Asked on 08 Jan 2020
Im 21 and took a gap year after poly, i have alot of side hustle and started saving in my poly days so i manage to save up this amount but not sure what i should do with it, any advise?
also you can give me your opinion if taking up a degree is worth it :)
It is heartening to hear that you are taking charge of your destiny early, and my quick answer is: both ways work.
The two important things to take away:
1) Be disciplined with your money
Make sure that you know where your money goes, and stick strictly to your budgeting.
It is a good habit to track your income and expenses, and always spend within your means.
2) Learn how to save, protect and then grow your money
Like other responses, either way you choose, you will have to learn how to protect and grow your wealth.
Find a mentor to show you the way to invest your money.
Even though you may not have much capital now, there are still options for you to choose from: unit trusts, stocks are a couple of them.
There are also lots of resources online to help you get started! :)
Hope that this helps, if you have further queries, you may reach out to me [email protected]
09 Jan 2020
I just graduated not too long ago so my plan for my tuition fees may offer you some ideas to ponder:
1) I took on the university tuition fee loan as it is interest free until I graduate. With that, I saved up the cash in a "high interest account" like CIMB FastSaver but you should put your cash in Standard Chartered Jumpstart Account as it offers 2% annual interest. Some of these cash will eventually be used to pay for the loan and these savings also offers you options to take on overseas exchange during your university time.
2) My grades are decent so every year I always apply for scholarships/bursaries as long as I meet most of the criteria. Sometimes I will get several thousands which can reduce my tuition fee loan. These applications also offer the opportunity to work on business writing which will be useful in writing cover letters during the job hunting period. Some of these scholarships also offer internship opportunities or even a job role after graduation so no harm trying.
3) I also work part time in school so I also saved up quite a sum from there and with the help from these income sources, I cleared my tuition fees when I graduate while having a decent savings left and funded my own exchange in Vancouver.
09 Jan 2020
09 Jan 2020
How much experience do you have with investing?
If nil or little, my suggestion is keep 3-5k as your investing budget while you learn it, the rest to earn some interest in a decent yield account while paying off the loan.
if you lose it all (worst case scenario), 3-5k is a tolerable amount.
decent yield bank account - keep the money safe, earn some interest, while you also learn to manage your money. It can be your emergency fund as well.
pay off the loan as it comes. I think tuition loans are a good kind of debt, not too high, and good purpose. Use the chance to learn how interest works, and imagine what 2% monthly on credit card outstanding balance can be like. This will help you in learning what is the balance you like in future loans like hdb loan, credit cards, or medical loans.
My suggestion hits multiple purpose for your learning over money. Hope it helps.
09 Jan 2020
If I'm you, I will try to clear the tuition fees and student loan asap. Investing you can wait, meantime read some books or online forum more about investing. Open a SCB Jumpstart account asap and keep some of your savings to maximise interest rate and for your rainy days. I think degree is great as long as your study what you likes and you are diligent in it. Investing in yourself is always better than anything else.
If you still have some funds left in PSEA + plus $3k credited once a male completed NS, you should be able to use it to pay off the first year. Then in your free time, weekends continue to work on your side hustle to pay off your daily expenses. Then, you can free up your $25k to invest instead.
A degree is only worth it if you take ownership of it. Be a pro-active learner, go for internships, ask questions on class, dont be afraid to take up course challenges / events
As always, the interest rate on your debt (i.e. student loan) is guaranteed while the returns from your investment will always be non-guaranteed.
Assuming that you take up a local bank's study loan, the typical loan rate will be at 4.75% per annum. As a result, your investment needs to beat the market consistently every year in order for you to be able to afford the loan and perhaps have some spare cash left.
Furthermore, you have a short timeline of 4 years (based on your degree) to ensure that the market works in your favour. In the event of a financial crisis, will you be happy paying the interest on your loan?
To solve this, we need to have a complete understanding on our cashflow. Through this process, we will understand our earning ability and spending habit. Here is a guide to help you: https://www.blog.pzl.sg/understanding-your-personal-cash-flow/
From there, understand how you can make this into a sustainable process by creating a budget for your school fees and your investment. The best way to do this is via automation and this is how I do mine: https://www.blog.pzl.sg/how-to-create-a-monthly-budget/
(Don't take my word for it) A degree is merely a piece of paper that gives you an entry into your first job. Hence, spend quality time and effort to know what you want, what you are good at, and what you won't mind doing for the rest of your life - this will be a degree worth taking up. Ultimately, we only live once - be kind to yourself.
Here is everything about me and what I do best.