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17 Singapore Investment Options That Will Grow Your Money NOW(Step-by-Step!)

Singapore Investment

Tuesday, 12 April 2016

I think you'll agree with me on this.

​People who succeed with money do two things very well:

​First, they have accumulated large capital either by saving or making a lot.

​Second, they put 100% of their effort on improving their financial knowledge and activity that grows their wealth.

They know what financial capital is and how the magic of compounding can grow their wealth like a bean sprout over time.

​They also know human capital depreciates and financial capital appreciates as they aged. Hence, by tapping on the right capital at different stages of life is a smart move.

And best, they even know there are plenty of Singapore investment options out on the street which the general public know nuts about.

Alright, I'm not here to talk. I'm here to show.​

Here are what I have for you: 17 Singapore Investment options showing you the benefits of each investment plus a highly actionable step-by-step's guide.

But before that:

Whatever you read & learn from here.

Please do NOT take immediate action.

Do your own diligent.

(My facts and data could be wrong even I have triple checked it.)

Thrive Leads Shortcode could not be rendered, please check it in Thrive Leads Section!

​1. Invest in Strait Time Index (STI ETF)

Do you want to invest in just one stock that makes you a part-owner of the 30 largest companies in Singapore?

I know you do and that stock (unit) is: STI ETF

Two things you need to know:

#1. STI is known as Strait Time Index. It tracks the performance of the general stocks market by holding a basket of Singapore’s top 30 largest companies by market capitalization.

#2. ETF is known as Exchange-Traded Fund. It's what makes it possible for us to invest in the market index. The fund is created to replicate the performance of STI.  And it is traded on the stock exchange just like ordinary shares. Hence it is called Exchange-Traded Fund.​

This differs from the unit trust you are normally exposed to which is commonly promoted by financial advisers. As such funds (unit trusts) are not traded on a stock exchange.

Why STI ETF?

By investing STI ETF, it is as though you are investing in the economy of Singapore. Why? Because those are typically the kind of companies that contribute to our nation’s GDP! They are not normal companies but big corporations.

Corporations that can affect the inflation rate of the country by rising prices on their goods and services. We know what inflation is and how it reduces our purchasing power. What you can buy with $100 since 10 years ago is less than what it is today. Your standard annual salary increment is not a pay raise that you get for 12 months of work but rather a made up of your dollar value's loss as a result of inflation.

​What causes the inflation? Supply and demand. Supply of goods and services produced by the huge corporations and the demand of consumers. People like you and me, and the foreign talents that build wealth to our nation. Increasing population coupled with the influx of foreign labor means the demand for goods and services will increase continuously, so is the rate of our inflation.

Investing in STI ETF meant being a part-owner of the companies that produce the supply. When the demand is high, corporations are able produce more to meet the increasing demand and hence generate higher revenue for the investors. You benefit from rising share prices.​

When markets face with worldwide shortage of supply with increasing demand. Corporations are able to charge higher prices as the unmet demands are willing to pay more. Hence, generate higher profitability. You benefit from the rising share prices.​

On inflation, corporations are able to pass down the cost to the consumer by charging at higher prices of their economic output therefore without undermining their profit margin. You as an investor benefit from owning businesses that affect the inflation.​

So who holds the short end of the stick if both corporations and investors do not “suffer?”​

Well, as you might have guessed. The people do not invest and put their money on a deposit that earns meager interest rate that can't even make up for the erosion of dollar's value that inflation brings.​

Now what makes me so sure that STI will increase and investors will nearly always make money over the long term?

The answer is a simple one, which is there is a fundamental reason to it. That's the increasing population’s growth of our sunny island. White paper aims to bring us to a 6.9 million population’s nation, not 3.9 million.

Growing population means growing consumption which leads to higher revenue for corporations who produce them.​

So who produces them? That's right! BIG corporations in the Strait Time Index.

This is come SPDR on their performance page.

The 10 years annualized STI ETF returns was 5-6%. It used to be higher but was dragged down by the recent plunge.

SPDR performance page.

Before you decide to invest, a good rule of thumb is to be willing to take a 50% drawdown of your investment value within 1 - 2 years' period in the event of a market crash.

What you should expect for a good time horizon for stock investment is somewhere between 5 - 10 years of holding period.

With that in mind, here's how to invest STI ETF:

How To Buy STI ETF? 


Step #1: Open A Stock Brokerage A/C & CDP

I'm using SCB and I recommend it due to it being the lowest commission fee in Singapore.

How To Open A SCB Brokerage Account

Official Site:  SCB Online Equities Trading

Requirement:

- You need to open an Esaving account with min. deposit of $1,000

- They might require you to do a CAR:

Application process:

1. Bring $1,000 cash with you and head down to one of the standard chartered's branches.

2. Once there, tell the receptionist "I want to open a securities trading account."

3. Get your queue number... once your turn is up, they will get you to fill up the application form to open both SCB E$saver A/C and brokerage A/C. The representative will ask for the cash $1,000 to open the savings accounts.

4. He/she might ask you to do a CAR(Pro tip: fill in the right things and will get the right results)

​5. If they ask whether you want to open oversea a/c, just say "yes" as there is no extra charge and you'll never know when you need it. Hence, avoid the hassle of going down in you need it in future.

​6. Wait for letter of confirmation letter and you are ready to invest!

NOTE: Only for SCB we do not need to have a CDP A/C as SCB will be the custodian of your shares. 

Step #2: Choose an ETF Provider: Nikko or SPDR

Source: STI ETF The comprehensive guide - BigFatPurse

SPDR is a far better option. Here are why:

  • Larger AUM, hence more liquidity
  • Lower management fee because of its larger AUM
  • More reputable
  • Lower tracking error i.e more accurately replicating the performance of the Strait Time Index.

Step #3: Login to your SCB account and transfer the balance from Saving a/c to trading a/c

Enter your username & Password:

For the first-time user, your trading account is zero. Hence, you'll have to transfer the balance from your saving account to trading account.

Click "transfer Between Own Accounts":

Select "E$saver A/C", and make sure the amount to be transferred is to "Securities Settlement account SGD":

Lastly, enter the amount you want to transfer, then hit "next" once you are done!

Step #4: Head over to SCB Online Trading platform and submit your order

Hit "Online Trading":

Then click "Place a trade":

The SPDR STI ETF code is "ES3", enter it and then fill up the quantity and price. 

Once done, hit "next":

You will receive a SMS confirmation once your order is filled.

STI ETF Investing Strategy

(Lump Sum Vs Dollar Cost Averaging)

"Should I invest in lump sum or in parts-by-parts?"

According to the Vanguard's study, lump sum investing works 2/3rd of the time. As prices tend to rise most of the time and crashes don't often last long (1 - 2 years) enough for investors to leverage on the lower prices.

For investors who want to maximize its returns. He / She should consider lump sum investing.

2. Use Share Builder Plan To Automate Your Stock Investment

Do you want the above returns but not the above hassle?

Or tell me is there any of the following statements that sound familiar to you:

"I don't have time, because I want to watch ‘Descendants of the Sun.’”

"I just started out working, my capital is small, how do I invest?"

"I'm planning for my children’s university fund for the future."

“I'm too tired after work and weekends are for leisure and family’s time.”

"I have a life."

Then let me introduce you: Share Builder Plan

This investment plan allows you to build a portfolio of Blue Chips Stocks with as little as $100 per month:

(It's completely hassle-free and the initial set up is quicker than you can finish saying the word: Cute Cat!)

So what exactly is SBP?

SBP is a GIRO arranged fixed dollar amount monthly investment plan that uses an investing method called Dollar Cost Averaging. By investing a fixed dollar amount monthly in STI ETF, means you will be buying more shares when prices are moving down and less when prices are moving up.

This removes the anxiety of hoping to buy at the best price and guessing the direction of the market, as Dollar Cost Averaging would averaged out your investment cost.

Anyway, why bother about picking the right stocks or getting the timing right where the average investors have shown to under-perform against the market index over long run?

Today, we have 4 Share Builder Plans providers in Singapore:

POSB vs OCBC vs POEMS vs Maybank Kim Eng: Which Regular Savings Plan Should You Choose? — By MoneySmart

Which One Should You Choose?

Take note that you are not buying STI ETF directly, rather through a Share Builder Plan. Which means the investment plan will own the ETF on your behalf. 

So you have to consider the investment cost as it will eat into your returns in the form of lower dividends ( cost is deducted from your dividend). 

Quick Solution:​

For cost effectiveness, choose POSB or Maybank if your monthly investment amount is less than $500.

And, choose OCBC or POEMS if your monthly amount is $500 or more.

On note of that, POSB allows only full redemption whereas the rest allow for partial redemption. Thanks to a reader who pointed out and had personally done a partial withdrawal. So POSB allows for partial redemption:

Site: 10. How do I redeem my holdings in POSB Invest Saver?

Throughout the 4 providers, POEMS is the only one that has the option to opt for dividend reinvestment. Whereas for the rest of the providers, dividends are credited to your designated bank accounts.

Note: Based what I gathered on POSB ​Invest-Saver. It does not allow dividend re-investment even though there seems to have an option in the online platform:

And GMGH:

How To Set Up Share Builder Plan Via Online


I will use POSB as an example:

Step: 1 Login to your online savings account

Step 2: Head over to More Investment Services

Step 3: Click "Set Up Exchange Traded Fund..."

Step 4: Select your Account and fund name: NIKKO STI ETF

You must tick the 3 "links" as I highlighted if not the error will pop out when you press "next"

Confirm your detail is correct, then click submit

And you are done!

​3. Gold Investment

Everyone knows what inflation is (even the donkey in my backyard knows), and that's the general increase in prices of goods and services.

As I have covered above, a large part of it is explained by the law of supply and demand. However, this considers one part of the equation that is goods and services, but misses out the other side of the equation.

Want to make a guess?

Answer: the value of money.

Prices can raise NOT because of the general increase in prices of goods and services as explained by supply and demand, but because of the decrease in the value of paper money. Consequently you need to pay more money to exchange for the same amount of goods and services as the value of your money depreciates.

​A quick history lesson: In the past, every dollar created was backed up by a fixed quantity of gold. Money was then seen as the ownership of gold that was stored in the country’s reserve. The value of money was tied to the value of gold. People and corporations used money in exchange for goods and services. No one would doubt the value of money since each dollar created has to be backed up by gold in the reserve. This era was known as the “Gold standard.”

In August 15, 1971 president Nixon of the U.S ended the gold system and since then entered into our present fiat dollar system.

This is where money is not backed up by any tangible unit but mere market confidence alone. The confidence that the value of money would not deviate much from its actual dollar amount when buyers and sellers make transactions. This is all good so long the authority does not abuse the system by artificially producing money out of thin air with the effort of passing a bill.

But as we know, the rest is history. Money has been created furiously by leading nations to stimulate their economy.

When markets lose confidence in the value of money. It will look for an alternative. And it happens to be gold. Why gold? Because it was used in the past during the gold standard so why not in the future? In addition to that, gold was also commonly used as an medium of exchange throughout the history of many countries.

Hence the natural tendency of humans is to believe that gold might be the money of the future. That’s what made the price of gold rises whenever a policy is passed that would depreciate the value of dollar.

Buying gold is to hedge against the loss of confidence in paper money and believe gold is a better representative than the printed notes itself. Some put it “Gold is an universally accepted currency.” But I wonder what would the response be if I head down to a car dealer and ask “Can I pay by gold?”

Perhaps pointing the direction of the nearest gold exchange is a kind gesture of response.​

You: “But wait… What you are explaining is in the perspective of USD and not SGD. We didn't have a gold standard. We didn't print money to artificially stimulate the economy and the bulk of our money is in SGD, but why are people buying gold for investment in Singapore?”

GV: Monkeyism​

4 Common Ways To Buy Gold In Singapore: Physical, ETF, Certificate & Savings

#1: Physical gold --> Gold Bar and Gold Coin

Gold Bar, prices are taken from UOB Gold Price:

ARGOR CAST BAR

11 March 2016 - Price 5654.00

CAST BARS11 March 2016 - 56,051.00

PAMP GOLD BARS11 March 2016 - 1800.00

Gold coin, prices are taken from Bullion Star:

Canadian Gold Maple

1 troy oz (31.1 gram) - 2016 SGD 1,787.48

Canadian Gold Double Maple 2007

1 oz1 troy oz (31.1 gram) - 2007 SGD 2,033.59

Australian Kangaroo Nugget

25 gram (0.804 troy oz) - 2016 SGD 1,622.23


American Gold Buffalo

1 troy oz (31.1 gram) - Various Years SGD 1,814.48

Enter your text here...

1 troy oz (31.1 gram) - 2016 SGD 1,808.48

And more over here.

How To Buy physical GOLD


Option #1: UOB Headquarter. Head down to Gold Department at UOB Main Branch and tell the counter you want to buy gold.

The daily price is listed here:

Option #2: Bullionstar though online order:

There are three delivery method: 1. Pick up, 2. Courier and store in their Vault Storage(click here for more info)

Giraffe's Tip:

UOB Gold prices are sightly higher than BullionStar but it comes the benefit of a tighter spread.

Do not tear the seal when you bought physical gold as it might be one of their criteria for resales.

Additional readings:

How I Buy Physical Gold In Singapore By 15WW

#2 Gold Exchange-Traded Fund(ETF)

ETF as explained earlier is a fund that's traded on the stock exchange. The investment objective of gold ETF is to replicate the performance of gold price by using its pool of money to buy gold.

As an investor, to buy gold ETF is to have investment exposure on gold without needing to own physical gold.

SPDR is the only Gold ETF provider in our SGX:

 SPDR Gold Shares (O87)

How To Buy Gold ETF(SGX:087) 


Step #1: Login Your Brokerage Account

Step #2: Enter Stock Quote: "087"

You will received a confirmation SMS once your order is filled.

And you are done!

#3 Buy UOB gold certificate

Gold certificate is like the money that was used during the gold standard. In today's world you can see it as a share just that instead ownership of the company. This is an ownership of gold that stored in UOB's vault.

Note the charges:

#4: Invest through: Saving account or Bullion Savings Program

UOB gold savings account:

Bullion gold Saving program:

My advice is to ignore these two gold saving programs as there are plenty costs involve unless you have extensive knowledge on it. The best gold investment options are either physical gold or gold ETF. 

4. Make 10x Interest Returns Via High Saving Account

Alright, this is not an investment option as your capital is guaranteed by the bank. And it's even backed up by government for $50,000 under the Deposit Insurance Scheme.

I included this because it’s still a money-growing option that you certainly wouldn't want to miss.

Why?

Because we are talking about 10x different as compared to your typical savings accounts!

Fair enough? Good. Let's get started.

There are 10+ savings accounts now on the market with newer ones more confusing than the previous, so there are two things I look at:

1. Hassle-free, no complex term and condition. It must be SUPER easy to understand and easy to qualify i.e crediting salary.

2. No Candy Crash game-points like system by making you spend more to "unlock" higher tier of interest rate (Well, it's sort of dumb that you'll end up spending more than you get from interest :::AWW::::: that's how the industry work)​

Alright, alright, I know, some of you may have family and are already qualify for those criteria with your current monthly spending. If that's the case, it's even better, because these options reward for that as well.

4 High Interest Savings Account In Singapore: Easy To Understand, Easy To Qualify and Hassle-Free

#1 BOC SmartSaver is a savings plan for BOC Multi-Currency Savings (MCS)

"BOC SmartSaver is a savings plan for BOC Multi-Currency Savings (MCS) account holders to earn bonus interests on top of prevailing interests when you fulfill the required criteria. Introducing a smarter way to earn up to 3.55% p.a. with BOC SmartSaver."

Site: BOC SmartSaver

Salary credit bonus + base = 1.25% interest rate min.

Base can be increased to 0.40% if you crossed $50,000 deposit and that brings you 1.40%.

For more info: Bank of China’s SmartSaver Appealing... by Investment Moat

#2 OCBC 360 account

Site: OCBC 360 Account

Salary credit bonus + base = 1.25% interest rate min.

​Plus another 1% on the amount of increase from the previous month's balance i.e Mth #0: $20,000 and Mth #1: $25,000... 1% * $5,000.

For more info: OCBC 360 Account: A Heavy-Hearted Update by 4HWW

#3 CIMB StarSaver (Savings) Account

This savings account lets you enjoy one of the highest interest rates in town at 0.8% p.a. by maintaining an incremental deposit of S$100 or more monthly. You will be surprised at just how much you can save.

Site: CIMB StarSaver (Savings) Account

Interest rate 0.8% is much lower than the above two but it's very easy to fulfill. All you need is to ensure you current balance exceeds its previous month's balance by $100. 

You know what's the best part? ​There is no cap on the amount.

​For more info: CIMB StarSaver Account by Passive Income Farmer

#4 CIMB FastSaver

"CIMB FastSaver is a savings account that you can apply online and pays you a high interest rate of 1.0% p.a. from the first dollar, without any hassle. What’s more, there are no monthly account servicing fees and fall-below fees."

Site: CIMB FastSaver Account

No salary credit needed, no incremental balance needed — Just park your money today and you will make 1% interest for the first $50,000.

*Initial Deposit AmountGift
S$10,000S$20 Cash Credit
S$20,000S$40 Cash Credit

*From 1 September 2016 to 31 December 2016, new customers who sign up for a CIMB FastSaver Account now will receive up to S$40 cash credit^^!

For more info: The 1% No-Frills Savings Account by Got Money, Got Honey!​

Giraffe's Tips:

"Earn 1.55% p.a. when you spend at least S$500 across your BOC Credit Cards and/or Debit Cards."

"Spend at least S$500 in total across your personal OCBC Credit Cards such as 365, Titanium, Platinum, FRANK, Robinsons, Plus! and Best Denki."

Looking at the base interest + salary both BOC SmartSaver and OCBC 360 offer 1.25%. 

But let's add in one more easy-to-fulfill criteria: 3 credit card bills/payments. Typo, it should be: $500 Credit card spending.Then BOC is significantly more attractive as it offers 2.8% as compared to OCBC 360 of 1.75%.

- And - 

If you salary is less than $2,000 or bank's balance in excess of $60,000(bonus interest cap for both BOC & OCBC). Then go park your money with CIMB FastSaver to make 1%, as both base's rate for BOC and OCBC is 0.4% & 0.05% respectively. 

5. Park Your Excess Money In A Fixed Deposit

Why park your money in fixed deposits where the interest rate is not a lot higher than the above savings accounts? The average interest is about 2 for FD..

Well…

If you notice, those high rates usually offered for capital in between the first 50-60K, above that the interest rate shrinks.

The basic of fixed deposit

Fixed deposit is also known as term deposit. Tenure is somewhere between 1 month to 3 years (most I see).

Min. $1,000.

interest: 2% or less(avg)

The basic concept for FD is that the longer the tenure the higher the interest will be. And you will earn interest over the tenure.

Con:

You can't withdraw the money for fixed deposit unless the tenure is matured. If not, you may lose the interest rate or may be subject to early withdrawal penalties.

There are a lot of fixed deposits in the market, and same as savings accounts with newer one being more complicated than the previous. Personally I do not park my money in fixed deposit. So I don't know which one offers the most competitive rate.

So you might like to head over to a few sites to see what others say about it.

A few sites to follow for the latest FD’s promotion:

#1. Check out the latest Singapore Fixed Deposits promotion

This site shows all the latest Singapore Fixed Deposits offered by banks

#2. Hear what other personal finance & investment bloggers say

Step #1. Visit: TheFinance.sg

Step #2:​ Enter keyword "Fixed Deposit" on the search function.

Step #3. ​The list of blog posts related to FD will appear:

If you want a short cut you can click here

#3. HWZ Latest S$ Deposit updates - Part 1(NOTE: sponsored by OCBC)

Good to be informed and discuss what good and what bad. 

Too many options and don't know what to choose?

Here's the tool for filtering:

Site: singaporedepositrate.com

I liked this a lot. All you have to do is key in the amount, set the "tenor from" and -- BAM! --- The list of fixed deposits available in the market will pop out with ZERO waiting time.

ADDED: ​

Giraffe's Tips:

Do not put the entire sum of your money in one fixed deposit. You can request to split it into different tranches of the same FD plan, for instance $500k can placed into 5 tranches with 100k each.

Why?

So that when in need of money you need only break the tranche that meets your immediate capital need. This minimize the cost of the potential loss of interest rate and early withdrawal penalties (if any).​

6. Make 5% Risk-Free Interest Via CPF Special Account

Now at the time of writing the current CPF OA interest rate is sitting at 3.5% and the average market returns over the past 10 years is 4.18%.

Want to know a way to make 5% risk-free returns?

... even by doing nothing and it is guaranteed by our Singapore government?

Top #1 SG money secret: park money in your CPF SA that pays 5% interest rate!

INTEREST EARNED BY MEMBERS by CPF Board

But here's the catch:

• Below 55 years old only

• CPF SA max up to full retirement sum of $161,000(CPF Annual Limit is $37,740)

• The voluntary contribution is irreversible. It's one-way. Once you transfer your sum to CPF SA, it will be locked until you either:

o Reach the age of 55(OA & SA becomes RS) where your RS exceeds the min. Sum in which you are able to withdraw the excess.

o Or when you reach the payout age of 65.

2 Options To Pump Up Your CPF SA To Make 5% Free-Risk Interest Rate

​Option #1: Through Voluntary Contributions(link). Your contribution will be allocated accordingly between OA, SA and MA depending on your age(calculator) or only MA. 

CPF Contribution Allocation Calculator

You are not able to contribute solely on CPF SA account. ​But you are able to transfer the amount from your OA. And that comes to our 2nd option below.

Note: you are able to claim tax relief on the amount you contributed max up to 7k for yourself. Want more? Then top-up for you wife, parents or etc. Up to the max of 14K.

How To Make Voluntary Contribution To CPF via Online


Step #1: Head over to cpf.gov.sg and clock "Login Here:"

Enter your "SingPass ID" and "Password:"

Step #2: When you are in your CPF home page, click "My Requests:"

Hit the "+" button and click "Internet banking using e-cashier.

Select "Member" and "Contribute to my three CPF...:"

Follow the below:

Enter the amount you want to contribute and hit "next:"

Check "I agree..." and click "submit:"

Step #3: You can pay in one of the 5 local banks:

Enter your bank login's ID & password, then hit submit:

And you are done!

Option #2: Transfer your OA balance to SA. Again, remember: This transfer is one-way and it's irreversible (But if you somehow transferred it by accident, MP's letter might help:))​

How To Transfer CPF OA to SA via Online


Step #1: After your login, at the homepage click "Transfer my Ordinary....." located at the bottom left:

Check the "Term & Conditions" and click "Start:"

Key in the amount you want transfer and check "I accept..." Hit "next" once done:

Next, hit "submit"

And you are done!

Giraffe's Tip:

When you are around the age of 45; 10 more years turning to 55 year old. You may consider beefing up your CPF SA to fully utilize the 5% risk-free interest rate over the next 10 years. “How is that good as your money is ‘stuck’ in CPF?” You might think.

But here’s the deal: because any sum in excess of the minimum sum(Retirement Sum) can be withdrawn at age of 55. So if you are close to min. sum and knowing you will exceed the sum at age 55, isn’t this a good investment deal? As it pays 5% risk-free interest which can be withdrawn in 10 years’ time.

7. Get 50% Tax Concession with Supplementary Retirement Scheme (SRS)

Supplementary Retirement Scheme (SRS)

Low income earners, skip this.

...Don't bother reading it.

Really. This is not for you, I'll explain.

Back in 2001 CPF started a voluntary retirement saving scheme known as the Singapore Saving Scheme(SRS). The scheme by itself does not provide you any interest returns like CPF. But it comes with a tax benefit.

To be exact: 50% tax concession.

(Look Singapore has one of the lowest personal tax rate. Hence It is unlikely for the average working class to benefit from this tax savings scheme. No surprise as to why after 14 good long years not many people aware of this scheme)

How it works?

First, you open an account with one of the three operators: DBS, OCBC or UOB.

Next you park your money in the SRS A/C with an annual max cap of $15,300(2016).

In the same year, you will receive a dollar for a dollar "tax deduction" in your assessable income even without submitting for a claim.

Now then you ask "What is the money doing in SRS account?"

Well, a few things:

1. Make 0.05% from the interest provide by the bank(:::AWWW:::)

- Or -

2. Invest the money in one of these options: bond, equity(hell yeah! STI ETF is one of the options), stock and etc...

And then you wait. And wait. And wait. Wait. Wait. Wait. Wait. Wait.

​Keep waiting until you turned 65 year old(retirement age).

Only at this age you can then choose to withdraw the money over a period of max up to 10 years.

​During these periods, only 50% of your annual withdrawal amount will be assessed for personal income tax. That's where you get the benefit of this retirement saving scheme.

​(Now you know why after 14 years since its inception SOO many people know about it)

And if your SRS account is less or equal than $400,000 at that time, it’s even better.

Here's why:

Let’s suppose you have $400,000 in your SRS account at your retirement age of 65. You set equal annual withdrawal the following 10 years, so each year you get $40,000. And since only 50% of the sum will be assessed for personal income tax(SRS benefit). That means only the remaining sum of $20,000 will assessed for tax.

All good? Great.

Now because in our current income tax bucket for the 1st $20,000 which has ZERO tax rate. Hence, you will NOT pay a single dollar on tax for your annual withdrawal of $40,000 over the next 10 years. In other word, with that your entire $400,000 will not cost you any tax expenses where you would otherwise be subjected to.

2 Reasons/Benefits Why You May Park Money In SRS A/C

Reason #1. Very high income earner. I don't have a specific number in mind as there are too many variables involved i.e remaining age to 65, future personal tax rate, your current and future income and etc. in determining the “yield” in term of tax savings.

The uncertainty of a long time period away for withdrawal to many could be 30 years and with the available investment options in the market mean SRS would unlikely be an attractive option for most people.

Reason #2. Someone who has maxed out his CPF Voluntary Contributions annual limit but still wish to park their hard earned money in government related savings plan. Again, if one has to compare between deploying their money in CPF special account VS SRS.

CPF SA in most cases will still be a far better option for the majority as their average income isn’t high enough to be benefited from the 50% tax concession.

For more reading: 

Starfish SRS fund - By Mr.IPO. He writes about his journey on building up his SRS account for retirement. 

How To Invest in SRS Account? 


I will use POSB online application as an example

Step #1: After your login, click "Open" and select "Supplementary ...:"

Hit "Instant Apply:"

Fill up all the following and click "Next:"

Check your detail and click "Submit" to confirm:

And you are done!


...I did that on purpose, I mean, the chart that shows 3 markets crashes with 50 over per cent prices drop.

Investing in equity is a risky business which is why you are being compensated for the higher returns. Stock market is volatile and not anybody has the stomach for such volatility. At time of financial crisis investment value can even collapse by half.

That's when investors start to make "fear decision" by selling their stocks at the worst possible time where to profit in market requires buying low and selling high and not the opposite.

So now you might be thinking:

"Maybe putting my money into a savings account is the only way to grow my wealth safely."

Well... hold that thought for a second, because what I'm about to show you is an asset class that may well be suited for your risk appetite. It is safer than stocks but has returns higher than high savings rate deposit.

Interested to find out? Alright.

The asset is called bonds

Bonds are like IOU. When you buy bonds, you are lending money to the issuer (Singapore Gov. or corporation) and the issuers agree to pay you back the full sum of the amount at a set date, known as the maturity date. In each year prior to the maturity date, issuers will pay you interest for lending them the money, and you will get your full capital back at the maturity date. That's how you make money from bonds.

This is unlike stocks. As a stock shareholder you own a piece of ownership in the company. The value of the ownership ties to the value of the company. When the company creates value, the value of your share increases so is the opposite. This means as a shareholder you are fully exposed to its upsides and downsides of the business as there's no limit to how much you would make or lose(not more than your investment capital).

For bonds that is a completely different thing. As a bondholder you are not the part owner of the company, and your investment returns do not depend on the company's performance but on the interest they agreed to pay you. The magnitude of your gain and loss is therefore narrowed as it’s not tied to the company’s value. Then who are you?

You are the creditor of the company as you lend them the money in exchange for a promise for future interest and capital repayment. This promise extends even in time of bankruptcy whereby you, as the creditor, has claim of the liquidated assets before the common shareholders.

"So what's the risk?" You might ask.

Issuers can default its interest or capital payment or worst — both.

So the basic concept for bonds investing is simple. So long the company does not default, you win. When the business is losing money but still have enough to pay you, you win. When the company declared bankrupt, sold off all their assets and have enough to pay you for your interest and capital, you also win. The only time where you lose money is when the liquidated assets are insufficient to meet your capital and interest.

Inverse prices relationship with stock price. Here's why:

In finance there is a concept known as "Flight to Quality." This is an action of investors allocating their capital in accordance to the market sentiment. When the market is bullish investors tend to put their capital into more risky assets such as stocks to capture performance.

But at times of uncertainty or poor market sentiment, investors in general tend to move their capital away from stocks to safer asset classes such as bonds.

This results in an inverse relationship in prices between stocks and bonds. For that reason, a bond and equity's strategy like Rick Ferri 60/40 Portfolio is able to reduce portfolio volatility without sacrificing much of the returns.

In Singapore we have many different types of bonds. I will cover each of them

One-by-one...

So let's start with the safest of the safest bond:

8. Singapore Government Securities(SGS)

Now you understand the benefit of bonds. But do you know that you can invest in Singapore Government Bonds?

Yes, you can. The name of the bond is called Singapore Government Securities(SGS)

So what's that?

SGS is a Singapore government issued debt security, which according to the official site, is to provide for banks' needs for a risk-free asset. Hence, the government does not use the money to finance its expenditure as the Singapore government is running on a balance budget policy and often enjoys budget surpluses.

www.sgs.gov.sg

SGS 10 years bond is often referred as a proxy for "risk-free" rate and used as a benchmark to price other assets. It is the safest bond you can get in Singapore as it is fully backed by the Singapore government.

You might ask, "So what is the interest rate for SGS?"

As of Dec 08, 2016 the interest rate is 2.33% for a 10 years bond.

Yes, I know it is not very high.

As Singapore is one of the few nations that have AAA credit ratings rated by all top agencies i.e very safe (low risk, low return).

You must invest in the lot of 10 bonds so 1 lot = $1,000.

Here is how you buy Singapore government bonds.

How To Buy Singapore Government Securities(SGS)? 


Similar to stocks, there are two markets you can buy from: primary and secondary market(SGX).

The bidding process on the primary market can be quite complex and troublesome. Hence the easiest way is to buy via secondary market(SGX). 

Primary market:

In the primary market you are required to bid via a dealer:

Step #1. Same as stock, you need a CDP account.

Step #2. Check out the next issue date

SGS Issuance Calendar 

Step #3: Apply via ATM or Online

I'll use POSB as an example for online application.

Click "Invest" and select "Singapore Government Securities(SGS):​

Then select "Bond Application" and hit "Next"

...Oh well, I can't show you now as today is not the auction date.

Step #4: Select 10 years bond i.e "NX16100F" and fill up payment detail 

Probably they will ask you two things:

1. The amount you want to invest

2. Competitive or non-competitive bid. 

- For competitive you specify an interest rate you want to bid for but this will have high risk of unfilled order.

- For non-competitive, you do not specify an interest rate and hence you get lowest bidder interest rate based on the result of the competitive tenders. But your chance of getting your order filled is significantly higher.

Note that all ​non-competitive bids will be satisfied first before competitive bids.

And done!

When your application is successful, funds will be deducted from your designated account on the issue date.

Read here for more information:

How to buy SGS? by Money Talk


Secondary market(SGX)

Step #1: Head over to SGX site to find the list of SGS bonds

Below is the list of SGS bonds:

Alright, I know...

Quick lesson:

Here's how you interpret the code:

Our goal is to buy a 10 years bond. But the problem is there's no exact 10 years bond to maturity on the above list.

So the closest we can get is a 9 years gov bond(This was a 10 years bond at the time of issued in 2015):

​Step #2:  Find the coupon rate of the bond on MAS website(or you can click on "code" to check out the coupon):

SGS Bond Prices and Yields - All Issues by Issue code

The above only tells us the coupon rate is 2.375%. Which means IF you bought at the time of issue you will be getting $23.75 coupon payment by investing $1,000(par value). 

​However, because we are buying it now, so we have to look at the market price which is currently traded at $1,025.33.

Hence, you will be paying MORE ​than the par value of $1,000. But receiving the same amount of $23.75 coupon payment i.e you are getting lower interest rate.

In short, coupon payment of 2.375% does not accurately reflect your actual interest returns if you buy now at current market price.

​Step #3:  Calculate your returns for buying the bond now

To find out what is your interest return if you hold until maturity. You'll need to use Yield To Maturity(YTM): 

The calculation can be quite complex, but here's how you do it:

#1. Head over to MoneyChimp:

Bond Yield Calculator by MoneyChimp

#2. Enter the figure you got from above:

Current price = Market price

Par Value: This is standard... always $1000

Coupon Rate = Get from MAS bond price & yield site.​

​Years to Maturity = I use 2016 - 2025(the maturity date)

Now you know your interest returns of this "9 year bonds" is 2.064%

If you wonder why are we using YTM instead of Current Yield, here's the explainer video: 

So next​...

Step #4: Login to your brokerage trading account and submit the order just like how you for stock

Note: SCB trading platform cannot be used to buy bonds. Hence I'm using CIMB for the example.

​Get the bond code:

Submit your order on your online brokerage trading platform(the below is CIMB):

Wait for confirmation and you're done!

9. Invest in Retail bonds

Want interest rate higher than the government bonds?

Then it's time to look at retail bonds which are bonds issued by corporations.

Their interest rate on average is about 3-5%.

It is not equally safe as the government bonds and has higher risk of defaulting interest and principal at times of financial crisis. For sure it does not have or even close to the credit-worthiness of the Singapore government which explains the higher interest offered. 

Now in SGX we have 8 retail bonds available:

Remember your goal for bonds investing is not to buy low and sell high. Rather it is to buy, hold and wait until it’s expired for capital redemption (par value of $1,000).

Let's say you buy an Oxley bond... You will pay $1,004. Each year, you will receive $50 (5% * 1,000) in a coupon payment. At the end of its maturity you will get back the principal amount of $1,000 (par value).

So same thing... your return on this is not 5% because you are paying more for the bond. To know your return, you have to calculate the Yield to Maturity which I covered above.

NOTE: Not all bonds have maturity date, for instance a Genting SP bond does not. In this case it will show the word "Perp" meaning perpetual bond.

Same as SGS, here's how you interpret the counter name:

How To Buy Retail Bonds? 


Exactly the same way as stock... At the time of issue through ATM for bid submission or buy in an open market via SGX. 

Note: SCB trading platform cannot be used to buy bonds

Step #1: Login to your brokerage account 

Step #2: Enter the bond code, price and quantity:

Wait for confirmation and you are done!

Giraffe's Tip:

Whenever you see that the bond's prices are more than $1, $100 or $1000 you know that your yield to maturity is LESS than the coupon rate.

For bond’s prices that are less than $1, $100 or $1000 you know that your yield to maturity is MORE than the coupon rate as you are paying less to buy a bond that will be redeemed at a higher amount once it's expired.

That's the explanation in why interest rate goes up while bond prices go down (and the opposite). Because the coupon rate is fixed, par value is fixed. Both are fixed at the time of issue. But once it is traded in the exchange, its prices fluctuate depending on the supply and demand of the market. It's not pegged to anyone, or any agency. It's a free and open bidding.

10. ABF Singapore Bond Fund Index(ABF ETF)

I heard you inner voice:

"Calculating bond returns is a real pain."

Solution: Buy bond ETF.

Remember what STI ETF is? It's an exchange-traded fund that invests in Strait Time Index’s stocks. To replicate the performance of STI i.e Top largest 30 companies listed in SGX.

For ABF ETF, it's an ETF that replicates the performance of iBoxx ABF Singapore Bond Index. So "what's that" you might ask.

And here's what it is: ABF in an index of investment returns of SGD$ denominated debt obligations issued or guaranteed by the Singapore government.

ABF Singapore Bond Index Fd by MorningStar Asia

Here are what contained in the ABF ETF bond portfolio:

Not all but mostly are Singapore Government Bonds in the portfolio.

... however, investing in ABF ETF is not exactly the same thing as investing in a bond, because you are investing in a fund which then invest in bonds. Your returns depends on the changes of ABF ETF’s price and the interest that it pays out throughout your holding period.

Even though the total value of bonds that it held often fairly accurately reflects in the ABF ETF's price.

But still, there is a few things you need to note:

The reason why you are investing in a bond is because of its principal redemption. However, in the case of bond ETF there is no maturity date, and that means there is no basic mechanism for you to redeem the bond. So in order for you to "redeem" your capital you would have to sell the ABF ETF in stock exchange hence you'll be exposed to market fluctuation. 

To find out more about ABF ETF here is the site:

Official Site:http://www.nikkoam.com.sg/etf/abf

How To Buy ABF ETF


The exact same way as how you'd buy STI ETF or stocks via online trading platform

Step #1: Login to your online brokerage account

Step #2​: Check the ABF ETF price in sg.finance.yahoo.com:

Step #3​: Enter ABF ETF code "A35," quantity and price

Once done, click "Next"

You will receive a confirmation once your order is filled.

11. Singapore Savings Bonds

Site: Singapore Savings Bonds

Okay, this is a really simple one.

By the government. Launched last year. Easy to apply. Easy to withdraw(penalty-free). Interest rate is higher than most if not all of the savings & fixed deposit interest rate on the market.

You might have heard it: Singapore Savings Bonds.

You might not agree, but I think our government is good. Really good. They put others before them.

Look:

Singapore Government Securities was launched to meet banks' need of a risk-free debt instrument for their liquid-asset portfolio even when the Singapore government does not need the money.

Singapore Savings Bonds was launched to provide individuals like us a long-term savings option with competitive interest rates even when the government does not need the money.

Love it!

Now let's look at the benefits:

#1 — As of this issue (April 2016) you will get an average of 2.19% interest rate per year over the next 10 years. Full sum of capital will be paid to you at the end of tenth year.

​#2 — Interest will be paid to your designated bank account on every 6 months. The first interest payment will be made 6 months after you receive your Savings Bonds.

​#3 — You can withdraw your capital at anytime without penalty (with $2 sales charge per transaction). But you will lose the higher step-up interest rate(below).

#4 — ​Invest up to $50,000 - $100,000 per issue depending on the particular month issuance.

​Con:

The interest rate is based on a step-up basis.

You get low interest rate in the first year and higher rate as your holding period increases for example: year 1: 1.04%, year 5: 2.62%...year 10: 2.77%.

The average per year interest rate you will get in this issue is: 2.19%. Why the step-up? Because the goal is to promote long-term savings:)

How To Apply For Singapore Savings Bond? 


First you need:

• #1 CDP account(as usual)

+

• #2 Bank Account: DBS/POSB, OCBC or UOB

+

•#3 Money​ $$

Step #1: Check the issuance detail of the bond(over here):

And the interest rate you will be getting:

If you like it then proceed to check the date

Step #2: Check the application date over here:

The highlighted green box is the period where you can apply.

Step #3: Login to your online savings account, click "Invest" and then press "Singapore Government Securities"

Step #4: Select "Singapore Savings Bonds Application" then click "Next"

I'm not able to show you the subsequent steps as I'm doing it outside of the application period. 

Money will be deducted from the bank account at the point of application. In the even where the your slot is unfilled, money will be refunded back to your account.

​After you have done with the application. Wait for 1st day of the following month to receive the result. 

You will be notified by CDP via mail of the amount of Savings Bonds allotted to you. Or you may check your holdings via CDP Internet service.

12. Invest in Preferred Share

You may skip this as it is quite complex and there aren’t many preferred shares listed in SGX.

So what is preference share?

Preferred share is similar to the share I described above but with slight differences. Preference share holder is still the part owner of the company; however, it does not come with voting right.

By giving up the right to participate in the company decision, PS holders are being compensated with a higher fixed dividend. They also have priority claim of company assets before the common shareholders in the event of liquidation.

It is important to keep in mind that even though the dividend is fixed, it is not a guaranteed payout. The company may skip dividend when business climate is bleak.

The below are the common features of preferred shares:

(I use Hyflux as an example; however each preferred stock is different, so pick up their prospectus to learn the differences)

#1 Dividend yield

The average dividend yield is around 4-6%. Remember dividend payout is not guaranteed. That being said, the P.S holder has the right to speak in AGM when dividend is not paid in the past 12 months.

#2 Cumulative and Non cumulative

Cumulative P.S occurs in the financial year when the company does not declare dividend, and all unpaid dividends will be cumulated for future payment.

Non-cumulative P.S means that in the event that the company misses its annual dividend for any reason, the unpaid dividend will NOT be paid in the future. The company is not responsible for any missed dividends.

Note that the company must pay dividends to preferred shareholders prior to paying dividends to common shareholders.

#3 Perpetuality

This is where the bond-like element comes in play. The perpetual preferred stock means there is no maturity date for redemption. The holders need to sell off the stock in order to redeem its capital.

Additionally, being perceptual does not necessarily mean that the holders will be able to hold the preferred stock indefinitely. This is where the next element comes in:

#4 Callbility

A callable preferred stock gives the RIGHT for the company to redeem the stock at pre-set date:

In the event that Hyflux chooses not to redeem:

NOTE: This is a right, and not an obligation. Hence, this is at the advantage of the issuer because it gives the flexibility to lower its dividend cost. This is done by redeeming the existing issue and issuing a new preference share at a lower dividend cost.

#5. Convertible

Lastly, some preferred shares allow holders to convert their preferred shares into a fixed number of common shares. This depends on the criteria at a pre-determined date i.e. as BullyTheBear had mentioned: "Citydev NCCPS has this convertibility option where each preference shares held can be converted to 0.136 CDL 'mother share' + $0.64 cash."

How To Buy Preferred Share? 


Buying preferred share is the same as buying common share, you buy through a brokerage trading platform.

The list of preferred shares can be found on SGX site:

Currently there are 5 preferred shares:

Step #1: Login to your online brokerage account

(NOTE: SCB does not allow you to buy preferred shares)

Step #2: Find out the stock code:

Step #3:  Enter your preferred stock code, quantity and price:

Once you received the confirmation and you are done!

13. Make 20% Returns With Singapore Crowdfunding(Debt based)

Do you want:

... More money?

... Higher returns?

... Quicker returns?

This one is epic: because you can make up to 20a year!

Mind-blowing isn't it?

Which of course it comes with serious RISKS(there’s no free lunch pal). Be prepared to lose your entire capital :) 

And here we have crowdfunding: Some call it 2p2 lending, "peer to peer", "P2P" or "marketplace lending" all mean the same thing.

And here we have crowdfunding:

Some call it 2p2 lending, "peer to peer", "P2P" or "marketplace lending" which all means the same thing.

Basically, crowdfunding companies provide an online lending-platform to facilitate transaction between lenders/investors and borrowers/companies (SME, usually).

As an investor, you lend/invest money to borrower/company in the form of contact note through a crowdfunding platform. You will be rewarded for interest payment and capital redemption, which is similar to bond, as I covered earlier. The average tenor is around 3-6 months, with some up to 12 months. Interest payment are typically quarterly or monthly.

Currently we have 5 crowdfunding platforms:

#1. New Union

Site: www.newunion.sg

#2. Capital-Match

Site: www.capital-match.com

#3. Moolah Sense

Site: www.moolahsense.com

#4. Funding Society 

Site: www.fundingsocieties.com

#5. Co Assets

Site: www.coassets.com

Learn How Crowd Funding Works by reading: Beginner’s Guide to Crowd-lending (or p2p lending) in Singapore by Let's Crowd Smart

How To Invest In Debt-based Crowd Funding


I will use moolahsense as an example

Step #1: Visit moolahsense.com and click "SIGN UP":

Step #2: Fill up the following and hit "Sign Up+"

​After that you will see this page:

Over head to your inbox and you will see this:

And you will receive another Email the next day:

Two things to do:

#1. Read the two documents:​

#2. Reply their Email with your address & bank a/c No.:

Hi Sir/Mdm,

​My home address:

80 Mandai Lake Rd, 729826

​My bank account:

XYZ -- 000-000-000-0​

Good day!

Regards

Giraffe​

Once they approved you will receive this Email:

And you are done!

14. Invest In A Portfolio Of Properties Via Singapore REITs

Do you want to invest in not 1 but many many properties in Singapore?

Want to make a consistent income in the form of rental payment distribution?

I know you do.

So here's the deal:

Real Estate Investment Trust (REITs) is a trust that is traded on the Singapore stock exchange. Think of it like a company where the core assets are properties and its main operation is renting out commercial spaces to tenants.

As an investor, when you buy a REIT you are effectively the part-owner/part-landlord of the properties.

How much do you need? With capital as little as $150...

​Currently there are 31 REITs listed in SGX:

To learn more about Singapore REITs, refer to:

​REITs Singapore: The Complete Guide by yours truly :)

How To Buy Singapore REITs? 


Step #1: login to your online trading brokerage account

Step #2: Key in the "stock code", "order quantity" and "order price." Hit "next" once you are done

Once your order is filled you will receive a confirmation Email/SMS.

15. Unit Trust Investment

What is unit trust?

... heard of mutual fund?

So what's the difference? The answer is both are the same.

U.S. Calls it a mutual fund and UK calls it unit trust. Since we follow common law. Hence the use of the term unit trust.

Still remember the ETF we discussed earlier? Both are similar but with some differences:

#1. Unit trust is not traded in a stock exchange

#2. Unit trust doesn't replicate the performance of an index as the fund is employed by professional fund managers. The fund's performance is largely dependent on the skill of the managers. Unlike STI ETF which objective is to replicate the result of Strait Time Index.

Unit trust is easily accessible by retail investors like us. Many local banks and financial institution offer unit trust. Heard of investment-linked whole life insurance? That investment portion is a unit trust:

​Courtesy of ClearlySurely

One big disadvantage of unit trust is its ineffective cost structure that eats into investor returns. See it this way: unit trusts require middlemen to facilitate the transaction in which sales charge has to be borne. ETF, on the other hand, uses stock exchange to facilitate the transaction. Sale agent is being replaced by an exchange. That means sales charges are gone and investors only bear brokerage's fee which of course is much lower than agent's fee.

In addition to that, index ETF does not employ active management. Hence ETF passive management fee is significantly lower as compared to active management fee of unit trust. The fee's structure of ETF allows economic of scale to be achieved. The more capital the ETF managed, the lower the fee is. Unit trust, on the other hand, its fee scales with the increasing capital under its active management.

It is no surprise why Vangard S&P 500 being the largest ETF has the world's lowest fee   ETF that has the high AUM typically has lower fee.

For example, Vanguard S&p500 vs s&p500 (other) for U.S and STI vs Nikko. Fee does not shrink with the increasing amount of trade, instead it scales trade amount.

Warrant buffett advises to invest in low cost index fund:

Read more: Unit Trusts by moneysense.gov.sg

16. Receive Regular Retirement Income From Annuity Insurance

Do you want: 

#1. Receive Regular Retirement Income

+

#2. Insurance coverage

When you retire?

Then annuity plan might be right for you.

Annuity is an insurance plan that pays out a steady stream of income usually for retirement purpose. Normally it's offered by insurance companies. As an insurer you make fixed sum of contribution periodically; the sum will be managed and grown.

When the annuity plan matured, (usually at your retirement age) you will start earning annual or monthly income based the sum and bonus (investment gain). This continues until the balance turns zero.

Think of it like CPF LIFE in the sense that when you reach your payout age (65), you will be receiving steady income every month.

In addition, do note that many insurance companies use the word "savings plan," "retirement income," and others but it all means the same thing:

2 typical Phase in Annuity plan:

Phase #1 — Accumulation: This is the phase you make regular premium payment, just like our CPF monthly contribution. For annuity premium can be paid at lump sum or periodically.

Phase #2 — Annuitization : This is where your annuity reaches maturity and you will start receiving regular income.

For more info: Understanding Retirement Income by DIYInsurance

How To Buy Annuity Plan? 


You can either purchase it from an insurance agent or via an online web portal like:

Site: www.diyinsurance.com.sg

Site: www.clearlysurely.com

Over here I will use DiyInsurance as an example. 

Step #1: Annuity Plan Secreening

Note that they do no hold EVERY single annuity product. They have probably filtered out the bad ones and show only the good plan.

#1: Head over to diyinsurance.com.sg

#2: click "Retirement Income"

#3: ​ Select the option for gender, age, and cover and type. 

Once done, click "GO"

Then -- BAM! -- The list shows up:

​To have a rough idea what the premium is like, click "Premium:"

The table of compassion will appear:

Now you roughly have some ideas what you are looking for... 

Let's we want to find out more about "Aviva MyRetirement"

Step #2: Get your Quote & Advice

Get back to the previous screen for prices quote

Fill up the form and hit "Submit":

And you are done!

The price quote will be sent to you via an Email. After your confirmation, the purchase will be facilitated by them between you and the insurance companies.

And you know what's best? 

That's after you receive your insurance policy. DiyInsurance will return you up to 30% of the commission​ otherwise would be in the pocket of sale's agent:

17. Use Endowment To Save For Your Future Big Ticket Item

What is Endowment plan? You might ask

Confusing​? Feel daunting to find out another strange word?

Well, no worries. I will explain.

Endowment is essentially a "forced savings" plan that pays out a lump sum of your contributed amount plus bonus (investment returns, if any) upon its maturity.

You might ask: "isn’t that similar to annuity" 

Yes, sort of, but there are some distinctive differences:

Endowment is designed to pay out a lump sum upon maturity, usually for an anticipated big ticket expenses i.e children university fee. Whereas annuity is to provide steady stream of regular income upon retirement.

Both have a regular premium to be contributed by the insurer during the policy's accumulation phase. Since both are a form of insurance. It means a portion of the paid premium will go to the insurance's cost and the remaining will go to a fund. Consequently your total payout may be lower than your contribution depending on your insurance's cost and fund's investment performance (if any).

Find out more about on:

4 Endowment Plans Specially Designed for Your Child's Education by DiyInsurance

Choosing the Right Endowment by DiyInsurance

Endowment Insurance by moneysense.gov.sg

...and for serious readers this is for you: 

The ins and outs of endowment plans by SPH

How To Buy Endowment Plan? 


Same as annuity you can either purchase via a financial adviser or through an online platform.

Step #1​: Head over to DiyInsurance.com and click the following: 

Step #2: fill up the following and hit "Go" once you're done

Step #3: Choose the one you like and select "Get Quote"

Step #4: Fill up the form and hit "Submit"

The quote will be send to you via an Email and once you are confirmed the purchase. They will help to facilitate the transaction with the insurance company.

Grab This 17 Singapore Investment Option guide for free NOW!

PDF version contains all of the content and resources found in the web-based guide

Can't Hold Yourself From Taking Immediate Action?

Yeees... I know it's hard not to take any action right after you finished this insanely actionable Singapore investment's guide that got you super excited in taking what you learned and put to practice.

If you really really want to take actions. Then here's one action you can take right now. That's to share this guide, it cost you only 30 calories for pushing your finger down on the share's button. But it means a hell lot for me, and surely it brighten up my days. It motivates me for creating content that makes previous one looks mediocre. That's how I push myself. So, Share. It. Now. 

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Click Here to Leave a Comment Below 33 comments
GMGH - April 12, 2016

fantastic post GV, another great article for me to share with my friends!

Reply
ZJ - April 12, 2016

Thanks for writing. Really appreciate it

Reply
    GiraffeValue - April 12, 2016

    You are welcome. Thanks for the nice words!

    Reply
Sam - April 13, 2016

Good guide, but some information are outdated, for example for
“2. Use Share Builder Plan To Automate Your Stocks Investment”, the POSB now allow partial redemption instead of just full redemption.

I personally had try to redeem 10 unit and the minimum unit requirement is 1 unit of STI ETF share.

Also refer to these POSB FAQ, under “III. Subscription, Redemption and Termination of the POSB Invest-Saver”, 10. How do I redeem my holdings in POSB Invest Saver?

Reply
Sylves - April 13, 2016

Hi Giraffe, There are definitely pros and cons in every investment options. It will be beneficial if you can share your investment recommendations for different earning tiers.

Reply
Lizardo - April 13, 2016

Wow Giraffe,

Fantastic work putting everything together! And comes with step by step guide to boot. Awesome!

Reply
    GiraffeValue - April 13, 2016

    haha. Thanks for the encouraging words!

    Reply
Poh - April 14, 2016

Very informative. Awesome.

Reply
John Png - April 23, 2016

The best article with best detailed guide for investment and retirement in
Singapore that I ever read on internet. Thanks GV. Keep up your good work.

Reply
Desmond - April 23, 2016

Although it’s mirroring what the others have said, a lot of hard work has gone into the article above, I dabble in some of the items you have mentioned above. Highly recommended vis-a-vis a lot of other “experts” out there. Will definitely share this with people who know nuts about investing (I think there’s a lot of people who belong in this category and prefer to seek out financial planners :S)

Reply
    GiraffeValue - April 26, 2016

    Hello Desmond

    Sure, financial planners certainly help. But ones have to find the one that possesses both the characteristic of competence and ethical. Really hard, most are very sale-driven. But at least the risk is not greater than speculating on stock market(the worst is only paying high sales charge). Thanks for your comment, appreciate the encouraging words as well!

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Ricky - August 8, 2016

Hi GV,

I just read your “About” page and I find your story so inspiring. Anyway, I’ve read several investment books and attended seminars but I just couldn’t figure out where and how to start investing. Your blog is so awesome because you provided step-by-step actionable ideas that can be implemented right off-the-bat. This is just what I need. Thanks for sharing your knowledge. My question is if I want to sell my ETF (Share Builder Plan), on the website I should go to Manage > Redeem Unit Trust or Exchange Traded Fund, right?

Thank you.

Best Regards,

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Sankar Dharmaraj - August 20, 2016

Very clear information.
Thank you.

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keana reeves - September 13, 2016

Practical suggestions ! I Appreciate the info , Does someone know if I can find a sample IRS 8809 version to fill out ?

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Sherman - September 15, 2016

Hey GV,

I’m very thankful to find an article like this to educate gundu me about such investing in singapore. Thanks for also providing step by step instructions on how to go about doing these things. Very comprehensive and well-thought. Will want to share this with my friends. “Knowledge is always meant to be shared” Thanks & God Bless. Will be starting my POSB Invest Savers as soon as I read more!

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    GiraffeValue - October 17, 2016

    Hey Sherman,

    I’m delighted to hear that the materials get you into action. No worries, everyone was once a gundu 🙂

    Reply
Robert Tan - September 18, 2016

Hi im am a student still and i will like to invest when im still young to better prepare for my future. I have a small sum of savings about 2k and i would like to know how u would suggest me to invest my money.

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    GiraffeValue - October 17, 2016

    Hey Robert,

    I would not invest if I were you because with $2,000 capital, even if I made 10% a year, the most I would get is $200 – not much things you can buy these days with that amount.

    Investing works better if you have sizeable capital to compound with.

    At this time, it is better that you save the money in bank and find other ways to generate more income.

    Reply
Jane - September 20, 2016

Your page contains well compiled, relevant and valuable contents from top to bottom. It’s so useful and helpful to see these investment options and money related information all in one site, especially when I’m trying to figure out which suit me most.

Appreciate the information. Hope you could keep it updated.
Thank you!

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    GiraffeValue - October 17, 2016

    Hey Jane,

    Glad that you find it helpful, I will try to keep it updated.

    Cheers!

    GV

    Reply
ashi - September 24, 2016

great article…thanks a lot for sharing this info.

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    GiraffeValue - October 17, 2016

    Hi Ashi

    Thanks for the support! I’m glad that it helps.

    Reply
Francis - November 27, 2016

Great Info!!! Thanks!

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T - December 16, 2016

Thank you for drafting this informative article! May I ask, for SCB, what is the likely annual returns?

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Lim - January 14, 2017

Dear GV,

Well written article with meticulous step by step explanation! It must have taken a long time to compile.
Much appreciated and thanks for sharing your knowledge, they are very relevant and practical.

Cheers
Lim

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ys - January 15, 2017

Hi… I would like to understand if, for investments below $500, it will be better to use posb. is the $500 like $500 for ABF and $500 for Nikko? Or we can only do $500 for both add up (eg 300 for abf, 200 for nikko)?

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Raghu Anantharam - January 25, 2017

How do I invest SRS funds in STI ETFs? I have a POSB account and have investment in the POSB-SRS account.

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