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Anonymous

Posted on 22 Jul 2020

How much savings should I have by the age of 30? What percentage should be liquid cash, FD, stocks?

Concern about not investing my liquid cash enough and whether the amount I have at the moment is considered at least average for my age.

I'm married and have purchased a 4rm HDB. No car. With no outstanding loan on education, wedding or renovation. Have purchased the general insurance coverage -hospital, life, eCI, accident.

Is cash in shares and FD, liquid cash? I have more than my annual salary in savings accounts (can withdraw) anytime.

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2 answers

Discussion (2)

Zi Shuen

Zi Shuen

Level 9. Genius

Posted on 04 Aug 2020

You are in a good position to start with no loan, no car, and already have insurance coverage.

Now back to the question, how much savings should you have? Well, it depends (duh).

  1. You have your annual salary in savings account, I am not sure if that is too much or too little, depending on your goals. But generally, 3-6 months of monthly expenses as emergency fund is a MUST. Then, you can save about 10% - 20% of your monthly salary in another savings account (don't lump together with emergency fund account)

  2. Let's assume your expenses make up to 60% of your monthly salary, and you save 20%, then you have 20% left. Now your SHOULD invest the remaining 20% instead of just putting them in the bank account and let inflation eat their value away. Well, as for what to invest in, that's another whole new topic to talk about.

But in general, do not bother with FD, I mean, if you invest $1,000, you are getting about $10 a year with a 1% return, or $20 with 2% return. Since you are below 30, go for a higher risk ones (not casino please). Some options you can consider as below:

(a) Buying individual stocks or ETF (can se Interactive Broker, Saxo, TD)

(b) Robo-advisor (StashAway, Syfe, EndowUs, etc)

(c) Regular Savings Plan (FSM One, DBS, OCBC)

(d) Cryptocurrency (super high risk, proceed with caution, please invest less than 5% in this asset class)​​​

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I believe you ask wrong question

Saving is the amount of free cash flow you have. Saving is equivalent to emergency funds + liquid cash ( defined by most community members here). This amount of saving is correlated to your x months of future expenditure. Thus, it is subjective because everyone has their own lifestyle

Borrowing a joke from Chua I-min,

You should ask about your assets by 30. In other words, how much r you worth? How much do u think u r worth now and future?

https://blog.seedly.sg/working-adults-allocate-your-monthly-salary/. This is a good guidelines.

What % should be liquid cash, FD, stocks?

Liquid cash is an fixed amount looking at e. G your 6 months expenditure. % FD and stocks?

This is a question of how much risk /money lost u r willing to take to increase your capital

Always go back to the basic of finance and what r your financial goals in life? How do u then meet your goals? That will then be your allocation

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