Investment advice needed
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I am a 19-year-old and I live on my own. So far, I've sustained my relatively frugal lifestyle with money that I've neither worked for nor truly deserved (e.g. cash from my parents, scholarship allowances, salary/bonuses from my past internships), and I've actually saved a decent chunk of money from all these multiple streams of income. I probably have enough now to do some small-scale investment.
Some background: I will not work for the next four years and thus will not draw a stable salary. However, I will continue to benefit from scholarship allowances (praise to the Singaporean government) and occasional contributions from my parents, which I predict will give me an excess of, say, S$100-200 each month after living expenses.
My parents suggest that I place my entire "decent chunk of money" in a time deposit account, and save my monthly excess funds aside in short-term fixed deposits (1-6 months) that will allow me access to my money in times of emergency. I was told to leave bigger investments for the time when I graduate and start gaining permanent employment because investments are very "taxing" and can serve as a severe distraction.
I know better than to "wait until graduation". If anything, I have to start early in educating myself as much as possible about personal finance (a department that, admittedly, I feel really handicapped in), and there is basically no better way than to expand my knowledge on the subject than to experience first-hand some small investments. I have a mini-plan that entails making a consistent monthly contribution towards a unit trust, maybe something like a monthly investment plan (taking the dollar cost averaging strategy here). I am also considering making structured deposits that offer principal protection.
I have to admit that I have done little homework on the subject of investment (e.g. I have scant understanding of how stocks and shares differ, if they really do that is, and I don't even know how one can purchase bonds), but some recent sould-searching and a half-year-long detachment from an overly idealistic academic prison have put things in perspective for me and inspired me to learn all there is to pick up about money management.
If it helps, I am supposed to make a "great" salary by my mid- to late twenties. I look forward to purchasing my first property no later than two years after graduation (using the money I've initially invested as downpayment). Even a studio apartment would be a great investment milestone for me, which I think is a realistic goal to strive towards.
I've decided that one good way to expand my knowledge on investment is to consult people who have been there and done that: seasoned investors and investment gurus on this forum, so I really appreciate any advice from you people.
Does anyone want to help a confused youth out?
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all you wanted to know is the best way to invest the extra $100 - $200 you have per month right? Or what?
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Eh... A studio apartment two years after graduation may be a tad unrealistic, though not impossible.
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One more note is that your expenses differ when you are working, compared to when you are a student. You need to take this into account.
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POEMS Share Builder's Plan? But need to be >21 years old
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your estra money is still to little for reasonable investment return lah...dont waste too much time on investment now lah, just keep it on some bank with good Fix deposit rate first..
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I note from your post that you are still below 21 years of age. The only way you can invest in local listed stocks is to open a trading account with your broker. However, you need to be 21 years of age.
Since you mention that you will not work for the next 4 years, My recommendation for you would be to invest 70% of your cash in a stock(stock and share has the same meaning) or unit trust that can pay you consistent dividends every year. This would form the base of your investment portfolio. It is strongly recommended you reinvest your dividends for the compounding effect.
As you are young, you have the capability to take on more risk than your parents, as such, you could also consider investing another 10% of your cash in riskier equities that have the potential for growth but may not necessary pay dividends.
If you stick to the principles of long term investing, you would not need to monitor your portfolio like a hawk everyday. Just invest and keep it for the steady payout.
But first, get your trading account, otherwise stocks and unit trust are off limits.
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1 word of advise, only invest with money that you do not need. The time period will be 4-6yrs as you are still studying.
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I regret not investing in year 1 :(
Even putting $1k in a unit trust would have earned me a few more hundreds by now... :(
Good for TS to learn and understand such things at this age...
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Originally posted by eagle:
I regret not investing in year 1 :(
Even putting $1k in a unit trust would have earned me a few more hundreds by now... :(
Good for TS to learn and understand such things at this age...
I started reading all the investment books i can find at 18. Started investing with real cash at 20.
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i'd rather invest in a fund with links overseas...India is the current emerging and soaring market economy now..im with a fund management plan that has a B-O spread of 3%
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Originally posted by Evangel:
1 word of advise, only invest with money that you do not need. The time period will be 4-6yrs as you are still studying.
Yes thats a good advice!
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Originally posted by Master -_-:
i'd rather invest in a fund with links overseas...India is the current emerging and soaring market economy now..im with a fund management plan that has a B-O spread of 3%
If I tell you I know of a Listed stock that pays 21% dividend yield, would you sell your india fund management plan and buy this? lol... -
Originally posted by shade343:
If I tell you I know of a Listed stock that pays 21% dividend yield, would you sell your india fund management plan and buy this? lol...
i know of a few that have yields like that and more but normally most of these companies trade at low PEs (6 or maybe 8) -
How about investing in foreign currency?
Many banks in Singapore allow a fixed deposit of foreign currencies, with some accounts offering >5% interest p.a. (like the Australian Dollar), if I'm not wrong. Any reason for the discrepancy with interest rates of local currency F.D. accounts? Are there higher risks involved?
Also, if I deposit my money in foreign currency, I would derive my returns from two factors, yearly dividends and forex movements, am I right? I don't take economics in school; this I need to clarify for my own understanding.
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This young man here is a FT whom is being paid by our government using our hard-earned money.
On a side note, buying euros is probably a good idea.
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Originally posted by Evangel:
I started reading all the investment books i can find at 18. Started investing with real cash at 20.
I only start investing recently, and only in a unit trust
going to 25 le... Guess I'm 5 years too slow to realise things...
P.S. I don't count really local fixed D as investment, although it is one...
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Originally posted by eagle:
I only start investing recently, and only in a unit trust
going to 25 le... Guess I'm 5 years too slow to realise things...
P.S. I don't count really local fixed D as investment, although it is one...
With the kind of money I have, it's difficult for me to invest in stuffs, even those prudential/AIA stuffs.
With the coming NS liability, investing now would only leave me financially crippled in the future 2 years to come.
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I taught a lot of tuition during NS mah...
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Originally posted by RETARDED_MORON:
How about investing in foreign currency?
Many banks in Singapore allow a fixed deposit of foreign currencies, with some accounts offering >5% interest p.a. (like the Australian Dollar), if I'm not wrong. Any reason for the discrepancy with interest rates of local currency F.D. accounts? Are there higher risks involved?
Also, if I deposit my money in foreign currency, I would derive my returns from two factors, yearly dividends and forex movements, am I right? I don't take economics in school; this I need to clarify for my own understanding.
3 words: Foreign Exchange Risks.
The nominal value of your foreign deposit rises and falls in tanden with the prevailing forex rates. Assuming you deposit 1k in an aus F.D @ 10% p.a., if your lucky, you earn the 10% interest after one year and the additional gain in nominal value of your australian dollar if it appreciates. Do note that the reverse can easily be likely when the aus dollar depreciates and wipes out whatever interest that you have earned in that year.
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Originally posted by eagle:
I only start investing recently, and only in a unit trust
going to 25 le... Guess I'm 5 years too slow to realise things...
P.S. I don't count really local fixed D as investment, although it is one...
Fixed D are savings to me. With inflation going high at 7-10%, money loses in value little by little.
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Originally posted by shade343:
If I tell you I know of a Listed stock that pays 21% dividend yield, would you sell your india fund management plan and buy this? lol...Share share leh, i want to know.
21% in 1 year is omg! lol...
You can pm me if you feel that you cannot tell everyone. I'll look at its financials.
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Many people think that by investing in funds. You dont have to do research. This is very wrong!
In fact, most funds dont beat index funds who do no stock pickings. Even if their earnings par, you lose out on management fee which is 2-5% of your initial capital.
Looking at the market is important but researching on the fund manager is even more important.
Most importantly, do not lose money!
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When you invest, there is always a risk to lose the principal capital.
The below are some that you can consider for your age in order to able to purchase a studio apartment in years to come:
1) Bank Funds
2) Bank Investment Deposit ( Some banks offer good ones, check it out)
3) Currency account : to invest in different currency.
4) Land Banking : Check the company's portfolio
5) Wine investment : Check the company's portfolio
6) oilpod.com: Check the company's portfolio
7) POEMS ( Philip capital- you can manage your own or have them manage your account)
8) Private investment : This type you will need contacts to invest as the company usually deal in corporate level.
Hope that helps! Is just pure info for you, you have to check in detail before investing.
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the era is now in commodities and agriculture.. you buy silver or gold and hold 1 year can almost be said confirmed go up..
for the time being better perhaps you invest in commodity and agriculture sector.. buy futures contract on commodities that are dropped and still have lots of upside room
wine investment rather ok, can get 10~15% in 4 years holding
landbanking is just aint so good, you cant reap returns unless you sell your plots which may mean 15-20 years..
shares bonds unit trust are taking heavy beating now... depends on how people see them, it is a no brainer... either you invest now and leave it for 2 3 years or just avoid it outright and wait till bull run cycle comes back in 4 year or so..