What to do with $18K?

[Nyan]

Currently 20 years old.

After reading up on passive investment books.
Parents is gonna put me in charge of a Fixed deposit $18k that is due mature in 2015.

Started on Posb invest saver $100/month since may 2014.

Will start to purchase abc bonds through SCB online when i hit 21 this october. And will continue to purchase them every month to do a passive investment strategy.


so the big question is the $18k.

Should i dump everything into sti index?

Should i increase my monthly contribution to the invest saver and abf?

Should i look for overseas stock?

Should i throw into the cpf.



please advice.

 

[alexchia01]

Currently 20 years old.

After reading up on passive investment books.
Parents is gonna put me in charge of a Fixed deposit $18k that is due mature in 2015.

Started on Posb invest saver $100/month since may 2014.

Will start to purchase abc bonds through SCB online when i hit 21 this october. And will continue to purchase them every month to do a passive investment strategy.


so the big question is the $18k.

Should i dump everything into sti index?

Should i increase my monthly contribution to the invest saver and abf?

Should i look for overseas stock?

Should i throw into the cpf.



please advice.

Should invest into your own education first.

Being young, your problem is not enough knowledge and no experience.

Easy to get suck in by all the investment scam hypes and false educations.

My advise is to get as much knowledge as you can before starting your investment journey.

 

[Bedokian]

Yes, invest in yourself first. You are still young.

If you really really really want to invest, then I suggest you read up on asset allocation and the permanent portfolio.

 

[Nyan]

Should invest into your own education first.

Being young, your problem is not enough knowledge and no experience.

Easy to get suck in by all the investment scam hypes and false educations.

My advise is to get as much knowledge as you can before starting your investment journey.

I'm going into national service soon. so i don't want the money to be sitting there for nothing for 2 years.

Yes, invest in yourself first. You are still young.

If you really really really want to invest, then I suggest you read up on asset allocation and the permanent portfolio.

any books to recommend?


I also wish for the money to grow, instead of a fixed deposit. i don't mind put and hold long tterm for 30-50 years.

 

[alexchia01]

I'm going into national service soon. so i don't want the money to be sitting there for nothing for 2 years.

Money in FD is not doing nothing.

Better than put into something and loss because you are stuck in NS.

 

[Nyan]

Money in FD is not doing nothing.

Better than put into something and loss because you are stuck in NS.

money in FD is nothing because if i would to purchase the three telcos or any bluechip in singapore, i would be able to collect dividends. and as i said I'm willing to hold long term with this $18K


FD highest rate 1.88% is scb Bonus saver but it requirers 50k and minimum spending of $500 per month.

or maybe now the ocbc 360 but it requires to much things to do to get the 3%

 

[Keverus]

buy 1 lot of dbs.

still have about 1k left for u to buy a chanel and xian char bo.

 

[Nyan]

buy 1 lot of dbs.

still have about 1k left for u to buy a chanel and xian char bo.

1 lot of dbs? is it really good?


u siao ah buy chanel xian char bo. $1k i can do a lot of things with it.

 

[Bedokian]

I'm going into national service soon. so i don't want the money to be sitting there for nothing for 2 years.







any books to recommend?


I also wish for the money to grow, instead of a fixed deposit. i don't mind put and hold long tterm for 30-50 years.

You could read up more on the internet, or go to the library to borrow some books.

Some recommendations on what I had mentioned - Permanent Portfolio (Craig Rowland), All About Asset Allocation (Richard Ferri).

And don't stop there. Read up more to gain more knowledge, such as FA, TA, REITs, ETFs, value investing, etc. and then find what is best for you.

Going in to NS? Bring in some of these books to read.

 

[Nyan]

You could read up more on the internet, or go to the library to borrow some books.

Some recommendations on what I had mentioned - Permanent Portfolio (Craig Rowland), All About Asset Allocation (Richard Ferri).

And don't stop there. Read up more to gain more knowledge, such as FA, TA, REITs, ETFs, value investing, etc. and then find what is best for you.

Going in to NS? Bring in some of these books to read.

Thank you! haha I'm at Catalogue - Home Page now lol

 

[w1rbelw1nd]

You could read up more on the internet, or go to the library to borrow some books.

Some recommendations on what I had mentioned - Permanent Portfolio (Craig Rowland), All About Asset Allocation (Richard Ferri).

And don't stop there. Read up more to gain more knowledge, such as FA, TA, REITs, ETFs, value investing, etc. and then find what is best for you.

Going in to NS? Bring in some of these books to read.

I second bedokian recommendation on permanent portfolio. Its a really solid book with clear explanation on why rebalancing works and how different asset classes complement each other.

Personally, I feel that rather than getting a "perfect solution" you may want to set some money to try some active investing. It is one thing getting ready made solutions from books and internet, it is another thing to be able to have the confidence and unwavering belief to stick to a consistent, objective investing strategy. Gaining more knowledge through nlb books and reading forums is good. Burned hands can also teach well

 

[Nyan]

I second bedokian recommendation on permanent portfolio. Its a really solid book with clear explanation on why rebalancing works and how different asset classes complement each other.

Personally, I feel that rather than getting a "perfect solution" you may want to set some money to try some active investing. It is one thing getting ready made solutions from books and internet, it is another thing to be able to have the confidence and unwavering belief to stick to a consistent, objective investing strategy. Gaining more knowledge through nlb books and reading forums is good. Burned hands can also teach well

i personally feel that books can only teach strategy, and those books are probably written in like 2001. but i wanna know what the people who are investing for a while what's their inputs.

After reading nine rules of wealth, I believe in passive investment. the big Q now is which stock/etf/index fund to spread my 18k


Awaiting shiny things input.

 

[teacup888]

seems like you are doing this because of the impending ns, ns is inevitable?

 

[w1rbelw1nd]

i personally feel that books can only teach strategy, and those books are probably written in like 2001. but i wanna know what the people who are investing for a while what's their inputs.

After reading nine rules of wealth, I believe in passive investment. the big Q now is which stock/etf/index fund to spread my 18k


Awaiting shiny things input.

There are some investment rules/research that applies even though it surfaced long long ago.

Anyway, do you see yourself using the 18k for any other purpose 5 years down the road? 20 years down the road? It will affect the choice of asset and the portfolio mix that you want.

You can refer to this thread (http://forums.hardwarezone.com.sg/m...-financial-planning-young-people-4628206.html) if you want to know how I plan to do my passive investing

 

[Bedokian]

Trust me, once TS comes out of NS, he will be inundated with calls from insurance agents, whom I still don't know how they got them. Now with the DNC thing, maybe it will be reduced.

Back to TS, investment is just one of the components of the overall financial planning of life. You may have other expenses/commitments to take care of. If I were you, I would do this: If you are studying after your NS, be sure to keep some funds for emergencies (if studying full time, keep at least $2K x 3 months; if studying part time and working, keep at least your gross pay x 3 months. This is my formula, you could adjust), after setting aside your education fees (unless you are on some scholarship). If working, you could also do some sort of rebalancing of your income, like x amount goes to savings, y amount to invest and a amount to spend and enjoy. In this way, you will see $$$ grow.

When the above is settled, then you can set about your investment. Since you are into passive, you may want to follow some portfolios found in books and the Internet (permanent portfolio, the 110 minus your age in equities, etc.). Once you have decided on a strategy, all you have to do is to rebalance it, say half yearly or yearly, and watch your money grow.

Many investors (me included) will still set aside some $$$ for trading/punting, after all the temptation to earn some quick $$$ is still there. But do not mix this into your overall portfolio.

And to add a little quirk of mine - I still engage in lotteries, though a small amount. Most of the windfall I have will plough back to my investment account. Don't follow me on this, though.

 

[Nyan]

Trust me, once TS comes out of NS, he will be inundated with calls from insurance agents, whom I still don't know how they got them. Now with the DNC thing, maybe it will be reduced.

Back to TS, investment is just one of the components of the overall financial planning of life. You may have other expenses/commitments to take care of. If I were you, I would do this: If you are studying after your NS, be sure to keep some funds for emergencies (if studying full time, keep at least $2K x 3 months; if studying part time and working, keep at least your gross pay x 3 months. This is my formula, you could adjust), after setting aside your education fees (unless you are on some scholarship). If working, you could also do some sort of rebalancing of your income, like x amount goes to savings, y amount to invest and a amount to spend and enjoy. In this way, you will see $$$ grow.

When the above is settled, then you can set about your investment. Since you are into passive, you may want to follow some portfolios found in books and the Internet (permanent portfolio, the 110 minus your age in equities, etc.). Once you have decided on a strategy, all you have to do is to rebalance it, say half yearly or yearly, and watch your money grow.

Many investors (me included) will still set aside some $$$ for trading/punting, after all the temptation to earn some quick $$$ is still there. But do not mix this into your overall portfolio.

And to add a little quirk of mine - I still engage in lotteries, though a small amount. Most of the windfall I have will plough back to my investment account. Don't follow me on this, though.

Because it's my parents money, i won't use it unless it's an emergency. so good luck to those insurance agents trying to break my principle on this.

I really like the the financial planning of life part, will definitely look more into that on how much to save, how much to passive invest.

I don't see myself using that money for 20 years. so no one has really and my qns on what to do with this money.

There are some investment rules/research that applies even though it surfaced long long ago.

Anyway, do you see yourself using the 18k for any other purpose 5 years down the road? 20 years down the road? It will affect the choice of asset and the portfolio mix that you want.

You can refer to this thread (http://forums.hardwarezone.com.sg/m...-financial-planning-young-people-4628206.html) if you want to know how I plan to do my passive investing

I don't see myself using that money for 20 years. Because it's my parents money, i won't use it unless it's an emergency/ buying a property. thanks for the link brah

 

[alexchia01]

money in FD is nothing because if i would to purchase the three telcos or any bluechip in singapore, i would be able to collect dividends. and as i said I'm willing to hold long term with this $18K


FD highest rate 1.88% is scb Bonus saver but it requirers 50k and minimum spending of $500 per month.

or maybe now the ocbc 360 but it requires to much things to do to get the 3%

You are assuming that the blue chips you buy will never fall.

Let me give you an example.

Let say, you buy Singtel before entering into NS, during your BMT training, market crashes 50%, after your 3 weeks training, your 18k becomes 9k. Even you collect 10% dividend, you still takes years to break-even.

You can argue that you can continue to monitor your stocks while in NS, but my experience and I believe that many that gone through NS, will tell you that you cannot.

It's not what you buy that I suggest you wait, it's the time and commitment that you don't have that why.

 

[Nyan]

You are assuming that the blue chips you buy will never fall.

Let me give you an example.

Let say, you buy Singtel before entering into NS, during your BMT training, market crashes 50%, after your 3 weeks training, your 18k becomes 9k. Even you collect 10% dividend, you still takes years to break-even.

You can argue that you can continue to monitor your stocks while in NS, but my experience and I believe that many that gone through NS, will tell you that you cannot.

It's not what you buy that I suggest you wait, it's the time and commitment that you don't have that why.

I'm clearly aware of the risk in stock market, but i'm willing to take them and I'm looking to make the risk lessen. Maybe by asset allocation? or some other techniques that i have not discover.

okay let's say i put my money in the STI index etf fund, are you gonna tell me that Singapore might have a tsunami or a bomb is gonna drop. Yeah it might happen but i think most of us know that amount of risk when we dabble with stock.

 

[Shiny Things]

So I was very politely asked to contribute to this thread, and I'm more than happy to.

Basically there's a couple of things you can do:

1) Set up an emergency fund - just enough to cover your expenses for six months, so that if anything untoward happens you've got a buffer;
3) Once you've done that, then, assuming you don't have any other debts, you should basically dump the money into the STI ETF and leave it there.

At your age, you'll want your investment funds to be roughly 90% in stocks (the STI ETF) and 10% in bonds (the ABF bond ETF).

Generally though: you've got the right idea! You're buying low-cost index ETFs instead of high-cost mutual funds; you're allocating your assets between stocks and bonds (don't forget to rebalance once a year!); and you have a LONG time horizon.

You're going to put yourself on a great footing for long-term success with this. Well done mate. Keep it up.

 

[iamverybuaysong]

The only things you will be monitoring in NS is your off, leave, and 'wife'

Why not put some into REITS, and some into a normal CIMB savings account

then use some to subscribe to magazines, and read them (which TBH, is very very dry after a while... )