facebookHow does a 25 year old save and invest? I am currently only earning about 3.5k and my bf and i recently managed to secure a BTO successfully.? - Seedly



13 Jul 2019


General Investing

How does a 25 year old save and invest? I am currently only earning about 3.5k and my bf and i recently managed to secure a BTO successfully.?

However, our monthly repayment is pretty high (approx $2.5k per month). My take home is only $2700. And my bf and I are most likely going to split the repayment which means i would be paying $1.25k per month and that leaves me with $1.5k per month. Minusing my expenses, i would be left would $800 per month.. how do i invest with $800 only? Not to mention i need to save a portion of the $800 for rainy days.... Advices pls :(

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Jefremy Juari

Jefremy Juari

13 Jul 2019

Financial Writer at Medina Books

One has to know what is an asset and a liability. A house that you are living in is a liability, no matter how expensive or how much potential for profit, etc.
The prices in hdb resale market is going down with the massive number of new btos popping up.
Our generation will never see the profits like our parents did. We have to work smarter and be proactive in looking for new opportunities while accepting the hard truth that we have it worse. Looks like you have to bite the bullet and burn the deposit. The numbers you wrote don't make sense.
Remember an owner occupied house is not an asset, it drains money from your pocket. Best of luck.

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Before you go investing, you should get your insurance right first as, you don't want to fall into the case where you need to sell your investments because your insurance doesn't cover you enough.

So, get your:
Hospitalisation and Personal Accident Insurance.
Mortgage Insurance.
Home Contents Insurance.
Life and Critical Illness Insurance (once you have dependants e.g. old parents or children).

Also, at the same time, keep a healthy sum as emergency funds in a high yielding interest account (maybe DBS Multiplier). Just imagine if you're suddenly retrenched, so how much money you would need to survive til you get a new job.

After all these, then your cash is called spare.

With the spare cash, you can divide into 3 parts.
1) Short term investment
2) Mid term investment (E.g. children needs)
3) Long term investment (E.g. retirement)

Short term.

You can consider maximising your high yielding saving account. For the risk taker, you can try purchase crowdfunds.

Mid term.

You can consider Endowments. If you don't mind DIY you can purchase unit trusts or ETFs.

Long term.

You should consider Maximising your CPF SA, by transferring from OA or cash top up.

Just some basic guidelines, further information are found all over the Web.

If all these not possible, although not recommended, just buy a ILP but please don't buy ILP as your first choice.

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Hariz Arthur Maloy

Hariz Arthur Maloy

12 Jul 2019

Independent Financial Advisor at Promiseland Independent

I don't wanna be too harsh but you may be buying a too expensive house.

It's 550k++?

Your home sho...

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