Been wanting to start investing in robos but need the money to repay student loan in Jun 2021... Any thoughts on whether I should start since my investment horizon now might be pretty short...?

Hi Anon! For context, I am in the same shoes as you. I recently graduated as well, and my loan repayment starts in Jun 2021 as well. Please allow me to share some of my perspectives. (:

For myself, I recently started investing (even though I am 30k in debt haha). My view is that I should not view investing as a 'linear process', meaning to invest all my x amount of savings today and take out y amount in Jun 2021 to pay my loans. This is extremely risky as the money could easily be lost due to market fluctuations. Instead, I wanted to invest safely while preserving my ability to repay my loans.

What I did was to look at my expenses and theoretical cash outflows (for loan repayments) first. I calculated a safe 6 months fund that I could set aside (to safeguard myself against being retrenched + have the capability to pay half of the loans) - this amount would be allocated in high-interest accounts such as singlife/jumpstart.

Next, I look at my left-over savings (throughout my years in Uni). My priority would be to allocate most of it into high-interest accounts while taking some of it out (leveraging on the current 0% interest rate on my student loans) to invest monthly (which in your case could be monthly investing into Robos).

As such, there could be a ratio (eg 9:1) whereby most of your savings are safe in high-interests accounts, and some are in Robos. Thus, it starts your wealth accumulation journey and at the same time does not pose a lot of risks to yourself.

If you are interested, I documented more on some other considerations before starting my investing journey here.

I hope it helps in providing another perspective!

Hi anon,

Investment returns are not guaranteed.

Your timeline to repay is guaranteed. (i.e. you have to repay in 2021, or else face a penalty - this is also guaranteed).

One year is too short a time frame to have a reasonable chance of getting some returns. Plus, even if you had $30K set aside for the loan and made 10%, that is just $3K, which you could earn in a year by taking on side jobs such as tuition.

Probably better to keep the funds safe, pay off your loan, be debt free, and start working on your finances then.