Asked on 13 Jun 2019
So after scouring many different websites, blogs and even SeedlyTV, I still do not have much idea how to split my money. I have about medium to low risk appetite? Maybe slightly high is fine.
I am considering POSB SAYS (for NS pay), Temasek Astrea V, SSB, STI ETF (using RSP) and robo-advisors.
Open to other ways to grow my money as well but generally do not want too high a risk to lose the capital.
Any suggestions on what percentage to go to which area? Or is my captial too low to split?
There are plenty of safe ways to invest your money and have it grow. You can go for REITs, other ETFs and bonds, but before you do that, I'd suggest you read up as much to understand what a Robo-advisor really does. Robo-advisory platforms assess your current financial position and recommend a portfolio strategy after reviewing your risk profile. These bionic advisors are still not very different from your ordinary financial advisors as both options will still have a management fee incurred for users. The difference lies with the amount, as Robo-advisors have lower management fees. And the best part is that they give you the most unbiased advice.
You can read here for a better understanding.
I work at Kristal.AI, and my mojo is to help people make the right financial decisions. If you think I helped you, do give me "Thumbs up". If you think my response was biased let me know, I will work on it.
I hope this helps you make the right decision.
I am a believer of teach a man to fish, instead of giving him the fish.
I dont think its a matter of capital amt to split, 20k is plenty. You are fortunate to have 20k by the time you are heading into NS. So questions:
when you say you want to leave 5 to 10k for emergency, is there any specific concern you have in mind (given you are prob younger than 20)? Helps us understand how much responsibility / accountability you have vs your family
if you think about the full stretch, 2-3 yrs NS, plus maybe 3-5 yrs of university is a long time. Over 5-7 yrs, the compounding impact is somewhat important enough to sway decisions.
how are you financing university education? Borrow from parents cpf? Is it a local uni?
do you have a clear idea of what goals you may have after university? Like start a business?
I think you may be a bit risk adverse as you have heard horror stories of people losing $$. On another hand I dont know if you might be like studying medicine which would cost a bomb.
Note: 37% of 5k = 1850. Assuming you are 20 now, this will roughly double three times according to the rule of 72. I am thinking when you are 64, this 1850 will be 1850 x 2 x 2 x 2 = 14,800.
I am not sure if you are 21 yet, coz I don't know if you can apply for cdp acct, which is required to buy ssb or stocks. If you turn 21 in ns, please go apply then it will open up ssb as an alternative. I think from there, you can subscribe to the mas ssb newsletter, n monitor the next subscription. I would suggest buy 1k worth of ssb only each time if the 10 year average yield is above 2.2%. Wait if its not that good.
when you turn 21, you can also apply for like those monthly savings plan account. My only concern is you probably don't have a regular income, so contributing 200 per mth could prove to be a toll. If 100 per mth, the transaction cost would be too high n erode returns. So my suggestion would read up the investing, and eventually learn how to pick good dividing paying stocks. Only turn on the plan if stock or reit offers at least 3.5% yield. But you may need time to learn this.
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14 Jun 2019
14 Jun 2019
No doubt there's merit in Gabriel Tham's answer, I am a little more risk adverse and would dabble in various forms of investments. Ultimately, it's a matter of your risk appetite. What is risk appetite? Simply put, will it be fine if the sum of money you invested dwindle over the many years (with a potential but without guarantee of recovering fully)? If you're okay with allocating a small fraction of your cash worth to that purpose, I would say now is the best time for you to learn and explore. You might not have the time after NS whilst in Uni or in the workforce to do so. SSB is definitely one solid option (higher rates than your SAYE and inherently similar liquidity as your SAYE). The Astrea V minimum investment amount is 2K which might be quite a huge sum for your case.. if you're getting SSB of about 3k, I'd suggest you allocate another 2+k to stocks -- but don't go for a basket of them, go for a single company you believe strongly in!! gotta do your research for this. Other options are worth considering (ie P2P or Robo) but ultimately it depends on your risk appetite. Use these two years to learn and experiment!:)
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14 Jun 2019
14 Jun 2019
Top Contributor (Jan)
You can start with Singapore savings bond as a safer way to get better returns.
SInce your time horizon is not that long before university starts, expenses start to kick in too (NS free food, free lodging etc).
POSB SAYS is a pretty good scheme for that extra interest boost too.
I would leave out STI ETF and robo for now. These would be a long term investment and require a longer time horizon.
Since you're in NS, i believe you're under 27. Firstly, have an account that generates higher interest.
Open up the Standard Chartered Jumpstart account, & park your money in there. Note that it should be capped at $20k, as the 2% p.a. is only effective for $20k. in there. This will give you appx $33.33 per month, for the $20k.
For your remaining amt,you may look at some other instruments. You probably might not want to consider bonds, given it's low yield during this period time. However, to get started in investing, please be equipped with the knowledge first. You might want to start off with the ETF which tracks the performance of the market. Historically, the S&P500 ETF have been generating 9% annualised returns, & STI ETF have been generating 7% annualised returns. Of course, past performance is not indicative of the future, so please DYODD. You can either use a DCA method for this or buy in when the market is at it's low. Either case, both works :)
Hope this helps :)