As the title says. Am 25 this year and I think I am extremely behind all my peers whom at the very least have decent savings. I was unable to save previously as I was paying my school fees & allowance on my own.
My current job has an average of 5%-10% increment YoY with a 1 - 3 month bonus package.
What should I be doing to save efficiently & when should I start investing? What would be my recommended DCA figure, the best investing strategy and market for me?
Am extremely lost right now :/ Thanks in advance!
Hello! Great to hear that you have started on your investment journey.
In terms of the amount of savings you should have, it is usually recommended that you will need at least enough savings to cover 6-12 months of expenditure. This is just a general rule of thumb and you can adjust accordingly. The whole point of emergency funds is to tide you through periods where you are out of job / unable to work. This buys you time to find an alternate stream of income.
After you have set aside an emergency fund, I would recommend you to make sure you have sufficient insurance coverage. (life, hospital, and critical illness) A cancer diagnosis will mean that you are forced to sell off all your investments to fund your treatment and lifestyle, even when your investments suffer a loss. Only when you are sufficiently covered will you feel assured to invest.
Once all of these is done, you can finally start investing. This is the most exciting part, but I highly recommend that you take the most boring route. Focus on your job, and let roboadvisors / fund managers do all the hard work for you. How much to invest? Unless you are saving up for a short term expense, i suggest that you invest most of your excess cashflow.. As long as proper planning is done, you should not need to touch your investments in the next 5-10 years.
If you prefer a simpler approach, you can just set aside 20% of your income to DCA into a Robo, or sign up for a RSP for mutual funds. What is most important is that you start investing. You can always increase / decrease your monthly investments later on.
Hope this helps:)
After emergency fund settled.
if you want to take it further,
This is how an average salary guy hit more than $100k before age 30.
If I were you, I'd do the following.
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