
Note: The new semester has begun, I won’t be able to post regularly as I need to prioritise my studies first. But I will still try and post at least 1 article per week! Cheers and happy reading!
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Where to Start?
Finally realised that working your ass off month in month out is too tiring and you want to retire earlier? Just how should you make your first investment? There are so many products out there, so many strategies, so which one should you choose?
Again, to answer these few questions, you need to ask yourself first:
- What is my risk appetite? (Depends on your age and time horizon)
- What is my time horizon? (Depends on your goal)
- What is my goal? (Retirement? Second Property? Wedding?)
Once you are done asking these 3 important questions, you can then proceed.
The key to investing your first $20,000 is really what you want to achieve out of this amount. Is it to pay off your first downpayment? Set aside funds for wedding? Or for long term retirement (financial freedom)?
Now that you answered those questions, I’ll share with you what I will personally do with the first $20,000 investment.
Disclaimer:
The content here is for informational purposes only and should NOT be taken as legal, business, tax, or investment advice. It does NOT constitute an offer or solicitation to purchase any investment or a recommendation to buy or sell a security. In fact, the content is not directed to any investor or potential investor and may not be used to evaluate or make any investment.
Do note that this is not financial advice. If you are in doubt as to the action you should take, please consult your stock broker or financial advisor.
Infinite Permutations
In the investment world, the possibilities are endless when it comes to what you can invest in. It is this dynamism that makes the financial markets a vibrant and thriving ecosystem.
So what is the end goal here? In investing, our goal is to invest consistently with a proven strategy that grows your wealth in the long run. Doing so allows your hard earned money to work even harder for you.(Even when you’re asleep)
Investment Returns are derived from 2 sources. They are:
- Capital Gains (by selling the stock after it goes up in value)
- Dividends (by holding the stock)
People invest either for Income(Dividends) or for Growth (Capital Gains) or Both. One needs to understand the difference before getting into investing as different stocks/sector/market have their own unique characteristics.
Characteristics of different markets
For instance, the Singapore Market is mainly for Dividend investing due to the excellent Bank and REIT stocks having attractive yields of 5% or more with solid fundamentals. However, Singapore stocks have limited growth potential due to our limited size and lack of liquidity. As for capital gains(while possible), it is generally not as attractive if you compare to the US Market.
The US Market on the other hand, is mainly for Growth investing due to the size of their consumer market and the large number of institutional participation. With many big conglomerates and technology companies with international branding, the US market is filled with growth opportunities and one can easily earn more than 100% capital gains if you remain vested in the US markets. (in the long run)
Once you understand the difference, we can now move on and talk about the different options available based on different individual preferences.
1. Conservative/Short Time Horizon Individuals
If you are someone who is generally risk-averse, and can forgo higher returns for the sake of safety and liquidity for short term needs such as wedding budget, this portfolio is something that can be considered:
- Singlife 2% – $10,000
- Syfe Cash+ (1.75%) -$10,000

Singlife 2% is basically the best option you can get right now to park short term money that can be withdrawn in and out easily at a pretty competitive 2% p.a, which is just sufficient to cover inflation of 1.9%~2.2% p.a

Syfe Cash+ invests your money into Money Market Funds which have almost no risk but also comes with very low returns as a result. The performance depends on how the underlying Money Market Funds are doing and they project around 1.75% p.a without any withdrawal fees, management fees and no minimum starting amount. This is perfect for individuals who want liquidity and already maxed out Singlife’s limit of 10k to earn the 2%.
These 2 products ensures that your capital won’t fluctuate compared to if you were to put money into equities, which are stocks and they will fluctuate in the short run.
Best for:
- Short Run Needs (<1 year – 3 years)
- Downpayment for BTO/Car
- Wedding Fund
- Honeymoon Fund
- Liquid high yield war chest/ emergency fund
2. General Investing With Average(Market) Returns Potential
For those starting out but unsure if you are able to take higher risk, you can begin with this instead. This helps you understand the importance of asset allocation while you learn the ropes but can at least get you average stock market returns.
I will be introducing the concept of Core and Satellite for portfolio construction.
Core and Satellite Portfolio

When we talk about Core portfolio, think of it like a set meal which consist of your main dish that will fill up your stomach. The CORE portion of a portfolio is supposed to form the foundations of your overall portfolio that you will stick to for the long run without making too much adjustments to it.
As for Satellite portfolio, think of it like add-ons/extra servings which are supposed to delight you further and solve a specific craving (eg. desserts to cure sweet tooth).
Satellite portion is not essential but important to help you attain higher return which you core portion is unable to attain. An example of such can be sector targeting or specific industry targeting.
Alright, with this out of the way, here is the suggested portfolio:
Core:
- Syfe Equity100 -$10,000
- DIY ETF (Via Firstrade Broker): Vanguard Total Stock Market ETF (Ticker:VTI) -$5000
Satellite:
- Syfe REIT+ -$5000
The rationale for this is very simple. Equity100 consist of 12 different ETFs which exposes you to over 1500 different stocks around the world, and it auto rebalances each quarter to ensure that the portfolio remains efficient and optimised which I feel most financial bloggers or investors out there failed to appreciate.
VTI ETF is a wide exposure to the entire US stock market so you are going to get back whatever returns the US market will offer all by owning this 1 ETF. VTI is essentially one of the most popular core ETF used for all types of portfolio construction.
Syfe REIT+ is a diversification away from equities and to expose yourself to high quality Singapore real estate from different sectors. Although only a $5000 allocation, over the long term, if you opt for dividend reinvestment, compound interest should be significant even if you don’t contribute to it.
Overall, you should be well exposed to almost the entire stock market across major economies and will be getting market returns and sometimes even higher (or might be lower) returns than the stock market.
Why is there no bonds?
For Singaporeans, our CPF monies in our OA/SA/MA are bond proxies as they are a form of guranteed capital with high yield, and hence, I am not factoring bonds into the portfolio construction.
With bonds portion taken care of by our government, the rest should be deployed to achieve higher returns but at the same time with such wide diversification of this portfolio, you will be certain to attain close to market returns in the long run with this portfolio.
Best For:
- Long Term Goals
- Beginner Investors
- Cost Conscious Investors
- Retirement Fund Accumulation
3. Aggressive/Higher Risk Appetite with a focus on higher returns potential
As a young investor with a long time horizon ahead, I fall under this category. If you are like me, able to take on higher risks and take on higher market volatility and short term price fluctuations in hopes of higher risk-adjusted return in the long run (eg 10% or more), this is a portfolio I will personally adopt if I were to start investing again with $20,000:
Core:
- Syfe Equity100 -$5000
- Bitcoin -$2500
- Ethereum -$2500
*Crypto bought via Gemini Exchange, sent over to Nexo for 5% APY
Satellite:
- DIY Stock Picking –$10,000
This portfolio in particular, is more advanced as you first need to understand what Bitcoin and Ethereum is all about and second, you need to understand individual stocks and get a grasp of fundamental analysis and technical analysis, and third, you need to have experience in times of volatility and even experiencing market corrections.
The reason is because this portfolio is more active, and may not be for the faint of heart.
Without good control of your emotions, you can easily lose your money in the stock market if you are unsure of what you are doing. For that, I will not recommend this portfolio for everyone and I feel that 99% of investors should adopt portfolio number 2 instead.
My current portfolio is a reflection of this an I managed to achieve +79.8% annualised returns for 2020, which is definitely a stock market outperformance.
Best For:
- Experienced investors (at least 1 year in the market)
- High Risk Appetite Individuals with understanding of more advanced concepts
- Willing to be more active in investing approach for higher returns potential
- Disciplined and Long Term Thinking Individuals
Conclusion
This pretty much sums up what I will do if I were to invest my first $20,000 again. In investing, it is important to understand that just like how every individual is unique and different, so does investing style and portfolio allocation. If you are a risk-averse individual, stick to a lower-risk portfolio, if you are able to take on more risk with a long term view, go for a more aggressive portfolio. At the end of the day, there are no right or wrong when it comes to investing, as long as you stick to your convictions and stay invested, you are bound to reap the fruits of your labour if you give it enough time to compound.
Rule No. 1: Never lose money. Rule No.2: Never forget Rule No. 1
–Warren Buffett
Thank you for reading. I hope this allow you to see the possible things that you can do with $20,000 and it is totally up to you to allocate. As long as it is a sensible strategy, it will help you to hit your goals faster!
TL;DR Syfe Promo Code
For people who are interested to invest into Syfe after reading how it can help achieve your goals and wants to open an account, you can use the promo code below as a bonus! 🙂
Promo Code: SRPTH8LK3
$10 bonus for the first deposit of $500 (or more)!
$50 bonus for the first deposit of $10,000 (or more)!
$100 bonus for the first deposit to $20,000 (or more)!
Note: Bonus is applicable on the first deposit made only. The bonus will be automatically credited to your portfolio and invested along with your existing investments
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