Asked by Anonymous

I am a fresh grad and working as a private tutor. I have just paid off all my loans and I now have 3k in CIMB Fastsaver, 2k in cash. Every month I will have average 3k of spare cash. How should I divide this among my POSB, CIMB, SSB and STI ETF?

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  • Kenichi Xi
    Kenichi Xi, nᴉʍ oʇ dǝnᴉʇsǝd 不能说的秘密 at Tag Team with Gabriel Tham
    Level 6. Master
    Answered on 21 Sep 2018

    You divide based on your 1. Family Plan 2. Asset purchase Plan 3. Retirements Plan

    Not short changing the reply here but is good to think thru point 1 to point 3 to commit ur investment tt benefits u and not go against u.

    Hope my reply helps.

    If you feel this reply have Quality, please upvote and check other Quality Reply.

    https://seedly.sg/profile/a-kenichi-xi

    Thank you.

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  • Kenneth Lou
    Kenneth Lou
    Level 8. Wizard
    Answered on 27 Jul 2018

    Hello there! You actually left out a very key criteria, your age and life stages (eg attached, getting married or planning to have a kid etc).

    But I will take it as though you are single and thinking to grow your wealth over a longer period of time :)

    It's a very good base to begin with actually, let's get that straight! Good on you :)

    And to be honest, 3k of spare cash a month is very ideal actually.

    If I were you I would do this... (But this is not a recommendation):

    • POSB: $500 (for daily spending) cos it's easier to acess via iBanking, paylah, payNow etc. (and since you don't have SALARY credit)
    • CIMB: $1,000 (for my forced savings) at 1% p.a flat. (You can use this to also build up your cash reserves as well for larger ticket items in the future, eg wedding or home etc.
    • SSB: $500 (this one i think is preferential... depends on whether you want to lock up your cash by lending it to the government (10 year is not a bad time frame as well for your later half commitments eg kids expenses etc, when your SSB matures. ) I think effective p.a interest is around 2-3% not too bad...
    • STI ETF: $1,000 (let it compound magically over time!)
    • Robo-advisors: Oversease ETFs at a low cost (Something to consider as well, if you don't want to just limit your investment portfolio to just the Singapore market :) You can read what other community member's say here: https://seedly.sg/reviews/robo-advisors

    Hope this helps :) And if you have any questions, feel free to ask me in the comments section below!

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    • Suzanne Tan
      Hi Kenneth, what would you think of voluntary CPF contributions? How many percent should go to that?
      30 Jul 2018
    • Kenneth Lou
      Hey Suzanne! I think voluntary contributions for CPF it's really up to you! Main thing is to note if you can get a better savings rate externally. This is unlikely eg you can get 1% from a CIMB account vs 2.5% in CPF OA and 4% in CPF SA. So if I were you, I would actually top up (how much is the key = map out if you plan to buy property, eg in 5 years time, you should work backwards to see how much you will need for the downpayment (you can use OA for this purpose) and continually pay from your OA for the full amount. But as a whole CPF contributions are definitely important. Take note: From 2016, the CPF Annual Limit is $37,740. :)
      31 Jul 2018