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If you live in the USA, UK, or Europe at the moment, then you have likely noticed that savings and investment interest rates have declined. Many are providing just 1% or less, sometimes as low as 0.1%. This means that your money is actually losing value.
Singapore on the other hand, is a thriving center of business. Many choose not only to run their companies in Singapore, but to actually relocate themselves. While you may not be ready to make such a change at this time, you can consider taking advantage of the stable currency and great returns on savings that Singapore has to offer.
At the time of writing, secured savings (backed by the government of Singapore) provide returns of 2-5%. This provides a steady return and almost no risk other than the exchange rates, if you anticipate the need to return funds urgently. However, so long as you plan long term, even the exchange rates can actually work in your favour, if you time the transfer well.
Those willing to take risks can gain even higher returns. Although the investment itself may return as less (you can lose money), there is the possibility to get returns in the 7-15% range or higher. The key with this approach is to ensure that you do your due diligence before investing, and never invest money you can’t risk.
Of course, if you are going to invest your money long-term in Singapore or anywhere else, you should also consider backup plans. It is not always easy to get quick access to the funds that you invest, and so you need to have some ‘flexible’ financial options.
Backup Plans for Tight Times
Here we look at how you can cover temporary costs or unexpected expenses while your money is tied up in investments.
- Savings – Hopefully you are saving 20% of your monthly income, so this is the first option.
- Overdraft – Apply early so that it is there when you need it.
- Bank Loan – Can be useful, but remember that you ideally don’t want to borrow long term.
- Credit Cards – Only use this is you are on a promotional period, otherwise the interest can cost far more than your investment returns.
- Title Loan – Good for a quick loan and even available without needing good credit. However, again, work out your expenses and repayments carefully.
- Peep-to-Peer Lending – You will normally need good credit, but can get reasonable loans. However, some providers have been shutdown and debt recovery processes activated. So, be sure to research the provider first.
Summary
Ideally you won’t need to use the backup options, but it is good to plan out how you will get through tight times before you take on an investment. In order to get the best returns, normally money will need to be tied up from 3-30 years. This means that you need to seriously consider both how much you can invest now, and how to get through ‘if’ finances or the economy bites harder.
