As a 21 year old individual with 10k savings is it more advisable to do volunteer contributions to cpf to beat inflation or to invest in stocks/ STI ETF ? - Seedly
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Asked by Anonymous

Asked on 17 Mar 2019

As a 21 year old individual with 10k savings is it more advisable to do volunteer contributions to cpf to beat inflation or to invest in stocks/ STI ETF ?

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Yeo Enk Loui
Yeo Enk Loui
Level 6. Master
Answered on 19 Mar 2019

Hello!

Just wanna share abit of my personal experience here.

I understand that at this juncture, perhaps what most people would advise you to do is to invest in the ETFs since it is passive, diversified and safe. I mean we shouldn't "put our eggs in one basket" right?

However, I feel like if you are someone who is highly interested in reading about stocks, finding more about various industries and interested in finance in general, what you can consider doing is to research on some stocks eg: Apple, DBS or anything to truly understand the financial metrics, its company's revenue segments and business model. I feel that this, in the long run, will help you gain more understanding and interest in the financial markets, as opposed to just being a passive investor and buying into the index on the mere basis that it is "safe" and "diversified".

That being said, there is no right or wrong in terms of which way you want to invest your money and ultimately, it depends on what you want to get out of this entire journey/experience (apart from good, solid returns).

For me, at least, researching about various stocks and determining if they are worth buying, and then deciding how much to invest in them vis-a-vis other stocks was something that really sparked my interest into reading up more and learning how to be a better retail investor... Just my two cents!

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Zann Chua
Zann Chua
Level 6. Master
Answered on 18 Mar 2019

Hello!

I would personally prefer to invest in STI ETF as compared to cpf since i feel that investing in etfs will help me to diversify my portfolio.

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Henry Hoe Yong Zhi
Henry Hoe Yong Zhi, Co-founder at Cantley Lifecare Pte Ltd
Level 3. Wonderkid
Answered on 19 Mar 2019

I made my money through businesses, and I would recommend you to do that. I highly recommend you not to voluntarily contribute to CPF as that money can never be liquid again until you are at least 55 (if government plans do not change). You have 34 years of your life where those liquid cash can come in very handy. Opportunities will come along in this 34 years and if your money has already been locked up in CPF, you can no longer take up the opportunity. For example, a property being sold below market value that you chance upon, or a car offered to you at a very low price which you can flip it very easily later.

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Gabriel Tham
Gabriel Tham, Kenichi Tag Team Member at Tag Team
Level 8. Wizard
Answered on 17 Mar 2019

As you are still young, you might want to consider if you will need the cash in future. It could be future wedding, housing, renovations etc.

You can consider Singapore savings bonds first.

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Ernest Yeam Wee Leong
Ernest Yeam Wee Leong
Level 5. Genius
Answered on 20 Mar 2019

You will need to decide what is your long term goal.

If you put into CPF, then you will need to wait for a long time before you can "cash out".

If you put into stcosk/STI ETF, it has higher liquidity that will allow you to "cash out" at anytime that you need the money.

Personally, i will put it into stocks which although is higher risk but due to your young age, the risk is worth taking for higher returns and more liquidity.

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