Asked on 25 Aug 2020
I’m a full-time degree student, also juggling with occasional freelance photography jobs at the side. I do earn some side income thanks to that but nothing is firm. I have a debt for my degree studies, and I do have enough in my savings to pay for it fully. I am considering on taking a small sum out to start investing, is it a wise decision or if not — what would you guys suggest for me to do to gain more financial freedom while I school?
Hi there, I too was a student like you thinking of taking the plunge into the world of investing. By reading your write up, I have a few food for thought you may consider.
1) Opportunity cost. Consider the loan interest rate vs the potential returns of your investments (be it through robos or self manage). Work out the potential gains/loss and decide if you’re better off repaying the loan to become debt free or invest your money to “outperform” the accrued interest. You’d have to do the maths yourself for this.
2) Zero knowledge. Most common mistakes new investors make is they’re too excited to jump into the bandwagon, blindly putting their money into securities that online forum recommends without having basic financial awareness. Take the recent Tesla, Apple boom as an example. I’m willing to bet my money that most new “investors” commit their money in the 2 companies purely based on hearsay with zero investment knowledge. Although I personally think Apple is a good stock to consider based on their financials and position in the tech arena, but that’s a different story altogether.
Bottom line is, read, read and read. Arm yourself with the knowledge!
3) Pre-Investment checklist. Before committing to investment, make sure you have the following available
i) Emergency funds. Hold onto at least 6-9 months of cash flow to aid in rainy days. But of course 6-9 months is just a guide. You need to consider your financial commitments before coming up with your own rule of thumb.
ii) Insurance to hedge against massive liability. Minimally, plan for hospital, Critical illness, Disability and life insurance. Ensure you have the means to afford them before putting your money elsewhere. As we all know medical bills are crazy expensive here.
iii) Knowledge. As mentioned in the point 2, have the knowledge to know what you’re doing. DO NOT put your money into securities just because this forum said so or that friend said it’s good etc. Because chances are, when you decide to buy a certain stock based on hearsay, you’re probably the last in the world to buy it and prices would have already skyrocketed.
Just my 2 cents. All the best!
26 Aug 2020
Appreciate this so much. Good thing is my loan has zero interest rate until 6 months post-graduation, I graduate next June. I will go on to learn more about investments and finances in general. Thanks so much!
Firstly, I would first agree with a previous reply that you should try and find a community or at the very least, a friend that you connect with through the common topic of investing, OR make a low risk low returns investment to get you warmed up and motivated to learn more (Singlife is a great first step in my opinion with up to 2.5% p.a returns is highly recommended here, but do your own homework on Singlife if interested!). I felt my own first few steps were INCREDIBLY intimidating when looking at a share order page with all the numbers and unknown terms, really take the time to google and investopedia every term or jargon you don't understand- or ask a friend/community!
Next I would say is definitely understanding your own risk appetite to start- almost all investment educational platforms survey you on risk appetite because it gives you needed direction in the huge world that is investing.
There are PLENTY of free resources online, youtube, investopedia, sgx education, r/investing etc. I'm not familiar with Kristal.ai but Stashaway Insights is not a bad place to start for basic level investing.
Personally, I use most frequently use r/investing and free resources on youtube, watching channels such as The Plain Bagel, Josh Tan and Chicken Genius Singapore. I highly recommend that you take the time and look at a few videos across different channels to decide who you think provides great, free, digestable content for beginners. Oh, and Investopedia is really good for linking beginner to intermediate concepts.
Good for basics: certain youtube channels like plain bagel, stashaway insights, investopedia, r/investing (not all posts apply to us singaporeans)
Bad for basics: r/wsb (great for laughs though), Sgxeducation (imho)
25 Aug 2020
Thank you so much. I do have a SC Jumpstart but sadly it just had a dip in it’s interest rates. I will definitely check out the YouTube channels you’ve mentioned though! Appreciate it so much.
I just started in investment this year!!
Singlife has 2.5% p.a which is not too bad!!!
&&& I’ve a...
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