Asked 4w ago
Hello, I'm a 19 Y/O with no debts, some savings
(DBS ~ $350, 0.05%
OCBC Frank ~ $800+, 0.05%
OCBC Monthly Saving ~ $180, 0.25%
SC Jumpstart ~ $250, 2%)
Interested in finance but no background in it, any recommendation for books to read (not a bookworm, but like to start reading)
Interning soon - allowance $800/mth (6 months of internship)
No investment acc, current risk appetite medium to high, but leaning to a dollar-cost averaging method. Interested in ETF, StashAway & REITs.
Hi, dear Alcander,
excellent steps You already took:
you saved some in your young age, super
you are interested in investing
you already mention ETFs as a possible vehicle
you are not risk adverse, which is compatible with your very longterm
lifetime investing horizon
I wrote up how I do it, You can read it here:
Don't search out the more risky alternatives, mentioned, when You're interested in
stock investing, may be VT and VOO are already all you will need.
Alway be consciuos that equity investing is associated with higher risks,
don't trade often, but buy & hold.
GOOD LUCK !
The Save as You Serve is the same as the Save as You Earn (SAYE) account from DBS so i dont think theres a need to 'take advantage' of it. Jumpstart actually gives you more liquidity which you can use to invest rather than lock it in but if you really dont need to touch the money for 2 years and use it to have the discipline for saving then go ahead. I actually signed up for the save as you serve account at the start of my ns as well but have opened a jumpstart account.
For DCA into ETFs, you can start with DBS Invest saver or OCBC bluechip investment plan since you've got both account. Here are some useful references.
Im using Syfe REIT's portfolio since its a basket of reits and bonds rather than a reit etf which has management fees on top of transaction fees. Let me know if you need a referral code!
I would suggest Rich by Retirement (Joshua Giersch) and Quit Like a Millionaire (Kristy Shen). Its easy to read and suitable for beginners with a lot of good info inside.
Since you are about to start your internship, let's use this as a good opportunity to start learning how to plan for your future.
Understand Your Cashflow
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/
Learn how to Budget
Next, create a budget that is capable of helping you to plan for the future. 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/
After you have read the second post (on how to create a monthly budget), you will realise that you only need two bank accounts. Accordingly, I will suggest for you to consolidate all your money into Standard Chartered JumpStart account.
This is because it gives a higher interest rate at 2% per annum for the first $20k balance.
For your expenditure account, you may just use another other bank account with little or no minimum balance.
Learning how to invest
Here are a list of recommended books that you can consider: https://www.cnbc.com/2019/12/02/full-list-warren-buffett-annual-sharehold-letters-book-recommendations.html
Lump Sum vs Dollar Cost Averaging
This post pretty much sums up the different scenario on how well dollar cost averaging fares in real life: https://www.blog.pzl.sg/dollar-cost-averaging-singapore-does-it-really-work/
On the whole, spend quality time on your own to start organising your finances and to take charge of it. Thereafter, read books to help you improve your knowledge. Moreover, consider speaking with a professional or a mentor who is capable to give you some guidance. Then work your way up. As always, everyone starts from somewhere!
Here is everything about me and what I do best.
Hey Alcander, great that you are starting out early!
First it's important to have 3 to 6 months of emergency savings first. You can save up to 12 months too if you have a dependent. This emergency fund will tide you through in case of life's unexpected events. So don't rush to put your money into investments, build your fund first.
Secondly, I'm not sure the reason for the multiple bank accounts you have but from the list, I'd only keep Jumpstart and dbs. Jumpstart should be where you amass your savings up to 20k and dbs should be your expenditure account where you take a portion of your intern pay and put it there for expenses. Reason being dbs has the most ATMs available for easy withdrawal.
Thirdly, I know it may sound like it's very expensive but it's good to think about getting your basic insurances covered first like health and life insurance. You can consider term life insurance if money is an issue so you can get more coverage at a low cost. The premium is cheaper at your age compared to someone buying at age 30.
After all these has been settled, you can look into investments. But do not put any money you need for the next 3 years into high risk equity products cos you cannot afford to lose them. Read up more about investments and understand your risk profile and the different types of investments. I find this article by The Fifth Person useful: https://fifthperson.com/how-to-start-investing-in-singapore-a-practical-guide-for-beginners/
For books, I recommend Rich Dad, Poor Dad by Robert Kyosaki to give you a paradigm shift in how you think about finances. As you get more familiar, you can try reading The Intelligent Investor by Benjamin Graham, though it can be abit technical sometimes. You can always get your feet wet by trying out with Robo advisors first and put in a fixed amount of money every month as a form of DCA.
To further your knowledge and fast track your learning, you consider signing up for investment courses like Dr Wealth or The Fifth Person. The course fees may be steep if you have limited capital but the contents and value you get from it should be well worth the money spent. You can always make or earn back the money but the knowledge sticks with you throughout.
All the best in your journey!
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