Should I be doing a lump sum investment or small monthly amounts with Stashaway? - Seedly
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Anonymous

Asked on 04 Jul 2019

Should I be doing a lump sum investment or small monthly amounts with Stashaway?

Hi all,

Recently I've just started my internship, I put in $300 into StashAway from my first month's pay. I'm trying to pave my way to financial freedom, honestly I got no savings but I really want to start saving and investing small at the same time :(

Can anybody suggest the general path I should take? Assuming my internship ends around September, I got 2 more payrolls to get. Each is around 1.3k.

My monthly bills are around $125. That leaves me with $1175.

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Earn more first. Really. Focus more effort to increasing your income, thus increasing your ability to save.

Secure yourself a full time job, work on a side hustle, and start learning more about investments and asset allocation.

Keep your expenses low and don't adjust that for "new income inflation syndrome".

2 comments

ūüĎć 6
Question Poster

04 Jul 2019

I'm trying my best to find ideas as a side hustle but nothing seem to be working out haha. I dont mind being a tutor but getting students is a lot harder than it seems, even via agencies. Reselling on Carousell is not sustainable as well. So I thought now that I have a short-term source of income I should take this chance to multiply that as quickly as possible
Hariz Arthur Maloy
Hariz Arthur Maloy

04 Jul 2019

Investing is a slow process. Even if you achieve a 10% yearly return which is a high return that comes with risk and potential loss of capital, it'll take you 7 years to double your initial capital. Right now a 10% growth on 5k is only 500 bucks, something you can earn in a week. I'm not sure what you're passionate or good in, but there will always be someone willing to pay for talent or a job they don't wanna do. That's where you can start.
Ck Chai
Ck Chai
Level 6. Master
Answered on 05 Jul 2019

I see that you mentioned you have no savings at this moment. I do agree with Hariz that you should start to work on earning more, as well as start saving for rainy days. Your priority now should be saving for emergency funds rather than investment. Investment always comes with a risk and you never know when emergency arises. When saving, you can go for accounts like CIMB Fastsaver that gives us 1% interest which is generally higher than most other savings accounts.

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Eric Chia
Eric Chia, Senior Financial Consultant at Prudential
Level 6. Master
Answered on 04 Jul 2019

I'm glad that you recognise the need to save and invest at the same time.

The ratio of savings to investments on your spare cash depends on the following factors:

1) how much emergency funds you need (typically salaried man needs 6 times monthly expenses)

2) what your plans are after internship, would you have money from somewhere to sustain your living expenses or need to rely on savings from your internship

3) your financial freedom goal - is it just wealth and buying things you want, or you want something like passive income? The tools and strategies used will be very different.

4) your risk appetite - no risk, no gain, but a fool will place all eggs in one basket. Is Stashaway comfortable? Are you aware of and accept the risks you're taking?

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Mark
Mark
Level 4. Prodigy
Answered on 17 Jul 2019

Stashaway works better with small monthly amounts. It's hard to time the market with lump sum which is strongly discouraged.

Remember that investing in Stashaway, you are exposed to currency risk as the ETFs are all in USD.

With regular savings plan, it could minimize the currency risk.

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ūüĎć 0

Starting early into investing is a good idea. I believe a monthly method of savings and investment would be a good idea to start off with.

I do agree with Hariz too. Once you start investing, the only way to see the numbers grow faster is to invest in yourself and create a higher income.

A higher income will allow you to have a higher amount to put into your investments which in turn bring back a higher amount of dividends.

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Thomas Koo
Thomas Koo
Level 3. Wonderkid
Answered on 09 Jul 2019

Hi QP,

What were your plans when you deposited $300 into StashAway ?

Do you intend to risk these money for high returns or as a form of regular investments, hoping to build your goldn nest ?

Do note that StashAway is in USD, you need to factor in FX loss.

Be Wise and Safe in All Investments, Always :-) !

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Mujimoro
Mujimoro
Level 5. Genius
Answered on 08 Jul 2019

Again, focus on establishing a healthy emergency fund of 6-9 months of salary. Investing can come after that!

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