Tuesday, 16 December 2014

Investing without your Parent's knowledge?

I received another email from a reader named Peishi. It goes as follows.

Hey there! :)
I am turning 17 in 2015.
Would you advise starters like me to save up for 1 lot of Nikko AM, or STI ETF for passive investment?
Also, I read off from your blog that you invested without your parent's knowledge, how did you do it?

Hi Peishi! 17 is a very young age, but I'm happy that you are already ahead of your peers in terms of mental maturity.

Nikko AM and STI ETF both track the Straits Times Index and aim to track it with minimal error.

Source: http://thefinance.sg/2014/05/21/nikko-am-sti-etf-v-s-spdr-sti-etf/

While both may be similar in many ways, what makes them different is the total purchase price you would pay to purchase 1 lot. As of today, 1 board lot of SPDR contains 1000 shares while 1 board lot of Nikko AM contains 100 shares. This would mean a vast price difference.

Assuming 1 share of each ETF costs $3,

1 lot of SPDR would cost $3,000 while 1 lot Nikko AM would cost $300.

SPDR has a lower tracking error and expense ratio and has been around longer than Nikko AM has. But because of the price, you may want to consider purchasing Nikko AM first.

Since you're 17, you're not yet of legal age to open a brokerage account which I believe requires at least 21 years of age.

So since you have 3-4 years to start saving, when you reach 21 you may already have enough money to purchase 1 lot :)

Moving onto investing without my Parent's knowledge, I simply didn't mention it. When you're of legal age, opening a brokerage account does not require parental consent.

Of course, if your parents approve and some parents do of course. Many experienced financial bloggers are parents who are knowledgeable about the subject and will probably impart their knowledge to their children in the future.

If not, some may choose simply not to mention it now but do so in the future.

Let me know how it goes. :)

Signing off,
Teenage Investor


  1. Hello Teenager!

    The girl named Pei Shi is definitely starting her investment in the right time. I regretted that i only started at the age of 27 but i guess it's never too late right?

    Cheer! Jeffrey

    1. hi Jfree!
      It's never too late to start, better late than never right?
      All the best!

  2. The SPDR lot size will be reduced to 100 shares next month on the 19th.

    1. Hi Raymond! Yes I'm aware of that! But I shall not count my eggs until they are in the basket! Haha! Hopefully it's true, and prices do not increase.

  3. I would prefer all transaction requires parental approval and control. There is always fear that the child may neglect study or even for young adult career focus since there are many path ways to success.

    1. Hi Cory! I agree with you, sometimes the child may not know what is right for him/her. There is always the fear that children, especially young teens may view investments as a way of getting rich without studying or a need for education.
      Personally, I do not view investments as a way to success for me though many others have achieved it.

  4. she can embark on POSB Invest Saver when she turns 18 for the Nikko AM STI ETF. Pros include auto dollar cost averaging and lower brokerage cost (unless she is investing upwards of $1800 per month)