Asked by Anonymous

I had recently inherited $14.7 million (after conversion from GBP). I have no parents nor guardian since 1.5 years ago which is why I don't have anyone to talk to when it comes to finances. Any investment advice?

I would like to gain some knowledge with regards to how I can invest without any risks involved. I'm a first year medical student and finance/investments aren't my forte so I hope you can excuse my newbie question. I do have a Singaporean uncle here in this country but I'm not close with him at all. I have read about investor's risk profile and I would say that I am very conservative, too conservative that I am not willing to take any risk. I've seen investment options that have high, moderate and low risks but nothing that says no risk. I have a minimalist lifestyle (eats in hawker centres, stays in school dorm, instant noodles, travels via metro) and am not looking to get rich as I am perfectly fine with extremely low rates of returns as long as it is higher than the HSBC Premier Savings Account I have right now which earns 0.1% interest rate. Would appreciate any feedback given. Thank you so much ^_^

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  • Christopher How
    Christopher How
    Level 4. Prodigy
    Answered on 19 Sep 2018

    Can I just say that very few people (if any) in this community have experience handling this large sum of money. You're really better off speaking to wealth managers (not insurance agents, I'm talking about the real deal here).

    They are the ones who can give you proper advice and they will do regular portfolio reviews with you.

    If you are working with a wealth manager for the first time, don't hand over all your money to him/her. Let him/her manage $200,000-$500,000 and see how they work. Are they capable of doing a good job?

    If yes, you can choose to double down on this wealth manager. Otherwise, you can always switch to find another one.

    Comments (5)
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    • Christopher How
      If the truth is a cheap shot, then I think many people would be full of holes in their bodies. You can say you have a lot more training for this scenario, but have you managed this amount of money for a single client before?
      19 Sep 2018
    • Leong Wen Fong
      Chill guys, to be fair, few people have managed this amount in their lives!
      20 Sep 2018
  • Lim Ren Ying
    Lim Ren Ying
    Level 3. Wonderkid
    Answered on 19 Sep 2018

    some capital guaranteed options would be:

    1. Singapore savings bonds, max $100,000 per person
    1. Fixed deposits, max $50,000 per financial institution under SDIC, so diversify
    1. Capital guaranteed endowments and annuities, max $100,000 per insurer under the Policy Owners' Protection Scheme, so diversify
    1. CPF, subject to limits

    (Also, not related to investing, but you should get yourself insured for hospitalisations and medical expenses 🌸)

    Comments (2)
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    • Kenneth Lou
      Another very good answer, thanks for contributing @Lim Ren Ying! Appreciate your answer! Im sure the asker will feel very appreciative also :) The SDIC one is a very legitimate concern
      19 Sep 2018
    • Shaun Goh
      Yup, just living off the passive income from these no to low risk instruments are way more than enough if you're not living a lavish lifestyle. *cannot imagine $14.7mil* @[email protected] Assuming you'd just draw down from the amount monthly for 80 years, that's $15k per month :D
      3d ago
  • Siti Putri
    Siti Putri
    Level 5. Genius
    Answered on 19 Sep 2018

    I can understand your situation somewhat feeling lost not being sure whom to ask or seek advice from financially.

    Firstly ask yourself if you are genuinely keen to learn to invest because that in itself takes time, dedication, lots effort and honestly the interest.

    Thruthfully this $14mil could last 3 generations without even investing since you seem to be very prudent in your lifestyle and most likely will have a well paid career after graduation.

    Not all “investing” can make money, in fact can even be in sub zero level loss if not careful like leveraging CFD etc.

    Since you know that you are conservative, I would just put in few FD in multiple banks. As HNW you can get special rates. Do becareful when any bank RM or insurance agents when they ask you to invest into products. You will be considered an accredited investor (AI) which means they can purposely give you risky stuff as their fiduciary duties don’t quite apply to AI.

    Think also about your future career. Is your intention to have your own clinic? If so, where will the clinic be? You might want to do research about buying a commercial unit where you could one day turn it into your own clinic. I am not sure if now is a time to buy but if you do invest in property in SG, I think you could consider commercial property which you could rent out too in meanwhile till you are ready to convert it you your hypothetical clinic.

    Do you think you want to live in SG or overseas? If u have plans to migrate overseas and defined sure where, suggest to purchase a property too. It could be for own stay in future be or rental.

    Since you mentioned that you are conservative. In general, I think besides the multiple FD, can consider real estate provided u do proper research on location. There will be rental yield and also capital appreciation. Also do lump sum put some money into your CPF SA, just to lock in for 4% interest. Do buy a good well covered health insurance too.

    You can also consider being a venture capitalist. This will be risky but there are courses from Angel Central ( I think) and you could network as well with entrepreneurs. Be diversified across different biz ventures if you decide on angel investing.

    Good luck with your studies.

    Comments (1)
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    • Yi Fong Tan
      Second this!! "$14mil could last 3 generations without even investing since you seem to be very prudent in your lifestyle"
      25 Sep 2018
  • Elsa Goh
    Elsa Goh
    Level 5. Genius
    Answered on 19 Sep 2018

    Edit: Have the estate matters been settled? I assume the moneys were left to you in UK. You may need to appoint a solicitor in the UK or a lawyer in Sg who is able to advise on UK estate law and tax liability. Big name law firms in Sg are Rajah & Tann, Wong Partnership, KhattarWong, Lee&Lee. Check whether they have UK offices or ventures.

    But before you do that, pls ensure u have really inherited something and it is not a scam, as it sounds too good to be true.

    If this is true... congratulations. Also, when it comes to investing such a huge sum, this is beyond us. You need to appoint a fund manager or a banking advisor.

    By the way, please ensure you have the money in your account before you actually start spending. Sometimes these things can get tied up for ages. And be wary of nigerian princes.

    Comments (1)
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    • Kenneth Lou
      I love this comment haha "If this is true... congratulations. Also, when it comes to investing such a huge sum, this is beyond us. You need to appoint a fund manager or a banking advisor." So true tho
      19 Sep 2018
  • Leck Ting Yan
    Leck Ting Yan
    Level 2. Rookie
    Answered on 19 Sep 2018

    Please speak to a private banker. In fact, speak to a few if you have the time. If you are happy with monthly or annual payouts plus planning for generations down, perhaps let the banker know you'd want to look into setting up a trust fund for yourself and your future family.

    Think most people agree that you need professional advice. Be wary about the investment products that the bankers will offer/advise you to take up. Risk should roughly equal the return and that all products should be low risk as per your appetite (which is why there is no such thing as no risk. Holding cash also constitutes risk from currency fluctutations and inflation)

    Given current market conditions, many private bankers will be clamouring to have you as a client. I do have a couple of friends in the space who've been helping Gen 1 or Gen 2 (Like yourself) manage their funds in UBS and DBS. You should go with whoever you feel comfortable with.

    Comments (1)
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    • Leong Wen Fong
      Good advice! Love the thought for the future generations
      20 Sep 2018
  • Gabriel Tham
    Gabriel Tham, Tag Team Member at Kenichi Tag Team
    Top Contributor

    Top Contributor (Apr)

    Level 8. Wizard
    Answered on 19 Sep 2018

    1% fixed deposit of 14 mil = 140k/year. More than what many average singaporeans earn a year. You no need work already earn more than us. Can relax and retire

    Comments (0)
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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 19 Sep 2018

    To play it smart with SDIC, become a privilege/premier/HNW account that allows you to

    1. Lounge with wine (be nice like me ya?)
    2. collect umbrellas on rainy day =p (ooppss...only if really need, i give many umbrella to elderly le)
    3. get special FD rates and for your case you can use the stagger FD rate method that provides you income month after 12months

    Remember I mentioned SDIC?

    Each Bank account will secured you a $50k protection so in a way your money will not be defaulted to Zero from the Premier Amount you deposited.

    In a way, the more bank account you have in SG covered by SDIC, you get a certain amount of protection.

    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.

    Comments (0)
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  • Tan YapSheng
    Tan YapSheng
    Level 2. Rookie
    Answered on 19 Sep 2018

    Hi there, Having that amount of inheritance immediately puts you under the High Net Worth category. When you’re at that playing field, there are many low risk options you can explore.

    I personally know a high net worth that deals with Private Placement Programs; it generates returns at minimal risk but it’s exclusive to the category. I can refer you to speak with him if you’re interested, afterall, it makes more sense for you to speak with someone who has been there and done that.

    Comments (1)
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    • Kenneth Lou
      That is pretty interesting... private placement programs! :O
      19 Sep 2018
  • Koh Jun Hui
    Koh Jun Hui
    Level 2. Rookie
    Answered on 19 Sep 2018

    Firstly, recognise that there is no way investments come without risk. Investments without any risk involved are called scams. Even banks go bust - Lehman Brothers. Lehman was the fourth-largest U.S. investment bank at the time of its collapse, with 25,000 employees worldwide (Nick, 2017). Get that clear and out of the way first because thats how people fall into scams when they hear a "no risk" investment.

    If you really want no risk, leave the money in the bank. SDIC covers per person up to $50,000 per bank, so you might want to diversify.

    The next option try Singapore Savings Bond, Maximum individual holding: $100,000 according to their website. Its backed by the government. Again, there's risk, however its from a government with AAA credit rating. So, again, are you alright with the risk?

    Just like what Elsa said, you might be better off with a fund manager or financial advisor instead of asking a community. However just be aware and learn some of these phrases like when can institutions use "Capital Guaranteed" or "Protected" etc. So you won't fall prey to people trying to use you for their own gains.

    Lastly, you are fortunate with this inheritance, do some charity work, it's happiness is what money cannot give you.

    Comments (0)
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  • Amanda Ho
    Amanda Ho, Financial Planner at AXA
    Level 2. Rookie
    Answered on 21 Sep 2018

    Hi there, would recommend getting a savings plan or a long term investment plan to growth your wealth.

    Savings plans are at generally at 3% interest and investment plans can have interest as high as 10% or higher (after deductions of all charges).

    Currently i might have something that could help you achieve your goals as well as achieve your retirement needs.

    If you're interested feel free to FB message me. I would be glad to share what i have with you and add value to you.

    Side note: With that amount of money, it's better to diversify it instead of throwing a lump sum into an account/plan/investment/biz. It's always good to have a few platforms of income to better protect what you already have and minimise the lost.

    Disclaimer, i'm not an insurance agent.

    Comments (0)
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  • Alvin Teo
    Alvin Teo, Financial Planner at AXA Insurance Pte Ltd
    Level 3. Wonderkid
    Answered on 20 Sep 2018

    I would firstly opt out of ‘Accredited Investor‘ status first, otherwise, anyone can ask you to sign anything without explaining to you.

    being conservative, i would not invest it just yet especially when you are in school. Maybe put FD or manage it in Citibank’s Maxigain.

    but whatever you do, opt out from AI status first

    If you‘re investing, I read somewhere in HWZ from a master called Shinythings about cash creation, someone asked about creating/redeeming directly from ABF bond fund, his reply:

    Anyway. If you've got more than $50k to invest in A35 in one lump, you can request that your broker do a "cash creation" - where you hand the cash over to your broker, they hand it to the fund manager, and the fund manager hands the broker newly-created shares, priced at the NAV instead of the market price. This is good because you don't pay any spread, and you don't pay any brokerage, but the broker does tend to charge a fee for it (I've seen 0.3-0.5% when clients have done it before, but the fee is entirely negotiable).

    II read somewhere in HWZ from a master called Shinythings about cash creation, someone asked about creating/redeeming directly from ABF bond fund, his reply: or A35. DBS can do it, but the RMs are all clueless; you'll need to escalate a few times to find someone who knows how to make it happen.I

    Comments (0)
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  • Jonathan Chia Guangrong
    Jonathan Chia Guangrong, Fund Manager at JCG Fund
    Level 6. Master
    Answered on 19 Sep 2018

    Glad that you are seeking advice on what possibilities there can be with this huge amount. Not much most of us here can advice as we do not really come across such a high amount.

    It is not possible to invest without some amount of risk, other than leaving it in fixed deposits or savings accounts. Even then, there's only financial insurance under the Deposits Insurance Scheme for such accounts, limited to S$50,000 per financial institution. So it will be a good idea to spread the funds out among different banks to take advantage of this scheme.

    With such a quantum of funds, you will be eligible for private banking services / acredited investor services across the banks here. Hence, seek out professional advice of a relationship or wealth manager at the banks, and see what solutions they can come up with.. It will be likely that special interest rates for savings accounts or fixed deposits can be given to you if you ask for it. Just don't get drawn into signing up for solutions offered by insurance companies (huge fees involved), which with acredited investor status, they do not need to disclose to you. Hence you will need to be careful and look at what documents you are being asked to sign.

    Singapore Savings Bonds will also be a good choice, since it's backed by our government here. Or you can also see if you can access the government bond market here, since our government does auction bonds here on a regular basis. Do buy the bond outright and avoid buying into a fund of bonds.

    As an alternative to investment, you may also consider using part of the inheritance to start a foundation to bless others who are in need. Talk to a tax consultant to see if this may provide some tax relief for you. Starting a foundation may also provide non tangible benefits like brand recognition once you embark on your professional medical career.

    Do seek further counsel if necessary, especially from those who are of this networth level. "Plans fail for lack of counsel, but with many advisers they succeed." Hope this helps and all the best.

    Comments (0)
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  • Nicholas Chan
    Nicholas Chan
    Level 5. Genius
    Answered on 19 Sep 2018

    Explore money market funds. Other than that, become a preferred customer at several banks (diversify your risks) & get preferential interest rates on your deposits.

    Comments (0)
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  • Jeff Yeo
    Jeff Yeo, amateur Social contributor at School of social sharing
    Level 6. Master
    Answered on 19 Sep 2018

    I would recommend parking money at separate banks in Singapore to spread out the risk. This would make you their VIP banking customer and enjoy the perks

    Look into going into Bonds with these private bankers.

    Pros

    • stable
    • regular pay out of coupons when held till maturity.
    • lower risks
    • less monitoring

    Buying a few properties and getting an agent to manage the rental might be a good idea too.

    I think Going into the ”outsource managed” model would be most idea so that you can focus on what you like without having to spend a lot of time trying to juggle the investments.

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  • William Seah
    William Seah, Financial services consultant at Pias
    Level 3. Wonderkid
    Answered on 19 Sep 2018

    invest without risks? That’s possible only if you don’t want returns. Return is reward for risk. You sacrifice returns for lower risk. That’s why plans with guaranteed returns often have low risk; and low returns.

    What do you want to do? What’s your ideal life like? Once you can work out what you want to do, what you ideally wish to have in life, you’ll have a better understanding of what money means to you, and then you can set goals and plans for your money.

    Don’t get caught up with the pursuit of yields. The why you are investing matters.

    Find an advisor you can trust; not just to help you plan to get maximum yield but to help you achieve your life goals.

    Comments (0)
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  • Jay Liu
    Jay Liu, Diploma in Accountancy at KHEA
    Level 6. Master
    Answered on 19 Sep 2018

    This reminds me of the email scams Hahaha. If its true maybe you can be a accredited investor by depositing your cash into a bank. I guess there will be managers giving you advices to invest.

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  • Jason Sin
    Jason Sin
    Level 5. Genius
    Answered on 19 Sep 2018

    Singapore Saving Bond and fixed deposits are your best options since you are conservative and are not willing to take any risks. Since you are a minimalist, I believe you are happy with what you already have. Focus on pursuing your passion. Be a good doctor and save lives! I believe that would be more meaningful. Just my humble opinion.

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  • Nicholes Wong
    Nicholes Wong, Diploma in Business Management at Nanyang Polytechnic
    Level 6. Master
    Answered on 19 Sep 2018

    Get Singapore Saving Bonds backed by Singapore Government with ok returns. Suits you the most. But like alot others have commented, its better for you to hire a wealth manager because this is quite a huge sum of money.

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  • Samuel Lim
    Samuel Lim
    Level 2. Rookie
    Answered 2w ago

    Just remember this dictum when seeking advice: "Never ask the barber if you need a haircut".

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  • Charles Alaina
    Charles Alaina
    Level 1. Freshie
    Answered on 28 Sep 2018

    I will advice you help some Orphange home so God will be so proud of you just as some of us do to the Prohans in Africa and if you want to help i could direct you.

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