Asked on 10 Jan 2020
Hi, I have 60k in my savings at the age of 24 this year. I am thinking of ways to let my money work on its own. Of course, 60k is a small sum but I’m sure there’s a better place to put in somewhere to have at least some good returns.. are there any recommendations? Thanks in advance!
For a 24 year old, $60k isn't a small sum hahaha
So first off, savings - Not sure if you've heard of it but Stanchart's Jumpstart Savings Account offers 2% interest paid monthly for the first $20k. This will ensure that your money is kept liquid yet being able to grow adequately as compared to putting it in other saving accounts!
With another portion of your cash, you could consider investing into a reputable REIT to offer you a respectable cashflow (approx 5-8%) since you don't really require the money right now and furthermore REITs / Stocks are relatively liquid instruments hence you are able to convert these holdings to cash rather easily too!
Hi Anon! Good job on accumulating $60k at age 24! I'd suggest putting your money into a spending account and savings account, and you may consider investing on the side.
Spending account: This can be your POSB or OCBC account that tracks your daily expenses and lifestyle needs.
Savings account: Considering putting your emergency funds (At least 6 months worth of expenses/income here) into Standard Chartered Jumpstart account. You can earn 1% p.a on the first $20k. Their rates are still better than the other banks out there.
Investments: Try robo-advisors! StashAway, AutoWealth, Syfe, Kristal.AI etc. Depending on your risk appetite and time horizon, you can reap favourable returns in the short and long run.
Other alternatives: StashAway Simple is a cash management account that earns you 1.9% p.a (not guaranteed) and Singlife, an insurance savings account that earns you up to 2.5% p.a (not guaranteed). You may also consult a financial advisor and consider any savings/investment plans to help you accumulate your wealth over the years.
Wow thats nice! First off, congrats on being closer to the first 100k. As laymen, I believe that the best things to do would be to diversify and place your money in different sources to minimise risk.
You can explore robo advisors, ETFs, high interest savings account, individual stock picking and even cryptocurrency.
Wow, outstanding work to have saved 60k at the age of 24! When I was 24, I was literally living on $2 char siew rice everyday.. Lol
For a start, it would be wise to keep aside an emergency fund, roughly 6 mths of your salary. If you are not working, I would think $20k is fair enough. Technically, the remaining $40k is up to you. For me, I still give a little buffer for daily expenses and the occasional entertainment, and the others I invest in stocks that can generate me 2%/annum (why 2%, because that's the average interest rate if you put in a bank). Some options you can consider is STI ETF (top 30 blue chips in SG), or even REITs (though they are overvalued now).
13 Jan 2020
What would you consider "some good returns"?
I created this for illustration. In my case, I lump anything "more than 4% p.a. and to the sky" (the sky's the limit) as moderate - high risk (which I consider from moderate risk as "some good returns"), and investments that I'll consider are stocks, ETFs & funds.
Meanwhile, to someone who have an even higher risk appetite, this pyramid may look different - they could separate moderate from high risk, where high risk is options/futures. Maybe this is their "some good returns".
As you're young, you can take opportunity to invest in the moderate-high risk category, so that your money can compound more over long term.
However, you do want to have some in the low risk category, because sometimes, things happen unexpectedly....you may have emergency funds set aside, but the actual may exceed your expectations. You may have no choice and to draw on this.
Usually your capital is guaranteed, so that it's like a base and you can still access to some cash.
Generally, you won't want to touch assets in the moderate - high category for as long as possible, so as to let compounding works its magic over time. It will be a bad idea to draw this down (worst if it's at a loss) in times of need.
Some folks may use The rule of 110, where 110 minus your age to determine how much you should put in stocks and bonds. Hence, your situation would be 86% in stocks and 14% in bonds.
Whether you want to follow this guideline, depends on your risk appetite and life situation.
Hope this gives some food for thought.
Put 10K inside Singlife to yield 2.5% p.a
The rest of the money can put inside standard Chartered jumpstart account to yield 1% p.a
You can also consider endowment plans ((quite safe)) or Robo Advisor such as StashAway/ Syfe etc to gain higher returns ((comes with higher risk))
Kudos for having so much savings in your 20s!!
Pros: Low fees, no minimum amount
Cons: Can't choose your own funds
Pros: Able to invest in what you like
Cons: Charges and fees everytime you transact, you need to know where to put your money at, need time to study the market. Expensive to diversify
Pros: Someone there to guide you into making informed decisions, someone to recommend funds for you, able to choose your own funds, save time and effort reading the market
Cons: Charges and fees applied, sometimes some advisers aren't sure what they are doing as well.
All in all, you already have 60k savings so keep aside at least 6months worth of expenses as your emergency fund. Plan your investment wisely and start investing long term and let compounding do its job.
If you're keen to know more, I would be happy to help. Hit me up fam linktr.ee/joeytrq
Awesome job! 60k at age 24! you're well ahead of almost everyone here in Singapore! I would take a couple of hundred and invest in your own financial education. Buy a couple of books, read through them. Once you've done that, you're ready to invest! Depending on your risk tolerance and how aggressive you want to be, you can be well on your way to being a millionaire when you retire.
Quick calculation below
I would say if you are on the following accounts, keep a part of the $60k in.
DBS Multiplier ($25k for 1st tier interest)
SCB JumpStart ($20k for bonus interest)
OCBC 360 ($35k for 1st tier bonus interest)
The remainder $25k ~ $35k can be better managed with the following tools (ris-averse approach)
StashAway (Up to 1.95% pa interest, non-guaranteed)
Dividend stocks or REITs (Avg 5 - 7%, depending on the stock type and companies)
Invest in the STI ETF is my recommendation. This is because the STI etf is self investing counter across 30 learge companies of Singapore which are diversified across industries and geopgraphy. The long term return is good at 6-7% per annum.
Conversely, if you are risk adverse, consider UOB one account paired with UOB one credit card, it is easy to attain 2% per year interest using UOB one card+ grab and parking your $60k in the UOB one account
Firstly, 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/
Next, determine how much you need as liquid savings (i.e. emergency funds). In general, it will be 3 to 6 months of your monthly expenses.
Thereafter, take time to understand yourself and your goals in life, e.g. car, wedding, house, retirement.
Then understand the best options for your money to grow in the most efficient manner to achieve your goals, e.g. savings, annuity, investment.
There are various channels in the market that is capable to help you grow your money. If you are open to understanding how I help my clients grow their wealth, send me a coffee invite: https://www.work.pzl.sg/#coffee
Here is everything about me and what I do best.
Nicholes Wong, Diploma in Business Management at Nanyang Polytechnic
Answered on 11 Jan 2020
If you want something safe, Standard Chartered Jumpstart account will be good for 20k at 2% interest. High interest savings account like DBS Multiplier, UOB one and so on are also good if you can hit their requirements.
If you can stomach some risks, you can also take a look at ETFs or robo advisors like Stashaway, Autowealth, Endowus, Moneyowl, Smartly and so on. But you have to do abit of research about them before putting your money in them.
You can start with this link https://blog.seedly.sg/singapore-robo-advisor-investment-comparison/
11 Jan 2020