Any tips for a fresh graduate starting out in investing with limited capital? - Seedly
 

Investments

Asked by Anonymous

Asked on 02 Sep 2019

Any tips for a fresh graduate starting out in investing with limited capital?

What are some things I should keep in mind?

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Answers (6)

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Dhruv Arora
Dhruv Arora, Founder & Chief Executive Officer at Syfe
Level 6. Master
Answered on 03 Sep 2019

Kudos for starting your investing journey early! As a first step, my advice would be to try to save more money. Saving more allows you to invest more, accelerating the rate of your compounding returns and the growth of your money. As you embark on your first job, aim to save 20% of your income and invest it in a low-cost, diversified investment portfolio.

Instead of trying to spot “winning” stocks, a better alternative would be to adopt a passive investing approach and build your portfolio using Exchange Traded Funds (ETFs). Research has shown that about 90% of active fund managers failed to beat their index targets over the previous one, five and 10 years. So why pay more for actively managed funds when they almost always underperform passive investments in the long run?

For young investors like yourself, ETFs make it possible to own a diversified portfolio with relatively low investment thresholds. Investing in an ETF that tracks the broader market e.g. the SPDR® S&P 500 ETF is also a sound choice that allows you to receive fair market returns without having to do much.

If you’d like to invest in a basket of globally diversified ETFs but find the capital requirement a challenge, you could consider investing with a digital wealth manager like Syfe. We don’t impose any minimum investment amount and you can withdraw anytime at no extra charge.

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Albert Tan
Albert Tan, Fin Lit Trainer at MoneyOwl
Level 4. Prodigy
Answered on 03 Sep 2019

Invest in yourself. The learning should never stop once you step out of school. There are many things in life not taught in school. You are your biggest financial asset. Take time to explore your interests and passion. Increasing your human capital takes time, as with all other types of financial investments.

Whilst you're still earning a basic income as a fresh graduate, perhaps it's also good to look at your financial health and start on the right note. Build your emergency fund, keep expenses in check, and thereafter systematically save and then invest on a regular basis to reach your future goals.

There are many ways to invest. MoneyOwl offers one way which works for most people. It is relatively easy to get started with just $50/month, and no lock-in period (as in the case of endowment insurances). This should give you a good feel of investing in the markets

https://advice.moneyowl.com.sg/the-right-way-to-invest would be a good read for someone just starting out, with a myriad of choices available on the market.

I wish you well in your career and investing journey!

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Cedric Jamie Soh
Cedric Jamie Soh, Director at Seniorcare.com.sg
Level 8. Wizard
Updated on 12 Sep 2019

As long as you have a salary, you can do consistently monthly purchase of ETF.

Go for any of the Robo-advisors or any of those stock monthly plans as long as the FEES are low.

Doesn't matter if it's low $200 or $100... consistently. If the market crashed, continue.

if the market keeps booming, continue.

Consistent is the key in the long run.

In the short run, if you are good at saving up, and finding stocks that are super undervalued, kudos. ;) but most of us can only do well in the long run with consistency.

Go buy books or borrow from the library. Read free stuff online or on youtube. I find capital to be very limited when you are a fresh graduate but knowledge is a BIG multiplier.

Stack up on knowledge.

If I knew what I know about the USA market back when I was a fresh graduate, I would probably be richer now... Oh well, the follies of youth. ;)

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Low San Zeng
Low San Zeng
Level 3. Wonderkid
Answered on 02 Sep 2019

I believe that before you start investing, you need to first understand what IS investment. For instance, you should start off by understanding investing terminology such as stocks, bonds, ETF, dividend etc.

You can start off with this guide by seedly, which has helped me greatly in my investing journey!

https://blog.seedly.sg/ultimate-personal-finance-guide-to-investing-singapore/

Importantly, you should understand the product/stock/bond you are investing in by reading up on them! Don't invest blindly without knowing what you're doing!

Learning investing is tough at the beginning but I believe a proper background of investment knowledge will pay off in the future. Jiayou in your investing journey :)

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Jonathan Chia Guangrong
Jonathan Chia Guangrong, Fund Manager at JCG Fund
Level 8. Wizard
Answered on 03 Sep 2019

Get your protection plans in place first before investing, especially hospitalisation plan. You won't want to focus on investments then see it all blown away to pay for expensive hospital bills or when you can't work due to illness.

Once these are done, look at why you want to invest. Is it for retirement or a big-ticket item down the road? Set a goal and know your risk profile. The latter can be made known by just creating a Robo-advisory account with perhaps StashAway. Then look at the different instruments that suit your risk profile. This may be bonds, equities or a mix of both. From here see what you can invest into using your limited capital.

Oh, and as Albert has mentioned invest in yourself as well by reading up on financial stuff.

Hope this helps and all the best.

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You might want to start up with

  1. Robo-advisory platform to invest monthly with a minimum sum.

  2. start reading up and build upon your investment knowledge.

  3. RSP (regular saving plan) in stocks or funds to get you started with.

These are ways that you can dip your toes into the water to get started.

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