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From Savings to Investments: How I Got Started on My Investment Journey in Singapore

As a young adult in Singapore, it is essential to start investing early to make your money work for you and build your wealth over time. However, investing can be daunting, especially if you don’t know where to start. 

When I first started investing in Singapore, I was overwhelmed with the number of options available. I wasn’t sure which investment products were the right ones for me and where to start. However, I realised that I needed to take a step back and do some research before making any investment decisions.

 In this blog post, I’ll share my personal story of how I got started on my investment journey in Singapore and provide some tips on how you can get started too.

How I Got Started Investing

I started my investment journey in Singapore by setting a savings plan. I put aside a portion of my monthly income into a savings account, which I used to build an emergency fund. This helped me to develop the habit of saving and to avoid dipping into my investments for unexpected expenses. Ideally, you would want to have at least three to six months worth of living expenses in your emergency fund.

Once I had enough savings, I began researching investment options. I spent a lot of time researching different investment options available in Singapore, including stocks, bonds, and mutual funds. I learned about the importance of asset allocation and diversification, and how these strategies can help to minimise risk and maximise returns.

For example, I learned that investing in a single stock could be risky because if that company performs poorly, the value of the stock could drop significantly. However, if you invest in a range of different stocks or mutual funds, the risk is spread out, and you can still achieve good returns even if one of your investments performs poorly.

After researching my options, I made my first investment in a low-cost exchange-traded fund (ETF). I chose this investment because it aligned with my investment goals and was a simple way to start building a diversified investment portfolio. The index fund I invested in was designed to track the performance of a specific market index, such as the Straits Times Index (STI) or the Standard & Poor’s 500 (S&P 500).

Achieving Investment Goals

Once I had started investing, I realised that it was important to continually educate myself on investing strategies and market trends. I regularly read investment blogs and watch finance YouTubers to stay up-to-date on the latest news and trends. Some of the popular YouTubers I watched are Kelvin Learns Investing and Adam Khoo.

For example, I learned about the importance of staying invested over the long-term, even when the market is volatile. By staying invested, I was able to ride out market fluctuations and achieve consistent returns over the long-term. I also learned about the importance of rebalancing my portfolio regularly to ensure that my asset allocation remained aligned with my investment goals.

I also made regular contributions to my investment portfolio. Based on the 50/30/20 budgeting rule, I invest a portion of my income into my investment account. This allowed me to take advantage of the power of compounding, which helped my investments to grow over time.

For example, if you invest $100 per month in an investment that earns an average annual return of 5%, your investment would be worth approximately $31,000 after 20 years. However, if you increase your monthly investment to $200, your investment would be worth approximately $62,000 after 20 years, due to the power of compounding.

I also made sure to diversify my investment portfolio by investing in a range of different assets, including stocks, bonds, and alternative investments. This helped me to spread my risk and achieve more consistent returns.

For example, I invested in a mix of stocks and bonds to balance out the risk and return of my portfolio. I also invested in alternative investments such as real estate investment trusts (REITs) and exchange-traded funds (ETFs), which provided me with exposure to different markets and sectors.

Lessons Learned Along the Way

Along the way, I learned that investing requires patience and discipline. It’s important to stay committed to your investment goals, even when the market is volatile or you experience a temporary setback. I also learned the importance of regularly reviewing and adjusting my investment strategy to ensure it remained aligned with my goals.

Another lesson I learned is the importance of being mindful of investment fees. Investing in low-cost index funds or exchange-traded funds can be a good way to keep investment costs low and maximise returns. If I could redo my whole investment journey, I would probably avoid stock picking and focus on ETFs to build up my portfolio. 

Starting on an investment journey can be intimidating, but it’s an important step towards achieving financial security and independence. By setting a savings plan, researching investment options, and continually educating yourself on investment strategies, you can build a diversified investment portfolio that aligns with your goals.

It’s important to stay patient, disciplined, and committed to your investment goals, even when the market is volatile or you experience setbacks. Regularly reviewing and adjusting your investment strategy, diversifying your portfolio, and being mindful of investment fees can also help you to achieve more consistent returns over the long-term.

Remember, investing is a long-term game, and it’s never too early (or too late) to start building your investment portfolio. With the right mindset and strategies, you can achieve your investment goals and secure your financial future.

Eugene Chai

Eugene Chai is a seasoned financial expert with over 4 years of experience. His work has graced the pages of prominent Singapore Investment sites. He has also been featured on Channel News Asia - Money Talks. With a passion for simplifying complex financial concepts, he empowers individuals to make informed decisions about their money. Whether it's investment strategies, personal finance, or market trends, Eugene's insights are a beacon of clarity in the world of finance.

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