Which investment plans can turn $1,000 a month into $1,522,077 over a span of 40 years as stated in the article below? - Seedly
 

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Investments

Asked by Anonymous

Asked on 16 Feb 2019

Which investment plans can turn $1,000 a month into $1,522,077 over a span of 40 years as stated in the article below?

Compound Interest: A Ridiculously Easy Way To Get Rich https://blog.seedly.sg/easy-way-get-rich-compound-interest/

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Lok Yang Teng
Lok Yang Teng
Level 8. Wizard
Updated on 17 Feb 2019

The article assumes appreciation of 5% which can be achievable through stocks in most markets up to the near future. It is rather uncertain how growth rates will be 10-15 years down the road though.

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Victor Chng
Victor Chng, Co-Founder at Fifth Person Pte Ltd
Level 6. Master
Updated on 07 Jun 2019

Hi,

Based on the figure in the article, it seem like the annual return is about 5%. Investing in stocks can achieve the follwing figure but a more safer way, I would suggest is investing in index ETF. In generally most index should be able to achieve the given percentage except for Japan market index.

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Victor Chng
Victor Chng

20 Feb 2019

Personally, I think that the index ETF require minimum monitoring because over the long time they generally go up except the Japan Index ETF. Index ETF is a basket of the largest company in the country which risk are generally diversify already. The knowledge you need to invest in Index ETF is to understand the when to buy them based on valuation.
Question Poster

21 Feb 2019

is STI ETF considered index ETF? Can you recommend some resources where i can learn about index ETF

Stocks, ETFs, Robo advisors and so on. There are a lot that can do that but you have to comfortable with dealing volatility and dont panic sell when prices drop. Investment can go down not only go up.

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Jonathan Chia Guangrong
Jonathan Chia Guangrong, Fund Manager at JCG Fund
Level 8. Wizard
Updated on 16 Feb 2019

You don't need to buy into an investment plan to get the same types of returns. This can be achieved using a basket of s-reits as well. Good ones with strong sponsors are yielding at about 5% onwards, which, when reinvested can potentially give the amount you mentioned. It should not be something you buy into and forget over time though, as you will still need to monitor the portfolio to determine if the fundamentals are still present. If not you need to consider changing to a different counter to invest into.

Frankly mutual funds as mentioned in article may not be the best option. Mutual funds carry fees, which will eat a big chunk of the profits, and there's no guarantee the fund will deliver at 5% or more over a period of 5 years, not to mention 40 years. Learn how to invest on your own. You'll potentially make better returns and it's a skill set you can use for life.

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