23 years old male undergrad, $42k savings but still have study loan liability. Any comments on my fund allocation and investment advice?

First off, congrats! You have a sizeable amount of savings that can be used to substantially pay off the entire student loan or a sizeable amount of it (to prevent the 4.75% p.a. loan interest rate from snowballing). Let's just say that I "inherited" your situation and I am now seeking to optimise whatever I have that you listed above in this question. I will recommend and state below the following steps and the things that I would do:

Based on just numbers alone, 1. & 2. sounds fine, although I may wish to find out more about the bonds and how it yields 3.85% as well as if there is a min. holding period for it

Next, I would allocate my singlife as my "emergency" fund. It is nicely rolling at 2.5% p.a. with an amount of 10,000 dollars.

Then, I would look at my investment horizon and consider a few things:

• when do I need to pay the loan?

• how much do I wish to use to pay the loan?

• what are the risks to reward ratio if I choose not to pay the loan (accum. @ 4.75% p.a. on a daily basis some more) compared to any investment I may shortlist/choose to get into

Simply put (as i do not understand your full background and accompanying circumstances), a generic and "fast" way out would, for me, be to continue putting this sum of money where it is (as i assume you are graduating at 24 years old) and then pay off the student loan in one shot before the interest kicks in

Only then, I would assess my remaining capital and seek to deploy them in investment vehicles as I would have a good time horizon for gains to actualise.

Hi, I'm 24 this year and I was at your situation too, perhaps I'll share with you what I'd do if I was you.

1. Have 6 months of emergency fund (Eg: if you spend $400 a month, then make sure at least $2,400 remain in the bank account), and save in Singlife for the 2.5% interst rate

2. I'd take as much time as possible to learn investment. If you're interested in stock picking, then read some books or take some courses that teach you how to evaluate and pick stocks.

3. Save 30% of your salary, another 30% to pay off your student loan (yes, 30%, because the interest rate is disgusting you have 42k savings for your disposal - mainly to invest)

4. Remain invested while you're still learning. There are a few beginners friendly ways to start your investment journey

4.1 Regular Savings Plan - you can try with OCBC Blue Chips Plan, FSMOne RSP, POSB Invest Saver. I'd go with FSMOne due to their lower fee. This is a good way to start your investment journey with as little as $100 a month and continue to Dollar Cost Average

4.2 Robo-advisor - there are many robo-advisors in Singapore such as StashAway, kristal.AI, EndowUs, MoneyOwl, Syfe etc. You can read online reviews and decide on your own. I'm personally using StashAway.

1. Once you have accumulated enough knowledge to get started, start picking stocks and invest in them. When you're young, I'd advise you to focus on growth stocks with smaller market capitalisation as they have a higher growth potential. After you accumulated sufficient capital from the growth stocks, you can diversify into more stable ones such as blue chips stocks, dividend stocks and REITs.

2. Focus on increasing your income, take on a side hustle, improve your skillset, start a small online business, whatever. Increasing income is the best way to accumulate capital.

All the best, stay safe, stay healthy and stay invested!

You have done well.

Take small steps in understanding your financial goals.

A good question is to ask what is your risk tolerance and expected cashflow income over the next 3-5 years. And what is the cashflow impact that comes from paying off your loan liability? With that, you would be able to better determine what kind of risks and time-horizon you will be able to take without hindering your planned repayments.

A macro approach of what you should invest in will not work.

You need to understand and plan out the cashflows first to better understand the financial cash flow impact of your decisions. Good cash flow planning will allow you to adhere to your investment plans and goals, without being exposed to huge shocks when markets swing.

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The tuition fee loan interest rate is 4.75% p.a. and starts accruing upon graduation. Assuming roughly $30k on loan which you will pay off in full immediately after graduation, that leaves you $12k that can form part of your emergency fund.

The key thing to consider is that with equities, there is high potential for returns but also high risk. It seems like you are halfway through university, so your timeframe is rather short. If your investment into equities loses value by the time your loan interest starts accruing, what would you do? Will your investment grow faster than the 4.75% p.a. interest on the loan?

Of course, you can take a calculated risk and invest a partial amount into the markets. My take is that you should just keep on doing what you are doing, and only invest if you have spare cash. By graduating with no debt and already armed with an emergency fund, you can channel more of your salary towards investment.​​​