Many people earning a standard salary think their net worth is only defined by their savings. However, I want to let you know that you are very rich! In today's loose monetary policy, where the cost of borrowing is less than the cost of inflation, why would you want to wait and save the money...?
This period is hard to come by, in today's economic condition is favourable to borrow and invest. The returns on investment is often more than the cost of borrowing. Today if you earn $5000 a month, your net worth potential is 4x$5000 per bank! If you have good relationship with 10 banks... your net worth is $200,000.
Now where is the risk limit?
Each bank can give you an unsecured loan at about 6% today for up to 4 x your monthly salary.
The repayment, interest plus principal is about $500 a month per loan for up to 5 years.
Say you have $3000 cashflow per month.
You potentially can leverage 6 x $20,000 - $120,000 at a cost of $3000 a month. Use this money to invest in an asset that gives you at least 8% rental yields per annum. You can have a forced savings plan in place. People talked about leaving an asset for their family, instead of insurance policy, why not consider property? You can apply for a insurance that covers your loan in case anything happens.
A good asset is property. As we know property cycle, property price doubles every 7 years, in 5 years time, we conservatively estimate the previous property gained 20% at 4% per annum. You could earn 2% yields * 5 years = 10% plus 20% capital gains. A total of 30% yields.
Learn to use bank loans to help you achieve your investment goals.