I found your blog over the past week, and I have been looking your posts when I have the time.

I don’t want to be a slave to my job when I am in my late 40s or 50s. I know that being an average salaried employee, it is quite difficult to ever be financially free.

Some facts about me:

  • Working since 2013, earning $5.7k a month
  • Save about $900/month in cash
  • Invest $300/month in STI ETF (I read blogs for beginner investors that said STI ETF is a low risk, simple, long-term investment that seemed to be ideal for young investors without much capital)

I have just bought a 3-room BTO for my mum and myself. Hence, I have emptied out my OA for the house payment and spent my cash savings for renovation. In a way, I am starting over from scratch again, with $0 in CPF OA and very little in cash savings.

I understand that since my loan interest rate is much higher than the OA interest rate of 2.5%, I should look to repay the loan as soon as possible (assuming I don’t refinance with a bank loan).

(Parts of the email omitted.)


What you do depends on what you want to achieve but what you do should also depend on the resources available and your ability to stomach volatility and some risk.

Investing through an STI ETF is good for someone who does not have the inclination nor time to research into specific stocks. It is a long-term strategy that should yield decent results over a 20 to 30-year period. This is your exposure to the local stock market.

You can think of the CPF as your exposure to an investment-grade sovereign bond. In this respect, you might want to use less of your CPF money for housing loan repayment and use more cash instead.

This will give you better returns than leaving your savings in the bank right away. Remember, this is a long-term savings tool and you won’t be able to access the money till you are 55 and, later, 65.

Of course, please ensure that you have an emergency fund first. How big should it be?

Also, you want to be adequately insured because you have to take care of your mum. I would suggest buying a term life insurance for yourself.

We don’t need some magic formula or complicated strategies to be more financially secure in Singapore.

Of course, if you decide to become an active investor or trader, you could make more money but you should know if you have the temperament for this. That is all I will say. :)

This article originally appeared on AK’s blog.

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