Asked by Anonymous
Asked on 25 Oct 2018
Should I use my bonus and savings to quickly clear the 32k first or use them to invest? I recently started StashAway and is contributing $100 monthly.
$100k is a huge sum of money and all investments carry risks and the returns are not guaranteed. Hence, you might want to consider other alternatives to investing which are safer such as buying Singapore Savings Bonds, put it in a Fixed Deposit account or put it in a high interest savings account. As for your debt, maybe you can negotiate with your mum if she is fine with you repaying small sums every month since it does not have any interest so there isn't an urgency to try to clear off your debts as soon as possible as compared to a debt with (high) interest.
I would like to offer a slightly different slant to this issue in my answer.
It would be good to take more care and factor in your parents' preferences. Better to not take for granted that our parents must always be our standby financiers.
You may or may not meet your target of $100K within 3 years, but with a high percentage of your income saved, you will at least hit your highest potential savings.
As others have said, save, hustle and optimise your finances 😉
Just be prepared that any investment carries risk.
$100/month x 9 yrs= $10.8k
$1000/month x 9 yrs = $100.8k
Only invest money that you can afford to reduce to $0.
investing wont get you 100k in 3 years. too much risk to take. better to just save up
You could always negotiate with your parents regarding the repayment of the 32k. What you should do is to earn and save more of your income. A portion of your savings (75%) could go into Singapore Saving Bond or fixed deposit, another(25%) could be used for investment or trading, depending on your risk profile. However, please do your homework and research before investing or trading your hard earned money. The % is based on my observations of the current market situation. Just my humble opinion.
How much is your savings excluding stashaway? How much is your bonus? Whats your income?
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26 Oct 2018
It depends on the following questions:
Do you forsee your parents needing the 32k within the next couple of years?
How much knowledge about investments do you have? As 3 years is a short period of time, it seems risky for you to invest if you do not have much knowledge in investing.
The market does not seem to be doing well right now. In the event of any downturns within the next 3 years, do you have any backup plans if your investments do not do well?
In my opinion, if you do not have much knowledge in investments, I'd recommend you to put your money in somewhere safer. I.e. Singapore saving bonds, fixed deposits or a high interest savings account. 3 years might not be enough for you to make a decent return on your investments.