facebookI’m a 25 year old and I just started working. I have 12k saved and plan to save 1K per month. I have no knowledge about investments and I been reading on this site. Would you advise that I buy DBS shares and keep for dividends? - Seedly


26 May 2021

General Investing

I’m a 25 year old and I just started working. I have 12k saved and plan to save 1K per month. I have no knowledge about investments and I been reading on this site. Would you advise that I buy DBS shares and keep for dividends?

I’m not sure how they give them out and the fees involved in stock purchasing. Or would you suggest I go into RSP?

Discussion (22)

What are your thoughts?

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It is easy for others to "advise" you whether or not to do a certain investment, because they are not the ones who have to bear the consequences.

There are a few factors you have to consider before making the final decision :

  • Your short term and long term financial needs :

1) Marriage plans - wedding, marriage home will require a substaintial amount (when will you be needing this?)

2) Are you mainly saving / investing for retirement?

3) Other than the 12K, do you have another sum set aside for emergency funds (or is the 12K your emergency funds?)

4) Do you have funds set aside for personal growth? do courses to upgrade yourself? (It will probably help increase your income in the future)

5) Will your family require your financial support in the near future?

  • Risks Tolerance Level

1) If your main goal is for retirement, then your risks tolerance level is relatively higher as you will have a longer to recover if losses occur. You also have the ability to wait it out when there is a downturn of the market

2) If you require $$ in the near future, then the liquidity of your investment is more important. It will be costly if you cash out during a downturn

3) The stability of your job/career is also a factor. Do consider the possibility of not having stable income for a period of 6 months and prepare for it.

  • Real Return

1) Please consider all factors involving your investment, including tax, currency risks

2) I stress the fact that you are young, therefore I do recommend taking some risks as you have time to recover. If you happen to make bad decisions now & then, learn from them. You will become better as time goes by, but please do not gamble. It is only an investment if you know enough about it.

If you have the discipline to put away $1K monthly, then I would not suggest RSP. Depending on the RSP you are reviewing, the costs involved could eat into protential profit. If however, you are busy and prefer to put away the $$ fuss-free, then RSP with low costs could be considered. I usually recommend FSMOne's RSP to my nephews / nieces as they lack the discipline to save on a regular basis. It is just my personally preferred platform.

If you have yet to register for the following platform, you could try them out too :

(Disclaimer : I do get something for referral too)

Now for my irresponsible advice :

  • REITS payouts had been good for the past few years, but past performance is not guarantee for future performance. Consider the return rate (i.e payouts) with risks of losing your capital. Only invest if you do enough homework
  • DBS shares (like other shares) do not have guaranteed returns too, same as the above point. If you are risk adverse, consider this instead : https://www.ocbc.com/personal-banking/investments/structured-deposits
  • Be it REITS, ETF, Bonds or Shares, the timing of investment is just as important. Do not panic when your investment temporarily drops in value, study the market, and if you had done your homework well, trust in yourself. However, DO NOT GAMBLE by blindly investment simply you got news from friends or otherwise that it will make you a lot of money.
  • I suggest considering these : CRPU (Reits), VOO (ETF), G3B (ETF), OCBC (Shares), DBS (Shares), UOB (Shares). In my humble opinion, Reits is high risks, but potentially offer high returns when it performs well. The shares of the 3 banks are rather stable, and should be held for long term investments. The 2 ETFs are also safe bets, but do only enter the market when the price is lower (or you could consider RSP if you are in for the long haul)

Hope the above is useful to you.


26 May 2021

Financial Service Consultant at AIA

Kar Yee

21 Apr 2021

Chemistry and Biological Chemistry at Nanyang Technological University

If you're not exactly sure what you're buying, I would suggest to read up first starting from the basics and decide on the level of risk you are comfortable in taking. As what other commented, buying DBS shares alone exposes you to more risk, so an index fund/ETF would be more ideal :)

As you are still young and needs time to build up knowledge while staying invested, you should look ...

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