I have cash savings of about $385k, how should I be investing it?

Hi there!

It is impressive that you have saved up 385k at a young age! If your goal is to be financial independence (have an option not to work), you have to know what kind of lifestyle do you want to live at that age and how much would you spend.

After gaining certain clarity, you can then reverse engineer on the require rate of return and see which investment tool allow you to do so over the long term.

My 2 cents:

Your question is vague. Clarity, for example, getting $2000 monthly cash flow by 2025, would be my 1st step.

Unclear destinations will not give investors clarity on the investment tool to use.

I won’t invest until I’m clear of my intentions. I would set aside 15 minutes to ask (a couple that came to my mind while answering):

1. What’s the end outcome that I want?
2. Is it meant for myself?
3. Is it meant for my parents or children?
4. What’s my current investment knowledge, I.e. understand the pros and cons of each tool available?

For myself, I currently set aside $600 each month and it’s labeled as “Parent’s retirement fund”. This fund objective is to provide a future cash flow of $2k a month when it reaches 2026.

When the objective is clear, investors will not put their capital at risk because:

Rule 1: Never lose money
Rule 2: Remember rule 1

Majority all of the answers here focus on growing your money, however, I would like to take a different stance here and bring out the perspective of expenditure. I think that is a crucial factor that you might want to analyse. Not working sounds amazing but on a day-to-day basis, what form of lifestyle do you lead? How much returns do you require in a day / month? And from there, you can deduce how hard your $385K has to work in order to generate your required income.

10% returns is plausible, but it might not even be enough for some should they consume starbucks and dine at restaurants everyday! But on the other hand, 5% returns might be a lot for some if they eat mixed rice and take public transport everyday.
If you are a bigger risk taker, you can try US markets for higher growth (but vice versa, higher falls) in terms of capital. But if you are just looking for recurring income, you may consider REITs which can provide you 5-6% thereabouts.
Knowing your spending habits will allow you to design your portfolio best to give you the adequate returns your require to lead your lifestyle. Hope my answer gives you more insight!

Stocks, ETF. without a doubt.

1. Global- IWDA ETF for the bulk of your investments that you do not need the money for the next decade or so. (retirement funds).
2. if you prefer SGD stocks, then STI ETF. (not a fan of SGX stocks myself).
3. Do have about a small sum for alternative investments, money that you can afford to lose. A small sum when you are young can open your eyes to greater returns (or experience in society...)