28 Feb 2020
As I understand that if I park all of my savings in my bank account it will not compound and not going anywhere.
Rule of thumb - Save minimum 20% of whatever you earn. If you're single and don't have much commitments, you should be trying to save 50-60%.
1) Create an emergency fund of 3-6 months of income.
2) Once the emergency fund is full, invest whatever you save.
3) As you grow older, increase your emergency fund amount. 1 year in your 40s, 2 years in your 50s, 3 years in your 60s till you die.
4) Don't invest any money you need within 3 years. Save this separately.
5) Switch your risk allocation strategy as you age as well. From Aggressive to Balanced, to Cautious, and then lastly, Defensive.
This allows you to make money, and then slowly convert them into guaranteed money, preserving your capital, as you reach retirement.
I recently answered a really similar question here, have a look: https://seedly.sg/questions/i-have-been-working...
Here at Seedly, we follow a 50-30-20 salary allocation model. It comprises of 50% expenses, 30% investments and 20% savings. The % is flexible and up to your unique needs. I would say clear your outstanding debts, set aside some emergency funds (as mentioned by Hariz) and beef up your investing knowledge before you begin investing. Use your savings % to help clear any outstanding debt too!
Hope this helped, all the best!
Save as much as you can.
Take a % of your savings for investments.
Find your comfortable Savings ...
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