Help on financial planing, direction on investment and insurance (pt3)?

As for my savings, I do have around $46,000 cash in my DBS multiplier which earns about 1.8% monthly interest rate. Among the $46,000 I intend to set aside $15,000 as emergency fund while $20,000 for master’s degree fee, $11,000 are extra money. On top of that recently, I sign up SAYE account with POSB and force myself to save $700 monthly for 2% interest rate. Do you have any advice on this? I am not a big fan of endowment plan on this.

Dear anonymous, thank you for your question and sorry for the late reply. You are indeed a great saver! Assuming that the $15,000 is your emergency fund, I would encourage you to invest your $11,000 into a portfolio of low cost ETFs to get a higher return. Low cost = less than 0.5% p.a. in terms of management fee.

As a start, here are a list of equities ETF you can consider:

SPDR S&P500 ETF - US, a proxy to develop markets
SPDR Straits Times Index ETF - Singapore market
Db x-trackers MSCI Pacific Ex Japan UCITS ETF - A proxy to Asia

By investing in then, you will be broadly diversified across different geographical regions. There are enough studies to show that it is very difficult to beat the market by trading and there is really no need to. The driver of returns for stocks is earnings or profitability. As long as world population continues to grow (and it is!) and people have needs and companies continue to exist to meet the needs, stock prices will (and have) gone up over the long run. Yes, some companies will fail but most will continue to be around. That is why you should invest in a broad diversified portfolio.So stay invested. Do not get in and out based on views or news. That will be gambling.

You are already doing well saving your money. But simply saving and not investing may not help you achieve your goals and also might not beat inflation rate.

Hope this helps.