DBS Multiplier Account
Asked on 05 Nov 2019
I am a 25 yo and have 90K in a DBS Multiplier account. I have no financial/investment knowledge.
Congratulations on starting your investment journey! However, since it is your first investment, here are a few things that you should assess before actually investing.
You can start by assessing your insurance and emergency funds needs. Insurance should not be loo large, but enough to cover for risks. Emergency funds should be enough to cover 4-6 months of expenses and this fund can be left in the DBS Multiplier itself so that it can be used as and when required. The remaining amount can be used in investments. You should arrive at your financial goals and an investment horizon based on those goals. For major goals like retirement, you will typically have a longer horizon and for any other goals, you can have a short horizon. Once this is clear, you will also have to assess your risk profile. This will depend upon various factors including age, knowledge about the markets etc. Using the above information, you can arrive at the asset allocation and start investing. All of this may seem a little overwhelming since you are just starting out, so I suggest you look into robo-advisors. They will charge lower fees and help you go through your investment process smoothly and provide you access to international markets.
I work at Kristal.AI, and it's my passion to evaluate various upcoming investment opportunities.
It's a very general question, so I can't get into the specifics. A list of things to consider before you start:
Have you sorted out your insurance?
Do you have adequate rainy day funds (this should be a yes, looking at your numbers)
Have you cleared or are clearing all your debt (study loan, etc)
If that's in place, then a simple 3 step frame work would be
Set your goal. Know what you want to invest for. What do you want to achieve? What's your timeframe? How much do you need for that goal?
Assess your situation. What is your cashflow? What are your financial ratios? What's your budget?
Plan. What kind of asset classes will you want to consider? How much risk can you take?
Broadly speaking, asset classes can be guaranteed or variable. On the guaranteed side, you have CPF, SSB, annuities, etc. Variable instruments include UTs, ETFs, shares, etc.
Understand what the pros and cons of each class are, and then craft a strategy that works for you, remembering to strike a balance between guaranteed and variable asset classes. There are simply too many things for you to invest in out there and I can't be putting into writing here or I'll end up penning an essay.
If you have further questions, you can reply to this post and I'll see how to better tailor my response to your query.
At 25 years old with $90K savings, you must be one lucky guy! Good job on having accumulate such a good amount of savings!
Before diving straight in onto any investment products, it is important to get a few things in place.
1) Get yourself proper insurance coverage. (Never tell your insurance agent about your $90K savings though, to prevent any possible conflict of interest). Get enough coverage, do not spend too much on it.
2) Liquidity. Set aside a good amount of rainy day funds which you can have access to immediately. A good amount will be your expenses for a few months.
3) Now now. The remaining amount will be what you can invest.
1) Recognise the type of investor you are. If you are the type that having trouble sleeping after buying a certain stocks, you might want to consider a more stable investment product. Something that gives a more stable or even guaranteed returns. Eg. SSB, Short Term endowment plans.
2) At such a young age, you are in a good position to take up slight more risk. That is where stocks, ETFs, Robo come into play. It is, however, advised that you spend sometime reading up all these products. Understand where your money is going.
Good luck on your investing journey!
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On top of stated no financial/investment knowledge, assume you have no interest in learning too much more (ie get professionals to deal with it for you).
There is a few financial planners on this site representing the large insurance companies / IFAs who I am sure would be happy to help advise / sell you something. The only piece you may want to consider on top of your current lump sum is any regular savings you can also add which would expand the investment universe quite a bit.
if you are interested in a simple (low cost) do it yourself, you may also consider looking at the Robo-Advisors - again a few reps from the more well known firms frequent the Q&A here but you can also look at reviews for a feel of what is on offer.