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          04 Jul 2019


          What is your best advice for a youth who wants to invest?

          I’m 19 years old currently studying. I’m interested in making some investment but have little or no knowledge in it. What are some advice on how to get started?


              Discussion (2)

              What are your thoughts?

              Kudos for the effort in starting young. As they always say, invest in yourself! Make sure to do well in your studies, and if you have the time, do go for courses (public speaking, coding, microsoft office...) to upgrade yourself and learn new skills. It will be significantly harder to pick them up when you're older.

              Subsequently you can invest with your money. You should start off by having at least 6 month's worth of salary in your bank. For a student, you can gauge the salary by the expected starting salary if you were to graduate now then multiply by 6. This is your emergency fund in case of any unforseen situations. You can put the money in any high interest savings account such as CIMB FastSaver which offers 1% interest rate. There are many articles by the various personal finance blogs which compares the different savings accounts.

              Before you start investing in anything, be sure to read and learn about them first. If you can afford minimally $100 a month, you can choose ETFs. Ordinary investors like you and me may not necessarily be able to afford to buy all the stocks in major indices (which consists of the biggest few companies in the market), which has proven good returns over the years, such as S&P 500 (which has 500 stocks!) or even Straits Times Index (STI). How these funds works is that they will pool in money from many many 'small time investors' and use these money to invest in all those stocks. The profits earned will then be split amongst the investors. One benefit of this is through the principle of dollar cost averaging. If the price is high for the month, you buy less units. Conversely, if the price is low for the month, you buy more. Over long periods of time, the price per unit will even outand this prevent impulsive buying when price is high. Another plus point is that you do not have to actively manage anything since everything will be settled for you. Another similar relative to this is robo-advisors which has been gaining traction over the past few years. Similarly, you should compare the different forms of investments before going into them.

              If you're super super free, you can borrow books/read online blogs and articles on how to invest. With Singapore market being more financial-centric, you may wish to look at Real Estate Invesment Trust. Similar concept to ETF, you may not be able to buy properties, but you are able to own a minute fraction of it. Be sure to invest with money that you can part with.

              If you're feeling less risky, you can consider going into bonds. Essentially, you lend the borrower a certain amount of money and they will pay you coupons semi-annually (usually) together with your principal at the end of the maturity. One more prominent and safe option is the Singapore Savings Bond (SSB) which is backed by the Singapore Government. The probablility your investment will default is roughly the probability the SG govt going bust (quite unlikely). Downside to this is that your money will have to be locked in for quite sometime. However if you do need the money halfway through, you can still get it out without any penalties.

              Always remember:

              • high returns = high risk, but high risk =/= high returns
              • do not die hard listen to others' financial tips, esp on stocks. Take it with a pinch of salt
              • do you homework before buying/selling
              • do keep reading and learning to try different investment methods to suit your style



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