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Anonymous

Asked on 05 Jan 2020

Advice for finance noob?

Hi! Need some advice! I’ve around 30k savings now and I earn 5k+ a month. I’ve just opened a multiplier account. I also have a ocbc 360. I’ve also initiated a rsp with DBS of $200 per month to Nikko am sti. My monthly hdb loan is 1.8k.

Questions as follows:

1) is it a right to change from ocbc 360 to multiplier?

2) should I think about financing my hdb loan from posb instead to get higher interest rate from multiplier?

3) what investment can I do?

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Firstly, we need to have a complete understanding on our cashflow. Through this process, we will understand our earning ability and spending habit. Here is a guide to help you: https://www.blog.pzl.sg/understanding-your-personal-cash-flow/

Next, use the respective bank's online calculator to have an estimation on the potential interest to be earned from each account. Accordingly, it gives you an idea on what to expect from each account.

Personally, I will prefer UOB One over the other two accounts mentioned - simpler criteria with similar yield.

For your second question, it will require a more in-depth calculation to determine if the switch is worth the interest earned - use an excel to help you.

Finally, before you start investing, it will be best to understand your objective. Here are some questions to help you:

  1. What is your capital?

  2. How will you want to invest your capital? E.g. lump sum or an amount on a regular basis

  3. How long will you want to stay invested? E.g. 10 years

  4. What is your risk appetite? E.g. How do you feel about short-term volatility?

  5. What is your objective for investing?

There are many investment tools available in the market to help you achieve your goals. Instead of focusing on the solutions, spend more time to understand yourself and your objectives. At the end of the day, these tools are to help you achieve your goals, rather than to create a goal to use the tool.

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