facebookHi I'm a beginner with 20k savings currently serving NS, how much should I allocate for emergency funds and how much to invest? - Seedly

Anonymous

01 Aug 2020

Robo-Advisors

Hi I'm a beginner with 20k savings currently serving NS, how much should I allocate for emergency funds and how much to invest?

Would a 5k emergency fund be enough? I'll continue to top it up with my NS income. What are some ETFs that generate high return in capital? Should I invest in those? Where can I do so? Or should I use Stashaway and Syfe?

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Sabrina Wong

Edited 13 Dec 2021

Communications at University at Buffalo

It's great that you are considering putting aside some emergency funds in your savings account and consider investing the rest.

I am currently using Hugo Save which is a digital account that helps you spend, save & invest, starting with gold. I personally found investing in gold super interesting particularly as I want my money to grow but without the volatility that comes with investing in high-risk options with the added advantage of liquidity for when I need cash.

Based on my research, gold had an average annual returns of 10.61% between January 1971 to December 2019, which shows why having some amount of gold in ones' portfolio makes sense. Here's the stats: https://www.statista.com/statistics/1061434/gol...l/

Gold works best as part of a diversified portfolio, particularly when it is acting as a hedge against a falling stock market & inflation. Here's sharing some insights from an article on why you should start investing in gold: https://bit.ly/case4gold

Since you mentioned you are currently serving NS, I think you would be able to resonate with this article which talks about how you can manage your NS allowance and practise healthy saving habits in general: https://bit.ly/NSHugo

Dionysius Ang

01 Aug 2020

Aerospace Engineering at Nanyang Technological University

I had the same question before.

The answer is..... It depends.

If you are planning to pay off your student loan (for uni) with that money, I would not recommend investing. But if you are lucky enough not to be burdened by student debt. Sure.

For investing:
5K as an emergency fund should be good enough. But you would still need to ensure that you have sufficient holding power (insurance and some income assets) before investing.

For student loan:
Recommend that you keep the money in a high-interest savings account or short-term endowment so that you can pay your student loan immediately when you graduate. (this is cos bank loan rates are at around 5%)

j

01 Aug 2020

IT at Accounting firm

It will be good to take a look at your current expenditures, and see how much the necessary spending...

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