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Beginner’s Guide: Start Investing With Just $100 A Month In Singapore

ByYour Money Bestie Last updated

When you are new to investing, you may have doubts and fear that stop you from taking action.

You could have heard of someone close to you mentioning that they loss their life savings due to a failed investment. Perhaps, you read someone sharing his bad investment experience on a forum that he had to take on a personal loan to sustain his existing living standard. You possibly met someone who told you $100 is not enough to start investing – you will need minimally $10,000.

Ironically, some people might not hesitate to spend $100 or more on a single meal at a restaurant, even if they know they could put that money to a better use: investment.

start investing in Singapore

Key takeaways (TL;DR)

  • Investing is not as complicated as it sounds.
  • You shall not let common misconceptions trick you into thinking investing is complicated. Otherwise, you will be missing out lots of investment opportunities which can help grow your wealth;
  • If you have limited capital and possess basic knowledge in investing, consider investing your money with Regular Shares Savings (RSS) plans where you can enjoy affordable, long-term investments in a variety of blue chip stocks, REITs and ETFs.
  • Alternatively, consider investing your money with Robo-Advisors if you want a bit more of a guided approach. But of course, they charge you much higher fees for their investment knowledge.

Demystifying common misconceptions about investing

I am here to demystify common misconceptions about investing which you may have heard of from family members or read on the internet.

You might think that stock investing in Singapore is only for rich people. The reality is that you can begin investing with as little as $100 in Singapore blue-chip stocks, Exchange-Traded Funds (ETFs), Real Estate Investment Trusts (REITs), and other investment products. For instance, you only need to fork out $100 if you wish to purchase a REIT with a listed price of $1 and sold in minimum board lot size of 100 units (that is $1 x 100 = $100).

Some financial gurus and bankers may want to trick you into thinking that investing is complicated and you should leave it to the pros. In reality, investing is not rocket science. You don’t need to be a maths genius or PhD researcher to start investing. All you need is to read this article to build up your confidence and basic understanding in investing.

While you may have heard people saying they loss all of their savings due to investing, they probably did not tell you the other half of the story. They could have put their money in highly speculative shares or investment products which their friends recommended. Coincidentally, they did not do their due diligence, not knowing the safety of their money and yet expecting high returns on investment within a short period of time. When it is too good to be true, it probably is.

On the other hand, investing is a different concept. As investors, we tend to focus on long-term, incremental gains rather than big gains in just a few weeks or months. On top of that, we stay away from fancy investment products which are not regulated by the Monetary Authority of Singapore (MAS). Sometimes, your portfolio may experience a dip due to bad economy and factors which are out of your control. All you need to do is to find out what happened behind the scene and decide if you should stay invested or sell your shares to cut losses.

Everyone is finding the next Tesla or NVIDIA to invest in so that they could wake up to a millionaire’s status the next day. The reality is that investing is a long-term commitment. Investing is more often a marathon than a sprint; it requires patience and consistency. Building wealth takes time, and overnight success stories are the exception, not the rule.

Timing the market is difficult even for professionals, let alone new investors. If someone ever told you that he or she can time the market, you should probably take his or her words with a pinch of salt. Market timing is highly unpredictable. A better approach is to invest regularly, benefiting from Dollar-Cost Averaging (DCA), and staying invested even when the market is bad.

Option 1: Regular shares savings (RSS) plans

With Regular Shares Savings (RSS) Plan, you will benefit from its Dollar-Cost Averaging (DCA) approach through consistently investing a fixed amount of money on a monthly basis in a diverse selection of blue-chip stocks or shares, Exchange-Traded Funds (ETFs) that track Straits Times Index (STI) or Real Estate Investment Trusts (REITs).

RSS Plans Pros

  • Set-it-and-forget-it investing process
  • Forces you to invest regularly even though you do not feel like doing it
  • Low minimum investment capital
  • Low trading and management fees
  • No lock-in period or penalty

RSS Plans Cons

  • DCA approach requires you to buy on monthly basis which leads to more transaction fees in the long run
  • Your investment returns could be better if you invest a lump sum of money rather than investing a fixed amount of money on a monthly basis
  • DBS / POSB Invest-Saver
  • FSMOne ETF Regular Savings Plan
  • OCBC Blue Chip Investment Plan
  • PhillipCapital Shares Builder Plan

$100 per month

RSS plans enable you to consistently allocate a fixed amount of money on a monthly basis into blue-chip stocks, STI ETFs or REITs. RSS Plans adopt DCA approach which allows you to ignore the emotional highs and lows of watching the market, and removes the need to time the market and figure out when is the best time to buy. When prices are down, your set investment buys more shares; when prices are up, you get fewer shares.

All you need to get started is to set up an RSS plan with one of the brokerage firms or banks in Singapore that offers RSS plans. With your instructions, your chosen brokerage firm or bank will then setup an automated investment facility which invest a fixed amount of money on a monthly basis in blue-chip stocks, ETFs or REITs. For instance, you can choose to allocate $100 monthly into an ETF that tracks STI.

  • People with limited investment capital
  • People who are new to investing and not sure where to start
  • People who enjoy safe and hassle-free way of investing

Option 2: Robo-advisors

A robo-advisor is a digital platform that offers automated, algorithm-driven financial planning and investment management services with little to no human supervision. Most robo-advisors in Singapore will guide you on investing a lump sum of money or a fixed amount of money on a monthly basis in shares, ETFs and unit trusts.

Robo-Advisors Pros

  • Good investment returns
  • Automated and guided portfolio rebalancing and reinvestment of dividends
  • Personalised portfolio with diversification in shares
  • Low minimum investment capital
  • Low trading and management fees
  • No lock-in period or penalty

Robo-Advisors Cons

  • Can be less costly if you do it by yourself
  • You have zero to limited control over how robo-advisors build and restructure your investment portfolios
  • Most robo-advisors use US-Domiciled ETFs
  • DBS digiPortfolio
  • FSM MAPS
  • Kristal.AI
  • OCBC RoboInvest
  • Syfe Managed Portfolios
  • UOBAM Invest

$100 per month

Robo-advisors make it easy for you to invest. Their software will automatically build your investment portfolio based on your risk tolerances, investment timelines, desired investment returns, and financial goals. On top of that, robo-advisors are designed to automatically rebalance and manage your investment portfolio.

All you need to get started is to choose a robo-advisor to start investing. Visit a robo-advisor’s website to find out your eligibility of opening an account with them. After opening an account, you will need to fill out a questionnaire regarding your risk appetite and investment timeline. Then, you will need to fund your account by connecting your bank account: either deposit a one-time payment or by topping up your account on a monthly basis. Once you have funded your account, the robo-advisor would allocate your fund towards buying assets based on your risk appetite and investment timeline.

Moreover, your robo-advisor would assist you in monitoring the market conditions and rebalancing your portfolio whenever needed, in order to minimise risk and maximise your returns.

  • People who are new to investing and want a more guided approach
  • People who want to diversify their portfolios in shares and bonds
  • People who want to leverage technology in achieving better investment return

In short

Investing is not as complicated as it sounds. Don’t let common misconceptions trick you into thinking that investing is not for you. Start small, invest regularly, and invest only in safe and regulated investment products. Choose Robo-advisors if you prefer a more guided approach. However, you will need to pay higher fees for their investment knowledge. Alternatively, RSS plans should fit you better.

Frequently Asked Questions (FAQs)

Your money is safe with RSS plans. Banks and brokerage firms that offer RSS plans to the public are regulated by the Monetary Authority of Singapore (MAS) and possess valid license to deal with capital markets products and provide custodial services.

Your money is safe with robo-advisors. Similarly, most robo-advisors in Singapore are licensed by the Monetary Authority of Singapore (MAS), and they usually hold a Capital Markets Services (CMS) License for retail fund management, dealing in capital markets products and providing custodial services.

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