Introduction of myself
Hi everyone. This is the first time posting on r/personalfinance. I am based in Singapore. I understand that there's SingaporeFinance but I believe that I would get more responses and feedback here.
I am 19 this year and would be enlisting for National Service later this year. I will be serving the nation for the next two years so I will have consistent inflow of cash in the form of allowance ($560) till I am done serving. I am also currently working part time before I enlist, earning about $1300 after contributing to Central Provident Fund (similar to 401k in US?).
Bank accounts interest rate in Singapore
The interest rate of Singapore savings account is very low at 0.05%. However, there is this no-frills savings account in Singapore that offers 1% per annum and I have been parking my money there for about 3 years. I understand the fact that, "A dollar today is not worth a dollar tomorrow" and parking my money in that 1% account does not beat the inflation rate of 1.9% in Singapore.
Got inspired to invest at a young age of 16
After graduating from Secondary school (High School in US) before studying in Polytechnic (College in US), I started reading forums relating to stocks and investments. I got inspired by one of the users there who retired with a paid house at a very young age of 30+ years old. He is currently surviving on $1.4k per month of dividends. I learnt a lot of from him such as looking at P/B ratio for Banks and REITS to see if they are undervalued/overvalued for example. I also learnt about investing in ETF using DCA method on that forum too.
However, this is not the reason why I am writing this post. I am writing this post because I would like to get advice from people here how they allocate their positive cashflow and whether I am spending too little or saving too much at this age.
Allocation
Earlier in this post, I mentioned how I am parking my money with CIMB? I have three accounts with them for different purpose. The first account would be meant for savings. The money in my second account are my investible funds when there are right opportunities. The third accout is for spending on my needs. The first two accounts yield 1% per annum so long as there are $1000 in the account every day. The third account only yield 0.8% per annum with the same requirement as the former two. Currently, the monies in my third account are in my savings account but I have a spreadsheet that states how much money are savings and spendings resepctively.
As I believe that one should start investing as early as they could, I started investing at age 18 as that's the age I was allowed to open my own trading account. I allocate a significant amout of positive inflow of cash into my second account (Investible account). For every $1 of inflow of cash, $0.735 will be transferred into my investible fund. The previous allocation was as high as $0.7875 but I started to cut it down by a little for savings and spending account.
I allocate $0.11 of every $1 of cash inflow into my savings account. I know that many advice for those newbie who want to invest to have 6 months worth of emergency fund. I have about 6 months worth of emergency fund in that bank account right now. The number of months worth of emergency fund is based on how much I spend on necessity such as transport, food and telco bills. I also invested $3k of my savings in 2.7% Temasek Bond as I believe that I won't be using that amount yet. Therefore, if you include that $3000 savings invested in Temasek Bond, I would have more than 1 year worth of emergency fund.
Lastly, I allocate $0.155 of every $1 of cash inflow into my spending account. As mentioned earlier, the monies in the spending account are now in my savings account to earn that 1% interest. I usually spend them on occassional meetup with my friends or to spend on my wants.
Problem
The problem I have now is that I feel that I am not spending my youth well since I am saving aggressively for the future. Because I scrimp, I don't eat expensive food at restaurant or cafe but at non-air conditioned hawker centre, spending less than $5 for lunch. Even though I have an account for spending, I don't actually spend on my wants like buying trendy shoes or clothes or hypebeast clothing. For example, I actually wanted to buy a new shoes (sneakers) but I don't think the purchase will be worth it because I will be serving my country for the next two years and I won't get to wear them often. Mind you, the sneaker I want to buy is just $69.90!
I honestly feel so miserable that I am spending my youth this way and I would like to change that.
At this age, should I save more money for my future and spend more now to spend the best time of our life?
Submitted April 06, 2019 at 03:29AM by Pesantkie http://bit.ly/2OWF1xi
