S$5,000

I was talking to a long-time primary school asking me to help her invest S$5,000.

She regarded FD as low returns, but when I told her about trading and some high-yield investment returns (which is in the range of 100% to 300%) as quite 'impossible'. I found that people normally gave all sorts of excuses to part their money into investment, yet readily spent them off as christmas gifts and some de-stress excuses.

Back to the S$5,000, I didn't give her an investment mode in the end. But rather, I told her to understand her own financial situation. Before I can tell her the right investment medium, she has to know her risk profile, expected returns, required liquidity of funds etc. And don't go for free gifts (this is especially silly when we look at investment products offered by most banks).

As always, one size doesn't fit all. Same goes to investment! Only by understand your own financial status, then will you be able to plan your Financial Routemap accordingly. When the whole Financial Routemap is firmed up, you can then consider the ERP* with the concept of Capital Preservation Model in mind.

* ERP = Early Recruitment Plan


p/s: I will talk about the ERP and Capital Preservation Model soon.