I’m a fresh poly grad waiting for university this year, currently freelancing and will continue to for as long as I’m earning about 1.5K per month, current savings of 3K. Any financial advice for me? - Seedly
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Anonymous

Asked on 16 Jun 2020

I’m a fresh poly grad waiting for university this year, currently freelancing and will continue to for as long as I’m earning about 1.5K per month, current savings of 3K. Any financial advice for me?

I’m currently awaiting university, I’m very fortunate that my parents are financially able to fork our local university fees, I’m looking into ways to earn passive income/save in the long run as my job is not guaranteed of fixed. Currently I’m using SC’s jumpstart acc, Singlife with my POSB passbook account that my mom started for me. Should I start getting myself insurance (which i don’t) or start investing? Please help!! I’m quite lost with what to do. Feel free to let me know your opinions!

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Hi anon,

I'd recommend that you focus on your studies first. As you don't have to worry about the university fees, do your parents a favour and ensure that the funds they use on your education is well spent. Get a good foundation in your chosen field so that you may be able to have a better chance at securing a job when you graduate.

As you are freelancing, there isn't much stability in your income. I'd hold off on committing to any insurance plans at the moment. However, you can build on your emergency savings first with the bank accounts that you are currently using.

You can use your spare time to build your personal finance knowledge. Start with the basics first such as money management, etc, before you move on to investing. This is an entire topic that cannot be summarized in my answer here, but you may read my other answers for an idea. You can already open a CDP account, and a trading account, so get that set up first so that it'll be ready for you to use in future.

For insurance, please ensure that you at least have a hospitalization plan. Your parents might have bought some policies for you, so please do a check with them. As you enter your final year of your studies, you might want to pre-emptively get yourself critical illness coverage if you don't already have any, since your savings by then should be able to pay off a couple of years of premiums. This also helps you to lock in lower premiums due to age.

Good luck!

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PolicyPal
PolicyPal, Official Account at PolicyPal
Top Contributor

Top Contributor (Jul)

Level 7. Grand Master
Updated on 08 Jul 2020

Before you start investing, it is key to ensure that you set aside funds in a Saving account to cover for your liabilities and short-term expenses. This includes your student loans, BTO, or even upcoming travel plans. You can consider putting your money in some short term endowment plan (2-5 years) while you understand more about the financial market. Great SP by Great Eastern and Tiq 3-Year by Etiqa is some short term endowment plans you can consider as they offer a decent guaranteed return for a short period of time. You can also consider Elastiq, which allows you to withdraw after 90 days, while providing a good rate of return. You can check out a detailed analysis here.

Next, it will be to ensure you are well insured should there be any cases of emergencies. Thus, it is essential to find plans that are well suited for you. Ensure the basics such as hospitalization and critical illness plans that would cover you from the hefty medical fees in the unfortunate event that you encounter a medical emergency. Some good health insurances you can consider are AXA Shield by AXA (only insurer with outpatient and PA benefits embedded into the cash rider) or the Great SupremeHealth by Great Eastern. You might also want to adding on or purchasing a Critical Illness plan to ensure you are well covered.

For investment plans, do take the time to understand the different plans available and risks involved. There are many asset classes with different projected returns on investment and risk.

Feel free to reach out to us here if you are looking for personalized and unbiased advice.​​​

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S
SYDZNL
Level 3. Wonderkid
Answered on 21 Jun 2020

Heres the living life slightly dangerous approach. Assuming your parents don't provide you additional pocket money.

Check with your parents if they bought you any insurance. If no, get at least Hospitalization. If you want to lock in the price for your Life insurance, then get one. Id do term life if I were you. But since you have no dependents I would think term life is a want and not a need (for now at least) plus looks like your parents are doing okay. When you start doing FT work then get all the other insurance that you want. I personally think this two is sufficient.

After that go save up 3 months (4.5K) worth of savings. Once that's done, start doing STI ETF RSP at $100 per month and don't even bother about the performance of the etf, i.e don't keep looking at the valuation. While you're at it start learning everything you can about investments and your own personal opinion on what and investment portfolio should look like.

Once you learned enough AND get a 6 months worth of savings (however long it may be), then start doing what you want whether its buying individual stocks or other ETFs. You should know why you're doing it by then. If you decide not to continue with the RSP since you realised STI kinda sucks (relative to other markets) then just stop and hold till your old. I don't think you're going to accumulate a lot of units by then. So it's not going to be a huge 'loss' if you don't want it but at the same time it's going to give you better gains rather than leaving your money in a bank.

In summary

1) Health Insurance + Term (optional)

2) 3 Months savings

3) STI ETF

4) Learn

5) 6 months savings

6) Do whatever you want.

This way you don't waste time, and in a way you already put some money in the market so as per norm, would 'work' hard to learn things faster.

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K
kai
Level 2. Rookie
Answered on 17 Jun 2020

Yes, before you start putting your money in investment, make sure you have adequate insurance for yourself, especially hospital and medical insurance.

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Before you start investing, you should spend quality time to do an analysis on your current situation. For instance, conduct a comprehensive planning on your current cashflow.

Here is a Guide:

Understanding Your Personal Cash Flow

Thereafter, you should ensure that you are sufficiently insured. This is especially important for healthcare. After all, you won't want to feed your investment returns into your medical bill.

More Details:

Is MediShield Life enough in Singapore

Integrated Shield Plan Singapore: A Starter's Guide

Once you have the basic structure covered, ensure that you have sufficient emergency funds. As a general guideline, this is 3 to 6 months of your total expenditure. Meanwhile, you should only invest money that you can afford to lose. This is because investment only yields non-guaranteed returns.

Once you have done the above, then you are ready to start embarking onto your investment journey. And yes, you should start early and let compound interest do its work. However, this is only possible after we have built a strong foundation. Otherwise, we are putting our money at risk, e.g. forced to liquidate investment portfolio.

I share quality content on estate planning and financial planning here.

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Https://www.aaronleow.com/calculators

You can use the above page to do your personal finance guidelines. Emergency funds, insurance, and general budgeting for finance matters. It answers 95% of most basic financial questions.

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Frankie Rappaport
Frankie Rappaport
Top Contributor

Top Contributor (Jul)

Level 9. God of Wisdom
Answered on 16 Jun 2020

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