Investment Products That Don’t Require Spending a Fortune

When you’re in your twenties, you’ve probably already realized that more and more of your friends are looking into investment and its assets. For instance, one of the more popular investment choices is to trade cryptocurrencies, and its no surprise to find that these individuals have yet to invest in their very first stock. As it is commonly said, the higher the risk, the higher the returns. However, not everyone can afford to invest their hard-earned money so easily; oftentimes there’s a lot of risks involved. Its no wonder that many others choose not to invest in investment products for fear of something unfortunate happening.

Though, it’s not to say that we shouldn’t invest just because we’d like to play it safe; if you’re able to invest in the right things, you’ll actually yield some reasonably decent side-income from the returns of your investment. That being said, instead of you having to scour around the internet for the best investment products, read on to find out more how you can begin your investment journey with just $1,000 or even lesser — it’s your turn to enjoy the benefits of being an investor without having to put so much of your money on the line!

What Can You Do With $1,000?

$1,000 is actually just nice for someone to start investing, and you won’t be limited to just having one particular asset. Singapore’s cost of living may be expensive but don’t let blind you from realizing that there are affordable investment choices for you to start off with. Here are seven types of investment products you can look into, check them out below!

1. Singapore Savings Bonds

To invest in Singapore Saving Bonds, you’ll need a minimum of $500. Issued by Singapore’s government, you’ll enjoy loads of benefits like having zero penalties for having an early redemption and can rest assured knowing that it receives a “AAA” credit rating since it is backed by the Singapore Government after all. When you invest in Singapore Saving Bonds, you’ll enjoy good liquidity, low barriers to investment and the returns are at least more than 1% per annum — comparatively, this beats having your Savings Account in the bank that barely yields you returns above 1%.

2. Robo-Advisors

Robo-advisors makes it easier for beginner investors to start investing because you just need is just $100. You can choose to invest through Autowealth, Stashaway or via Smartly, all of which are the three main powerhouses for Robo-advisory in Singapore. Robo-advisors are run by reliable algorithms and models instead of using fund managers, and this helps to lower management costs from 3% to less than 1%. Plus, when you invest in Robo-advisors, you’ll enjoy diversification because of how your investments will be placed into a basket of the Global Exchange Traded Funds (ETFs).

3. Straits Time Index ETF (STI ETF)

In 2017, STI’s returns were approximately 22% and this exceeded MSCI’s World Index of returns by 8.3%, being extremely outstanding for investment returns. For newbies to the world of investment, you can opt for the Regular Savings Plan because the minimum sum starts as low as $100 each month. Investing in STI ETF allows you to invest in a blend of Singapore’s top 30 companies; you’ll be placing your money in good hands given that these companies have a notable regional presence and are likely to thrive with their foothold in their industries.

4. Blue Chips

Blue Chip Stocks is also part of the Regular Saving Plan, just that it is in stocks. This is offered by institutions like OCBC, Maybank and Phillip Capital. It allows individuals to input a fixed sum of money each month and in turn, investors will use the money wisely with the strategic dollar-cost averaging. Dollar-cost averaging helps investors buy greater shares when the prices are low, and consequently lesser shares when the prices are higher. Not only does it take up less time to monitor the market system, but it also requires much less starting capital for investment to take place and it forces one to save regularly and conscientiously too!

5. ABF Government Bond

Another investment product under the Regular Savings Plan is the ABF Government Bond. You only need $100 to start investing and you won’t have to worry about it being a risky investment; the ABF Government Bond also invests in the Singapore government bonds, so you’ll feel secure knowing that your investments are with a certified “AAA” credibility. To top things off, the ABF Singapore Bond Index Fund usually has higher returns than the 12-months fixed deposit rates.

6. Money Market Funds

The Money Market Funds is not a common choice amongst Singaporean investors. However, it’s portfolio is not to be underestimated; it consists of short-term securities that provide clients with high quality, efficient monetary instruments, and liquid debt. If you’re just starting out on your investment journey and you don’t want to start playing with high-risk investment products, you’ll be glad to know that investing in their funds is low-risk and low-returns — you won’t have to worry too much!

7. P2P Lending

It’s a lending platform that involves MoolahSense, Funding Societies, and Capital Match. It provides its investors with a decent diversification because they’ve got a variety of companies to choose from and invest in. Furthermore, with just $100 per loan for each investment, you’ll easily get monthly returns after the interest is returned to your investors — pretty neat, right?

Key Pointers To Note:

So, how should you portion your monthly salary such that you’ll have enough for your savings, expenses and wealth? Taking into account the Central Provident Fund (CPF) contributions, you’ll be left with a portion of your salary that you get to take home. Within this, you should follow the golden rule of 50/30/20. Keep 20% of your take-home salary for your savings, leave 50% for your monthly expenses and the rest will go to your wealth plans. The remaining 30% dedicated to wealth will be used for investment purposes. Finally, before you jump the gun and start investing, bear in mind the Age Vs Risk Profile formula. To determine the percentage of the portfolio that can be in the risky assets zone, simply take (110 – Your age). This will help you decide how you can get 90% of an investment’s return because it helps you apportion your asset allocation cautiously. Investment isn’t just about having good judgment and being able to study the market properly; you also need to know how to effectively allocate your assets too. 

Investment isn’t for everyone, but don’t let that deter you from trying your hand at investing in financial products. While it is true that the learning curve can be steep, the investment can yield favorable returns and act as a way for you to gain a decent side income — plus, it doesn’t take much to start investing, so wait no longer and begin your investment journey today! 


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