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From Saving To Investing: How Young Singaporeans Can Transit From Being A Saver To An Investor

We cannot afford to grow our funds in a bank savings account at the current interest rate.


Investing for the future

This article was written in collaboration with DBS. All views expressed in this article are the independent opinion of DollarsAndSense.sg based on our research. DollarsAndSense.sg is not liable for any financial losses that may arise from any transactions and readers are encouraged to do their own due diligence. You can view our full editorial policy here.

According to Investopedia, Singaporeans are among the top 10 savers in the world. This probably comes as no surprise, since many of us are encouraged to save from a very young age by our parents.

Alongside us on our journey to build up our savings during our formative years was usually our first savings account with POSB. Growing up in Singapore, we may also remember seeing the bank come to our school, providing a workshop to inspire us to grow our savings and even giving us a $1 gift deposit when we first open our bank account.

While this was more than 25 years ago for me, I can still fondly recall the morning assembly in my primary school when the friendly squirrel mascot was on stage relating the values of squirreling away my money. I believe I opened my first savings account that day.

This savings habit would go on to serve all of us well as we grew up, and had increasing autonomy with our money – and ways to spend it.

Our Savings Habit Creates A Strong Foundation To Invest For Our Future

In our younger years, we were reliant on our parents to build up our savings. While going to school, many of our parents (at least mine did) would have given us excess pocket money – not to spoil us, but as an encouragement to save.

The $1 gift deposit on our first savings account with DBS/POSB may not have been much either. But, it played a role in kickstarting many of our savings habits. Personally, I still recall certain milestones growing up, seeing my bank balance grow from $1 to the first $50, and then to $100, and then to $1,000.

Going a step further, whenever my parents brought me to the bank to deposit my savings for the month – however mediocre it was – they always topped up the amount I had too. This provided my first taste of “earning a return”, whenever I had worked hard to save some money.

It would also be during these formative years that we start seeing another entry into our bank books – a very small amount of interest return paid by the bank. While we may not have thought much about it during our younger years, we cannot afford to let our savings compound at such a rate indefinitely because it lags behind the inflation rate in Singapore.

From Kickstarting Our Savings Habit To Offering A Globally-Diversified Investment Solution

By the time we started working, we would have heard of how our parents, other relatives or friends were investing – and how it can help us grow our wealth.

However, making the transition from becoming a saver to an investor at some point in our young adult lives is easier said than done. For a start, there is a good chance that the majority of us wouldn’t have the experience or expertise to invest on our own. In addition, many of us may not have much funds to start investing. Some of us would also have little interest in learning more – reasoning to ourselves that investing is too risky and complicated, and there are more fun ways to spend our time.

This is where the ready-made portfolios offered by DBS digiPortfolio become invaluable. Through the same trusted eco-system that we’re already building our savings, DBS digiPortfolio allows us to effortlessly transit into investing via the same platform. We can start investing via DBS digiPortfolio within 5 clicks, and under 5 minutes, on its digibank platform or digibank mobile app. This means there’s no need to do extensive research on the service providers, download new investment apps or remember new passwords.

If we are new to investing and unsure of how to get started, we can simply dip our feet into the investing world with DBS digiPortfolio by starting with an investment of just S$1,000.

Regardless of how much (or little) knowledge we have or money we are investing, we also enjoy the same access to professional advice. Our money will be managed by a team of DBS investment portfolio managers, aligning the portfolio with the Chief Investment Office’s views. With this, retail investors like you and I can sleep a little easier knowing that our investments are being looked after by a professional team that was previously only available to DBS’ private banking clients.

This team has created two broadly diversified portfolios – the Asia Portfolio and the Global Portfolio – that spread our investments across companies, geographies and industries. This way our investment portfolio remains resilient even if a market or industry faces massive headwinds.

DBS digiPortfolio (Global Portfolio and Asian Portfolio)

Source: DBS digiPortfolio

On our behalf, DBS investment portfolio managers also monitor and evaluate the market outlook for our portfolio. Technology is utilised to effectively automate the process of rebalancing our portfolio on a quarterly basis – ensuring it’s done efficiently and at scale for all customers. The views of the Chief Investment Office will also be incorporated in these rebalancing exercises.

We should also pay close attention to the management fees involved. For the benefit of enjoying the security, expertise and convenience of investing via DBS digiPortfolio, we pay a competitive and transparent all-in annual management fee of 0.75%. This translates to a management fee of $7.50 for a portfolio worth $1,000. There are no other fees that need to be paid.

Read Also: Pros And Cons Of Investing Through The DBS digiPortfolio

A Great Stepping Stone To Start Investing On Our Own

At some point growing up in Singapore, we would have been reminded that “money doesn’t grow on trees”. The message was clear – an equal part of encouragement and to berate us to use our money more wisely.

As we evolve from being financially dependent on our family for our living expenses to earning an income,  and even having dependents of our own, we would start appreciating the need to secure our financial well-being.

While it’s obvious that money does not grow on trees, it can grow – when invested. However, many of us procrastinate starting our investment journey when we are young and have a long window to ride the ups and downs of market cycles over decades.

Even if we do not have the time, knowledge or expertise to start investing, we can rely on the familiar eco-system of DBS digiPortfolio to kickstart our journey. The DBS digiPortfolio product is built such that we do not need to have much knowledge, time or expertise to enter the market. We can simply invest $1,000 at regular intervals that suit us – regardless of whether it is monthly, quarterly or any other time period. This will give us the average return over the long-term – which, historically, far outpaces the low interest rates that we earn on savings in our savings accounts.

Learning to invest via a ready-made portfolio managed by a team of professionals allows us to gain a deeper understanding of the investing world. Knowing our investments are curated by a specialist DBS Investment Team, and aligned to its Chief Investment Office before rebalancing, also gives us the confidence to continue investing regardless of what is happening in the global economy.

As we gain a better understanding, we can also choose to start managing a smaller portion of our portfolio on our own. For example, we can choose the industries (via ETFs) or even individual stocks that we think would do well through DBS Vickers – the bank’s stock brokerage account or via its Regular Savings Plans (RSP) or unit trusts. Of course, we can do so while also continuing to invest in a professionally-managed and broadly diversified portfolio for our long-term goals with DBS digiPortfolio.

Read Also: Invest On The Go: 5 Things To Trade On The Financial Market Through The Newly Revamped DBS Vickers App