Do people actually sell off their investments to fund their big ticket items like housing and wedding, considering their investments can grow if kept for retirement? - Seedly
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Anonymous

Asked 4w ago

Do people actually sell off their investments to fund their big ticket items like housing and wedding, considering their investments can grow if kept for retirement?

Would like to hear out some of your strategy for funding big ticket items! :)

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Hey there!

I think it really depends! Stage of life, age etc plays a factor. If I was 29 and I'm looking at a house in 3 years time, it might not be realistic to expect my investment to boom sufficiently in that short span of time. In general, investments have to be held for a long term for compounding to work so it depends really on their time horizon. Investments, if done well and smart, can bear fruit over the long term.

As certain as the reality of retirement is, so are things like housing and wedding. However depending on the time horizon and age of the person at question, not everyone have the luxury of time to grow their investment to fully meet big ticketed needs eg. housing etc! (of course, all subjective! Depends on income, capacity to invest etc)

For people in ther mid or late 20s, I normally encourage them to start saving intensely and cut down on unnecessary expenses. A high yield savings account, an endowment that allows liquidity is a great way to start :)

Probably other strategies out there, will love to hear some too!

Financial planning is an integral part of life. You can reach me here to find out more.

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Andrew
Level 3. Wonderkid
Answered 2w ago

It depends on your life goal strategy. It is all about opportunity costs, if your investments can grow to keep for retirement then why not? Its about prioritising what you really want/need in life. If you value housing/wedding more, than cash out the investments to fund it. If you value a more comfortable retirement many years down the road later, then cut down on the big ticket items. Look at the long horizon.

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Malvin Tan WP
Malvin Tan WP
Level 5. Genius
Answered 2w ago

Sure, why not? whats the point of making money if you cant use them for necessities (i'd consider shelter and a life partner necessities). Provided the investment's time horizon matched the event of these big ticket items.

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It depends on your investment objective and how you intend to accumulate wealth for your goal.

Let's take education for example. Since the entry age is somewhat fixed, therefore, we have a tendency to prefer a guaranteed yield instrument as compared to an investment.

On the other hand, maybe we are saving up for renovation. In this situation, it may be possible to use investment in a controlled environment. In the event when we lose e.g. 20% from our portfolio, we could perhaps live by having lesser furnitures for a start.

To summarise, it depends on your risk appetite and how you conduct comprehensive financial planning for your future. This gives us the confidence that we need to put our money into the right financial instrument for the future.

For me, I will always spend quality time to do a detailed planning and analysis on the figure that I need for my goal. Thereafter, I will analyse my cashflow and create a budget. The best way to do this is via automation.

How I do My Budget:

How to create a Monthly Budget

I share quality content on estate planning and financial planning here.

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Unlike investments, housing and weddings are consumed with immediacy. Investments are deferred consumables.

How much you will liquidate will depend largely on your holistic financial plan. Some people will liquidate as the need for the consumable exceeds the long-term needs.

If you have a plan in place to ensure investments over the long term, there is little harm in consuming cash for immediate needs.​​​

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