Asked by Anonymous
I heard from my friends, methods such as insurance saving plans, unit trust, SG bonds, ETF, autowealth roboadvisor, stashaway etc. I am planning to set aside $200 per month but I am not sure where to start for a beginner like me. Thank you!
Profile: No debts fresh grad just started full time job.
Target: Side income
Can read this by Seedly for a start:
With full time job, start budget and finanicial planning. Get basic protection (insurance first, then the $200 can either start somewhere as advice in the links above)
On the other hand, don't give up on Tuition as side income as it is your side gig supporting your main job. This side gig gives u the $ to save for war chest for investment and use some for holiday and others and even if one day you're changing or in between job, you'll always have this side gig as income. Safety net!
Meanwhile, read all the investment product reviews and choose what's fit you most.
Next, save about 1k+ and read review at: https://seedly.sg/reviews/investment-courses to attend investment courses and start taking things into own hands while continue doing full time job and side gig tutition.
This will allow you to achive whatever your financial purposes / dreams or FIRE early.
Hey, as ShinChan has shared, you can start off by setting up a Regular Savings Plan with POSB investsaver to invest in the Nikko AM STI ETF. Alternatively, you can consider using robo-advisor to diversify your portfolio outside of the Singapore market. Stashaway is a good choice to do so! SG Bonds offers higher interest rates than savings account and is liquid too. While insurance savings plans (endowment) locks in your money and if you choose to surrender the plan/withdraw the funds, you might lose to interest that you could potentially earn.
If you invest $200 per month, then maybe POSB invest saver might be good for you. From there you should get Nikko AM STI ETF. Just my opinion based on $200 per month. But if you really want to invest on more stuffs, best is do self research first since nowadays informations are all around the internet.
Based on 200 a month consider
please take time to study And become more savvy
on a longer term you might want to accumulate more capital before going into the stock market building a dividen portfolio or do active trading.
You can look can singapore savings bond, POSB regular savings plan, and robo-advisors!
Don't touch the STI.
I've seen many people invest out of convenience alone, like in the STI where they've given up their monthly payment plans halfway when they don't get or understand the results they're getting. It's a phenomena developing recently, which I've written over here: https://www.moneymaverickofficial.com/posts/sti-etf-not-good-beginners
Before you start investing, you have to consider your objectives.
Many people don't plan, and become resentful later as a result. If their investments are liquid, they'll have many excuses to take them out. Their returns and their capital becomes abysmal over time, instead of high.
For first timers, I'd love to take you through a good mix with dividends - so you can see how profits are generated from actual companies you're invested in, and be motivated by the balanced growth before deciding what kind of investment result you want to aim for in line with you objectives.
Do drop me a PM and we can always talk about how I can help you. As an investment specialist, I made 32.7% last year. https://www.facebook.com/luke.ho.54
Do your homework first. Understand your risk profile and choose the instruments that suit your profile.
Mm for a complete beginner to investing with a small monthly budget, stashaway will be a good start. You will set up your risk profile when you create your account (which I believe can be adjusted later once you are more experienced), and can start with the $200 you intend to set aside every month. They offer free workshops as well which anyone can join in; I've been to a couple of these even though I did not fund my account and the information presented was great. I'd say forget about using unit trusts or retail insurance products for investing. It won't amount to much eventually, or rather it gets very expensive to be able to hit a target of say $1 million using these said tools
Your friends gave very good methods - a range of tools from insurance savings to stashaway robo advisors. With $200/month, you can cover at least 2 of the tools listed.
To start investing, consider the following:
1) What's your risk appetite?
Do you believe that to gain some side income, you need to take some risk? How much risk would you be able to take?
Do you need liquidity? The $200/month is extra money or you may need the money 1year, 5 years, or more than 10years down the road?
Do you already have emergency funds set up?
2) How much would you like to be in control of your investment?
Do you want to drive the investment manually? i.e. spend the weekends reading up on companies, learning investments and analysing when to buy and sell
Do you prefer driving the investment on semi-auto mode? i.e. let the experts handle the money, sit back and check in once in a while (the frequency of check matters - savings insurance only need to check once a year; unit trust about half a year once; robo advisers is as and when needed, about once a month
Get started and keep yourself invested!