What should I do to maxmise my $400k before buying a flat?

It is great that as an entrepreneur you are contributing to your CPF for tax deductions. I would highly suggest you take advantage of the low-interest rate to take a loan. Taking a variable rate loan might be a wise choice and subsequently, change it to a fixed-rate loan as we do not expect the interest rates to rise in the next few years.

You might want to compare between taking a HDB loan and a bank loan and weigh the difference in your decision.

With a loan, you might want to consider taking a term plan to pay off any outstanding loan if anything happens to you. This will effectively protect you against any liabilities.

You might want to reinvest some cash into your business to grow it further. Continue to milk the cow while you can. Build your moat and protect your business by providing better value to your customer.

Investing in stocks or other instruments is a good way to diversify your risk. Business may be good now, but you can never be sure of competition and the future. Better to focus on your core business and perhaps delegate the investment to someone else like investing into an ETF or a managed fund for better returns.

We have a limited amount of time and we cannot do everything.

It's best to speak to a qualified advisor for more tailored advice.​​​

$400k at 26yo... hats off...

I note that you're an entrepreneur and businessperson. You may want to examine your business to confirm (1) how regular your income is and (2) how sustainable your income is. This will have downstream implications on your mortgage payment.

I agree that being debt free is under-rated. So if you want to pay off your flat in full with your $400k, that wouldn't be bad. This will also allow you to not worry about having to pay for high monthly mortgages, esp if business is bad in the future (choy).

But I also think $400k is a lot of money, that can potentially get you a lot of investment return in 10-15 years' time. And if your business income is regular and sustainable, and you don't have problems with mortgage payment, you could consider using some of your $400k for downpayment and investing the rest long-term.

If I were you, I'd do an honest calculation of how much I need for my house downpayment in 2022-2024. Let's say you buy a 600k 4-room SBF. You need 30k cash for downpayment and 50k for renovation (ball-park figures, you plug and play accordingly). I'd invest the 80k for the house in short term, less volatile instruments (either money market or bonds). This 80k, die-die, at all cost, I will need it back by 2022-2024.

The remaining $320k, I'd deploy as fast as possible into longer-term instruments with higher returns. I'm a noob, so I will just go with Endowus' advised portfolio, which basically comprises global equities. But I'd dial up the risk profile to gain the most exposure to equities since this is money that you don't need to see until at least 15-20 years down the road. You can choose to lump-sum or DCA. Lump sum gets you into the market the soonest. DCA helps you average down in event of a market dip. No hard and fast.

With this $320k in investment, even if your business doesn't do as well in the near future (choy) you can just focus on paying off your mortgage and not worrying about having not enough to invest, since you alr have $320k working hard for you.

Good luck, and once again, solid job on amassing $400k net worth.