Is it enough to just save and not invest?
Suppose I live a frugal life (which I am currently during so, e.g. eating only hawker/home cooked food, not spending money on unnecessary items etc.), would I be able to survive purely on savings and not investment?
Say if I currently earn +/- 4k a month and I’m a fresh graduate.
By survive I mean having the ability to take care of my parents, pay for future potential medical bills, potential BTO and starting a family etc.
The reasons for not wanting to invest is
1) its rather time consuming to learn and analyse everything,
2) may be too risky for me and
3) troublesome. I’m just worried I won’t be able to survive in this increasingly expensive world 🙂
- can consider fixed deposits, Singapore saving bonds etc. for low risk investments.
- you can invest in yourself and earn higher paycheck 🙂
- Better to have more savings in case of a rainy day. No one ever knows (touch wood) when a big misfortune happens to them. Disability, illness, family problems can be the end of even middle class people
- If you’re OK with inflation eroding your savings lor.
- BTO is expensive. Children is expensive. If nothing else invest in yourself at least to make sure your pay outpaces the cost of living.
- No because:
Despite being frugal, you still have financial goals (taking care of parents, BTO, starting a family etc) so you are going to need money.
As mentioned by others, inflation is a very real thing that will erode your savings
You shouldn’t assume you are able find work from now till 65 at a wage that can sustain even the frugal life you are planning for. So it’s recommended you have alternative income choices at some point.
Even conservative choices like using your CPF still requires some effort to learn how to maximize its use (deciding how much more to contribute to annually, tax avoidance, SA shielding at 55 etc)
It’s not that hard to get started on investing on very low risk investments like SSB, Singapore government bonds and treasury bills, especially now as interest rates are high. After that you can explore contributing regular amounts to a low cost ETF.