Hi, what would be the best and safest way to invest $300,000? Would putting the money under Funding Societies' Property-backed Secured loans and guaranteed loans be really risk-free to principal?

Safest way would really be to leave them in a bank but inflation will erode your money.

Consider splitting up the money into different buckets if you are willing to take risks and make sure no matter what happens you can still sleep soundly at night.

A lot of instruments are available with risks involved including ETF, stocks, bonds, robo advisors, Singapore savings bonds, etc

Best way is subjective and dependent on your risk profile and investment objective at the end of the day.

As for safest way, Funding Societies loans definitely won't be categorized as the safest since it is mentioned when signing up that there is a risk of you losing all your money when investing in their loans. I guess this also answers the question on whether to use leverage to invest into their loans.

Property-backed secured loans may sound safe but it depends on factors such as; the type of property, the LTV applied, whether it is a leasehold or freehold, the nominal amount of the property, etc. All these factors would affect the speed of liquidation and the amount of proceeds that would cover your principal and interest in the event of a default. For some properties that are less liquid, eg. leasehold industrial properties or a property worth SGD5-10mil, an investor may have to sit through a period of uncertainty while liquidation of the property is happening.

It is also important to note that if you are leveraging, there may be reinvestment risk due to tenure mismatch where your leverage loan may have a lock in period vs the tenure of Funding Societies property-backed secured loans which are typically a 1 year tenure. Also, the interest and late interest of the property backed secured loan may not be guaranteed in the event that the sales proceeds of the property is unable to cover those cost thus you will be paying interest on your loan but not receiving any throughout the process.

As part of a diversified portfolio, it would be good to include property-backed secured loans. However, it should not be viewed or treated as a risk free investment.