How a salaried employee became a millionaire?

A few days ago, I went for a talk on “Path to Financial Freedom” by Dennis Ng. It was actually a free preview for his workshops but one could learn a thing or two from the preview. He has been featured in many local newspapers and TV shows and writes for MyPaper every alternate Wednesday. What connects him to the layman is that he was once a salaried employee like most Singaporeans and he became financially free after several years of saving and investing prudently.

Dennis Ng shared how he became a millionaire. He was earning an average of $6,000 per month for 15 years. He saved 20% of his salary per month and that works out to $14,400 per year. What he did with his savings over the years was that he invested in stocks and properties. He did not reveal things like what stocks he invests in, which year he started investing, if he lost huge amounts of money during his investments and if he has buffer cash to cushion him from loses and to cover his basic needs. From his preview, I could gleam that he looks at the financial statements of companies and invests in fundamentally strong companies ala Warren Buffett style. I think a major reason why Dennis became a millionaire was that he timed the market. When the stock market was getting exuberant, he exited from the market like in 2007. He entered again after the prices crashed. He uses technical analysis by looking at 100 days simple moving average and 200 days simple moving average crossovers.

He also is very prudent in his expenses. He shared his experience on how he curbs his expenses. When he was working, his fellow colleague always bought a $5 Spinelli coffee everyday whereas he made his own 3-in-1 coffee. To commute between places, he uses BMW (bus, MRT, walk).

Furthermore, he explained that not all debt is bad. There’s good debt and bad debt. Bad debt is car loan, credit card debt, among others. Good debt is your housing loan and investment property mortgage loan.

The preview reinforced my beliefs and the idea that becoming financially free is not difficult. One has to save a substantial amount every month consistently. Use part of the savings to invest prudently in stocks for the long-term. The other part can become your “safety net” or emergency fund to be used to cover your daily expenses when you lose your job. Your expenses should also be kept low and not be spent on unnecessary stuff. Also, the earlier you start investing, the faster you can start compounding your money since time is on your side.

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24 thoughts on “How a salaried employee became a millionaire?

  1. Yes!
    Salary workers can become millionaires. But it usually takes many years with your savings and invest them for “compound” returns. And no mistake of a big loss in your investments. We should have a “balance portfolio” of risks/gains(Assets allocation and time horizon must be correct for you first before you can become a millionaire in your investments.

  2. “What connects him to the layman is that he was once a salaried employee like most Singaporeans and he became financially free after several years of saving and investing prudently.”

    That is what he wanted us to think. A salaried employee earning $6k a month on average can hardly be considered as able to connect to most laymen… our median income is almost half of that! How about his wife? Is $6k a month the income for the whole family?

    I can’t see how prudent he could be with his expenses if 80% was spent, or $4.8k a month on average. There are many families surviving on $2k or less. How could he connect with this?

    Saving 20% a month, or $14.4k a year, might sound like a cool idea to achieve millionaire status, but could he connect with those earning $3k a month and below?

  3. To be fair to Dennis Ng, he owes nothing to any families on 2K or 3K or people who earn alot more.

    Neither is he a PM, MP nor their families. He is there to share and there are people who benefited from it.

    Cory

  4. Hi Wealthbuch,

    I concur with what Cory said. He does not owe anyone a living. He’s telling people the way he did it and there are people who have benefited from it. I’m sure there are people who earn more than what Dennis earned but are still poorer off than Dennis due to their high expenses or lack of knowledge on how to invest. These people can surely benefit from Dennis’s teachings.

    And the main point of my post is not whether he could connect with the layman or not. The main point that I wanted to drive across was that with prudent cash management and investments, we can all be financially stable or even financially free. I hope this clarifies.

    Hi Cory,

    Thanks for your input.

  5. lol, I was more on the sentence that he could connect with the layman as he was once a salaried employee. Why I chose 3k as the comparison is because that is the median income. Prudence with expenditure is a relative thing. What is prudent to one may be a luxury to another.

    I agree with you and Cory, and to be fair, he deserves what he has for I believe he worked hard for it. There is of course nothing wrong with Dennis teaching and selling information that most books have written upon, or what many knows, to those who do not know anything about personal finance. Nothing is new, but as per most educators, we teach things that are not new either.

    I have no qualms about Dennis wanting to sell his courses. There would definitely be some who could benefit. My main point is, things are not what they appeared to be at face value. One can always point things out selectively to sell or make a point (or credentials), without the full picture being obvious to most.

    That said, if he didn’t even comment on Musicwhiz’s blog here:
    http://sgmusicwhiz.blogspot.com/2011/04/march-2011-portfolio-summary-and-review.html
    I wouldn’t even have thought he could fail so badly to consider simple mathematics when he lambasted MW for a poor 36.9% returns over 5 years.

    • Hi Wealthbuch,

      Yes, most of the stuff that people teach publicly in courses can be found in books and the internet. These trainers just make life simpler for those who want to learn rather than poring over the books and numerous sites.

      Not showing the full picture is part of the marketing, isn’t it? But that doesn’t necessarily mean that I agree with these type of “marketing”. Everyone, especially trainers who are doing paid courses, should be honest enough to reveal everything.

      Thanks for alerting me to MW’s comments section. I didn’t know about it till now. I can’t believe that Dennis (I most probably think it’s the same Dennis Ng we are talking about) is saying such things. It’s not respectful to put another person down like that. Oh well…

      • Well I’ve known Dennis’ attitude and his abrasive way of insisting he is right since 2007-2008, back on Wallstraits Forums. At the time he was still sharing his “knowledge” freely and posting his views on everything from property, economy to shares. Nothing very ground-breaking, to be honest, and you can probably glean such information on personal finance, property and investing by reading some good books. He charges a 4-figure sum to attend his seminars in order to accumulate one million dollars.

        Selling a dream, perhaps. 15 years to achieve his first million, and 1.5 years to reach his second. Has anyone ever questioned why it took so much faster for the 2nd million? Is it because he spends more time selling seminars and engaging in salesmanship than actually investing or leveraging in properties?

        Hoping that Dennis Ng changes his attitude and the way he treats people is like hoping for the sun to rise….from the West! I’ve learnt to just ignore him and be quietly confident of what I am doing with my own money. After all, he was not kind at all during the 2008-2009 market crash and kept trying to “wake me up”.

      • Hi MW,

        I concur with you. Most trainers go into training after making substantial money from the market as that’s the next easiest thing to do. By charging each person around $2k and even with 10 people attending (worst case scenario), one can easily make $15k after deducting overheads.

        I also feel one should always be humble and not put another person down just because he/she made tons of money from the market. One should be humble enough to understand that the market can “take away the money” at any point of the market cycle. Warren Buffett is not going around boasting his returns, nor did Peter Lynch or any of the top investors in the world for the matter. Stay humble and one shall be rewarded handsomely. This applies to our daily lives as well. Cheers! :)

  6. What Dennis is trying to do is just pushing sales. He forgot the most important thing in the fundementals of Investments.

    You have to be comfortable in your investments.

    I applaud him for reaching his ‘target’. But he himself also have to learn.

    The Best teacher in Investments so far is Warren Buffet. And he shares his way opening via You-Tube and even to little children for FREE. Just search for the ‘Secret Millionaires Club’ on YouTube.

    Why pay thousands of dollars for something people got for free?

  7. Let me add, having a few million dollars today is considered middleclass.

    Because of Inflation, if you want to consider yourself rich. Try to reach 1 Billion. Then you can brag all you want.

    • Dennis deserves credit for reaching his first million his way. But let’s not forget what he has done since is geared towards selling his seminar courses, which he calls “sharing”. Probably a substantial portion of his next million comes from his seminar business. It must be good business as there are so many like him out there selling “millionaire” courses.

  8. $6,000 a month is $72,000 a year. If you’re a “salary worker” with a far more modest income of $20-$30k, you don’t stand a chance of saving that $14k a year. So what I’m saying is: that’s great, but even I could have told you to save and invest all that extra money… but you’d still need a high-income job to do it. If you’re in the poverty class, like me, you don’t stand a chance of breaking out unless or until your wages increase.

    • Hi Devon,

      Thanks for visiting my blog and for your input!

      I truly agree with you. However, if one’s wages are low, it doesn’t have to stay that way. We can always find ways to increase it. Some ways are doing another job (even though it’s taxing), business, getting promoted, among others.

  9. Hi financiallyfreenow,

    that’s right, if one’s income is low, it doesn’t have to stay that way. People need to understand that our income reflects the value add of our work. So one earns a very low income, it just means that he/she provides very low value add.

    So one can simply increase one’s income by focusing on increasing one’s value add.

    11 years ago, I was earning S$2,500 a month. 11 years later, I’ve increased my income by 10 times after I realise the “formula” for income which I just shared.

    How did I become wiser and more knowledgeable about Finance? I learn from the rich, multi-millionaires in Singapore. So if one wants to get rich, learn from the Rich. It is as simple as that. In 1998 I only have S$50,000. In year 2011, I have over S$3 million. It’s possible to become a multi-millionaire if one learn HOW.

    I’m sharing this not to boast but hope that this can inspire and encourage people to learn how to Master Your Finances. Becos when you Master Your Finances, you Master Your Destiny.

    The message is more for anyone reading the blog and not addressed to financiallyfreenow.

    Cheers!

    Dennis Ng

    • ” People need to understand that our income reflects the value add of our work. ”

      Wow!
      Are u saying that bus drivers, cleaners, construction workers, all the look down blue collar or black collar workers are LOW in value?

      Thats BS. It is only low in value in SIngapore. Other countries have fair wages that reflects the true value of work job done. Bus drivers in euro and australia earn more fair income than over here.
      How is a bus driver that provide essential service to a society is rewarded with such a salary that is unwanted by society itself.
      Without the driver, all the major companies probably would not have half its workers.

      CLeaners have no value added service? WOuld u work in a place that is dirty and unhygienic with no cleaners. Would u visit.

      No my dear ELitist millionaire. People like u need to understand that blue collar workers are not being given fair wages due to some reasons.

      Theres a thousand reasons why SIngapore have the biggest income gap from rich to the poor.

      Remove all the deliverymen in SIngapore and we see how companies cope without their essential undervalued worker. Paying pittance to them is not justifiable just by saying is a simple job. Just becoz is “low-brained” work doesnt mean is more less value compare to a manager job.

      U dun “train” in workshop, life goes on. nobody gives a hoot.
      Blue collar ppl dont work, see if life goes on without hiccup.
      Whose “work” is more important now.

      Yes yes your advice is very inspiring.
      You know what. A true inspiration is one who can help the working class, who earn 20k-30k with children and commitments, to really be financially free.
      Not inspire those who can throw 2k-4k to workshops and seminars that has all the info which u can find in free blogs on personal finance.

      Why dont u inspire those children who are stuck in a vicous cycle of poverty. Since all the overvalued jobs required educational credentials, our children borned in the wrong class have an unfair advantage before they even start. In a society filled with tuition and more tuition, those who are living hand to mouth have not even a single opportunity to obtain an overvalued and well paid job to start their financial life with good savings to start investing.

      Why dont u obtain financial freedom with an income of 1k. Be the example. Show every1 your skills. The ability to obtain financial freedom for anyone, at any level. Im sure it would be a best seller.

  10. “Gurus” who charge others absurd fees to impart the “secrets” that made them rich are never authentic and one can learn absolutely nothing from them. Those who really made it big will share their experiences free, if they can be bothered to. They are not so cheap and low class as to charge money for the saliva from their mouth.

  11. Hi i am kavin, its my first time to commenting anywhere, when i read this
    article i thought i could also create comment due to this brilliant piece of writing.

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