I was wondering for first timer fresh graduates what type of Investment Moats Wealth Machines should we look to build from scratch? Stocks or ETFs portfolio? Do you have an example?

There used to be some value there. It's nearly all gone now.

Hi there, thanks for trying your best to understand my philosophical idea of the wealth machine.

I think as someone starting out your job is to create a good wealth foundation. So most of your time is spend getting things ready.

As a baseline, your focus is to do well in your job.

But do not neglect that you need to understand how to build wealth. To do this, make it a point to read books on personal finance and investing.

In this initial phase, the wealth machines can be based on 70% instruments that are savings based. This can be Singapore savings bonds, hurdle savings accounts, money market unit trust and all. 30% would be the first more risky wealth machine you u try out.

My thinking is for most folks their default should be a passive index exchange traded fund portfolio. This should be most of our baseline wealth machine.

Why? Not everyone can cut it in active investing. Suppose you wanna try if you can cut it. You could succeed or you could fail. If you fail you need a fall back plan.

So why not learn how to set up this basic wealth machine first. Then take part of the money and see if you can cut in active management.

So the idea is

1) build your emergency fund, pay off your debt and try to build your first $20,000 with the safe assets form of wealth machine. You should be able to get a return of 2% ok this average.

2) while you are doing this, prioritize reading on index investing and portfolio allocation

3) once you have $20,000 start diverting majority of it to a etf portfolio allocation. U should know roughly what to do. Also can funnel part of your disposable income into your wealth machine

4) explore whether you can do more. That is start business, do trading or do active stock investing.

5) if you manage to read and get competent, wish to try it, rebalance part of your passive portfolio, or take new capital injection to form a satellite active stock portfolio.