Thinking about investing but not sure where to start? You’re not alone. For many in Singapore, investing can feel overwhelming or risky, especially if you’ve never done it before. But the truth is: investing is no longer optional, it’s essential for building long-term financial security.
Whether you’re just starting your career or looking to grow your savings, this article will guide you through exactly how to begin investing in Singapore.
Why Should You Start Investing?
If you’re keeping all your money in a savings account, here’s the harsh reality: you’re losing money over time. Inflation in Singapore averages around 3% to 4%, while most banks offer interest rates between 0.05% to 2%. This means the real value of your money is slowly eroding. In contrast, long-term investing offers the potential to earn 4% to 8% annual returns, depending on your risk profile. It allows you to build passive income, accelerate wealth accumulation, and reach big financial goals like retirement, housing, or funding your child’s education.
What You Should Have in Place Before You Start
Before you begin investing, it’s important to establish a solid financial foundation.
Clear High-Interest Debt
Start by paying off high-interest debt, such as credit cards or personal loans. These types of debt often charge more interest than you’re likely to earn from investing, so clearing them first will give you a stronger financial footing.
Build an Emergency Fund
Next, save 3 to 6 months’ worth of living expenses in a high-interest savings account. This emergency fund will give you peace of mind and prevent you from needing to dip into your investments during unforeseen circumstances.
Know Your Financial Goals
It’s essential to define your financial goals. Are you saving for a house in 5 years, or planning for retirement in 30 years? Your goals will shape your investment strategy and help determine the right approach for your needs.
Understand Your Risk Appetite
Lastly, assess your risk appetite. Are you conservative, balanced, or aggressive? Your comfort with market volatility will dictate the mix of investments you should consider, ensuring your strategy aligns with your risk tolerance.
Step-by-Step Guide to Start Investing in Singapore
1. Pick Your Approach
There are three main ways to invest in Singapore. The first is DIY investing through brokerages like FSMOne, Moomoo, or Saxo, where you take control of your own investments. The second is using robo-advisors, with platforms such as Syfe, Endowus, or StashAway offering automated, beginner-friendly investment options. Lastly, you can choose to work with a financial consultant who can help you create a personalised, long-term investment strategy.
2. Open an Account
To get started, open an account based on your chosen approach. For DIY investing, you’ll need to set up a brokerage account. If you opt for a robo-advisor or personalised advice, sign up with a licensed provider or financial advisor to guide you through the process.
3. Start Small and Stay Consistent
You don’t need to start with large amounts. Begin with as little as $100 to $300 per month, investing in ETFs or diversified funds. The key to successful investing is consistency, so automate your contributions through a process called dollar-cost averaging to ensure steady growth over time.
4. Diversify Your Portfolio
To reduce risk, avoid putting all your eggs in one basket. Diversify by mixing local investments, like the STI ETF, with global exposure through options like the S&P 500 ETF. Consider adding a mix of REITs, bonds, and equities to further balance your portfolio and strengthen your financial strategy.
Mistakes to Avoid When Starting Out
When starting out in investing, it’s important to avoid common mistakes that can derail your financial goals. Jumping in without a clear plan can lead to poor decisions and unnecessary risks. Chasing hype around trends like crypto or meme stocks often results in losses when the excitement fades. Panicking during market drops is another mistake, as it can cause you to sell low instead of riding out volatility. Finally, not reviewing your portfolio regularly means missing opportunities to adjust your strategy and stay aligned with your long-term objectives. Avoiding these mistakes will help set you on a steady path to financial success.
Final Tips Before You Begin
Investing isn’t about timing the market; it’s about time in the market. Staying consistent with your investments, even when markets are down, is key to long-term success. It’s important to review your goals annually to ensure your strategy is still aligned with your financial objectives. If you’re ever unsure, seeking guidance from a trusted financial advisor can provide valuable insights and help you stay on track.
Need Help Getting Started?
As a licensed financial consultant in Singapore, I help young professionals and families build customised investment plans that:
- Fit your income, goals, and lifestyle
- Grow your wealth safely over time
- Integrate with your CPF, insurance, and life plans
If you’re ready to stop letting your money sit idle and start building your future, let’s talk.
Disclaimer: This article is intended for general information purposes only and should not be considered financial advice. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Please consult with a qualified financial advisor before making any investment decisions based on your specific financial situation and objectives.
Joel Khoo 
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