contribution is 16% and employee contribution is at 20% of wage. Therefore, the total contribution will be 36% of wage. Out of the 36% contributed to CPF, 23% of it will be credited into CPF OA, 6% into special account and 7% into medisave account.

My monthly remuneration for my 6 months internship is $1,100. Total wages earned is $6,600. Contribution to CPF OA during this period will be:  $6600 x 0.23 = $1,518

Total amount earned during internship = $1518 + 6($1000) = $7,518

Given that the $2900 bursary I just applied is awarded to me,

Guaranteed net worth by end of June 2012 will be :

$35000(current net worth) +$3000(bursary awarded this month) + $2900(bursary that I just applied) + $7518(cash and CPF OA earned during internship next year) + $1215(9 mths of RSP into ILP) + $1080(girlfriend contribution into savings account 3) + $840(tuition until internship starts) + $400(Ang Pow for 2012) = $51953(assuming no investments returns)