How to have passive income by investing $100 monthly in ETF? Any good and suitable products I should look out for?

Question

Currently 55 yo. I am worried that I might not have enough to take care of when reaching 70 as I still have my HDB loan to pay. 
I am thinking of investing $100 monthly into ETF or REITs or both. 
Would really appreciate some good advice on how and what should I do to at least have a better lifestyle quality when retire.

And is StashAway a good option to consider? If not, then should I consider PhillipCapital or Vickers to start the plan?

Cedric Jamie Soh · Accepted Answer

I know not much about StashAway personally but I will say these ETF, robo-advisers etc are all much better choices with lower fees compared to the older, traditional investment companies such as PhilipCapitals or Vickers.

Even buying stocks via Standard Chartered Bank is way cheaper than using Vickers.

If you ask me to choose between them, I will stick to Robo-advisers and ETF, and research on StashAway, Moneyowl, Autowealth etc.

Here is a great article by Seedly

[https://blog.seedly.sg/singapore-robo-advisor-investment-comparison/](https://blog.seedly.sg/singapore-robo-advisor-investment-comparison/)

Jonathan Chia Guangrong · Answer

Frankly, it may not be a good idea to go into equities fully as there's a risk of a depressed portfolio when you need the funds at the desired age. There's no luxury of time to weather any downturn cycles. With this in mind, perhaps you can look at StashAway to help you create a portfolio based on your risk profile and years to retirement. Their portfolios usually have some element of bonds to help balance equity risk.

Do look into contributing more on a monthly basis if possible as $100 a month is a bit difficult to achieve a meaningful goal to aid your retirement. Hope this helps and all the best.

Takingstock @ · Answer

I have two ideas in mind, given your circumstances.
1) Top-up the retirement account, you get a bit of tax relief, and if you did not reach the cap for FRS, then that $100 per mth may end up increasing your monthly payout by a bit more than investing. At least it's a guaranteed min. 4% and the payout is aimed to keep going as long as you live.

2) Of the monthly investment products, I think (but am not sure) the POSB invest saver scheme would charge 0.82% fees for investing in an STI ETF G3B only. I would guess the current dividend yield is about 3.2%, but you will have to endure the ups and downs of the stock market.

In both cases, the annual returns are really not that high.

For CPF life, 4% of 1200 = 48, and the 1248 / (remaining expected life span) may only work out to be less than $1 increase in the monthly payout.

For index ETF, if I assume a 3.1% yield, the dividend per year may only work out to be $37, which would be like $3 a month.

Between the two, it would seem that you will get better value for money from POSB Invest Saver into the Nikko AM STI.

* disclaimer- I have not looked through all other products, but it would be highly unlikely to find one that charges less than 0.82% fees. Need to confirm that's the charges (no other hidden fees).

* if you don't have a lot of cash in hand, you might want to save up for the emergency fund first though. The emergency fund will help you tide through some periods of either income decrease vs unexpected expenses.