How saving just $11 a day can make you a millionaire

By Adam Wong

How saving just $11 a day can make you a millionaire

Before you think this article is a bunch of hyperbole, I want to say that, yes, it is possible to make a million dollars by saving just $11 a day. The only thing is… it won’t happen overnight. So if you’re looking for a silver bullet or some magical “get-rich-quick” scheme that will bring you eternal riches right now, you’ll have to look elsewhere (and I’m not sure if you’ll ever find it).

But if you’re looking for a steady, no-frills, no-bull method of building your wealth and enjoying your golden years when it’s time to call it day, then we believe that there’s no better way than this.

Although this may take time, the good news is you can speed up this process if you want to. If you’re willing to work harder and be disciplined in your savings and wealth building, you can enjoy the fruits of your labour much earlier. In any case, we want to show you what is possible even if you just start with $11 a day.

(Why 11? It’s an arbitrary number that’s easy to remember, annnnnd it’s my wife’s birthday.)

By now, it should be no secret that our method to building lifetime wealth is to consistently save and invest your money. This is an investment website after all, and we also believe in getting your financial house in order first before you even put your first dollar into the stock market.

Many times, we receive emails from readers saying that they’re not sure if they should even invest. Some of the most common questions we get are:

  • Should I invest even if I only have limited capital?
  • Do I need a huge sum of money before it’s worthwhile to invest?
  • If I only have a thousand dollars to invest and my stock gains 10% in one year, I’ve only made $100. It seems too little, too slow.

Do you ask some of these questions yourself? Even if you do, it’s entirely normal because we get this all the time. And I too had the same doubts when I first started investing.

But the thing is, if you never start now, then when?

And if never have enough to invest, then how will you ever have enough if you don’t invest now?

It looks like a catch-22 situation but it isn’t. The answer is to just start small and grow it from there. Even if you only have $11 a day to set aside.

Is it possible? Let’s have a look.


First, is it possible to save $11 a day? By most measures, it should be reasonable for most people to save $11 a day. Which means you can save approximately $330 a month or $4,015 a year.

Read more: 6 ways to reduce your monthly expenses… without compromising on your lifestyle

So how much can you grow your wealth if you continue to save $11 a day until the day you retire? Assuming a normal person starts work at 25 and retires at 65, saving $11 a day will give you:

$4,015 x 40 = $160,600

Saving $11 a day for 40 years.

After 40 years, that’s not much at all and most definitely not be enough to fund your retirement.

We all know this: saving alone is not going to save us. (Pun totally intended.) We need to invest and grow that money as well. So let’s park our money somewhere safe where it can grow.

Fixed deposits

How about fixed deposits? Notwithstanding promotional rates, the current annual fixed deposit rate from DBS Bank is 1.2% — and that’s if you lock your money up for at least five years.

Assuming the interest rate doesn’t move, how much will you earn if you save $11 a day and lock it in a fixed deposit for 40 years?

Investing at 1.2% p.a. for 40 years.

About $204,585.

As you can see, the total amount now comprises 22% earned in interest. That’s better than keeping all your savings under your mattress or hidden in your Milo tins, but we’re still far from a million dollars and sipping piña coladas at a nude beach in St. Martin at 65 with other sexagenarians. (That’s not a dirty word by the way.)

We know Singapore banks are notorious for offering some of the lowest interest rates compared to foreign banks. For example, Malaysian banks offer higher fixed deposit rates at around 3%. Using the same scenario, that will give you around RM302,736 after 40 years – but, yes, you have to invest in ringgit.


Ok, instead of fixed deposits, how about bonds? We receive a higher fixed interest rate and bonds are still considered relatively safe.

Well, some bonds are considered extremely secure like AAA-rated government bonds. But there also are so-called junk bonds (rated BB or lower) which are high-yield, high-risk instruments. (Interestingly, only two corporations in the world, Microsoft and Johnson & Johnson, are AAA-rated.)

We’ll steer clear of junk bonds because this money is for our savings and retirement and we’ll pick a AAA-rated sovereign bond from a financially stable, well-governed, well-managed country like… Singapore! (Surprise.)

The easiest way to invest in Singapore government bonds is through the Singapore Savings Bonds (SSBs). Besides offering higher interest rates than Singapore bank fixed deposits, SSBs also extend other benefits and advantages to investors.

As of the time of writing, the current 10-year interest rate for SSBs is 2.1%. (The 10-year yield has been between 2% to 3% most of the time.)

So assuming the interest rate doesn’t move, how much will you earn if you save $11 a day and invest in SSBs for 40 years?

Investing at 2.1% p.a. for 40 years.

About $247,841.

As you can see, the total amount now comprises 35% earned in interest – your money is working harder for you to make more money.

(Side note: The Singapore government currently allows an individual to only invest a maximum of $100,000 in SSBs, but for the purpose of simplicity, we will assume an individual can invest beyond that limit in this example.)

Comparatively, 10-year Malaysian government bonds offer interest of 3.9% (as of writing) and have ranged between 2.87% and 5.35% over the last 16 years. While you net a higher yield, the Malaysian government bond is rated A-.

But let’s be honest, investing in bonds alone isn’t going to help the average person retire comfortably. So unless you’re ultra conservative and you have a large pile of cash sitting somewhere which you can use to invest in AAA or AA-rated bonds, we’re still more than three-quarters away from our million dollar goal.

Read more: 3 reasons why bond investing is a negative art


If the bank and bonds can only provide you with around 1-3% growth per annum, what about stocks?

Well, stocks have historically outperformed bonds over the long term. According to this New York University study, if you invested $100 in the 10-year U.S. treasury bond from 1928 to 2016, your total compounded returns would be $7,110.65. That’s a 71 times return. Amazing.

But if you invested the same $100 in the S&P 500 from 1928 to 2016, your total compounded return would be… $328,645.87.

That’s a HUGE difference. And although the data is from the U.S. markets, I’m pretty sure the same holds true: that most equity markets around the world will historically outperform bonds over the long term.

Let’s find out.

In Singapore, we have the Straits Times Index (STI) which comprises the 30 largest companies listed on the Singapore Exchange. If you invested in the STI from April 2002 – when the SPDR Straits Times Index ETF was first launched – to May 2017, your annualized return over the last 15 years would be 7.28%.

Assuming that the STI’s average annual returns will remain around 7% for the long term, how much will you earn if you save $11 a day and invest in the STI for 40 years?

Investing at 7.28% p.a. for 40 years.

About $861,712.

That’s more than triple your returns if you invested in SSBs. We’re not at a million dollars yet, but we’re almost there. However look at the principal/interest breakdown — 81% of this amount is earned from interest. Your money is really working hard for you now!

What about the Kuala Lumpur Composite Index (KLCI) in Malaysia? From 1977 to 2016, the KLCI rose from its original base of 100 points to close at 1,642 at end of 2016. That’s an annualised return of 7.25% over 40 years. Remarkably similar rate of return to the STI.

The Hang Seng Index (HSI) in Hong Kong also has a similar long-term average annual return of 7.69% from 1987 to 2016. But that slight extra makes a sizeable difference – you’ll have $958,843 after 40 years from just saving $11 a day and investing in the HSI. That’s already almost a million.

What about the S&P 500? From our earlier study, we know the long-term annualized return of the S&P 500 from 1928 to 2016 is 9.53%. Assuming the S&P 500’s average annual returns will remain around 9.5% for the long term, how much will you earn if you save $11 a day and invest in the S&P 500 for 40 years?

Investing at 9.53% p.a. for 40 years.


We’ve hit our goal of a million dollars and then some.

In fact, to hit one million dollars, all you need to do is to just save $11 a day and invest at an average annual return of 7.8%. And we’ve seen how achievable this is by just investing in the index. You don’t even have to do any stock picking; just buy the whole market!

I know past performance is no indication of future results. But if you believe in human endeavour and that there will always be newer, more successful companies to replace older, fading companies in the future (which is essentially what the index is), then we should expect the stock market to continue growing in the long run.

The fifth perspective

The idea of this whole article isn’t to dumb down the process of investing or play down the challenges you’ll face – yes, the stock market doesn’t go up in a straight line, there will always be another stock market crash, and you may sometimes find yourself barely breaking in the short term. You’ll also need tons of discipline and the commitment to save and invest for decades until you decide to retire. (By then, you might love it so much, you’ll continue investing.)

At the same time, we want to prove that it is possible to make a million dollars or more if you’re willing to stick it out for the long term.

And if you think saving and investing for 40 years is too long to make a million, remember you can always increase the amount you save every year (especially when your income rises) or improve your returns by learning how to invest better – all of which will get you to your goal faster. For example, if you save $20 a day and compound your money at 10% a year, you will reach a million in 28 years.

Even if you only invest in the index, you can also potentially increase your investment returns by only buying when market valuations are low – like during a market crash – and selling when valuations hit historical highs.

So even if you don’t have a large amount to start with now, you can always start small — even if it’s just $11 a day.

(All charts:

Robin Han
Adam Wong
Adam Wong is the editor-in-chief of The Fifth Person and author of the national bestseller Lucky Bastard! which made the Sunday Times Top 10 Bestseller's List in 2009 and Value Investing Made Easy which made the Kinokuniya Business Bestseller's List in 2013. In 2010, he appeared on U.S. national television on the morning show The Balancing Act. An avid investor himself, Adam shares his personal thoughts and opinions as he journals his investing journey online.

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