facebookHow should I divide my savings from my monthly salary. Should I take part of the savings for investment? Partly for long term savings? - Seedly

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Anonymous

28 Feb 2020

Saving Hacks

How should I divide my savings from my monthly salary. Should I take part of the savings for investment? Partly for long term savings?

As I understand that if I park all of my savings in my bank account it will not compound and not going anywhere.

Discussion (5)

What are your thoughts?

Hariz Arthur Maloy

Hariz Arthur Maloy

30 Jun 2019

Level 15·Independent Financial Advisor at Promiseland Independent

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.

Sarah Chan

Sarah Chan

01 Jul 2019

Level 7·Business Administration at NUS

Hi anon!

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!

Pascal S

Pascal S

28 Feb 2020

Level 7·MBA Graduate at Singapore Management University

Save as much as you can.

Take a % of your savings for investments.

Find your comfortable Savings ...

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