facebookI had recently inherited a huge sum of money $14.7 million (after conversion from GBP). - Seedly

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Anonymous

21d ago

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General Investing

I had recently inherited a huge sum of money $14.7 million (after conversion from GBP).

I have had no parents or guardians since 1.5 years ago which is why I don't have anyone to talk to when it comes to finances. Any investment advice?

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I would like to gain some knowledge with regard to how I can invest without any risks involved. I'm a first-year medical student, and finance/investments aren't my forte so I hope you can excuse my newbie question. I do have a Singaporean uncle here in this country, but I'm not close to him at all. I have read about investors' risk profiles, and I would say that I am very conservative, too conservative that I am unwilling to take any risk. I've seen investment options that have high, moderate and low risks but nothing that says no risk. I have a minimalist lifestyle (eats in hawker centres, stays in a school dorm, instant noodles, travels via metro) and am not looking to get rich as I am perfectly fine with extremely low rates of returns as long as it is higher than the HSBC Premier Savings Account I have right now which earns very low-interest rate. Would appreciate any feedback given. Thank you so much.

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As a year 1 medical student, the priority is your studies now. No hurry to rush into investing your inheritance. You could temporarily park the S$14.7M in time deposits to lock in the "high" interest rates for the time being.

When you could afford time, borrow books related to financial planning (in local context for a start) from the library. Familarise yourself with the financial/insurance terminologies. Next step, enrol in investing courses to know/learn more.

Don't wet your feet right after the course. Work on your "protections" first e.g. emergency fund, insurance plans. You could also set aside living expenses based on your monthly expenses then; multiply by 2 and factor in an annual 8% headline inflation till you reach 62 years old. Update the sum as your commitments increased e.g. start a family.

Strive to generate the projected living expenses for the remaining 38 years (till 100 years old) with the balance funds. Use S$500k to try investing yourself. Once comfortable with the investment risks, approach professional help (no less than four) for your balance funds. Divide the monies into tranches and never invest all tranches in one shot. Hear them out. You have time. Do it slowly, over years. Accept their proposal only when you think it is workable/achievable. Otherwise, move on. Add on another tranche when you see surpassing results couple/few years later.

Last important point to note, never disclose your wealth to friends no matter how trustworthy they may appear.

Just my 2 cents.

Before you even invest, you need to protect your assets from large expenses such as medical bills, etc. So you need to buy insurance first. The basic insurances to get will be hospital, life insurance, critical illnesses, accidents, income protection. Since you are a student, doing a costly medical degree, you wont be needing income protection. All insurance adding up should not go beyond $1000 per month. Buying insurance will need the help of FA. Take note, many unscrupulous FA will oversell you insurance plans, investment linked policies. So you must do your due diligence before you approach any FA. And of course, do NOT get investment plans from any of the insurance companies.

For investment, there are low risk low return, higher risk high return kind, plus emergency fund to keep at hands. You should have them all for diversification.

With 14 M on hand, you should keep small portion as emergency fund in a saving account (not fixed deposits), where you can access the money immediately. Even keeping 1M in a saving account can get you good returns per month on interest rate alone. (DIY, I personally like OCBC, citibank over other banks due to shorter queue (than DBS) and better customer service (than UOB, CIMB)). Additionally, you can try locking up the money in fixed deposits too, but the money cannot take out asap so they are NOT considered as emergency funds.

The safer investment (low risk low return) will be singapore saving bonds and T bills from singapore govt MAS. Very low risk, with low return. You should consider this option if you want to start safe. (DIY, you just need a sgx cdp account and a bank account). I consider fixed deposits from bank as a safer investment too.

The higher risk high return investment will be in stocks, ETFs. For a newcomer, ETF such as S&P 500 (VOO) is a good start. Currently, the stock market in a bear run (prices are decreasing), so this is quite a good time to invest. (DIY, use online brokerage such as Interactive Broker).

Anyway, just remember that there is no such thing as quick returns, easy returns, or guaranteed returns (aka ponzi schemes); there is NO SUCH THING AS LOW RISK HIGH RETURN). And you must do your due diligence in learning investment from YouTube and not relying on FA. Some good YouTuber to learn investment from will be Kelvin learn investing and Honeymoney Sg. Also, a good YouTuber to learn about investment frauds, crypto frauds will be coffeezilla. All learning resources are free so don't ever pay for them in overpriced courses.

#not proper financial advice

With 14.7 mil, I will buy a house in a good location.

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The rest of the money into different banks.

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Just purely collecting interest is enough for your life time.

I would say buy properties and rent it out. Singapore's land is scarce :)...

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