How should young people
start investing in Singapore?

By Hanna Tantoco | The CONNECT Blog

Dec 05
before you start investing

You probably hear people telling you to start investing today. Am I right? But if you aren’t financially stable yet, how would you even start? Or where do you even begin?

1. Before you invest, save and set Goals!

Having goals compels you to save with a purpose. Remember the time you wanted to buy something so badly and you patiently saved up for weeks to get it?

For short term goals:

  1. Car down payment
  2. Vacation

For long term goals:

  1. Future house
  2. Wedding funds
  3. Retirement

Keep your eye on the prize

When you’re young, it’s hard to set your eyes on a retirement goal that’s 30, 40, 50 years away, but an investor’s best asset is time.

If you understand why saving and investing for the future is important, it’ll be easier for you to get started.

Starting early provides your investments extended years of compounding. It’s a similar concept to putting your savings in a bank, however with investments, your returns tend to be higher over a longer period of time.

The “I’ll start tomorrow” mentality only delays you from achieving your goal.

2. So, how do you start investing? First, spend lesser than you earn

Before you start any investing, you should have some reserved cash to spare. This helps you relieve yourself from immediate financial pressure.

Here are some steps you can start with:

checklist before you start investing

1. Make a list of all your fixed expenses (i.e. things you can’t escape from like, phone bills, insurance payments, transport)

2. Understand what makes up the bulk of your spending on entertainment, convenience (like taking a taxi), and shopping.

3. Now,  try taking on some simple budget games with a friend, family member or a partner:

saving with your partner

  • Who takes fewer cabs or shared rides during the week
  • Not buying new clothes for a whole month
  • Cutting down on atas coffee
  • Preparing and cooking food instead of eating out

4. Set aside $1,000-2,000 as an emergency fund.

5. Pay all your debts, writing them all down in a budget app. If they are fixed payments over a period, note it down too.

  • Your phone bills
  • Monthly insurance bills
  • Transport fees

6. Lastly, grow your emergency fund to give you 3-6 months salary for a buffer.

This way, you free yourself from any financial stress or burden that could weigh you down while you start your investment journey.

3. Start growing your money

growing your money

After you’ve got yourself covered against your liabilities, time to start growing your money. This helps you to put more money into your pocket each month instead of taking it out.

  1. Start investing with 10% of your income. Even if it’s a small amount, 10% won't be too painful.
  2. Open an investment account that is low-cost, transparent and easy to operate – robo advisers are ideal to help get you started.
  3. Once you have put your money into an investment account try to think of it as untouchable.
  4. Stick to a fixed budget or percentage you will invest every month, quarter or yearly. This allows you to average your investments over a long period of time.

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One Wallich Street
#24-05 Guoco Tower
Singapore 078881

Regulated by Monetary Authority of Singapore (MAS)

Integrated with MyInfo for seamless account opening

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