Use all the tools out there to manage your wealth – don’t just think of stocks and foreign exchange!
Over lunch, one of our DollarsAndSense team member had a conversation with an analyst, Evelyn (not her real name) from one of the largest credit rating agencies around.
Marcus: I’m sure you’ve some awesome wealth tips. Any advice for people like me who have just started working?
Evelyn: To be honest, I do not really keep track nor have any specific wealth preservation methods. I just passively buy into the Singapore Straits Times Index (STI) on a monthly basis.
Marcus: Oh, that’s a good way of preserving wealth what, no?
Evelyn: Yeah, you could say that. But my goal is to just beat inflation. I don’t need to be a multi-millionaire from my investments.
Marcus: Huh? You just want to beat inflation and you’re investing in the STI? Isn’t the risk that you’re taking slightly excessive?
Evelyn: Yeah, but I do not specifically know any products that would suit my preference. It is tiresome to do research on those things after a day’s work as well.
The topic then changed to where lunch should be the next day as Raffles Place is filled with good food, but with a hefty price.
This conversation got us thinking, that even some finance professionals do not understand the instruments are most suited to their individual financial planning. We can only wonder how the non-finance savvy individuals fare.
Hence, the team decided to do a little research on financial instruments that are easily and readily accessible to Singaporeans. To our amazement, there is an abundance of tools available at our fingertips. Most of us just ignore them.
What are available in Singapore?
Using United Overseas Bank’s (UOB) website because it offers one of the simplest snapshot of what’s available to Singaporeans.
|1||Singapore Government Securities||Conservative||Yes|
|2||CPF Investment & SRS Account||Conservative||Yes|
|4||Gold & Silver Savings Account||Conservative||Average|
|5||Bonds||Conservative to Aggressive||No|
|6||Unit Trust||Conservative to Aggressive||No|
|7||Foreign Currency (FX) Margin Trading||Moderate to Aggressive||No|
From the above table, we arrived that there are at least 10 other types of instruments other than equities (securities trading) that are easily and readily available.
Adding to your normal savings and fixed deposit accounts, these instruments are enough to ensure that an average Singaporean will achieve better financial planning and goals in the future.
Equity investing has stolen the limelight, as multiple successful stories on that are widely publicized. The likes of George Soros, Warren Buffet, Jim Rogers and many other successful investors have made a fortune from putting money into equities and foreign exchange. Unlike these people who have great insight and foresight, most of us average Singaporeans are unable to react and leverage the market as efficiently.
Rather than thinking of making it big in equities, which requires you to monitor and understand the companies you are buying into, managing your current wealth with simpler tools would be a better solution. With discipline and a full understanding of what you need, you get closer to being a millionaire than if you relied solely on equities which are highly volatile.
DollarsAndSense intends to launch a series of articles with regards to the above 11 tools that are available to Singaporeans. Hence, if you have any queries on any of the above tools, feel free to drop us a comment at the end of this article or Facebook message us.
Don’t worry; we aren’t representatives from any banks or companies trying to sell you any products. We just hope to increase the financial literacy of our fellow countrymen. And we thought a good way would be to introduce products that are easily available and quite simple to understand.
SingSaver - Battle Of The Cards. Apply for your favourite miles, cashback and rewards card today!
From now till 9 June, you can participate in SingSaver’s Battle of Cards campaign. To participate, all you need to do is to apply (via SingSaver) for any of these credit cards during this period (you can apply for more than one).
Battle Of Cards (Best Miles Cards)
Citi PremierMiles Visa Card: $200 NTUC Voucher/Grab Code (new customers only) or $30 vouchers (existing customers)
UOB PRVI Miles Visa Card: $50 cash gift (new customers and existing customers)
Standard Chartered Visa Infinite: $100 cash gift (new customers only) or $50 cash gift (existing customers)