What to do with 1k

[fluxos]

1k is a very insignificant sum in Singapore. But it is a decent sum for a 18 year old. Your utility and enjoyment of spending 1k at 18 years old is much higher than when you're a working adult. Yes, this is economics.

So spend it on what you fancy, because 1k will come easy when you start working but you're only 18 once.

 

[RollingPig]

Buy me coffee, we can talk about life

 

[power_range]

1.4K is a good start for a 18-years old..
I also think putting it in CIMB is a good idea.
After this, if you have any extra savings.. just save it into CIMB.. slowly build up your wealth..

 

[endlssorrow]

PM me if u r really interested to grow more and gain more exposure

 

[Seannie]

PM me if u r really interested to grow more and gain more exposure

Elite advisor spotted!!

 

[endlssorrow]

Elite advisor spotted!!

Elite in sexposing losing mah
Hahahahaha

 

[Shion]

Use it for your daily expenses, more than enough for quite a while unless you spend a lot on wants instead of needs

 

[BBCWatcher]

Your first suggestion is decent enough but your second suggestion...Putting into CPF at 18 is just crazy.

Not at all! There are some people who start saving for retirement, housing, disability, medical care, and education while still in the maternity ward (thanks to generous relatives). My nephew's university fund started up when he was one year old. That's what CPF is too, and it's the highest yielding, lowest risk savings vehicle available in Singapore, probably also in the world.

Please do read carefully the second sentence in my post, a key assumption.

It's only 1k, a working adult can spend that in a weekend.

Sure, anybody can spend money. That's easy. But the original poster is asking about how to save $1K, not to spend it. (And CPF OA allows spending! It just has to be qualified spending, not beer in 2018, for example.)

I know I do. With 1k, just keep it for a rainy day....

Yes, and please re-read the second sentence I wrote.

....pay any debts you have....

Yes, and that's my recommendation #1.

or just spend it to enrich or broaden your horizon by travelling or taking some lessons (driving lessons, guitar, dancing or whatever you fancy).

As I pointed out, CPF OA allows withdrawals for qualified education expenses provided the savings is replenished with interest. So qualified educational expenses are fine.

None of the suggestions so far are anywhere near as high yielding, never mind risk free, as even CPF OA. There's also the guarantee of owing MediShield Life premiums (unless you're destitute or practically so), so why not park some money in CPF Medisave to pay for those near-future and lifetime premium obligations? That's paying forward a debt, akin to my first recommendation. And earn 2.5% interest or more in the meantime? That would be a GREAT idea for extra savings...with the important caveat in the second sentence I posted.

CPF savings are also protected against creditors, worldwide.

 

[BBCWatcher]

But the original poster is asking about how to save $1K, not to spend it.

Correction: It's not entirely clear whether the original poster wants to save or spend $1.4K (new amount).

....OK, if the original poster wants to save some or all of that windfall, and assuming emergency funds are available already, and assuming interest bearing/accruing debts are paid off, then CPF can be an excellent option.

Another excellent savings option in these circumstances would be a Singapore Savings Bond (SSB). It pays quite excellent interest for 10 years at rates that rise every year until maturity, funds can be accessed quickly (with one month's notice or less) with no penalty, and you can get started for as little as $500. The interest isn't as good as CPF, but that's the price for near-instant, unrestricted access to funds. Like CPF, there is zero risk to principal (unless the AAA-rated Singapore government fails to pay its debts). Unlike CPF, a SSB is a very appropriate way to hold general emergency funds.

 

[dork32]

if u have only 1k, you should never put it into cpf.

down payment for hdb is xxk, down payment for car is xxk. if you start to put money in cpf every time you hit 1k, when are you going to get enough money to buy your hdb or car.

 

[BBCWatcher]

down payment for hdb is xxk, down payment for car is xxk.

CPF OA funds can be used for a HDB down payment. In the meantime, those CPF funds earn market beating interest, and that extra interest obviously reduces your cash housing costs and/or makes housing acquisition financially possible that much sooner.

One of the primary purposes of CPF savings is to support housing purchases in Singapore. My goodness! It's one of the central pillars of CPF!

It's financially idiotic to buy (or lease) a private automobile in Singapore. Some people still do so, but there's no financial sense in it. However, to the extent CPF OA helps make your housing costs more affordable (and it does), it thus can make your purchases of other things -- including pure luxuries like private automobiles -- that much more financially possible.

 

[Maeda_Toshiie]

I think the people here are straying away from the original topic.





1.4k as a lump sum is not going to get anywhere in the case of investments, so let's leave investments out for the moment. Likewise, it is a drop in the ocean in the case of CPF. Just think, his future monthly CPF contribution can easily be half or more of that 1.4k. Better to have such money in a much more liquid form. As for fixed deposits, most fixed deposits require 10k or more for a decent rate. On top of that, the money is going to be tied in for one year (6mths in some banks, but the amount is easily 25k in the case of CIMB).


I recommend the 1.4k to be used for the following activities:

1. Spent on schooling necessities by TS.

2. Put in a high(er) yielding savings account like CIMB's Fast Saver. Meanwhile, continue to save and accumulate more cash.

3. If TS worked really hard for that bursary, he can spend a part of it to reward himself. TS should keep in mind that the reward should also spur him to continue working hard in the future.

We can talk about investments when TS accumulates more cash, and/or start getting a regular paycheck.


BTW, paper trades are frankly not very educational, especially when it comes to long term investments for retail investors. I'd not go around recommending paper trades to people who have never traded on the stock market before. It will only give people the wrong impression about actual trading on the stock market.

 

[Buaya_Hunter]

1.4k just pay school fee....

 

[[M]aiev]

Go Geylang call chicken.

Posted with HardwareZone Forums app

 

[dork32]

CPF OA funds can be used for a HDB down payment. In the meantime, those CPF funds earn market beating interest, and that extra interest obviously reduces your cash housing costs and/or makes housing acquisition financially possible that much sooner.

correct. but if you dont have cash, you are held hostage to take to take the lousy hdb loan.
if you have cash, you have option for bank loan. people that have taken the hdb loans have lost out for the past 10 years compared to people on bank loan

 

[dork32]

It's financially idiotic to buy (or lease) a private automobile in Singapore. Some people still do so, but there's no financial sense in it. However, to the extent CPF OA helps make your housing costs more affordable (and it does), it thus can make your purchases of other things -- including pure luxuries like private automobiles -- that much more financially possible.

yes it does not make sense financially to buy a car. do you see how many cars there are on the roads? wow, there are really lots of idiots out there. why are these idiots buying car.

 

[dork32]

i really want to see you put your last 1000 into the cpf

 

[BBCWatcher]

Put in a high(er) yielding savings account like CIMB's Fast Saver.

If the funds must be liquid and have no restrictions, that's a not a bad idea. However, there are a couple important caveats:

1. CIMB's FastSaver Account has a minimum balance requirement of $1000 to receive interest. For example, if you deposit $1400 but then pull out $410 to spend on something, the remaining $990 won't earn any interest at all.

2. The 1% rate only applies to the first $50,000. Which, conveniently, is the deposit insurance limit as well. That's not an immediate problem.

3. Unlike a fixed deposit, savings bond, or CPF -- which all have various forms of interest rate guarantees -- there is no guarantee CIMB will maintain that 1% rate. It could change literally overnight, up or down.

Given these caveats, if you think there's a high likelihood you'll let the money earn interest for at least 3 years, but you still want liquidity with no rules whatsoever limiting how you can use the money, I would favor SSBs over FastSaver. You can also "split the baby" if you have at least $1500: $1000 in FastSaver (its minimum) and $500 in a SSB (its minimum).

Both of these savings vehicles pay much less interest than even CPF OA and Medisave. The fact that $1K is "not much" is not at all a persuasive argument against CPF. A higher yield is a higher yield, and a higher yield compounded is even better. Those who have the least wealth benefit the most, in lifestyle terms, from higher compounded yields.

 

[BBCWatcher]

correct. but if you dont have cash, you are held hostage to take to take the lousy hdb loan. if you have cash, you have option for bank loan.

Also correct, but that's an excellent reason to put your first dollars (after emergency funds) into CPF OA, and to then, later on, hold your last dollars in other savings vehicles to accumulate the 5% cash component for your 20% down payment (for example).

....Do the math! It is correct. Compare a strategy of first dollars into CPF OA versus last dollars into CPF OA. The former approach gets you to your down payment faster, and with less cash required for your down payment. It's the simple power of higher and longer compound interest -- basic financial math here. CPF OA pays the highest rate, so if your goal is to save for housing -- and most people have that goal -- then that's exactly where your first dollars should go so they can "run" the longest. You want your 15% CPF OA dollars to run the marathon, and you want your 5% cash downpayment component to run a sprint, relatively speaking. Do the reverse and you're poorer -- you've lost interest earning power.

All after paying off interest-bearing debt and setting aside enough emergency funds -- and the latter could potentially be via proxy (i.e. a family member).

 

[shared]

1k don't need put in CPF la, the compounding interest is negligible anyway for such an amount

Take the money go for a holiday, that's what people in their early adulthood should do, see the world more