Basics of investing as a Singaporean

investing-sg.md

Quickstart to investing as a Singaporean

1. Put aside 6 * monthly spend as your emergency fund. Keep as cash in your high-yield savings account with a bank, or in things that can be quickly converted to cash such as money-market funds. This piggy bank will keep you alive in emergencies such as unforseen retrenchments.

2. Get term hospitalisation/critical illness and/or MediShield. DO NOT INVEST USING INSURANCE IT'S A SCAM

3. Decide on your goals (eg, HDB in 5 years, early retirement in 10). This is the hard part and determines how much you save and invest and your asset allocation.

4. Find your investing ratio. Monthly salary - monthly expenses - some fun money. Eg, if you earn $1000, spend $300 on food and bills, and spend $200 on gacha, you can invest $500 (50%) of your monthly income.

5. Sign up for a low-cost brokerage that doesn't charge fees based on how much you have. As a noob, choose a cash account over a margin account, and pick one that allows for PayNow transfers. Interactive Brokers Singapore comes highly recommended and lets you sign up with Singpass. DO NOT USE expensive robos and high-fee brokerages.

6. Fund your account with your monthly investing money. Some brokers let you automate this.

7. With your investing money, put it into these suggested assets according to a ratio you decide on your brokerage of choice. Feel free to find other options that serve the same purpose of diversifying across assets and geographies.

   • Equity/Stocks

     • VWRA on London Stock Exchange: if you buy an index exchange-traded fund like VWRA you're basically buying almost the entire market
     • G3B or ES3 on Singapore Stock Exchange: not strictly needed since VWRA already covers Singapore stock

   • Local bonds

     • CPF SA/MA (some people use CPF as part of this bond component)
     • A35 on Singapore Stock Exchange if you want more

   More stock over bonds = more risk, more volatility, more returns. Bank fixed deposits generally return less money. Singapore has no capital gains or estate tax. The recommendation here is called a Bogleheads-style allocation. A general guideline is to put (120 - your age in years) into equity/stocks. Toto is not an asset; it is legalised copium. It's best to keep a small portion of actual bonds as this give you the liquidity to rebalance when either component gets too high or low.

8. That's it. Don't get suckered into collecting more assets like collecting Pokemon. Go touch grass with your remaining time and money.

As always, do your own due dilligence. This doc should contain enough pointers for you to do your own research. If you have short term (<5 years) goals put more money into bonds/money-market funds.

Traps and other advanced ways to lose money

The world is a harsh place and there are hordes of smarter people out there looking to grab your hard-earned money. Anything that guarantees returns significantly more than what bonds are offering IS A SCAM.

• DO NOT buy crypto
• DO NOT buy actively traded funds
• DO NOT buy meme stocks
• DO NOT buy ILP or insurance for investment
• DO NOT buy gold
• DO NOT buy foreign currency
• DO NOT buy REITs
• DO NOT buy options
• DO NOT time the market
• DO NOT FOMO and sell when the market dips 1%
• DO NOT transfer all your OA to SA
• DO NOT collect 10 credit cards to minmax miles
• DO NOT max out your home loan with the intention to flip property, or flipping in general
• DO NOT invest on margin
• DO NOT buy leveraged ETFs
• DO NOT buy US ETFs (QQQ, VOO)
• DO NOT buy US stocks for dividends
• DO NOT buy unit trusts over ETFs
• DO NOT buy structured products or structured notes
• DO NOT go to casinos ($1 Toto quick pick will satisify your human need for hope)

unless you're regarded and know what you're doing.

Advanced optimisation tips

• CPF investment scheme
• CPF SRS and topups for tax relief
• SSB

(this is a quick doc for some people I know)