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Latest Update (23rd April 2024): AutoWealth launches new portfolio for investing SRS funds. Learn More

How Smart People Have free vacation for Life

Learn the secret to enjoying free annual vacations for the rest of your life !

Year-end holidays are here but are you still having problems ticking off “more vacations” from your resolution list?

Well, you are not alone. While we all dream of travelling to far-flung destinations and staying in ultraluxe hotels, nobody likes to break his/her wallet on a holiday.

But there is this group of smart people, who are travelling for “free” every year. How do they do that so effortlessly?

Here’s the secret: save and invest.

Quickly save up 40k in a special travel fund and invest that 40k in something that generates at least 5% annualised returns. This investment gives you $2,000 “free money” every year, which is more than enough for a one-week trip to Greece, a modest stay in Canada, or a luxurious holiday in Taiwan!

Yup, this is what some smart people are doing! On top of the regular HDB & wedding funds, they set up a special travel fund just to generate money for their vacation!

Sounds too good and too simple to be true? Yes, it might sound ridiculous. But let us work out the math to show you how this 40k of savings is truly achievable.

Imagine that you are an average graduate earning a starting monthly salary of $3,000. Every month you save $300, which is 10% of your salary into your special travel fund, and invest this amount into an account with 5% annualised returns.

By the end of 5 years, you already have 20k in your account. And within 9 years, you can easily save 40k in your travel fund.

Investing the principal sum of 40k at 5% returns means you can start enjoying “free” vacations around the age of 31 – 33!

This is not even taking into consideration the pay raise along your career journey (or those 13th month bonuses!), which allows you to save more and accelerate this process.

Let’s say you can save $100 more per month every year. You’ll shorten the process to 5.5 years. If you save $200 more per month every year, you will be far exceeding target at the end of 5 years. By then, you are not even 30 years old!

Isn’t that amazing?

And of course, if you are a true wanderlust, other than the annual free trip, the amount you saved up (40k or more) can also be eventually used to sponsor your around-the-world trip plan after retirement. How great!

Perhaps you may still hold some doubts about the practicality of our solution. We know, 5% annualised returns sounds too good to be true.

That might be the case in the past, when traditional investing requires much time, sweat and blood put into understanding the market to have such a return.

But there is an easier way out now:

The easiest way to consistently get 5% returns is to do it through a robo-advisor. For instance, AutoWealth.

Based on robust back testing, a moderate risk portfolio can achieve 6.2% annual returns, across an investment horizon of at least 3-5 years.

If we look at actual performance, the same portfolio has been raking in 7.65% annualised returns from 1st May 2016 to 30 Sep 2018. Bottom line: 5% returns is easily achievable.

We believe, by now, we have solved most of the obstacles you face in earning yourself a “free” vacation, except maybe for one, the impact of inflation.

Inflation can be such a pain in the neck because it reduces the benefits that your $2,000 “free money” provides in a few years’ time.

There are two things you can do about this.

The easier way is of course to continue saving up into your travel fund. With a constantly growing base, the additional annual return generated can nullify the effect of inflation. And that way, you can still enjoy the same benefits (if not more) from the “free money” generated every year.

And if you do not wish to contribute to your travel fund after your 30s, do not freak out. You can choose to kick off your free vacations with the most luxurious places where your $2,000 can generate the most values.

As inflation grows, you can then slowly move to places nearby where you can still easily enjoy a good chill holiday with less than $2,000. Bangkok and Taiwan are two good examples of cheap holiday destinations.

And lastly, this “save and invest” strategy not only works with your travel fund, but also all other types of savings, such as for housing and weddings.

And even if you are not that into travelling, $2,000 is enough to get you the latest iPhone every year, a dinner at Gordon Ramsay’s Bread Street Kitchen every month, or a new dress every week. All for “free”.

A vacation a year may seem like a luxury, but with the right planning, you can achieve your big holiday dreams all free and easy too! Don’t let your savings account be an obstacle to your wanderlust 🙂

All is clear: start saving & investing today, so that you can have “free” yearly holiday earlier!

If you are looking to generate some “free” money today with your savings, you can consider investing in 3 simple steps & 5 minutes using the AutoWealth platform today!!


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