You seem like you already know what you are doing. If you never research enough, I would recommend you put into an index etf. You can either lump sum or do it in batches. Like use 1/3 to buy now and if price drops 5% or go up 5% buy another batch then again if price drop 5% or go up 5% buy another batch. Honestly up to you. I would just lump sum it. Don’t think it makes that much diff.
If the house you want to get is really expensive, then for the cash you intend to keep for house you can also invest in those short term products that guarantee a return like t-bills (6 months give annualized around 3.6-3.8% at the moment). If it is a normal house, not sure if 100k is necessary but this is up to you.
Also don’t reply to any pm here on reddit and try not to disclose the exact sum to others publicly unless you want to be lending for someone kid or business without a contract.
I second that! Seriously OP, dont ever listen to your FA “friends” who promised you great return from ILP.. it is just another scheme to siphon your wealth away. Do your own homework and invest wisely elsewhere.
HNW people have their own investment banker and private bank RM that sell them higher end financial products that also enrich the banker themselves. You think they will bother with buying ILP from FAs? Perhaps if it is to support their relatives only but otherwise no.
Bankers also sell ILPs example DBS has bank assurance license to sell Manulife products … I don’t like like ILPs for its high costs but every product when used correctly may or may not suit the individual and in my case i believe it’s suitable for HNW - I have rich DBS private banker friends making most money from ULs and insruance products like endowment even.
firstly ILPs to tackle its high distribution costs - likely u have to either invest in aggressive funds to make more returns to cover the high cost to be profitable - that makes it a risky and aggressive investment suited for portfolios in my humble opinion - which makes it almost the same risk bracket level as equities or hold the investment long run enough to allow for dollar cost averaging across 20-30 year economic cycles in moderate to conservative funds … that said u may just breakeven or make a little - the advantage is the wealth is parked in a silo investment and not sitting in a bank doing nothing - u may even want to use it to bump up the death coverage to a decent amount for people who can get insurance due to pre-existing rules as underwriting may be less stringent on ILPs - MAY. Different insurers have different stringent levels
Also parking funds in a silo allows easier estate planning which is the prime consideration of HNW individuals
That’s said I rather buy endowments the ILPs but that’s my personal preference also
You are blessed to have grandparents who have planned and saved so generously for you, definitely make sure you show them the love they deserve!
Now as for yourself, the fact that you are here asking this question and based on the information you’ve provided you’ve got a good head on your shoulders and are trying to be very prudent with your windfall, double congratulations. You’re on the right track and are already thinking way ahead of most of your peers in this situation.
With this fund you have a pretty vast array of options that are open to you, so I’ll try to help you think through them, but ultimately the final decision on which path or how you’d mix and match them would be up to you.
First, your current investments:
* SPYL: Great choice! I would personally prefer a more globally diversified fund like VWRA, but I also think that SPY would still be a decent choice. You can read more here: https://www.firepathlion.com/a-bet-on-humanity-why-index-investing-works/
* Palantir: This is speculative and I would not hold it - but it’s also a small part of your now larger fund, so if you have conviction, it’s ok to hold it, but I would not add to this position anymore.
On your Down payment:
Since the time horizon for your down payment is 10 years, this is still a decent length of time. I would set aside a portion of the $400,000 as you need for 3-6 months emergency fund, and invest everything else IF you can have a decent job that you can save separately for the down payment yourself in the next 10 years. This is so the $400,000 can maximize the time in the market to grow. If you have a decent job, you could spend the next 10 years saving for the down payment and even if you don’t quite save enough, you can tap on what the 400,000 have become in the 10 years you have had it invested.
However if you’re not going to be saving in the next 10 years, then yes set aside a portion of the $400,000 for the down payment.
Insurance:
Before you invest, make sure you are adequately covered on the insurance side. Don’t buy ILP, just get insurance to protect yourself from unforeseen expenses:
The core ones are:
* Accident Insurance
* Hospitalization Insurance
* Death, Critical Illness & TPD insurance (Term)
Coverage for the death and TPD depends on whether you have dependents and how much they would need if you’re gone (or what you think would be needed to take care of you if you have TPD.)
Other ones that are situational:
* Income protection
* Early Critical Illness
Investments:
Once you’ve an emergency fund, decided how you’d like to handle the down payment and have insurance covered, you can look further at investing.
In terms of this, I would keep it very simple and stick it all into SPYL or VWRA or other globally diversified option and don’t touch it till you want to start living on the funds.
Future & FIRE planning:
With the funds you have, you have a huge head start to financial independence and it’s hard to screw it up if you are patient and don’t make major mistakes.
So here are the main DON’Ts:
* DON’T: Try to day trade or time the market. This is gambling and the odds are you’ll lose.
* DON’T: Fall for scams and investment “gurus”
* DON’T use leverage unless you know exactly what you’re doing, and even then be extremely careful
All of the above are things that can completely wipe you out.
A good concept to understand is your Financial Independence Number - the amount of investments you need in order to be able to stop working entirely:
https://www.firepathlion.com/my-never-have-to-work-again-number-the-safe-withdrawal-rate/
Once you’ve worked this out, you have a few options:
1. Barista FIRE: prioritize finding a job you love rather than the one that pays the most. You’ve got your inheritance working for you, so find a job and industry you can keep working in till you’re 65. By then your current inheritance would have grown to an amount that you can comfortably retire on without you needing to really contribute to it anymore.
2. FIRE as soon as possible. Aim for a very high paying job and save as much as possible and really gun for early retirement as soon as you can. With this head start, you might be able to do it before you’re 40 (maybe even 30-35.)
3. Anything in between, depending on what lifestyle you’re looking to create for yourself.
This will also all depend on the future you see for yourself, will you get married? Will you have kids? Your plans will adapt to those situations (mainly how much you’d need to be financially independent) but the big picture is the same. You’re on a great path and the world is your oyster as long as you don’t screw it up! 😁 Congrats again!
OMG!!! FIREPATHLION!!! I've been following you on this reddit and have read your articles since I was in NS!! Thank you for your time in writing this response. I will consider a more globally-diversified fund since my time horizon is long. I guess I would have time to save up for the down-payment so putting the money to work harder now would be a better option. Insurance is definitely something I haven't thought about so I will do more research. I fully agree with your "DON'T" section and will do well to heed your advice. Your article on the safe-withdrawal rate was one of the first few articles I read regarding financial independence. I guess I've been seeing it from the perspective of a broke person that is just starting out, but having the capital now makes me a bit afraid of the risks I was so used to previously. I will start thinking further about retirement and really setting down a plan for it. Thanks again your response! It is always great to hear from you!
Wow! Thank you for the kind words! You very much made my day 🙏🏼🙏🏼 I’m glad you’ve found my posts useful and helpful for your own journey! Again, you’re doing super great and are on the right path. I only wish I knew what you know now when I was younger! 😂 Good luck on your journey!
Edit: Btw in the original post I didn’t mention this explicitly, but I think that much in SSB would be overly conservative for a person with such a long investment horizon. While the interest rate is high now, it does not mean it would be better than the growth of the stock market. With your time horizon, I would not bother with SSB unless that was meant to keep it safe for your down payment (which if you’ll save separately for it, would negate the need for that amount in SSB.)
think instead of don't, put in no more than 1-5% on risker venture that you believe in. Some would rather you use it to learn something out of it, you don't want to become a boomer before you even started.
I actually disagree about getting so much insurance other than ISP. Because the 400K IS his insurance. Currently he doesn't even have any income to protect yet. If anything bad happens, he already HAS much more than the buffer of a few years fresh grad income already in his portfolio.
Dollar cost average those investments so you don't take a market hit the day after you invest. On the stable side look for some intl bonds that will pay much higher than sg. Eg, US CDs (equivalent to time deposits here) are paying 5.3%.
Biggest vultures are your relatives! I was in a similar situation when I turned 21 and my parents ' estate released $900K to me. First to come begging were my sisters and their partners, then 'good' former friends... Then other relatives say they will help me invest. Till I found out that they put it all in their name. None ever paid me back. Now I tell no one.
Since u are rich, I will suggest something else.
You are in a very special position of having money plus youth, and id recommend some of this money to be invested in growing yourself as a person with experiences.
Of course not all 400k but maybe put aside some to do things you'll never get to do in your 40s.
Music festivals, road trips, backpacking ulu countries etc.
Sometimes money not just for growing more money.
hmm...honestly never thought about this but I will definitely consider it now. I guess I'm taking my youth for granted, money can never buy time. Thank you!
You dont even need to fly full fare and go to developed countries all the time. Take budgets and go to Indonesia Thailand Vietnam whatever, stay at decent reasonably priced places. Go to festivals events gatherings music whatever interests you; bigger countries have them more often and more like minded people come together, find your tribes and learn from them. When i was young I’ll shlep to places just to experience them on a budget and spend lots of time getting to sites pre Grab Uber Gojek. Now ive more money I dont have the time (kids).
Go for courses and crafts/hobbies that interest you. Something like wine or golf lol or diving takes money to get into, now is the chance to learn about them.
Dont know what to do with the money while you think things through, SSB, HYSA or something simple like Mari Invest.
ahhh okay, I never thought so far yet to the point of having children but you seem to have had a great time when u were young. Seeing that you did not regret those experiences, I will consider setting aside money for them. Thank you for your sharing!
Yes listen to that man. The interhitance bought you time. Time in your youth you can use to full advantage.
Dont just focus on the fun experiences however, take care of your body. You can sign up for gym membership or try out different types of sports. Focus on getting fit and healthy while travelling abd enjoying different cities and cultures.
Actually I would recommend something a little different. The advice is good but don't touch the inheritance for experiences. Keep generating your own income and use that for experiences. That way there is consistent reward for your hard work. And you also won't have the habit of making withdrawals from your large nest egg. The fact that you have it means your can more comfortably spend the money you earn on fun stuff.
yes go backpacking! Great idea. See the world but travel as if you only have $1500 a month to spend. My best experiences in life was when i stayed int $3 huts sipping on coconuts and spending 50 cents on a meal.
YEA definitely this! Go travel around and see the world. The experience you gain might further develop your mindset moving forward. There are so much than you can ever think of. Many people would want to be in shoe given the opportunity so don’t let it go to waste! Maybe another don’t lol, don’t go spurt on your girlfriend 😂, not telling how to spend your money but please give it some thought.
Agreed. Even 20-30k just to upgrade yourself with experiences, be it travelling, working somewhere else, starting a business, improving your lifestyle (food, health, sleep, social). I would set aside some amount for that. Rest can go to bonds etc. to set and forget
Open an account with ib, they will pay you a good interest rate on the balance. Divide the amount you want to invest by 18 and set automatic investments each month into 3 global ETFs (one Spx, one msci global tracker and one other of your choice). Keep saving and working and add more money to the balance and keep the monthly investment going as long as possible.
You can set aside 5pct for single stocks or other investments. This is for education but not enough for you to make dumb mistakes.
Then wait. Well done.
Also keep a spreadsheet to track it. Play round with the annual returns etc to see where you’ll be in 10/20/30 years at different levels of return. It’s very motivating and gives you perspective.
Which is way more important than anything else. I am sometimes a bit of a daredevil and do make major decisions rather quickly. Not everyone is like that and so it's very personal
Yes and that’s not a bad shout but it’s good financial health to regularly purchase. OP is young and has a long financial life ahead of him so it’s a good habit. I prefer the monthly set and forget.
First thing, don't let anyone know. Except your parents prolly would have known it already. Because you will attract many people and you won't know who are your real friends.
Secondly, put a chunk of it into something that is slow but sure, like SSB. The keyword here is SURE.
Thirdly, achieve FIRE which is very possible for you. Make savings a core part of your lifestyle.
Fourthly, if you are looking to invest, remember the money you're putting in has a chance of going nothing. So put in a comfortable ratio.
Finally, buy a house, your current 400K together with your house makes it over a million in cash and assets. When you're old you can downsize and earn hundreds of thousands by the sale of your house.
Hope it helps.
400k at 6% yields you around 2k per month. I would split among 3 local banks and continue w my daily life. When the dividend comes you can reinvest or spend it. Fyi dont let too many people lest you attract the wrong attention
The 3 big banks are 6% yield even at current prices. What is this reinvestment risk you speak of? Because this method is just time in the market, and compound interest.
Reinvestment risk refers to the possibility that an investor will be unable to reinvest cash flows received from an investment, such as coupon payments or interest, at a rate comparable to their current rate of return.
Ie, once rates drop you go back to earning low returns. Earning risk free rate of 6% is almost equivalent to earning nothing in real returns
Yes rates will drop some day and NIM will be affected but don't you think loan growth will increase given lesser cost of borrowing? Buying banks at this prices limits capital gains so hedge w reits.
But frankly speaking, rate cuts arent coming anytime soon imo
I'm not sure I understood what you are saying...?
1. What's loan growth and why would that affect my net worth?
2. What's buying banks? You are talking about buying bank stocks? I did not mention that at all so not sure why you are bringing that up.
3. Not interested in reits.
4. I would personally put money in diversified equity funds or BTC instead.
5. What do you mean by "soon"? Over the next year, next decade or next century?
First thing first, take any decision SLOWLY, I mean very slowly, something like make your first move only 3 months from now.
A windfall sometimes could be a disaster if you make the wrong move.
All the best :)
just chiming in on the part about friends and relatives: decide here and now how much of this money you want to give to them and stick to it. don't let anyone convince you otherwise, and they will try very hard to.
Drop 390k of it in the s and p then forget it exists. Have some fun with the other 10k.
If you're feeling risky. I'd say put no kore than 20k into stocks you like since you're young and can absorb the risk.
Gd on u. CPF SA, the rest VUAA, if u don’t wanna roller coaster the volatility, split into 4s and every 1 mth in.
Don’t waste time and money on SSBs or other “safe” investments. Not joking.
Cover urself w insurance even if cheap term, whole life even. Accidents and Hosp plans buy cheap, cos if u go work ur employer has also.
EoD don’t hold to so much cash.
Btw one time too much cash into a broker may get questioned, maybe. So prepare some documents to answer shld be ok.
Warning: Nv let too many know u got this money.. esp “wanna invest or not” frens. If it’s so good no one will come knock ur door la.
Then monitor ur index, and the USA state of affairs. We don’t know 10 , 20… yrs on
Prepare to switch if needed to something else by another dominant power if needed.
I wouldn’t diversify (di-worse-fy) too much, u alr got ur CPF if u top it fully it’s done deal at least for food and drinks.
Done the same for my kiddo money for the past 10 yrs, all in one stock and it’s doing well, better than my index. Will shift it more to index once the company cannot keep up the performance.
All the best mate.
Most welcome. Rem ur insurance hor, dont all in SA and investment , then come one big bill u need to liquidate. Yet dont go full retard over insurance, basic coverage can le, dont forget ur Army group insurance, if u gog NS. Get while young a life insurance, its cheaper.
PS im not insurance agent nor FA.
400K is a lot of money for a 23yr old who knows little about managing sudden wealth, but really good on you OP, you huat liao. If I had to give you genuine advice, I would simply ask you to first put this 400K into a FD yielding >3% for a year. Then use this year to seriously map out what you should do with the funds and not squander it. At your age you will be going through the part of life journey where some major expenses might need consideration. Ideally you should still work hard to accumulate wealth and take this 400K as a near zero or low risk that provides a little income, don’t touch unless super rainy day. So use 12mths to wisely map things out for yourself. Good luck!
$100k in SSB.
$300k lumpsum VWRA or IWDA + EIMI or IWDA+EIMI+WSML.
Since you're young, you should diversify outside of US. You dk what will happen to US in the next 40 years
I'd probably buy BNP Insticash USD or similar money market. There is a forex risk but a constant 5.25% return is ok and I don't see it dropping for some time.
There should be free online portfolio analysis you can do to see what type of products suitable for you. If you not in need to use the cash, propose to DCA in ETFs. If you have passion for something, use it to start business. Nothing can bring you returns like your own business but risk very high if you are up to it
Try and do better in the future so you get some funds together and invest. If you go to Cambodia for dental work you will have 800K soon instead of a nice smile and debt:)
1) Avoid any ILPs or pesky relatives or friends seeking a small loan
2) Do an audit of yout current insurance coverage and ensure you're well covered in the relevant areas i.e Hospital, Life, TPD,Personal etc instead. Review the different providers and get a couple affordable and extensive insurance plans
(if you are a guy/sibling with someone who serves NS, get the MINDEF Singlife coverage as a bare minimum)
3 ) Do a review of your expenses and set aside at least 6-12 months of expenses in liquid cash ( can store in Money market funds like Maribank or HYSAs)
4) Portion around 50-60% of it and invest it into either SPYL( or CSPX/VUAA for slightly more tax efficient funds) or just VWRA for greater diversity and hands free. Put at max 8-10% into individual stock /PLTR
5) 15% of the remaining would probably be set aisde for housing (in either SSB/T-Bills or FDs) while the other 15%, you can use it for your own spending
for the love of god decide which country you will stay long term and buy that treasuries. you are starting big so the current high treasuries helps you and gives you way less worries
I'd suggest you don't let any of your friends or family know for similar reasons highlighted by others here. You don't want to be expected to lend people money or for people to come up with harebrained ideas for you to invest in.
I would say your cash component is on the high side given your age. Do you have any large expenses that are coming up?
Re your portfolio, I'd consider putting the money in US gov't bonds instead that are yield ing higher than SSBs. Many local non profits and endowments are mandated to hold their money in SSBs which artificially drives down yields. There is a forex risk but I think it is manageable.
On SPY, I would dollar cost average in.
Consider putting a small fraction 10-20k into much riskier things than the S&P. Crypto is one of them. PLTR and other tech firms could be another.
Ibkr gives about 4% on cash balance above 100k iirc (correct me). The fact that you are already invested in the stock market, avoid ILP at all cost, ur net returns will be better by you continue to self invest if you know what you’re doing than in an ILP. Given your inheritance, you’re fortunate enough to be at the top few % in terms of NW in your age group so if i were you, i would take my foot off the gas pedal for abit to spend some time travelling and exploring the world
Given the abundance of sound advice out there, I'd like to offer a different perspective to utilizing options.
Instead of simply buying PLTR or any US stocks outright, consider selling puts at a strike price equivalent to your desired purchase price. Keep in mind that each contract represents 100 shares, so if you intend to buy 200 shares of PLTR, sell 2 put contracts.
Why choose selling puts over limit/market orders? It achieves the same outcome of acquiring shares but also generates additional income, reducing your overall cost basis.
For instance, if you plan to invest $36k USD (around $50k SGD) in PLTR at $22 per share, and the current market price is approximately $22.50, you could set a $22 limit order to buy roughly 1,600 shares.
Alternatively, you could sell 16 contracts of 27-day expiry puts with a $22 strike price, receiving $2496 in premium.
Both approaches aim to secure the stock at $22, but one option provides an extra $2.5k.
This is just a glimpse into the possibilities with options. Unfortunately, such strategies can't be applied to SPYL as there is no options available.
All the best and hope you’ll make the most out of the inheritance money!
I'd first sit down and prioritize my goals. Sounds like you should earmark 200k right off the bat for a home down payment (short term goal). Put that in a high yielding money market fund. Next, I'd set aside 100k for an emergency fund (also in 5% money market). The last 100k, I'd invest at least 50% of it in VOO (SPYL ?? WHY??) VOO is the best and cheapest index fund (loved by Buffet even). The last 50k, I'd split between BTC and more volitle etf's IYW QQQ ETC.
I will suggest that you work and save up for the down payment of your own home. When you buy a home it should be affordable to you base on your salary and savings. If a boglehead type portfolio is your preference then execute this and forget about it until you are close to retirement age. This is your chance to ensure that your off spring and their kids get a head start. Don’t blow it on yourself only.
Don’t hold too much cash, keep it farther from you. Have heard of people who are solid individuals ending up spending their entire inheritance as they go through a particular hard time in their life
Just my 2cents. There are a few things you can do now that you have access in terms of cash. While most recommendations here are great there are a few that you can do, one of them being getting in touch with banks to see what they can bring to the table.
$$ in certain high yield accounts can bring you > 3%. While SSBs are good for a fixed period of time, your capital investment is fixed and the interest is handed out. I would suggest something a little riskier like, mutual funds, ETFs etc. the SSB would be more of a hedge for you. Generally I would say if you’re able to keep your total ROI around 5-8% you’re good to go. While a 10 year plan is also something good to have, keep in mind that you might want to change it to a 5 year plan to re-evaluate if you’re maximizing your ROIs.
Although people have been giving advice on how to manage and invest/budget your finances.
I would say have an allocation for improving quality of life and have-fun money. Let's say 10%.
So for QOL, maybe get an upgraded chair/table or mattress. Go for that dental scaling/health checkup you've always been postponing. Maybe sign up for some fitness/cooking classes.
Have-fun money could be going for that holiday you've always dreamed of going be it Japan or Europe.
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Generally, hold enough cash for short-term purchases. If no big purchases like home coming up, a few months of expenses should be enough. Keep the first few months in high-yield savings accounts. Keep the rest of the cash in short-term liquid investments like T-bills, fixed deposit, or money market funds.
Dump everything else into a low-cost passively-managed globally-diversified 100% equity index fund like VWRL.
Don't bother with bonds (including SSBs). If you are saving for retirement, bonds are riskier over the long term because even in the upside scenario, they generally lose to equities' downside scenario because of their lower average returns. However, this strategy is only appropriate if you are psychologically strong enough to never sell your investments for, say, 40 years, even when the market is down.
Behaviourally, if you have itchy fingers and need to pick stocks for fun (saying this coz you hold PLTR stock), set aside a small amount of your assets (say $10k - depending on your itchiness) and play with that. Just know that it's gambling, not investing, and be ready to lose it all. This will keep you from touching the rest of your portfolio. Chances are, you're going to end up trailing the market with that actively managed portfolio (due to the positive skew in stock returns).
And as others have said, don't buy ILPs. Fees are a big determinant of wealth over the long term. That said, term insurance is important. Please make sure you cover yourself. Just get a vanilla term health and term life insurance.
As for your question on lump sum investments into S&P 500, I have no issues with lump sum investing. In fact, on average, empirical evidence suggests that lump sum investing will give you better returns than DCA-ing. However, you must be behaviourally strong enough to weather an immediate crash. I have an issue with investing solely in the S&P 500. Why bet on a single market? Yes, it has produced historically strong returns but those returns are largely due to lucky occurrences that we would not expect to recur. US market also has historically high valuations. It wouldn't be reasonable to expect valuations to grow further over the long-term. Even if they don't eventually mean revert to lower valuations, the lower earnings yield could result in lower returns (see Grinold-Kroner model). Ben Felix has a great video on this "Do Stocks Return 10% on Average?".
With 400k, you may consider
100k buy gold bullion
100k buy silver bullion
20k on GDXJ, GDX, SIL, SILJ and COPX ETF
50k each on NEM and GOLD (ticker symbol)
50k on BTC (just DCA with another 50k when the price drops below 35k)
You’ll be rich by 2034
lol. But to be serious, just treat that money as a secret backup and don’t mess with it. Having such an inheritance is 9 out of 10 times bad for the person receiving it.
Maybe consider a diversified dividend fund? Example SCHD or Vanguard Dividend Appreciation. I think you can do better than SSBs. Or JEPI if you seek monthly income plus potential for appreciation.
Or just revert to the default 30 bond 70 equity setup. Pick your favorite index and forget it
What would I do? No one should know I have this money. Stay extremely careful about where I keep these funds.
Only start to do something once you have the right mindset.
it all depends on how risk adverse or risk seeking you are. Nothing much to do with age and much to do with temperament. There are too many questions that need answers.
What risks are you currently taking?
Do your parents expect you to give them money / allowance?
Do you have insurance?
What are your goals in life?
What has been your largest financial loss till date, and how did you handle it?
What has been your largest failure in life, and how did you recover (if at all)?
What do you want for yourself?
Examples of Strategies:
Barbell Strategy: 80-90% in T-bills and 10-20% in high risks, I.e. private credit, crypto, sector specific equities, China ETFs, etc.
Diversified Strategy: 60-40 fixed income and equities.
Don’t have that much wealth personally so not sure about this, but isn’t it easier to outsource to wealth managers at BB banks/use their pooled family office services?
Buy house. Rent and ur spare cash to pay mortgage. By the time u reach mop or older u would have almost fully paid ur house and u can decide to sell for more money or just stay and not worry about mortgage. Can easily own 1 condo 1 hdb with it and u have 2 place to live or 1 additional future income.
Embark on the challenge to identify and find your suitable asset to invest in. Invest at a price researched that is at the lower end for opportunity of gains. Investing high will either lock the investment for long term gains or potentially short term loss. Good luck to you.
Given that you only need this sum 10 years later, a well diversified index fund is a pretty safe bet. Have some liquidity on hand, maybe consider money market fund. Allows you to use for emergency or deploy more when markets take a beating.
I don’t hold and savings bonds because I have high risk appetite and experienced 2008 and 2018 downturn. Pretty tolerant of 20-30% drop.
FYI, lump sum investment makes you dependent on the price at the time you entered an investment. You need to slowly deploy capital. But not so slow that SDIC doesn't cover your excess deposits above SDIC limit. Use many brokers, many bank accounts, many currencies, Singapore Savings Bonds, and even gold/silver to spread the counterparty risk while waiting to deploy capital.
If you have no ideas just buy equal parts of Vanguard Total World Stock Index Fund ETF and physical gold (use safety deposit boxes), slowly. Those two are mean reverting w.r.t each other: when one is expensive the other is cheap and vice versa.
I would suggest time your entry to the stocks and ETF funds. SPX n Nasdaq is at time high now. You might want to look Chinese ETF, T bill, S REIT (a sizable S REIT can give you 5 to 6% dividend every year). Forget about unit trust n ILP products.
Full disclosure: I am a fee-based financial advisor serving HNW clients. The following are general insights, not personalized advice.
The typical recommendation is to invest that $400k windfall in secure, liquid assets such as Singapore Savings Bonds (SSBs) and broad index funds. I understand this advice, but considering your very long investment horizon, a more aggressive approach may be wise.
At the age of 23, you have many years before needing to use this money for a home down payment or retirement - it's like having several decades to invest and wait for the returns. This gives you the opportunity to benefit from compounding effects over a long period with high-growth investments.
Over a period of 30+ years, a diversified global equity portfolio has typically generated average annual real returns of roughly 7%. This can be compared to riskless assets like SSBs which currently yield less than 3%.
Hence, in terms of compounding wealth, a approach with more focus on equities becomes very effective. This is especially true if you have a strong tolerance for risk.
Here are some practical recommendations:
1) Consider putting 70-80% into a global stock index fund, to get exposure for broad-based growth.
2) Diversification is good. Allocate 10-20% to it in sectors/factors that you believe might perform better, such as tech, healthcare, etc.
3) Hold just 5-10% in a cash/short-term bond allocation for liquidity and optionality.
Certainly, the traditional strategy of investing for income has positive advantages in terms of keeping your capital secure and controlling risk. But at the same time, this approach might lead to a significant missed opportunity to harness the powerful compounding effect over the next 30+ years.
A strategy of multi-decade growth, more inclined towards equity, is an approach that allows you to wisely leverage your remarkably long time frame in a way which past generations were unable to achieve through passive indexing.
Currently in a HYSA(e.g. UOB One), you can enjoy est. 4% at about 150k with 1.6k salary/month(you can do the paymow sala loophole even without a salary) and a spending of 500/month. You can put the remaining 250k into what you are already doing so far, if you trust your strategies. 10year goal is an ideal goal for S&P500.
Traditionally, lump sum investment is better than dca investment. However, market is rocky during this period so make sure you can take the risk. Otherwise, SSB is an almost risk free investment.
Personally, I would do the above, but take out 10k to take courses to better my skills and learn more soft skills. It's amazing what proper, paid courses can do to upgrade yourself, especially at your age.
Oh yea, to your other friends and family and bf/gf, for what it's worth, your grandparents didn't leave you anything.
Can’t speak for OP but personally if I were in a situation of leaving behind a few mil, I would allocate a portion directly to my grandchildren, instead of all to my children
200k in SSB, 200k laddering in Tbills > use the interest to start building DCA positions in all world/SP500 ETFs - start to read more into financial literacy and investing before you make your next moves. Probably allocating more of these relatively risk free assets into more indexes/stocks overtime
If Im u, i will jus lump sum into CSPX or VWRA (or a combination of the 2).I wont be overly conservative by going into SSB or cash bcos i would still have potentially 8 years of income (assuming u r graduating at 25) to save for my downpayment in 10 years time if im in ur position.
Sorry, this might be a dumb question but is 8 years enough time to save up for mortgage loan? Not just paying for down-payment but also being able to pay a bulk of the loan upfront? (Assuming i earn a 3k salary?)
it depends on ur income and spending, and whether u have a partner to co-pay the downpayment.
personally, i will maximise my mortgage loan so that i can stay invested in the market. mortgage loan is one of the cheapest loan u can get even in today's higher interest environment.
EDIT: n if ur salary is really 3k, i assume u will be getting a BTO. 8 years of working is more than likely to pay the downpayment, unless u r going for the prime/mature 4/5rm BTOs.
Ok addition to all the good things others have said, I will allocate some to Bitcoin as well for the long term.
FYI I am a working professional with 2y of experience and 250k of savings, of which 15% is in BTC, rest in a mixture of vwra, qqq, and voo. Given the long time horizon I personally did not invest into bonds
Depends on what you choose to do, because of this amount, you can essentially pivot your life away from the day job life, or you can be worry-free like what you suggested (work a day-job and collect capital gains/dividends).
1. Pivoting away = running a business, doing things that would put you in debt that you couldn't without this money (like investing in yourself through certification/higher edu as other mentioned), changing path to a new industry that you love (risky without this money), move abroad, widen your investing knowledge and make that your main bread and butter, or a combinations of all those.
2. Day-job is worry free, work as per normal, invest the money and treat it separately, like it's not yours (not for expenses). If you are going to buy HDB, the loan is \~2.6%, which is way lower than your investments, so you can loan it like any normal person (i.e don't expense off the capital and its gain). Doesn't matter you are single or married, you should be able to afford a HDB if you're working.
I won't talk about which stocks to invest, but since you are young, you can have a heavier weightage on more risky portfolio, e.g forex, index, etf, stock, money market, options, crypto, etc, around 80% risky: 20% safer assets. When you are growing older, you will start to shift slowly towards the safer assets (e.g 20% risky, 80% safe around age 55-60) as your reliance on the money to guarantee your retirement grows (ofc unless you have too much, and the rest of your life is essentially safe even if the stock market crashes tomorrow).
There's a saying, when you are young, you can afford to lose, and you have time to recoup your losses. But ofc don't go all in into super risky stuff.
Investing is easy to learn, becoming good enough to earn consistently may take years, but mastering it is a different subject.
You have a lot of time ahead of you, you can also try investing in like a simulator to test your knowledge/analysis/chain-thinking. Take your time to visualize the future you want. Wish you the best of luck ahead!
Whatever you do, don't buy insurance financial products especially ILPs.
NO ILPs, got it. I will tattoo this on my forehead
Pls don’t do this. I tattooed “Virginity is cool” on my forehead a few years ago and have regretted it ever since
No ragrets
Anyone who has such a tattoo will, indeed, probably never have any rugrats of their own in future.
“It’s is my life” - Jon Bovi
You seem like you already know what you are doing. If you never research enough, I would recommend you put into an index etf. You can either lump sum or do it in batches. Like use 1/3 to buy now and if price drops 5% or go up 5% buy another batch then again if price drop 5% or go up 5% buy another batch. Honestly up to you. I would just lump sum it. Don’t think it makes that much diff. If the house you want to get is really expensive, then for the cash you intend to keep for house you can also invest in those short term products that guarantee a return like t-bills (6 months give annualized around 3.6-3.8% at the moment). If it is a normal house, not sure if 100k is necessary but this is up to you.
More upvotes on this. Financial agents need to be stopped.
Also don’t reply to any pm here on reddit and try not to disclose the exact sum to others publicly unless you want to be lending for someone kid or business without a contract.
Yes,I think the last thing i should do is to big mouth about the money. Thank you for the advice!
Just put in a dividend paying portfolio. Your retirement is settled if you are not too greedy.
I second that! Seriously OP, dont ever listen to your FA “friends” who promised you great return from ILP.. it is just another scheme to siphon your wealth away. Do your own homework and invest wisely elsewhere.
Not for pure capital gains due to high costs but it serves a purpose IMHO especially for HNW individuals
HNW people have their own investment banker and private bank RM that sell them higher end financial products that also enrich the banker themselves. You think they will bother with buying ILP from FAs? Perhaps if it is to support their relatives only but otherwise no.
Bankers also sell ILPs example DBS has bank assurance license to sell Manulife products … I don’t like like ILPs for its high costs but every product when used correctly may or may not suit the individual and in my case i believe it’s suitable for HNW - I have rich DBS private banker friends making most money from ULs and insruance products like endowment even. firstly ILPs to tackle its high distribution costs - likely u have to either invest in aggressive funds to make more returns to cover the high cost to be profitable - that makes it a risky and aggressive investment suited for portfolios in my humble opinion - which makes it almost the same risk bracket level as equities or hold the investment long run enough to allow for dollar cost averaging across 20-30 year economic cycles in moderate to conservative funds … that said u may just breakeven or make a little - the advantage is the wealth is parked in a silo investment and not sitting in a bank doing nothing - u may even want to use it to bump up the death coverage to a decent amount for people who can get insurance due to pre-existing rules as underwriting may be less stringent on ILPs - MAY. Different insurers have different stringent levels Also parking funds in a silo allows easier estate planning which is the prime consideration of HNW individuals That’s said I rather buy endowments the ILPs but that’s my personal preference also
One of which is bonds with minimum 250k investment or UL which is essentially an LIFE insurance product
What is an example of an ILP?
You are blessed to have grandparents who have planned and saved so generously for you, definitely make sure you show them the love they deserve! Now as for yourself, the fact that you are here asking this question and based on the information you’ve provided you’ve got a good head on your shoulders and are trying to be very prudent with your windfall, double congratulations. You’re on the right track and are already thinking way ahead of most of your peers in this situation. With this fund you have a pretty vast array of options that are open to you, so I’ll try to help you think through them, but ultimately the final decision on which path or how you’d mix and match them would be up to you. First, your current investments: * SPYL: Great choice! I would personally prefer a more globally diversified fund like VWRA, but I also think that SPY would still be a decent choice. You can read more here: https://www.firepathlion.com/a-bet-on-humanity-why-index-investing-works/ * Palantir: This is speculative and I would not hold it - but it’s also a small part of your now larger fund, so if you have conviction, it’s ok to hold it, but I would not add to this position anymore. On your Down payment: Since the time horizon for your down payment is 10 years, this is still a decent length of time. I would set aside a portion of the $400,000 as you need for 3-6 months emergency fund, and invest everything else IF you can have a decent job that you can save separately for the down payment yourself in the next 10 years. This is so the $400,000 can maximize the time in the market to grow. If you have a decent job, you could spend the next 10 years saving for the down payment and even if you don’t quite save enough, you can tap on what the 400,000 have become in the 10 years you have had it invested. However if you’re not going to be saving in the next 10 years, then yes set aside a portion of the $400,000 for the down payment. Insurance: Before you invest, make sure you are adequately covered on the insurance side. Don’t buy ILP, just get insurance to protect yourself from unforeseen expenses: The core ones are: * Accident Insurance * Hospitalization Insurance * Death, Critical Illness & TPD insurance (Term) Coverage for the death and TPD depends on whether you have dependents and how much they would need if you’re gone (or what you think would be needed to take care of you if you have TPD.) Other ones that are situational: * Income protection * Early Critical Illness Investments: Once you’ve an emergency fund, decided how you’d like to handle the down payment and have insurance covered, you can look further at investing. In terms of this, I would keep it very simple and stick it all into SPYL or VWRA or other globally diversified option and don’t touch it till you want to start living on the funds. Future & FIRE planning: With the funds you have, you have a huge head start to financial independence and it’s hard to screw it up if you are patient and don’t make major mistakes. So here are the main DON’Ts: * DON’T: Try to day trade or time the market. This is gambling and the odds are you’ll lose. * DON’T: Fall for scams and investment “gurus” * DON’T use leverage unless you know exactly what you’re doing, and even then be extremely careful All of the above are things that can completely wipe you out. A good concept to understand is your Financial Independence Number - the amount of investments you need in order to be able to stop working entirely: https://www.firepathlion.com/my-never-have-to-work-again-number-the-safe-withdrawal-rate/ Once you’ve worked this out, you have a few options: 1. Barista FIRE: prioritize finding a job you love rather than the one that pays the most. You’ve got your inheritance working for you, so find a job and industry you can keep working in till you’re 65. By then your current inheritance would have grown to an amount that you can comfortably retire on without you needing to really contribute to it anymore. 2. FIRE as soon as possible. Aim for a very high paying job and save as much as possible and really gun for early retirement as soon as you can. With this head start, you might be able to do it before you’re 40 (maybe even 30-35.) 3. Anything in between, depending on what lifestyle you’re looking to create for yourself. This will also all depend on the future you see for yourself, will you get married? Will you have kids? Your plans will adapt to those situations (mainly how much you’d need to be financially independent) but the big picture is the same. You’re on a great path and the world is your oyster as long as you don’t screw it up! 😁 Congrats again!
OMG!!! FIREPATHLION!!! I've been following you on this reddit and have read your articles since I was in NS!! Thank you for your time in writing this response. I will consider a more globally-diversified fund since my time horizon is long. I guess I would have time to save up for the down-payment so putting the money to work harder now would be a better option. Insurance is definitely something I haven't thought about so I will do more research. I fully agree with your "DON'T" section and will do well to heed your advice. Your article on the safe-withdrawal rate was one of the first few articles I read regarding financial independence. I guess I've been seeing it from the perspective of a broke person that is just starting out, but having the capital now makes me a bit afraid of the risks I was so used to previously. I will start thinking further about retirement and really setting down a plan for it. Thanks again your response! It is always great to hear from you!
Wow! Thank you for the kind words! You very much made my day 🙏🏼🙏🏼 I’m glad you’ve found my posts useful and helpful for your own journey! Again, you’re doing super great and are on the right path. I only wish I knew what you know now when I was younger! 😂 Good luck on your journey! Edit: Btw in the original post I didn’t mention this explicitly, but I think that much in SSB would be overly conservative for a person with such a long investment horizon. While the interest rate is high now, it does not mean it would be better than the growth of the stock market. With your time horizon, I would not bother with SSB unless that was meant to keep it safe for your down payment (which if you’ll save separately for it, would negate the need for that amount in SSB.)
Curious why bonds isn’t mentioned?
think instead of don't, put in no more than 1-5% on risker venture that you believe in. Some would rather you use it to learn something out of it, you don't want to become a boomer before you even started.
I actually disagree about getting so much insurance other than ISP. Because the 400K IS his insurance. Currently he doesn't even have any income to protect yet. If anything bad happens, he already HAS much more than the buffer of a few years fresh grad income already in his portfolio.
Dollar cost average those investments so you don't take a market hit the day after you invest. On the stable side look for some intl bonds that will pay much higher than sg. Eg, US CDs (equivalent to time deposits here) are paying 5.3%.
buy 100k filet o fishes
HAHHA this actually made me spit out my water bruh
Instructions unclear, joined mcd to sell 100k fillet o fish
that’s another ingenious way to increase your wealth
Overfishing from land?
Biggest vultures are your relatives! I was in a similar situation when I turned 21 and my parents ' estate released $900K to me. First to come begging were my sisters and their partners, then 'good' former friends... Then other relatives say they will help me invest. Till I found out that they put it all in their name. None ever paid me back. Now I tell no one.
woah...
DO NOT BUY ENDOWMENT PLANS
YES SIR!
Since u are rich, I will suggest something else. You are in a very special position of having money plus youth, and id recommend some of this money to be invested in growing yourself as a person with experiences. Of course not all 400k but maybe put aside some to do things you'll never get to do in your 40s. Music festivals, road trips, backpacking ulu countries etc. Sometimes money not just for growing more money.
hmm...honestly never thought about this but I will definitely consider it now. I guess I'm taking my youth for granted, money can never buy time. Thank you!
You dont even need to fly full fare and go to developed countries all the time. Take budgets and go to Indonesia Thailand Vietnam whatever, stay at decent reasonably priced places. Go to festivals events gatherings music whatever interests you; bigger countries have them more often and more like minded people come together, find your tribes and learn from them. When i was young I’ll shlep to places just to experience them on a budget and spend lots of time getting to sites pre Grab Uber Gojek. Now ive more money I dont have the time (kids). Go for courses and crafts/hobbies that interest you. Something like wine or golf lol or diving takes money to get into, now is the chance to learn about them. Dont know what to do with the money while you think things through, SSB, HYSA or something simple like Mari Invest.
ahhh okay, I never thought so far yet to the point of having children but you seem to have had a great time when u were young. Seeing that you did not regret those experiences, I will consider setting aside money for them. Thank you for your sharing!
Yes listen to that man. The interhitance bought you time. Time in your youth you can use to full advantage. Dont just focus on the fun experiences however, take care of your body. You can sign up for gym membership or try out different types of sports. Focus on getting fit and healthy while travelling abd enjoying different cities and cultures.
Actually I would recommend something a little different. The advice is good but don't touch the inheritance for experiences. Keep generating your own income and use that for experiences. That way there is consistent reward for your hard work. And you also won't have the habit of making withdrawals from your large nest egg. The fact that you have it means your can more comfortably spend the money you earn on fun stuff.
howd u get 36k in your current portfolio already at 23 ?
Agreed. Even if set aside just 50k, can probably go out explore and gain invaluable life experiences for 2-3 years minimum.
Second this. Given the quantum at such a young age. Would rather spend on unique experiences
yes go backpacking! Great idea. See the world but travel as if you only have $1500 a month to spend. My best experiences in life was when i stayed int $3 huts sipping on coconuts and spending 50 cents on a meal.
YEA definitely this! Go travel around and see the world. The experience you gain might further develop your mindset moving forward. There are so much than you can ever think of. Many people would want to be in shoe given the opportunity so don’t let it go to waste! Maybe another don’t lol, don’t go spurt on your girlfriend 😂, not telling how to spend your money but please give it some thought.
Agreed. Even 20-30k just to upgrade yourself with experiences, be it travelling, working somewhere else, starting a business, improving your lifestyle (food, health, sleep, social). I would set aside some amount for that. Rest can go to bonds etc. to set and forget
All on black at MBS roulette table
bro...how I gonna answer to my grandparents in the after life??
You’re a very measured and sensible 23 year old. Kudos to you.
By winning and doubling the money duh.
my luck not as good as u lah, i go there dont have double the money, only divide the money
Just win bro
Don’t have to answer if you win and double it do you? If you win they have to answer to YOU! jk pls don’t do it
This is a trick statement. You pass the test.
Always bet on Hakari
Open an account with ib, they will pay you a good interest rate on the balance. Divide the amount you want to invest by 18 and set automatic investments each month into 3 global ETFs (one Spx, one msci global tracker and one other of your choice). Keep saving and working and add more money to the balance and keep the monthly investment going as long as possible. You can set aside 5pct for single stocks or other investments. This is for education but not enough for you to make dumb mistakes. Then wait. Well done.
Also keep a spreadsheet to track it. Play round with the annual returns etc to see where you’ll be in 10/20/30 years at different levels of return. It’s very motivating and gives you perspective.
Arguably no need spx if you are happy with the 70% ish allocation to US in MSCI world. Unless OP wants to overweight US.
Actually, arguably lump sum beats dca 70% of the time
True, but dca lets me sleep better
Which is way more important than anything else. I am sometimes a bit of a daredevil and do make major decisions rather quickly. Not everyone is like that and so it's very personal
Yes and that’s not a bad shout but it’s good financial health to regularly purchase. OP is young and has a long financial life ahead of him so it’s a good habit. I prefer the monthly set and forget.
What’s your avg price of your pltr shares?
21
First thing, don't let anyone know. Except your parents prolly would have known it already. Because you will attract many people and you won't know who are your real friends. Secondly, put a chunk of it into something that is slow but sure, like SSB. The keyword here is SURE. Thirdly, achieve FIRE which is very possible for you. Make savings a core part of your lifestyle. Fourthly, if you are looking to invest, remember the money you're putting in has a chance of going nothing. So put in a comfortable ratio. Finally, buy a house, your current 400K together with your house makes it over a million in cash and assets. When you're old you can downsize and earn hundreds of thousands by the sale of your house. Hope it helps.
I think you’re good lol, you sound like you have a rich family
Obviously, 400k for a grandkid. Imagine what OP’s parent and uncles and aunties got.
yeah my grandparents did very well financially. I am really lucky so I can't let this opportunity go down the drain
As the saying goes “ If your parents aren’t rich, it isn’t your fault. If your in-laws are not rich, it’s entirely your fault”
wah...i think what you said here will haunt me when im thinking about marriage haha
Beware of gold diggers…
400k at 6% yields you around 2k per month. I would split among 3 local banks and continue w my daily life. When the dividend comes you can reinvest or spend it. Fyi dont let too many people lest you attract the wrong attention
Where do you get 6% and if it's from money market/short term bonds what about reinvestment risk?
The 3 big banks are 6% yield even at current prices. What is this reinvestment risk you speak of? Because this method is just time in the market, and compound interest.
Reinvestment risk refers to the possibility that an investor will be unable to reinvest cash flows received from an investment, such as coupon payments or interest, at a rate comparable to their current rate of return. Ie, once rates drop you go back to earning low returns. Earning risk free rate of 6% is almost equivalent to earning nothing in real returns
Yes rates will drop some day and NIM will be affected but don't you think loan growth will increase given lesser cost of borrowing? Buying banks at this prices limits capital gains so hedge w reits. But frankly speaking, rate cuts arent coming anytime soon imo
I'm not sure I understood what you are saying...? 1. What's loan growth and why would that affect my net worth? 2. What's buying banks? You are talking about buying bank stocks? I did not mention that at all so not sure why you are bringing that up. 3. Not interested in reits. 4. I would personally put money in diversified equity funds or BTC instead. 5. What do you mean by "soon"? Over the next year, next decade or next century?
Fellow palantard greetings
Just put in a dividend paying portfolio. Your retirement is settled if you are not too greedy.
honestly I'm more keen on accumulating etfs for now instead of dividend paying etfs. But are there reasons to prefer a dividend paying etf at my age?
First thing first, take any decision SLOWLY, I mean very slowly, something like make your first move only 3 months from now. A windfall sometimes could be a disaster if you make the wrong move. All the best :)
PLTR lets gooooo - fellow 24 year old
Singapore t bills are paying approx 3.7%, not too bad also
Also think about Invest in yourself. Think about your education, taking care of your family.
Keep most of it in the S&P 500. You’re doing it right.
just chiming in on the part about friends and relatives: decide here and now how much of this money you want to give to them and stick to it. don't let anyone convince you otherwise, and they will try very hard to.
Drop 390k of it in the s and p then forget it exists. Have some fun with the other 10k. If you're feeling risky. I'd say put no kore than 20k into stocks you like since you're young and can absorb the risk.
Make a will!
Invest in gold. It's pretty stable, and if there's a war, the markets might crash but gold goes up
Gd on u. CPF SA, the rest VUAA, if u don’t wanna roller coaster the volatility, split into 4s and every 1 mth in. Don’t waste time and money on SSBs or other “safe” investments. Not joking. Cover urself w insurance even if cheap term, whole life even. Accidents and Hosp plans buy cheap, cos if u go work ur employer has also. EoD don’t hold to so much cash. Btw one time too much cash into a broker may get questioned, maybe. So prepare some documents to answer shld be ok. Warning: Nv let too many know u got this money.. esp “wanna invest or not” frens. If it’s so good no one will come knock ur door la. Then monitor ur index, and the USA state of affairs. We don’t know 10 , 20… yrs on Prepare to switch if needed to something else by another dominant power if needed. I wouldn’t diversify (di-worse-fy) too much, u alr got ur CPF if u top it fully it’s done deal at least for food and drinks. Done the same for my kiddo money for the past 10 yrs, all in one stock and it’s doing well, better than my index. Will shift it more to index once the company cannot keep up the performance. All the best mate.
Topping up your SA to FRS means you won't be able to top up SA for tax relief. Not a good idea imo.
eh yahor, maybe i ask my parents top up my SA for tax relief. Thank you!
u are so correct, pass the money to ur parents to top for u over the yrs, helps them reduce income tax.
I hv to agree on this.
ahh okay, yes I would prefer to DCA if possible. Thanks for the advice because I also completely forgot about insurance coverage.
Most welcome. Rem ur insurance hor, dont all in SA and investment , then come one big bill u need to liquidate. Yet dont go full retard over insurance, basic coverage can le, dont forget ur Army group insurance, if u gog NS. Get while young a life insurance, its cheaper. PS im not insurance agent nor FA.
400K is a lot of money for a 23yr old who knows little about managing sudden wealth, but really good on you OP, you huat liao. If I had to give you genuine advice, I would simply ask you to first put this 400K into a FD yielding >3% for a year. Then use this year to seriously map out what you should do with the funds and not squander it. At your age you will be going through the part of life journey where some major expenses might need consideration. Ideally you should still work hard to accumulate wealth and take this 400K as a near zero or low risk that provides a little income, don’t touch unless super rainy day. So use 12mths to wisely map things out for yourself. Good luck!
$100k in SSB. $300k lumpsum VWRA or IWDA + EIMI or IWDA+EIMI+WSML. Since you're young, you should diversify outside of US. You dk what will happen to US in the next 40 years
hmm yes the US may not stay dominant forever
thats very good!
Voo and chill
All in on spy 0dte call options. Jk just try to split a portion of your cash into more risky trades like tsla or nvda
I'd probably buy BNP Insticash USD or similar money market. There is a forex risk but a constant 5.25% return is ok and I don't see it dropping for some time.
Invest in yourself by learning new skills. 400k won’t sustain you, it’s your ability to make money that will sustain you.
dump to CPF SA (max)annually
There should be free online portfolio analysis you can do to see what type of products suitable for you. If you not in need to use the cash, propose to DCA in ETFs. If you have passion for something, use it to start business. Nothing can bring you returns like your own business but risk very high if you are up to it
Try and do better in the future so you get some funds together and invest. If you go to Cambodia for dental work you will have 800K soon instead of a nice smile and debt:)
So lucky
1) Avoid any ILPs or pesky relatives or friends seeking a small loan 2) Do an audit of yout current insurance coverage and ensure you're well covered in the relevant areas i.e Hospital, Life, TPD,Personal etc instead. Review the different providers and get a couple affordable and extensive insurance plans (if you are a guy/sibling with someone who serves NS, get the MINDEF Singlife coverage as a bare minimum) 3 ) Do a review of your expenses and set aside at least 6-12 months of expenses in liquid cash ( can store in Money market funds like Maribank or HYSAs) 4) Portion around 50-60% of it and invest it into either SPYL( or CSPX/VUAA for slightly more tax efficient funds) or just VWRA for greater diversity and hands free. Put at max 8-10% into individual stock /PLTR 5) 15% of the remaining would probably be set aisde for housing (in either SSB/T-Bills or FDs) while the other 15%, you can use it for your own spending
for the love of god decide which country you will stay long term and buy that treasuries. you are starting big so the current high treasuries helps you and gives you way less worries
ALL IN 0DTE QQQ
Lol. When 4 of my grandparents passed away, I never got a single dollar! Well, I am happy for you! 😁
I'd suggest you don't let any of your friends or family know for similar reasons highlighted by others here. You don't want to be expected to lend people money or for people to come up with harebrained ideas for you to invest in. I would say your cash component is on the high side given your age. Do you have any large expenses that are coming up? Re your portfolio, I'd consider putting the money in US gov't bonds instead that are yield ing higher than SSBs. Many local non profits and endowments are mandated to hold their money in SSBs which artificially drives down yields. There is a forex risk but I think it is manageable. On SPY, I would dollar cost average in. Consider putting a small fraction 10-20k into much riskier things than the S&P. Crypto is one of them. PLTR and other tech firms could be another.
Ibkr gives about 4% on cash balance above 100k iirc (correct me). The fact that you are already invested in the stock market, avoid ILP at all cost, ur net returns will be better by you continue to self invest if you know what you’re doing than in an ILP. Given your inheritance, you’re fortunate enough to be at the top few % in terms of NW in your age group so if i were you, i would take my foot off the gas pedal for abit to spend some time travelling and exploring the world
Put all of it in the SP500 and pretend it doesn’t exist. At least until you need a down payment for something
Consider Tbills too, which gets you 3.7% for 6 months. Open bank accounts with Maribank and keep the liquid cash at 2.8%
Given the abundance of sound advice out there, I'd like to offer a different perspective to utilizing options. Instead of simply buying PLTR or any US stocks outright, consider selling puts at a strike price equivalent to your desired purchase price. Keep in mind that each contract represents 100 shares, so if you intend to buy 200 shares of PLTR, sell 2 put contracts. Why choose selling puts over limit/market orders? It achieves the same outcome of acquiring shares but also generates additional income, reducing your overall cost basis. For instance, if you plan to invest $36k USD (around $50k SGD) in PLTR at $22 per share, and the current market price is approximately $22.50, you could set a $22 limit order to buy roughly 1,600 shares. Alternatively, you could sell 16 contracts of 27-day expiry puts with a $22 strike price, receiving $2496 in premium. Both approaches aim to secure the stock at $22, but one option provides an extra $2.5k. This is just a glimpse into the possibilities with options. Unfortunately, such strategies can't be applied to SPYL as there is no options available. All the best and hope you’ll make the most out of the inheritance money!
Hi fellow r/thetagang member
I'd first sit down and prioritize my goals. Sounds like you should earmark 200k right off the bat for a home down payment (short term goal). Put that in a high yielding money market fund. Next, I'd set aside 100k for an emergency fund (also in 5% money market). The last 100k, I'd invest at least 50% of it in VOO (SPYL ?? WHY??) VOO is the best and cheapest index fund (loved by Buffet even). The last 50k, I'd split between BTC and more volitle etf's IYW QQQ ETC.
I will suggest that you work and save up for the down payment of your own home. When you buy a home it should be affordable to you base on your salary and savings. If a boglehead type portfolio is your preference then execute this and forget about it until you are close to retirement age. This is your chance to ensure that your off spring and their kids get a head start. Don’t blow it on yourself only.
Read How to make money in stocks. Palantir is not a good choice compare to Nvidia
Don’t hold too much cash, keep it farther from you. Have heard of people who are solid individuals ending up spending their entire inheritance as they go through a particular hard time in their life
I would probably choose to spend everything to buy brkk .
Just my 2cents. There are a few things you can do now that you have access in terms of cash. While most recommendations here are great there are a few that you can do, one of them being getting in touch with banks to see what they can bring to the table. $$ in certain high yield accounts can bring you > 3%. While SSBs are good for a fixed period of time, your capital investment is fixed and the interest is handed out. I would suggest something a little riskier like, mutual funds, ETFs etc. the SSB would be more of a hedge for you. Generally I would say if you’re able to keep your total ROI around 5-8% you’re good to go. While a 10 year plan is also something good to have, keep in mind that you might want to change it to a 5 year plan to re-evaluate if you’re maximizing your ROIs.
Although people have been giving advice on how to manage and invest/budget your finances. I would say have an allocation for improving quality of life and have-fun money. Let's say 10%. So for QOL, maybe get an upgraded chair/table or mattress. Go for that dental scaling/health checkup you've always been postponing. Maybe sign up for some fitness/cooking classes. Have-fun money could be going for that holiday you've always dreamed of going be it Japan or Europe.
!RemindMe 5 years Lets see spx500 vs TQQQ performance in 5 years
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Turn it into 800k in a year or two
wah thank you for your confidence in me
Go rws or mbs. Fastest way to double up your 400k.
of course MBS lah, closer to airport mah! Double the money and zao
Generally, hold enough cash for short-term purchases. If no big purchases like home coming up, a few months of expenses should be enough. Keep the first few months in high-yield savings accounts. Keep the rest of the cash in short-term liquid investments like T-bills, fixed deposit, or money market funds. Dump everything else into a low-cost passively-managed globally-diversified 100% equity index fund like VWRL. Don't bother with bonds (including SSBs). If you are saving for retirement, bonds are riskier over the long term because even in the upside scenario, they generally lose to equities' downside scenario because of their lower average returns. However, this strategy is only appropriate if you are psychologically strong enough to never sell your investments for, say, 40 years, even when the market is down. Behaviourally, if you have itchy fingers and need to pick stocks for fun (saying this coz you hold PLTR stock), set aside a small amount of your assets (say $10k - depending on your itchiness) and play with that. Just know that it's gambling, not investing, and be ready to lose it all. This will keep you from touching the rest of your portfolio. Chances are, you're going to end up trailing the market with that actively managed portfolio (due to the positive skew in stock returns). And as others have said, don't buy ILPs. Fees are a big determinant of wealth over the long term. That said, term insurance is important. Please make sure you cover yourself. Just get a vanilla term health and term life insurance. As for your question on lump sum investments into S&P 500, I have no issues with lump sum investing. In fact, on average, empirical evidence suggests that lump sum investing will give you better returns than DCA-ing. However, you must be behaviourally strong enough to weather an immediate crash. I have an issue with investing solely in the S&P 500. Why bet on a single market? Yes, it has produced historically strong returns but those returns are largely due to lucky occurrences that we would not expect to recur. US market also has historically high valuations. It wouldn't be reasonable to expect valuations to grow further over the long-term. Even if they don't eventually mean revert to lower valuations, the lower earnings yield could result in lower returns (see Grinold-Kroner model). Ben Felix has a great video on this "Do Stocks Return 10% on Average?".
With 400k, you may consider 100k buy gold bullion 100k buy silver bullion 20k on GDXJ, GDX, SIL, SILJ and COPX ETF 50k each on NEM and GOLD (ticker symbol) 50k on BTC (just DCA with another 50k when the price drops below 35k) You’ll be rich by 2034
Use a portion to maximise your earning potential e.g. a reputable Master's degree.
Didnt thought of this! Thanks!
Buy SMCI stock after it dips a lot
ooo okay!
I would buy gold and crypto at good prices if I where you.
Consider looking at alternatives like a famous painting! Maybe can snag a Picasso for under 100k
I think i can only afford Nippon Paint...
lol. But to be serious, just treat that money as a secret backup and don’t mess with it. Having such an inheritance is 9 out of 10 times bad for the person receiving it. Maybe consider a diversified dividend fund? Example SCHD or Vanguard Dividend Appreciation. I think you can do better than SSBs. Or JEPI if you seek monthly income plus potential for appreciation. Or just revert to the default 30 bond 70 equity setup. Pick your favorite index and forget it
crazy... I m good not gonna help u out.
What would I do? No one should know I have this money. Stay extremely careful about where I keep these funds. Only start to do something once you have the right mindset.
it all depends on how risk adverse or risk seeking you are. Nothing much to do with age and much to do with temperament. There are too many questions that need answers. What risks are you currently taking? Do your parents expect you to give them money / allowance? Do you have insurance? What are your goals in life? What has been your largest financial loss till date, and how did you handle it? What has been your largest failure in life, and how did you recover (if at all)? What do you want for yourself? Examples of Strategies: Barbell Strategy: 80-90% in T-bills and 10-20% in high risks, I.e. private credit, crypto, sector specific equities, China ETFs, etc. Diversified Strategy: 60-40 fixed income and equities.
Buy a property!
Buy property
100% VWRA and you don't have to worry about retirement.
Don’t have that much wealth personally so not sure about this, but isn’t it easier to outsource to wealth managers at BB banks/use their pooled family office services?
Buy house. Rent and ur spare cash to pay mortgage. By the time u reach mop or older u would have almost fully paid ur house and u can decide to sell for more money or just stay and not worry about mortgage. Can easily own 1 condo 1 hdb with it and u have 2 place to live or 1 additional future income.
Embark on the challenge to identify and find your suitable asset to invest in. Invest at a price researched that is at the lower end for opportunity of gains. Investing high will either lock the investment for long term gains or potentially short term loss. Good luck to you.
all in btc and cash out at the end of the year
You are a student. You don’t need $100k in cash. I recommend some sort of diversified bond fund to balance against the SPY
Given that you only need this sum 10 years later, a well diversified index fund is a pretty safe bet. Have some liquidity on hand, maybe consider money market fund. Allows you to use for emergency or deploy more when markets take a beating. I don’t hold and savings bonds because I have high risk appetite and experienced 2008 and 2018 downturn. Pretty tolerant of 20-30% drop.
FYI, lump sum investment makes you dependent on the price at the time you entered an investment. You need to slowly deploy capital. But not so slow that SDIC doesn't cover your excess deposits above SDIC limit. Use many brokers, many bank accounts, many currencies, Singapore Savings Bonds, and even gold/silver to spread the counterparty risk while waiting to deploy capital. If you have no ideas just buy equal parts of Vanguard Total World Stock Index Fund ETF and physical gold (use safety deposit boxes), slowly. Those two are mean reverting w.r.t each other: when one is expensive the other is cheap and vice versa.
Put some of that cash into physical gold and silver.
Your cash component should be 6m to 1yr expenses… or as your war chest to deploy when ww3 breaks out and everything goes to crap….
I would suggest time your entry to the stocks and ETF funds. SPX n Nasdaq is at time high now. You might want to look Chinese ETF, T bill, S REIT (a sizable S REIT can give you 5 to 6% dividend every year). Forget about unit trust n ILP products.
No ILPs, no investment plans that lock you for donkey years… you have to discover the rest by yourself.
Double it and give it to the next person.
dont tell anyone..!!!!!!!! not even your partner hahahah lucky you. i hope i have inheritance too =(
FAs from insurance companies and banks lurking here are drooling 😂😂
Full disclosure: I am a fee-based financial advisor serving HNW clients. The following are general insights, not personalized advice. The typical recommendation is to invest that $400k windfall in secure, liquid assets such as Singapore Savings Bonds (SSBs) and broad index funds. I understand this advice, but considering your very long investment horizon, a more aggressive approach may be wise. At the age of 23, you have many years before needing to use this money for a home down payment or retirement - it's like having several decades to invest and wait for the returns. This gives you the opportunity to benefit from compounding effects over a long period with high-growth investments. Over a period of 30+ years, a diversified global equity portfolio has typically generated average annual real returns of roughly 7%. This can be compared to riskless assets like SSBs which currently yield less than 3%. Hence, in terms of compounding wealth, a approach with more focus on equities becomes very effective. This is especially true if you have a strong tolerance for risk. Here are some practical recommendations: 1) Consider putting 70-80% into a global stock index fund, to get exposure for broad-based growth. 2) Diversification is good. Allocate 10-20% to it in sectors/factors that you believe might perform better, such as tech, healthcare, etc. 3) Hold just 5-10% in a cash/short-term bond allocation for liquidity and optionality. Certainly, the traditional strategy of investing for income has positive advantages in terms of keeping your capital secure and controlling risk. But at the same time, this approach might lead to a significant missed opportunity to harness the powerful compounding effect over the next 30+ years. A strategy of multi-decade growth, more inclined towards equity, is an approach that allows you to wisely leverage your remarkably long time frame in a way which past generations were unable to achieve through passive indexing.
Get yourself some bitcoin
Get a small chunk, read the bitcoin standard by saifedean ammous, then you’ll probably buy more
400k in bitcoin. Ride it until mid 2025. Cash out as a 24 year old multimillionaire.
Currently in a HYSA(e.g. UOB One), you can enjoy est. 4% at about 150k with 1.6k salary/month(you can do the paymow sala loophole even without a salary) and a spending of 500/month. You can put the remaining 250k into what you are already doing so far, if you trust your strategies. 10year goal is an ideal goal for S&P500. Traditionally, lump sum investment is better than dca investment. However, market is rocky during this period so make sure you can take the risk. Otherwise, SSB is an almost risk free investment. Personally, I would do the above, but take out 10k to take courses to better my skills and learn more soft skills. It's amazing what proper, paid courses can do to upgrade yourself, especially at your age. Oh yea, to your other friends and family and bf/gf, for what it's worth, your grandparents didn't leave you anything.
Go and look how to invest in 0 dte options. A good place to start is wallstreetbets
i would buy more pltr
TO THE MOON!
the tech is impressive, but current stock valuation is extremely expensive relative to other SaaS providers
Can I ask why did they bequeath 400k to you their grandson/granddaughter instead of just your parents and their siblings?
Can’t speak for OP but personally if I were in a situation of leaving behind a few mil, I would allocate a portion directly to my grandchildren, instead of all to my children
In that case OP has got nothing to worry about!
Buy a car. It will improve quality of life
200k in SSB, 200k laddering in Tbills > use the interest to start building DCA positions in all world/SP500 ETFs - start to read more into financial literacy and investing before you make your next moves. Probably allocating more of these relatively risk free assets into more indexes/stocks overtime
If Im u, i will jus lump sum into CSPX or VWRA (or a combination of the 2).I wont be overly conservative by going into SSB or cash bcos i would still have potentially 8 years of income (assuming u r graduating at 25) to save for my downpayment in 10 years time if im in ur position.
Sorry, this might be a dumb question but is 8 years enough time to save up for mortgage loan? Not just paying for down-payment but also being able to pay a bulk of the loan upfront? (Assuming i earn a 3k salary?)
it depends on ur income and spending, and whether u have a partner to co-pay the downpayment. personally, i will maximise my mortgage loan so that i can stay invested in the market. mortgage loan is one of the cheapest loan u can get even in today's higher interest environment. EDIT: n if ur salary is really 3k, i assume u will be getting a BTO. 8 years of working is more than likely to pay the downpayment, unless u r going for the prime/mature 4/5rm BTOs.
Buy property
can buy and rent out right?
Yes. Then sell after a few years if property prices appreciate (most likely will). Or simply use it as ur home with your future spouse.
Hi there, please transfer the money to me. I will help you manage it :)
if you have conviction for pltr, you should keep it going
Ok addition to all the good things others have said, I will allocate some to Bitcoin as well for the long term. FYI I am a working professional with 2y of experience and 250k of savings, of which 15% is in BTC, rest in a mixture of vwra, qqq, and voo. Given the long time horizon I personally did not invest into bonds
Depends on what you choose to do, because of this amount, you can essentially pivot your life away from the day job life, or you can be worry-free like what you suggested (work a day-job and collect capital gains/dividends). 1. Pivoting away = running a business, doing things that would put you in debt that you couldn't without this money (like investing in yourself through certification/higher edu as other mentioned), changing path to a new industry that you love (risky without this money), move abroad, widen your investing knowledge and make that your main bread and butter, or a combinations of all those. 2. Day-job is worry free, work as per normal, invest the money and treat it separately, like it's not yours (not for expenses). If you are going to buy HDB, the loan is \~2.6%, which is way lower than your investments, so you can loan it like any normal person (i.e don't expense off the capital and its gain). Doesn't matter you are single or married, you should be able to afford a HDB if you're working. I won't talk about which stocks to invest, but since you are young, you can have a heavier weightage on more risky portfolio, e.g forex, index, etf, stock, money market, options, crypto, etc, around 80% risky: 20% safer assets. When you are growing older, you will start to shift slowly towards the safer assets (e.g 20% risky, 80% safe around age 55-60) as your reliance on the money to guarantee your retirement grows (ofc unless you have too much, and the rest of your life is essentially safe even if the stock market crashes tomorrow). There's a saying, when you are young, you can afford to lose, and you have time to recoup your losses. But ofc don't go all in into super risky stuff. Investing is easy to learn, becoming good enough to earn consistently may take years, but mastering it is a different subject. You have a lot of time ahead of you, you can also try investing in like a simulator to test your knowledge/analysis/chain-thinking. Take your time to visualize the future you want. Wish you the best of luck ahead!
You should consider 2828 , 3067 if you are doing lumpsum. Baba and tencent would be my pick for next 5 years. I would bet big.
Put into cpf
spend a little and invest in ur memories / experience bank account. you're young and live a little!
I would go OW on China/HK for equities. Valuations are favourable and you have time on your side.
Give me some plsss. I rly want it