Do you have some spare cash and are looking to invest, but not sure how to start? Seems like a common conundrum in Singapore, judging from the conversations I have with friends and family. Questions and comments like "If I have XXX amount of money, what should I invest in that's not too risky?", or "I have some investments with my insurance, but not really sure what it is" bug me. This shows a lack of financial literacy amongst Singaporeans, despite our well-known status as a global financial hub.

While investments obviously comes with risks, the age-old adage of "low-risks, low returns" still holds true.

If you are looking to start out investing but not sure how much you need and what to invest in, here's some suggestions from for the amateurs out there.

Good luck!

  1. 1. If You Have $100 - $500 A Month To Invest:

    You can consider the various monthly investment plans being offered by banks and brokerages. POSB's Invest Saver, OCBC's Blue Chip Investment Plan, Maybank Kim Eng's Monthly Investment Plan, and Phillip Securities' POEMS Share Builders Plan are good places to start.

    You only need a minimum of $100 per month to start investing using these plans, even a fresh graduate can afford it!

    How these plans work is based on the strategy of dollar-cost averaging - you buy a fixed dollar amount of an investment monthly so that the cost of buying is lowered over the long term. This takes out the risk of going into the market at the wrong time.

    Costs are around 1 percent for each of them, so it's considered pretty low for a passive investment.

    If you are not sure which counters to pick, you can try a blue-chip stock or buy into the STI index to diversify your risks.

  2. 2. If You Have $500 And Above To Invest:

    Remember our article about the Singapore Savings Bonds? They are now ready for subscription!

    The minimum application amount is $500 with the maximum at $50,000 for each bond issue. With this investment, you can earn up to 2.63% interest if you hold it for a 10-year term.

    The best part is that you can redeem the bond anytime, with no penalty issued and your principal is entirely protected.

    If you are looking for risk-free investment, this is it.

  3. 3. If You Have $2,000 And Above To Invest:

    If you've been shopping recently and has walked past some jewellery outlets, you might have seen the advertisement for the Aspial Corporation retail bonds. Before going into the details, you might ask, what is a retail bond?

    When we buy a bond, we are essentially lending the company a sum of money and promised a return (interest).

    While most investment marketing material will say that bonds are considered risk-free, this is not the case for retail bonds.

    Government bonds backed by the government mostly likely have a high credit rating, given that government defaults are less likely compared to a retail business.

    Therefore, do read into the financials of the company before buying a retail bond before taking the returns at face value. Remember, higher returns = higher risks.

  4. 4. If You Are Thinking Of Investing In Stocks:

    Since the start of this year, the Singapore Exchange has reduced the minimum lot size for stocks from 1000 to 100, making stocks investing more accessible to the common man-on-the-street.

    Depending on the stocks you choose and their current pricing, stocks investing can start from a few hundred dollars to 5-figure sum. If you are starting out, it might be more prudent to buy into blue-chip stocks – companies that generally have solid financial reputation with a huge market capitalization.

    If you prefer to diversify, you can also look into buying an index ETF. Simply go to a securities brokerage to set up a trading account and a central depository account (CDP) to start on your stocks trading journey!

    With a minimal sum of $100 a month to using your lump-sum bonus for investments, there's no more excuses for you to not start growing your wealth!