Wednesday, March 05, 2008

Accumulate short term savings in a bank account

Dear Mr. Tan,
What is the best way to invest $200 a month?

REPLY
You can accumulate the savings in a bank account. If you join a monthly savings plan, you may be able a higher interest rate on your savings.

After you have accumulated sufficient savings, you can use it to buy Government Bonds or invest in the STI exchange traded fund. or a low cost investment fund.

The advantages are:
1. 100% of your savings is intact
2. You can earn a better return from the investment fund or government bonds.

Do not invest in an insurance product where 18 to 24 months of your savings are taken away as charges to pay the agent and other expenses.

Do not pay high charges for your investments. Read this FAQ:
http://www.tankinlian.com/faq/ilp.html

2 comments:

Anonymous said...

If you can save $500 a month, i would recommend you NTUC Income's Flexi-Cash.

The returns are good and is highly liquid.

It is a great product.

Anonymous said...

A passing comment: Try not to invest now. Save money in saving bank will earn you more money and more security. Don't bother about averaging down, it's wasting your time.

Read what Jim Rogers has to say on Singapore's investment in the foreign banks. He and I agree on the same fundamental issues: this crisis is far from over.

I reiterate my observation: the world economy is heading down. You see the writing on the wall: each high lower than the last high and each low lower than the last low, but the worst has yet to come. It is better to stay put and sit tight for the next two years, to after 2010 to start bottom fishing and do that in phases too.

If you are able to save $200~300/mth for 36 mths, which is about $7,200~$10,800, you would be able to pick up some choice blue chips like UOB, DBS at that price then.

All the best!

R.

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