I am 25 this year, and my freelancing job gives 5k spare cash per mth. I DCA 1.5k in STI ETF every month, and my cash is accumulating quite fast now I don't know what to do with it. Any suggestions? - Seedly



Asked by Anonymous

Asked on 09 Apr 2019

I am 25 this year, and my freelancing job gives 5k spare cash per mth. I DCA 1.5k in STI ETF every month, and my cash is accumulating quite fast now I don't know what to do with it. Any suggestions?

When should I stop DCA in STI ETF?


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Jonathan Chia Guangrong
Jonathan Chia Guangrong, Fund Manager at JCG Fund
Level 8. Wizard
Answered on 10 Apr 2019

Great work on your freelancing income. Quite a feat at your age.

You may want to set aside an emergency fund before you go further, perhaps 6 months' worth of expenses or more. This is to help cushion any periods where you are unable to arrange for accretive projects.

For investing, if you can stomach a higher risk, consider learning how to manage an options portfolio. Returns can be upwards of 30-40%pa. Best to find a mentor to guide you on this


Wilson Nid A Break
Wilson Nid A Break
Level 8. Wizard
Updated on 10 Apr 2019

So basically you had 5k in spare cash every month, the next question is how to allocate this 5k into different portfolios. My following suggestion is based on the fact that you are relatively young (can afford to be more aggressive), typical average investors seeking average/decent returns w.r.t average risk that do not want to constantly monitor market and/or little time/desire to pick out individual companies's financial statements etc.

Here's my suggestion:

  1. Build up an emergency cash funds 3-6 months worth of expenses. ($500 per month, 10%)

This portfolio will be your "Pay-youself" fund to always ensure you had a financial safety net, on top your CPF savings.

No hard & fast rules on the number on months, dependent on one's individual circumstances. For example, if you had dependants, a monthly mortgage, low job security then the emergency cash funds could likely exceed 6 months. This cash fund could be parked in a high-interest savings account and/or Singapore Savings Bonds (SSBs). Once you hit your targeted emergency cash fund amounts, you can just deploy the $500 to CPF-SA top-ups to get tax relief & earn up to 5% interest (almost risk-free).

  1. Next put your monies to work via ETFs ($1,500 each per month for STI & US-index ETFs, thats $3k in total, 60%)

The ETFs will be your "Time-in-the market" fund, always stay vested regardless of near-term market fluctuations, betting on the fact that 10/20/30 years down the road, things will eventually pay off.

You alr made the first step by DCA to STI ETF, the next step is to consider adding US-index ETF which had historically & statistically proven to be far superior in terms of growth.

"When should I stop DCA in STI ETF?" - Once again, no hard & fast rule, perhaps set an $X amount of target value for STI ETF to be in your portfolio. Eg: Once ETF reach $10k/$15k/$20k, stop buying into it and redeploy to other investments products.

  1. Lastly, invest the remaining into dividend-yield stocks ($1,500 per month for REITS etc, 30%)

This will be your "Pay-your-expense" fund, dividend income from these stocks could pay a meal/transportation/utilities bill.

Owise, you can just simply re-invest the dividend income if you had no immediate need for it. Invest in REITs with a good sponser, etc Capitaland & Mapletree, circa 4-5% dividend yield. There's plenty of information on these kind of reits in Seedly, take your time to read through.

All e best!


Cherie Tan
Cherie Tan
Level 4. Prodigy
Answered on 10 Apr 2019

Hi! Great to see you’ve taken up a freelance job that pays well.

At the age of 25, I think you’re set in a rather comfortable financial situation with increased streams of income and ample amount of energy and time. By setting aside 1.5k each month in investments, you’re doing your future self a great service.

However, at this age, you would also likely have plans to settle down in the next 3-5 years, and possibly welcoming a bundle of joy within the next 5-7 years. These are considered relatively short term. And with the additional 3.5k a month, you could consider the following:

70% of 3.5k into a savings account / liquid savings option like the SGS bonds with a higher interest rate of around 2% to preserve the value. This will serve as additional savings for upcoming short term goals: wedding, child, your further education.

30% of 3.5k into a retirement savings plan and/or CPF SA contribution, to grow & diversify your retirement nest egg. CPF is a risk-free instrument that compounds up to 5% annually, and with a long time horizon, your seemingly small contributions now will grow incredibly well by the time you retire.

It is easy to be distracted by additional investment options, but you must ensure you’re planning and investing sensibly, not forgetting your short term goals, and the ultimate goal of retiring well. Consider upgrading / various insurance plans for additional coverage against common critical illnesses, accidents, and other unfortunate events as well, safeguarding your health and wealth in down times like these.

Let me know if you would like to know more, as I work with many millennials in similar situations, and I can advise better knowing the full picture.

Cherie Tan

Representing Prudential Assurance Company Singapore (Pte) Ltd Reg. No. 199002477Z



Awesome work on the spare income from freelance. Must learn from you sia.

Anyway regarding investments. Honestly the best way forward is simple.

Invest globally. Invest in profitable companies. And have more exposure to smaller cap value stocks.

This is the best way to earn expected return from your investment. Because statistically since 1926, this has been the most consistent way to make money.

I'd stay away from SG equities and especially our local market ETF because it just has too high concentration risk in one small region, Singapore, too high concentration in financials, and the constituents of the index just aren't big innovators to expect big growth anytime soon. We still haven't reached levels before the 2008 crisis. Pretty much everyone else has.

Now that you have your equity exposure done, it's to balance some volatility and short term risk with investment grade bonds.

Decide the split based on your risk profile and you're good to go.

If you want to set this up, let me know. I'll be more than happy to show all the research that has been done for the last 90+ years that backs this up.


Allan Lee
Allan Lee, Financial Planner at Axa Singapore
Level 3. Wonderkid
Answered on 09 Apr 2019

Hi, you might be looking for some savings/investments tips that will give you a better interest rate rather than putting them in some place which generate low rate of interest?