Asked on 28 Nov 2019
What is a decent amount that one should be leaving in their bank account before investing the rest? After considering the 6 months emergency funds.
6 months of emergency fund is good. I like to keep 5k Around just for day to day use.
Invest into books. Dont be shy to ask people what is their thinking process when evaluating their investments. You get to tap on their many years of experience!
My mentor taught me: Pick up the phone
Fast track your learning with books and courses. Do not be greedy and use leverage. Only invest for long term.
6 months of emergency fund is good enough.
There is no hard and fast rule as to a 'decent' amount. What matters more is that your insurance coverage is in place, and your emergency funds are also prepared. The rest of your money can be earmarked for investing. The amount you need to leave in the bank consists of your emergency funds (12 months worth of expenses), and the rest would be your war chest that you don't deploy just yet. If you are saving for a big ticket item like a wedding, I'd advise setting up another account for that so that you can stay focused on saving towards the goal.
Once you have that done, you'll need to gain knowledge on the different asset classes, understand their pros and cons, have a multi asset investment account open (along with CDP) and decide what you want to invest in. Execution will be the key, if you don't take any action, nothing will happen.
6 months worth of emergency funds is good! :)
Invest with the money that you could afford to lose first. Gain confidence before putting more of your hard-earned money! :)
1) Start small, so you wont lose all your money due to blind spots
2) Ask and ask and ask, do not have an ego to say your are right or wrong.
3) Find a community or investing mentor who has been there and done that.
It's great that you have 6 months of emergency funds! You can start of by reading some books regarding investments: One Up Wall Street, 5 Rules of Successful Stock Investing.
Don't get too anxious to start investing.
Arm yourself with the necessary knowledge! Follow the advice given by others. A lot of fantastic content in this thread, Joanne!
No decent amount - once you have set aside emergency funds, I would start deploying capital already.
How to Start Investing
1. Accumulate capital. Everyone needs to start with some investment capital. Also of your pool of available capital, decide how much you want to invest.
2. If you can, start as early as possible. Compound interest allows your account balance to snowball over time.
3. Open your CDP account (which you have already). For the benefit of those who haven't, sign up via the instructions here: https://investors.sgx.com/cdp-account-opening/#/form-selection
4. Open your brokerage account, and link your CDP account to it.
5. Understand your investment options.
There is a whole world of investment products out there from stocks, bonds, ETFs, mutual funds to the more exotic or less mainstream ones like art pieces, scultures, gold, and cryptocurrency.
Read up lots to understand your risk appetite, and form your own investment strategy.
6. Execution is everything
I always like to say that one can spend a decade reading and not deploy a single cent because of fear of procrastination. I always say to start early, and start investing in small amounts so that you can better understand yourself as an investor.
Buy STI ETF. The 1 counter which owns 30 leage singapore companies across numerous industries
No need to think or research as homework
There isn't any decent amount TBH, it depends on your plans per-say. For example for me, I have my wedding and house renovation to consider, so I keep more in my bank account than just the 6 months emergency.
And at the end of the day, you should only invest in money you can afford to lose. I admit I make that mistake of over-committing sometimes - time to relook at my portfolio! Thanks for the reminder!
As you are new to investing, before plunging into it, you should invest some time in reading and learning more about it. A good book to start with is "The Intelligent Investor" by Benjamin Graham.
The amount you should put towards investing should only be the amount that you do not need in the near future and that which you do not mind losing on to. The returns in the market are volatile so it may so be that you lose some money, and in case you need the money in the short term, you may not be able to recover it all.
Also, starting investing can be a little overwhelming as there is a lot to know before you can actually earn some returns. Till such time you get more comfortable, you can make use of a robo-advisor. It will create an optimal portfolio for you, based on your financial goals and risk profile.
I work at Kristal.AI, and it's my passion to evaluate various upcoming investment opportunities.