I'm a 26 year old private tutor earning 140k/yr by teaching pri and sec sch. Pri sch accounts 70% of income but I don't like it. Thinking to give up on pri and focus on sec. Any advice?

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Hi anon,

An earning power of $140K/yr is quite decent at your age, and you have low expenses too. If 70% of your income is from primary school, that's $98K/yr. Let's round this up to $100K/yr.

I'm going to make a reasonable guess that you probably have a ratio of 2:1 or even 3:1 for primary and secondary school students, since primary school tuition rates are lower in general. Although I do not know how many are upper or lower primary students, we must also face the fact that to continue an influx of referred students, you will need to maintain your reputation by seeing through the current primary school students till their parents decide that they don't need tuition any more.

Thus I would suggest that you stick with the current batch of primary school students first. They will eventually move on to secondary school and your income will go up. In the mean time, reduce your acceptance of new primary school students gradually so that in 4-6 years, your ratio of primary to secondary school students is more like 1:2 or 1:3.

With respect to your cash flow, you are in a good position. Ensure that you invest your spare cash flow in income producing assets (that's a seperate topic entirely which I won't go into). Preferrably have a good mix of both guaranteed and non-guaranteed asset classes so that you may have some form of income in good times and bad times (such as now). As you build these income streams, you will also reduce the number of students you need to maintain your current income level.

Hiring your spouse can be a good idea also, since your income accounts for 75% of your combined household income, if your spouse leaves her job, your combined household income will not take too large of a hit. Ensure that your cash savings are decent first, as your spouse will be taking low or no income for a while while he/she picks up the skills needed to help you market your business and scale it in time to come.

In time to come, with a shrinking population in Singapore, expect that you will have lesser students in 20-30 years time and thus revenue may hit a ceiling and start to dip. By then, you should have sufficient passive income such that you won't have to worry about this too much.