Posted on 28 Jan 2021
Which scenario will you choose?
$9k per month stagnant salary from the age of 21 (didn’t complete studies).
$2.5k/ month at age of 25 (just complete studies) and salary will increase over the years.
I'd go with 9k/month for starters. Having a high income is under-rated. Having a high income early on, is even more under-rated. Think about that for a moment.
Think of all the opportunity cost you gain by having 9k/mo at age 21. Low liability, early start on saving and investing. If you can survive on 2.5k/mo as a 25 year old, you can do the same at 21yo. That's already an extra 6.5k/mo just for saving/investment.
2.5k/mo with annual wage growth may work out to a much higher lifetime income in the end - but realistically at 50 or 60 years old, how hard does your money have to work to gain returns at that point?
We always talk about time in the market. Earning your first 9k at 21 will give you plenty of time in the market. Every dollar invested earlier reaps a better return than the same dollar invested 10 years later.
I'm not sh*tting on life long learning and wage increments. I'm just saying opportunity cost matters as well.
If the 9k salary allow you to have an early headstart in investing, not too bad a deal.
For 2.5k/mth scenario, there's no guarantee that it will eventually grow to 9k/mth either? It depends on the career prospect and how soon it can hit the 9k/mth range.
Money aside, interest, job stability and many other factors should be considered.
I'll choose Option 2, $2.5k / month at age 25 plus completing your studies which I assume is getting...
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