Path to FIRE FUND

[gabrielod]

@lichtoefur I don't know anything about crypto bro, so I should not comment! All the best to your research

 

[orthodoxokie]

@lichtoefur Helllo, one of my dreams is to migrate to Singapore as a PR. Just wondering how you did this and is there any tips? I’m currently 20 and in Uni.

 

[gabrielod]

@orthodoxokie I am not OP. As cliche as it sounds, if you are an "ordinary" person, attend a great course at a great university and grow to becoming an excellent talent. The ability to make (and execute) great decisions in your life is as important as working (extremely) hard.

 

[meinl]

@orthodoxokie PR acceptance is pseudo random. There are few things sg gov likes:

1. Malaysians
2. Full time Stable job (EP/ white collar/at least 4k a month)
3. Getting married.

If you hit these 3 it’s almost a guaranteed PR

 

[icanspellthornwell]

@meinl No 1 only applies to Malaysian Chinese. Malaysian Indians and Malays don’t count.

 

[lichtoefur]

@icanspellthornwell There are some truths to it but generally if you have degree and earning the baseline salary (IIRC that’s about SGD4k), you’ll have high chances

 

[icanspellthornwell]

@lichtoefur Again, only matters if you’re Malaysian Chinese. Having degree and a high salary doesn’t matter if Indian/Malay, it’ll still be hard.

 

[lichtoefur]

@orthodoxokie Yo! Great dream, I support! What I did was that after getting my degree at 23, I applied for 200 jobs through jobstreet, landed 3 interviews and accepted one offer it’s not tough if you wan it enough. However, if you’re in medical line, do check if your cert is recognised in Sg as I understand their requirements are stringent

 

[aanntdark5161]

@lichtoefur I'm not a financial advisor so I can't tell you what you should and should not do, but I can tell you what I'd do if I were you - speaking from experience in the world of investing/trading.

Questions:

• The obvious result is to go for S&P 500, but is that really so simple?

The answer is yes, it IS that simple. But simple doesn't mean it's easy. The S&P500 has a very long track record, it has survived and come out of a few financial crises. To achieve this, you must cover your eyes, ears, ignore the noise/volatility and CONSISTENTLY DCA into the market. The easiest way to do this is to have an automated system. Rain or shine, market crash or market sky rocketing it doesn't matter, you DCA every month.

“A market downturn doesn't bother us. It is an opportunity to increase our ownership of great companies with great management at good prices.” -Warren Buffett

• Which is the method you’d go for and why?

If I were your age, I'd be more aggressive. Instead of just S&P500 (SPY/VOO), I'd also consider investing in NASDAQ (QQQ) with a portfolio allocation of 2/3 (S&P500) to 1/3 (NASDAQ). If you want to supercharge your investments then you have to put in the hard work, the due diligence. Learn how to invest/analyze individual companies/trade stocks/options. But if you're not into that, then DCA would work just fine for most cases.

“In my view, for most people, the best thing to do is owning the S&P 500 index fund. There are huge amounts of money people pay for advice they really don’t need.” -Warren Buffett

• Which other avenue with relatively steady returns will you go for and why?

GXBank has a 3.0% p.a. savings account. Imo, a great place to park your cash/emergency fund. EPF is relatively safe and the good thing is you won't be able to touch the money until nearing retirement. This is important, as with any investment, you won't want to unnecessarily interrupt the compounding process.

"The first rule of compounding is to never interrupt it unnecessarily" -Munger.

 

[lichtoefur]

@aanntdark5161 Wow, thats a detailed reply, thanks. And appreciate the quotes from the greatest investors

Ok let me consider between QQQ and S&P, perhaps a good mix will do better than single choice

On the GX bank topic, if it’s only 3%, why don’t I just go for ASM instead, declaring 4% ish and relatively fluid? Let me hear your thoughts

 

[aanntdark5161]

@lichtoefur Honestly, I'm not familiar with ASM by ASNB. But based on my quick research, you are allowed to only redeem up to 2,000units per month? Correct me if I'm wrong.

Source

"The maximum limit of online redemption is set at 2,000 units per month as it is adequate for an immediate source of income for unit holders when in need.

As unit trust is a form of medium to long-term investment, unit holders are encouraged to maintain the investment longer to reap the benefits of investment and only redeem when necessary."

If being fluid is what you're looking for, I can't find anything better than GXBank's savings account atm. The interest is credited daily, for e.g at RM50k, you'd get RM4.1/day. Plus, your funds can be used IMMEDIATELY, no need for redemption.

P/S: I am in no way affiliated to GXBank. I just find that it is a great platform as I used to park my emergency funds in a Money Market Fund which would take a few business days for withdrawal. Too long for my liking.

Good luck on your financial journey!

 

[lichtoefur]

@aanntdark5161 Thanks man, I guess ASM is not as fluid. But sticking to a 3% will be disaster on the duration to end day for FIRE fund. EPF is not as fluid too unless MYR1M can be reached fast. Is liquidity really important ? Hmm

Any thoughts on 5% into crypto?

 

[amanda88]

@lichtoefur FIRE usually implies retire really early... And to do that with fat FIRE is almost impossible. At 51 of age, it's more towards normal retirement (approaching 55). Even the FIRE movement are changing, and they are now doing something called FINE (Financial Independence, New Endeavor).

Assuming SGD EPF, you at least do not need to contend with SGD depreciation so it's going to beat inflation and then some.

S&P is the safer option. Or you can consider mixing that with QQQ (or equivalent like EQAC) to capture possibly better return from tech stocks.

You are still young. The key is to keep your money invested and keep compounding. The road to FI is long, you won't see result until at least 5-10 yrs.

 

[lichtoefur]

@amanda88 Yeh true normal retirement , not so early hah, I can’t imagine how to do it early except having a good business running. That could be an option to consider

Wait do you mean storing SGD in MY EPF? I haven’t heard that before, but if you meant storing in sg version of EPF - CPF, then that’ll be issue as you’ll never be able to withdraw fully, unless you decide never to work in Sg again. The interest is lower than MY EPF tho

Ok, it seems mixture of S&P and QQQ is good, I’ll definitely consider that

And yeah the waiting game… gotta close my eyes and keep depositing

 

[amanda88]

@lichtoefur Yes, I meant CPF. MYR EPF had to content with 3% MYR depreciation per year. You have no such problem with SGD.

I don't work in SG, so I don't know how CPF withdrawal works, but it's not like MYR EPF allows you to withdraw before age 55, so I am assuming they are simpatico.

 

[lichtoefur]

@amanda88 That is a valid point, investing in MYR EPF for 5% gains , but with depreciation will be an issue; not just pure inflation, but including losing of spending power due to dropping of conversion rate. Perhaps EPF should take a lower cut, and more into index funds ?

 

[taylorjr94]

@lichtoefur What I would do :

If I were you, I would go for 20% MYR (just to have some MYR assets), 40% SGD SREITs and SG Banks (honestly there are no good sg equities outside of banks and reits), and 40% USD S&P 500.

Why?

USD Is self evident. So

MYR Devalues vs SGD quickly, yet returns in MYR isn't much better than SGD. Holding SGD thus makes more sense as a hedge vs MYR.

The minimal MYR presence is just to maintain records and activity, and sometimes, you need access to MYR liquidity.

 

[johndaniels]

@taylorjr94 This is more or less what I did 20 years ago while working in Singapore. Back in 2000 to 2010 was 50% MYR in properties and 2005 or started in VTI. Back in those days don’t have VWRA CSPX.
I would suggest OP doing taking your advice this age and time.

 

[lichtoefur]

@johndaniels Thanks both. What’s the SG REIT returns like? Never studied them before but I probably would soon

 

[gtfox26]

@lichtoefur being single can speed up your FIRE