3 ways to invest and grow your money

Got some extra cash to spare? Here's how you can grow your money – no matter what your budget is

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INSURANCE STRATEGY: Spend $200 to get $500,000 in coverage Put $200 into insurance. If you are in your 20s, that should be enough to get you coverage for most hospitalisation expenses and for disability income (this gives you an income if you can’t work for health reasons). Assuming you purchase policies without cash values (ie those that don’t give you an eventual payout), you could get coverage of up to $500,000 for death and $300,000 for critical illnesses over the next 40 years. Instead of plans that cover 100 per cent of hospitalisation bills, consider riders with a more manageable co-payment amount – they're often half the price of plans that give complete coverage.
INVESTMENT STRATEGY: Diversify with unit trusts Put your remaining $300 into unit trusts. These diversify your investment portfolio with a relatively low amount of capital – key to maximising returns in the long run. Assuming your unit trusts off er an average interest rate of 4 per cent per annum, you’ll net $340,000 over 40 years.


INSURANCE STRATEGY: Upsize your policies Pay more to improve your coverage. If you already have disability income insurance, upgrade to get escalation benefits. These increase the monthly payout for every year that you cannot work. You can also up your basic critical illness coverage to a limited-payment life plan with a cash value. You’ll fork out higher premiums, but you pay for only a specific number of years, while still getting coverage for life. Another plus? The cash value of your policy grows over time, making it a good supplementary savings strategy.
INVESTMENT STRATEGY: Take risks... safely. Besides your core investments – which are usually more low-risk – consider using 20 per cent of your spare cash to set up a “satellite portfolio”, which lets you try out riskier investments. If you have a hunch that the price of gold is going to rise, this lets you invest in it without affecting the value of your nest egg.


INSURANCE STRATEGY: Free up your money faster Since you can afford it, get a whole life plan with short premium durations – between five to 10 years, for instance. You’ll fulfil your premium obligations faster, and can spend your money on other investments.
INVESTMENT STRATEGY: Stock up Consider stocks and bonds. These are riskier investments (and need more initial capital – often in the thousands) but do not incur charges and fees that come with unit trusts (typically 1 to 3 per cent in sales charges). If you purchase lots of Exchange Traded Funds from the Straits Times Index, you could pay as low as 0.2 per cent in brokerage fees. This way, you also diversify your portfolio because you’re investing in the STI’s 30 component companies, such as Singapore Airlines Engineering, Singtel and DBS Bank.

The advice in this column is intended for information purposes only. Always do your due diligence and consult a qualified financial adviser or planner before making any investment decisions.

Expert Advice: Seth Wee, Senior adviser at Promiseland Independent, who writes about finance at

This story was first published in Her World Magazine November 2014.

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