It’s no doubt that having children is one of the greatest joys for any parents, from the day they are born until they reach adulthood, it’s a lifetime of unconditional love and support. However, having children can also be considered a form of “investment” because of the amount of money you need to invest in their upbringing…from baby products to their education fees (primary, secondary and tertiary) and other miscellaneous things, you need to be well prepared financially before you decide to start a family.
And if you’ve lived in Singapore for any amount of time, it wouldn’t take long for you to realize Singapore isn’t exactly the cheapest place to live in. With the increase of GST coming, inflation in Singapore is definitely one of the main contributing cause.
Don’t take our word for it:
“A study by the Economist Intelligence Unit reports that Singapore retains its position as the globe’s priciest place to live.” – Forbes.com 30 Nov 2017
Of course, it’s no brainer that you need to be working adults in order to be financially stable and to be able to have children. It’s a continuous cycle where you work to earn a monthly active income, save up so that you can budget and plan your expenses accordingly and perhaps go on a trip once in a while. How much would you need to save if you plan to start a family? It’s the same for existing parents too…are you able to spend quality time with your family or go on frequent family travels? The thing is…how long can you actually work for to continuously support your family? What if there’s a way to provide more for them, without using your active income so that you can save it for your retirement comfortably?
Introducing value investing, a safe and consistent way to generate passive income! Yes, it’s common for people to associate investing to be risky and dangerous, but that’s not the case if you have the knowledge and know how to do it properly in a systematic way! You see…value investing is about finding stocks at ridiculously discounted price under the 3 requirements of having the right business model, right management, and right valuation vs. price. If you’re completely new to investing and you’re not sure what to invest in, the good news is that there are many things to invest in Singapore because being in a first world country has left us spoilt for choices!
1. Mutual funds
A mutual fund is professionally managed pool of money, whereby shareholders in the mutual fund will have their assets allocated to stocks, bonds and other money market instruments. Typically, mutual funds are vested in many different types of securities and the fund managers will aim towards growing your capital for you.
Also known as fixed-income type of investments. When you “invest” in a bond, you are actually lending money to an entity who offers to pay you a fixed interest rate. This entity can be a company or government body who will then use your money for their activities.
3. Precious metals
Precious metals are typically used as a hedge against the effects of inflation. While the value of cash depreciates over time with economic development, investors believe precious metals retain their intrinsic value because of rarity. Other than investing in physical silver and gold to stash in your vault, you can also opt to invest in gold-linked stocks or Exchange Traded Funds.
The good old property in Singapore has often been described as “sure-win” in Singapore. Bear in mind that there are many instances that property investments have burnt the unsavvy investor, typically the over leveraged ones who are forced to sell in the economic downturn. If you have an eye for location and see long term, there’s a good chance you can make money in property in Singapore.
Also known as the Real Estate Investment Trusts, REITs are large companies that manages a portfolio of properties which they rent out for you. Interestingly, by Singapore law, REITs are required to return 90% of their net taxable income to YOU as a shareholder. The best thing is that REITs manage this portfolio for you and represent a form of instant diversification into many properties, lowering your risk. With a small capital of $1000 or less, you can actually buy into REITs instantly to receive dividend income from their rent.
Before you invest in any of the above, it’s important to understand a few things about yourself and what are you trying to achieve in your investments. Here are a few critical questions you must ask yourself first:
What are you trying to achieve with your investing?
What is your starting capital?
What is your appetite for risk?
How much time are you willing to devote to investing
How liquid do you need your investments?
Meet Pauline, a regular Singaporean just like yourself who was working very hard to provide for her family. Pauline started investing because she lost up to 40% of her savings in the unit trust back in 2008 and with 2 children under the age of 8 to support, she knew that something MUST be done about her finances!
She gradually started to receive passive income in the form of dividends every month and having invested for close to 10 years, Pauline has already achieved financial freedom! Now she is able to spend quality time with her family by travelling frequently to exotic countries and even fly business class, all being paid for by her passive income. With her success, Pauline is renowned as the ‘millionaire supermum’ and has authored 2 books on value investing, as well as speaking on international stages to educate the public on the importance of investing.
To find out more about Pauline and understand what advice she has to offer for parents who are keen to generate passive income and what to start investing in, watch the video below:
If you are inspired by Pauline’s story and wish to be like her to provide more for your family, click here to register for the FREE workshop as shared in the video to learn how generate safe and consistent passive income for you and your family!