$100K headache???

[path_seeker]

Hi all

My good friend had $100K spare cash in his bank after selling his house last week.
He consulted me what should he do with all the money?He mention his goal is just to preserve and keep it for retirement use.

These are the suggestion i gave to him:

Presume:
-His health and dependent insurance are well covered.
-Age 35,6 months of rainy fund in place.

10%(10k) - To pamper himself in anyway as a reward
40%(40K) - To buy STI ETF over 1 year using dollar cost average
20%(20K) - To buy ABF SG Bond over 1 year using dollar cost average
30%(30k) - To keep as war chest in step up fix d while waiting for market correction to buy blue chips at basement prices.

He seems happy with my suggestion.

I was wondering if his $100k can be allocated in a even better way?

Anyone?

 

[Dividends Warrior]

How much risk is he willing to take?

 

[path_seeker]

Ty D W for your reply

I think he is a total noob when it comes to shares and stuffs.

As low risk as possible i think...

 

[kebinu]

Keep all cash and invest during recession. No point spreading it over a year only.

 

[henrylbh]

Hi all

My good friend had $100K spare cash in his bank after selling his house last week.
He consulted me what should he do with all the money?He mention his goal is just to preserve and keep it for retirement use.

These are the suggestion i gave to him:

Presume:
-His health and dependent insurance are well covered.
-Age 35,6 months of rainy fund in place.

10%(10k) - To pamper himself in anyway as a reward
40%(40K) - To buy STI ETF over 1 year using dollar cost average
20%(20K) - To buy ABF SG Bond over 1 year using dollar cost average
30%(30k) - To keep as war chest in step up fix d while waiting for market correction to buy blue chips at basement prices.

He seems happy with my suggestion.

I was wondering if his $100k can be allocated in a even better way?

Anyone?

He should have hung on to his property as long term investment instead of realising it and now looking for other ways to invest.

Buy bank preference shares.

 

[Dividends Warrior]

He should have hung on to his property as long term investment instead of realising it and now looking for other ways to invest.

True. He could rent the property out.

 

[Godmode]

Buy UsD and sell in October. Easy money

 

[jgyy1990]

Rent property out better. Within 3-5 years can have near 100k raw cash liao

 

[path_seeker]

Hi.

Ty for your insight.

He sold his flat when he collected the new bto keys.So can say he dont really have much of a choice.

 

[path_seeker]

But presume if the recession would to come after 5 years,then the money would have bled to inflation?

 

[Futureskid]

Hi all

My good friend had $100K spare cash in his bank after selling his house last week.
He consulted me what should he do with all the money?He mention his goal is just to preserve and keep it for retirement use.

These are the suggestion i gave to him:

Presume:
-His health and dependent insurance are well covered.
-Age 35,6 months of rainy fund in place.

10%(10k) - To pamper himself in anyway as a reward
40%(40K) - To buy STI ETF over 1 year using dollar cost average
20%(20K) - To buy ABF SG Bond over 1 year using dollar cost average
30%(30k) - To keep as war chest in step up fix d while waiting for market correction to buy blue chips at basement prices.

He seems happy with my suggestion.

I was wondering if his $100k can be allocated in a even better way?

Anyone?

Your suggestion is not good because u r telling him to spend and risk his money, not his goal.

Tell him to top up his CPF account to max, that can meet his goal... and government would love him too...

 

[Shiny Things]

Your suggestion is fine, though I'd personally put more - another 10% or so - into the STI ETF and less into the rainy-day-bottom-picking fund.

This guy might be super-conservative, but he's only 35 and he's saving for retirement. His investment horizon is somewhere around thirty years. If he puts it all in cash and bonds, he's going to get destroyed by inflation; putting the majority in stocks is absolutely the right way to go.

 

[nooblaster]

m2 2cents your friend should:

buy a good medishield plan for himself & family: good MEDICAL insurance is good investment. cost = about 10k total, (3 ppl)

leftover 90k, put in bank dividend investment plan, monthly investment plan, the kind where u select the stocks and then they put a fixed amount for you, NOT ILP, you actually own the stocks

 

[bakuten]

allocate 30% of it into (silver 3 : 7 gold)
current economic climate quite dangerous to hold cash...

 

[cct75]

I am in a similar situation. My case is as below:

I am having my HDB loans via SCB with current outstanding amount around $206k with 3 years lock-in period up to around November 2015. The interest rate is reasonably low for now till Year 4 which is at just above 1.1%. My monthly repayment is about $700 with around $200 as interest back to SCB.

I have $100k currently in OCBC normal saving account. I have other savings in other banks.

1) Should I break the lock-in period to redeem $100k of my $206k loan with the view of penalty admin fees of I think around $1.5k plus then re-financing?

2) Hopefully look for a stable short-term investments (says 3-5 years)with monthly returns of at least $300 and above so that it is worth to cover back the interests with SCB.

3) Any other better options?

 

[sAVaGEmP5]

- Take away that 10k reward and i rather u invest first into next point

-Shld use only 30k (30%) to dollar average buy over 5 years of worldwide stocks eg. Russell world index and Global income bonds

- At least 50% 50k into "cash is king" policy hehe. You never know medical bills.....



So a change in total percent, 50-50 of risky investments and spread 5 years. Its retirement right ? Don't tell me he retire 1 yr later ?

 

[sAVaGEmP5]

I am in a similar situation. My case is as below:

I have $100k currently in OCBC normal saving account. I have other savings in other banks.

2) Hopefully look for a stable short-term investments (says 3-5 years)with monthly returns of at least $300 and above so that it is worth to cover back the interests with SCB.

3) Any other better options?

Quantitatively, if we take a norm of about 4% (investments with small risk and generate a stable 4% PA):

To calculate how much needed to cover the $300, take
(($300 * 12) / 4) *100 = $90,000

All you need is to take $90,000 to invest in an assuming 4% to cover the monthly $300. Assuming you take a higher risk of 6% amt needed wld be $60k, 8% will be just 45k.

Something for you to consider splitting the pot of money into diff risk profiles to cover that $300. heh

 

[cct75]

THanks for the quick advise. Any that you can recommend?

 

[allways]

Quantitatively, if we take a norm of about 4% (investments with small risk and generate a stable 4% PA):

4% with little risk is the norm?

I don't think any investment can give a norm of 4% over a long term with little risk than present bank PS. Even then I perceive PS has higher risk than CPF money in my case. My OA is withdrawable in cash for investment and the only reason I dont go for PS is because there is no certainty of redemption and selling it involves price and interest rate risk and timing. Currently all PS trading above redemption amount.

Yesterday after visiting CPF Board, I am now considering transferring 120k from my OA to my father's SA so that he can drawdown 2k plus per month. (He keeps 500 and I take the rest!!!).

The first 60k earns 5% and the balance earns 4%. My risk? My money may be freezed longer than I expected if father lived for another 20 years. He is 86 and got very little in his RA.

Another risk is the yield drops from the rates above. Actually no risk as the floor rate will be no lower the rate on my OA.

Would appreciate feedback on the above before I act.