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What to do with $45K? It depends.

Friday, October 20, 2017

Reader:
I have a bal of 45k which trying to find place to put. need for kid study or health problem. Is posb invest-saver a good choice?







AK:
Since you say you might need it for health problem, then, it is not money you can afford to lose.
Go for the safest options.
In case you are wondering, safest options are those that will not result in monetary loss. 🙂
So, if you need the money, you know you can get 100% of it.


Reader:
ya. cause read many earn from this invest saver but not savvy in investment. think just buy some good stock to keep is better.






AK:
Invest saver is an investment plan.
There is a risk of monetary loss.
The same goes with stocks.
Invest only with money u can afford to lose.

Also read this:
Investor psychology.

3 comments:

Spur said...

He'll sleep better by just putting into SSBs. Yields will be similar or better than 10-year endowments without the liquidity risk & premature termination penalties.

Although for health, he's better off making sure he's covered by an appropriate shield plan. $45K is nothing even in C-class ward if major health issue. I've come across quite a few C-class patients chalking up close to 6-figure sums in govt hospitals.

InvestSaver is primarily targeted for DCA into ETFs / blue chips for people capable of long-term accumulation phase. Those in their 20s or early-30s doing these monthly investment plans should be on their knees everyday praying for a -80% crash in the markets. Of course whether still got jobs to go to is another question ... personal finance more complicated than investing! Kekeke!!!

AK71 said...

Raymond Ng:
一石二鸟? If you need the money in short term, don't invest it.

Jimmy Ng:
Need for kid studying ? Long time line. Invest. Even top up kid's cpf now, to compound the returns that they can use for education / housing later in life.
For (kids>) health problem ? Then treat as emergency cash & get Med & Hosp policy coverage, as this amount may be insufficient.

Lee Jiahui:
30 k SSB. 15k in cimb starsaver. Should be ok enough for health. He should break down the health and study pot man...

AK71 said...

Hi Spur,

In replying to the reader, I did not share any specifics.

I did not mention getting a H&S policy because I assumed that everyone should be covered by Medishield Life by now. Of course, there is still the deductible and co-insurance components for which cash would be needed.

As for investing the money for children's future education, I sidestepped that question because the reader is not savvy when it comes to investing. Also, not everyone has the temperament to be an investor. It is not just about risk but also volatility.

So, I settled for suggesting that the money be stashed in the safest options (i.e. where risk of monetary loss is almost zero) which would provide easy access. Like you suggested, the SSB is one option.

It is good to see readers weighing in on the topic. :)

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