Tuesday, 13 January 2015

Investments, Money + Teenage Investor's Q & A

Hello, recently I received emails from new readers of my blog after my post was shared on Facebook. Honestly, I was quite shocked and a little gratified that readers found my blog post interesting and relatable enough to share on their Facebook page. That post alone got me an increase in readership by 30k+.

Today, I will be attempting to answer a few questions that were asked by readers. I noticed many of you have questions about investments, you want to start but not sure where to begin.

Currently, I'm still discussing with an investment company on their seminars and if it will be helpful for readers to attend. Nothing's confirmed yet, but stay tuned for good news hopefully.

Anyway, moving on!

I will try my best to answer all the questions posted to me by BR.

1st Email 

HI, teenage investor, i have recently read your blog posts and come across many interesting articles and i must say that it is very informative and helpful.

Just a short introduction of myself, i am currently 21 years old and currently serving NS and about to ORD in august this year, I recently have became worried about my future and have a feeling that in the future, a degree with a stable income job is not sufficient. I began picking up some books and one of it was the infamous "Rich Dad Poor Dad" in hopes of learning the tricks of the trade.

Realising that books are not enough and that the internet is full of information, i have been reading blog posts/articles about investing and most have said to start early. It seems that you may be younger than me, however, i respect you in a sense that you have the mind to begin earlier and that is what i hope i can do now.

Now just a few questions that i hope you can help me to clear up,

1) Do you have any Regular Savings Plans, such as the OCBC BCIP / POSB Interest saver?

Hi BR. I used to have a RSP. But now, I prefer a more DIY approach.

2) What brokerage are you using and is it ideal to start using SCB now?

I'm currently using SCB. But after the recent chaos, I am planning to use SCB only for international stocks. For local stocks, I'm actively searching for other brokerages. You can use SCB if you wish. It remains the ideal choice for those seeking for low commissions per trade.

3) What are your opinions on STI ETF and do you think that it is 100% profitable?

Nothing is 100% profitable. Investing in ETFs does have its advantages. But there will always be risk present.

4) Are there really any stocks that are 100% profitable, be it big or small yields?

Not as far as I know.

5) How much do you leave aside per month solely for the purpose of investing?
Currently, I set aside $100 every month.

6) I have read about some posts about compounding interests and would like to know in which area of the market can i make this possible and in what way, is it by putting the money in a savings account and gaining interests yearly or is it in buying and holding stocks and hoping for them to grow?
Compounding interests work best if you're in it for the long term. That being said, savings account give a very miserable interest rate. You'd be better off sticking your funds into a time deposit. Eg: $1000 in a 0.7% interest rate would give you $7 every year. Impossible to get even $1 interest yearly from regular savings account. Eg: $0.02/month x 12 = $0.24

Buying stocks and hoping for them to grow is a different strategy. Perhaps you are more interested in investing for income rather than investing for the long term: Retirement.

7) If i buy and hold a stock, how do i get access to the gains that i have made when the stock has grown, would i have to sell the stock?

Yes. Eg: You buy Stock X at $3/share for a board lot of 1000 shares. That's $3000. Assuming the share price increased to $3.50 and you sell it, you would receive $0.50 x 1000= $500 profit.

8) (Personal Question) How much are you making per month from investing?

I'm afraid you're mistaken. I don't invest for income. That's a different segment of investing. Therefore, I don't receive income from my investments. Yes, I receive dividends, but I don't see that as income :)

Summary: I believe you're interested in investing for income or for profits. Eg: Buy Low Sell High.
While that may be the majority of what most people want, I don't practice it. I believe that I'm not at that stage where I can predict the market. It would be very stressful for me to monitor the market constantly.

I invest passively. Time is better spent with family and friends than to monitor the market day in day out. But that's for me. Of course, I purchase shares at a low price if possible, but that's normal.

Hope this answers your question.

2nd Email

Hi TI, i'am 19 this year a international student that has being studying in SG for 13 years since primary school, went to ite for one year finished with a Nitec cert.
Currently still no PR, application always being rejected don't know the reason to that. So basically i'am a Singaporean just without the black and white.

Presently studying in kaplan (dip in Hostility and tourism).

I have read some of your blogpost on life in Singapore and how to achieve goals here so i'am inspired by you, therefore I need your help. i have a few questions for you hope you can help me out.
Recently i have seem to lost my way in life don't really know what i want to do in the future either. I might go back to my country but still no confirmations.
What i need your help on is all the advice you can give like education, work life etc... Basically just all the things that you can guide on a 19 yo dude haha.

This is my email - paseoblossom@hotmail.com
Thanks alot and hoping & looking forward to your reply soon!

Hi Jack! At one point in their life, everyone questions themselves on what they want to do with their life. I don't really know what kind of advice you seek, but I believe a positive mindset and a hardworking attitude is crucial for both education and work life. You have a NITEC Cert and are currently studying for a diploma in Hospitality and Tourism. This industry has many possibilities. You can either further your studies, or proceed to get a full time job. Whether or not you remain in SG or return to your home country, you can always find hospitality jobs or jobs that suit your strengths best.

For us Singaporean Boys, we already have the passage marked out for us from birth. Kindergarten - Primary - Secondary - Polytechnic / JC - Army - University - Full Time Jobs. Whether or not we choose to take this path or take another path is entirely up to us. I wish you luck in your future endeavours.

3rd Email


I have stumbled upon your blog recently. I briefly browsed through your posts and you seem to be quite knowledgeable with investments. Also, you seem to be quite young, so I thought it would be good for me to consult you regarding this.

I am also a "young adult", and most likely even younger than you. I am 17 this year and I have been quite interested in personal finance. I hope to be able to dabble into investments from a young age. Hence, I have a few questions:

1) How old are you now? (if you are willing to reveal)

I'm currently 20.
2) How old were you when you started investments?

20 as well :) I have begun looking into investments around mid 2014.

3) I have been looking into investment options with local banks recently, however, most banks require me to be at least 18 years old. At my age (17 this year), do you know of anything that I might be able to make some investments in?

As far as I am aware, you need to be either 18 or 21 to open brokerage accounts or invest with banks. I would recommend getting more knowledge about the various forms of investments before investing. Are you investing passively? Attempting to Value Invest? Investing for income? There are many types and strategies.

4) What did you do to become so knowledgeable with finance matters? Are there any books, or any good reading material regarding finance and investments that you would recommend to me?

You're too kind, I don't see myself as knowledgeable at all. There are many other financial bloggers out there that are far more knowledgable and more advanced than I am. You may refer to Blogs I Read on my webpage to view the different links I have there.

As of now, I have near zero knowledge regarding investments, but I do not wish to let my money just lose value in the bank (I recently switched to a high-interest savings account actually), hence, seeing that you might have started investments at a very young age, I thought that your advice would be very helpful. I hope you would be able to reply my queries.

A high interest savings account is good for now. I use fixed deposits, which means you must leave your money with the bank for a certain period of time. Eg: 1 or 2 years and you can receive a higher interest rate. You can try that for now until you are of legal age.

Thank you and have a nice day!

Best Regards,
Christopher Goh

4th Email

Hello Teenage Investor, I'm currently a Polytechnic student and upon reading your blog, I'm interested to actually do a little investment. I'm currently 18 years old. What would be a good way to start? Low risks preferably. And also, I've read on some forums that it's better to buy blue chips myself rather than through the banks. Any advice would be appreciated. Thank you in advance! Cheers!

Hi YM! If you are looking for low risk investments, I recommend you invest in ETFs. Exchange Traded Funds. Invest in the STI ETF. They are lower risk than the average share. It is better to buy blue chips yourself than purchase from banks if you're able to find brokerage with cheaper commissions. Eg: StanChart 

You can read this post by Lepak Investor. I find it very informative.

Currently, I'm in the midst of withdrawing my funds from SCB and looking for alternative brokers. I need to do more research on both POSB / OCBC and POEMS if it's possible to transfer my shares purchased from the bank to CDP account.

The costs also matter as I believe brokerage commissions are still too high for my appetite. But if it's necessary, then I will do it.

Till next time,
Teenage Investor


  1. Hey TI,

    Famous celebrity already siol :P I think you're doing a great job helping other young people be more aware and conscious of their personal finances. I don't think I would have the patience with some of the more basic questions, especially when it can be easily Googled. Good job!

  2. Hi TI,

    0.7% of $1000 is $7, not $70(:

    Can you also elaborate on $0.02x12=$0.24? What does it refer to?

    Best regards,

    1. Thank you! Error corrected! $0.02 is the monthly interest from your savings.

  3. Hi,

    I have been reading your blog for quite some times. I am currently 17. This year I'm turning 18 soon so I was very interested in opening a brokerage account. However, I found out in order to open a Standard Chartered Securities account required me to be 21. May I know how you are able to open one for yourself?

    And last question. What is the difference in custodian and CDP? Is there any risk in using Standard Chartered Securities account than using in other brokerage such as CIMB, POSB, OCBC and others...?

    1. Imagine you go to the market to buy fruits, say 10 apples and 10 oranges.

      Option A: You can ask someone to buy the fruits and then you put it in your own fridge. It need not be the same person, it can be person A or person B, but no matter who that person is, you always end up with the fruits in your own fridge. This will of course, be a little bit more expensive.

      Option B: OR you can ask one particular person to buy it a a very low cost, then deposit it in his fridge. You can also ask person A or B to buy your fruits, but remember, those fruits are going to end up in your fridge, so it's a little different. You will have the same fruits ending up in different fridges.

      Option A is like opening an acct with different brokerages houses (CIMB, OCBC, DBS vicks, POEMS etc)...whenever you buy stocks, you end up having them deposited into your CDP account. It's yours. Buying the same stock over different brokerage acct ends up all in your CDP account, so you can also sell your stocks from your CDP through any brokers, regardless of whether you bought from them in the first place.

      Option B is like having a custodian account. The shares bought are not deposited in your CDP account. You run the risk of having the owner of the custodian acct (in this case, stanchart) going bellyup, locking your 'fridge' and making it hard to take out your shares.

  4. Hello Teenage Investor
    A little b/g on myself. I just started work for a yr, but haven't invested a cent as I've been too busy. I did manage to pop by to open my CDP acc one day but also never got started. I've just been reading basic financial advice here and there and I read that some recommended savings would be about 6 months of salary for contingency and some regular savings (~20%?) a month, which at present I do have.
    I've only now learnt abt regular savings plan and clearly that's for someone like me who haven't started before and have not much interest in following stocks closely.
    My question is, how much is a gd amt to set aside for such RSP? At present I'm earning 4.5k, so abt 900 to CPF and 900 to my parents each mth. If I have abt 10 months of my salary as savings now (also from Uni days) does it mean that expenses aside, I shall put the rest of my money from now on into this regular savings plan? How does it work - is it a recommended savings plan for retirement or for marriage and getting a car/house etc? Where does such a regular savings plan come in if I do intend to get a condo - is it that I channel 1k a month to this RSP, then get everything out when I wish to get a condo? I'm very confused.

  5. Singapore’s manufacturers had a subdued start to the new year, with the latest purchasing managers’ index (PMI) signalling that industrial activity shrank for a second straight month in January.

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