Asked on 01 Jul 2020
Last month I signed on AIA PRO ACHIEVER (100% Investment) 3k/yr & 1 time payment of $200 in stashaway...Thinking that it might be a good way to start off and mayb few years ltr (more financial power) I'll venture into investing myself.
But I see many - comments on ILP and now I'm thinking if is really not worth having the policy... At the same time I need someone to help me to "manage my Investment" because of my inability atm.
Feeling conflicted cuz I want to start investing esp now i'm young
I am 24 right now and am graduating next year, so I believe we are 'peers' in some sense. I totally understand that you are overwhelmed by the tons of options available out there, and everyone tells you different things due to their personal interest/ experience/ knowledge. I would like to share with you what I would do once I graduate next year for your reference.
We are still young, so our goal now is to grow our capital as fast as possible and as aggresive as possible (but hey I am not asking you to gamble). We have at least 3 decades to grow our wealth, so invest in something that can generate us higher return (though riskier) instead of the safer ones such as fixed deposit and bonds. So aim higher! Below are the options you can explore, pick 1, or even do both:
Regular Savings Plan, if you do not have sufficient knowledge and confidence to start picking individual stocks yet, start with RSP, it will not go wrong. Options available now are POSB, OCBC, Phillip Capital and FSMOne. I'd suggest go with FSMOne RSP as they have the lowest fee ($1) and provide the most options (even international ETFs). You can DCA a couple hundreds into each ETF every month, such as iShares Core S&P 500 ETF, iShares FTSE A50 China Index ETF, Vanguard FTSE Emerging Markets ETF, Fidelity® MSCI Information Tech ETF (note: these are my choice, you can choose other ETFs that you personally like on the platform)
Robo-advisors. They are pretty solid option as well, you just have to answer some questions and they will provide you with a customized portfolio that cater to your goals and risk level you are comfortable with. If you want to maximize growth (comes with higher risk), choose a portfolio that has the highest risk-reward. You can invest a lump sum or just DCA every month. Some options are StashAway, Syfe, Endowus, Digiportfolio, Kristal, etc. Personally, I would go for StashAway for general investment and Syfe for their newly launched REIT portfolio.
Both of the options above are pretty 'passive' as it requires minimal effort on your end, so you can focus on your work and maximize your earnings as much as possible (learn some new skills, impress your boss, get your promotion, and invest more!). In the meantime, start learning about investing and stock picking. There are many courses and investing books to get you started. Once you have equipped yourself with sufficient knowledge, you can start to invest in stocks with high growth potential (instead of dividend stocks). This will further accelerate your FIRE (financial independence, retire early) journey. Of course, if you think stock picking is time consuming and you have no interest to do this at all, you can definitely stick to option 1 and 2. If you start to invest consistently at the age of 20, you can live a very comfortable life when you are around 50 years old (instead of 65 :D)
Hope it helps, cheers!
Hi, you must feel really overwhelmed with so many things to consider, especially since you're working as well!
With regards to the ILP that you signed, it does have some benefits of providing you returns which are pretty decent. Though you are paying quite a bit of fees to the insurance company, ultimately you would still have better returns as compared to the banks.
You could take this as a lesson to do your research first before signing up for any policy. I highly recommend you to read through the policy terms and ask as many questions to get a clearer picture on what you're signing up for.
You may not have the time, but I really encourage you to improve on your financial literacy. I really like to listen to podcasts as you can listen to them on the go, especially when you're on public transport!
Here's a list of resources from an article on my blog, I hope that these resources will be able to help you improve your financial literacy!
Alex Chua, Sophomore (Engineering System Design) at SUTD
Answered on 10 Jul 2020
If I recall correctly, there is a package for AIA, you probably can ask your advisor. You may also w...
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