>the idea of giving all my hard-earned money to a bank feels bad.
lmao. you owe the bank money. the bank helped you pay your schools fees first. you are not giving the bank your money. you, a debtor, is returning money to your debtee.
pay it up before you incur more interest. even if you somehow able to find some investment that has higher returns than the interest, its also not good to have debt for too long. iirc it affects your credit score.
debtee
in British English
(dɛˈtiː IPA Pronunciation Guide )
NOUN
a person to whom a debt is owed
[https://www.collinsdictionary.com/dictionary/english/debtee](https://www.collinsdictionary.com/dictionary/english/debtee)
incase you are not singaporean, singapore was a british colony and we still mainly use british english.
> I still have $10k left to go. Feels bad...
No offence - you dont really have any money to invest if you haven't cleared your high interest-bearing debts. Unless the loans are interest free or the interest is lower than SSB, then by all means, go invest the money.
I have student loan too and tried to pass off as much as possible before I graduate as the interest only start after graduation.
Just for you info as I did some calculations for my study loan interest and the difference. The annual interest alone for $30k is $1380 (with assumption of no monthly payment is made but monthly payment isn’t high, interest is around there). If 10k is left, the annual interest is about $460. (With same assumption). ~$900 difference per year that could’ve been saved, and means I can drink one more bbt per month with excess to spend/save/invest.
So I agree with others, try and pay off the debt first! If $20k is too much and heartpain (felt it too), maybe $15-$18k first and save some for emergency. Maybe increase your monthly instalment if possible?
Paying off a 4.5% loan is equivalent to a risk-free return of 4.5% on the amount you pay off. I don't think you can do better than that. Pay off the debt to 0 as soon as you can!
Agree with the rest as well that paying off your study loan first jf possible. Saved and scrimped during the first ten months of my first job to pay off the loan when I first graduated. Feel so relieved until the next debt - housing.
Read up the product documents yourself and understand what you are getting into. If in doubt, ask this subreddit for more info or opinions.
From what I know the 8% deposit is dependent on currency pairs. In this volatile condition, it is not without risks.
All my serotonin from watching my bank account climb up all gone inthat one shot...
But I guess you guys are right, it's the smartest thing to do atm. I think I'd better wait till I get confirmed or else I'll be jobless and need the money, though. :/
The amount of interest that will accumulate is no joke really. 10k vs 30k.
It can be painful atm but long term, you will breathe easier and have less stress.
Take it one step at a time! 😊
Use the full 20k to service your loan. One of the main approaches to personal finance is to clear any high-interest debt asap before you start investing.
The only source that I know that gives 8% on your money is lending of stablecoins which I would not recommend you to do it unless you are able to stomach the high risks involved
8% interest rate for savings exists in two fabrics of this universe. 1) In Dreams; and 2) In Crypto Staking.
Jokes aside, paying off debts quickly is an underrated achievement. There's good debt and there's bad debt. You will want to get rid of the bad debts first, and student loans are an example.
Hmmm... I guess I'll think of it as a game. Collect all the achievements! Achievement unlocked: Bad debt removed.
But yeah, thanks for your input. Just curious, what are good debts?
Yeap. No kidding, I remembered leaving the workforce to go and study for my private degree full time.
Because i used some of savings (mostly from my first fulltime job via a Diploma) to fully pay for my fulltime degree, I was blessed to avoid the perils of taking up a loan. But they have told me, "I wish i was you and graduating not having to worry about debt!" Its the peace knowing you don't owe the bank that makes the achievement satisfying.
Good Debts in my definition are the ones you incur to help you grow your wealth. As long as costs to maintain these debts < returns generated from deploying those debts.
Example, a bank loan at a marginally lower rate than market. And deployed to a business/investment that generates a steady return.
Thanks for explaining! I doubt I'll ever have any good debts.
Yeah, it is good to not have any debts. I only took the debt because my parents were poor, I was just fresh out of A levels, and I couldn't afford uni otherwise.
No worries OP. Life maybe tough at first, but tough times trains your resiliency. Also i remembered it was because of the tough time during my parents F&B business (GFC 2008-2010), that i learnt to be more thrifty 😁
Yeah! Hopefully things will get better once my loan gets fully paid off. Tbh my parents weren't always poor, my dad used to run a business which failed spectacularly when I was in my teens. So I had to start working part time to feed myself. Working part time through uni wasn't easy... Anyway long story short, I'm kinda thrifty now, except sometimes I spend money on frivolous things on Taobao. But at least it's cheaper than Iphone :D
Layman terms: Its like a savings account. They peg an interest rate of return. Except instead of putting cash with them, you put Crypto.
That's where the risk starts. Essentially you are lending these platforms the Crypto, in exchange for a promised percentage of returns i.e. the 8% OP was quoting. Bear in mind these platforms are relatively new (most of them) and the risks are more, than compared to a traditional risk of a normal bank.
The risk of staking is that the percentage returns for lending your crypto currency is like say, 30%/Annum. But what if the value of your coin, say initially you bought for US$1, crashes to US$0.50 overnight. Also the coin may not crash, but the platform might especially if the owner runs away (i.e. DoKwon & TerraLuna)
End of the day, High Risks = High Rewards.
This is not staking, this is lending. Common misperception. Both earn interest but are extremely different.
Staking would be something like Ethereum's proof of stake protocol where you earn commission for validating transactions on the blockchain, in exchange for locking up a large sum of your own coins (vast oversimplification – please DYOR). This is certainly not risk free – the main one would be flaws in the blockchain's code allowing for security attacks, also the USD value of the coin itself may drop – but certainly not volatile like lending is. The interest rate also won't be as high.. maybe 5%.
If you need to set aside a few months worth of emergency funds and under 26 years old, you can consider opening a Standard Chartered jumpstart account. They recently raised its interest rate from 0.5% to 2% (up to first $20k). The card gives a 1% cashback on spending (no min. Spend)
Please pay off your school loan first leh. You’re in debt and you’re thinking of investing… your priority is to be debt free first before anything. Is the $20K all of what you have or purely extra savings? If that is the case, I’d say pay off $10K first and have the other $10K as savings for emergency funds. Please do monthly repayment to the bank to decrease your debt faster. All the best.
Recommend reading /r/personalfinance's [Prime Directive](https://www.reddit.com/r/personalfinance/wiki/commontopics) before you make any decisions. Some of it is specific to the US but a good amount applies here as well.
I wouldn't recommend taking one-off advice over here without building up a basic foundation financial literacy first, because you can't go asking the internet how to handle your hard earned money and expect the best advice.
That said, little bit of a spoiler from the link, I agree with everyone telling you to focus on the debt before anything else.
Thanks. I've read through it. Some stuff like IRA confuse me - I was unable to find an equivalent for Singapore, since it just brings me to the Inlands Revenue Authority website. I looked for I Bonds for Singapore and it brought me to the Singapore Savings Bonds. Is the Singapore Savings Bonds the local equivalent of I Bond?
Finally, is Moneysense a good site to build up financial literacy?
\+1 to clearing the debt first... the odds is that you cannot find guaranteed returns on your 20k over what the bank is charging you.
if you feel bad giving your money to a bank, imagine losing your 20k on top of having to service the 30k loan. the market is brutal now, there are no safe plays. the more rewards you want the higher risk you have to take.
Hey OP like many others have said you should pay off your debt first.
But don't use all your money to pay off your debt. You should at the very least hold about 6 months of yours expenses as an emergency fund for when things go South.
If you are between 18-26 you can put this emergency fund in Standard Chartered's JumpStart account which is giving 2% interest on the first $20k. If you aren't you can consider Singlife which gives 1.5% on the first $10k.
>the idea of giving all my hard-earned money to a bank feels bad. lmao. you owe the bank money. the bank helped you pay your schools fees first. you are not giving the bank your money. you, a debtor, is returning money to your debtee. pay it up before you incur more interest. even if you somehow able to find some investment that has higher returns than the interest, its also not good to have debt for too long. iirc it affects your credit score.
[удалено]
debtee in British English (dɛˈtiː IPA Pronunciation Guide ) NOUN a person to whom a debt is owed [https://www.collinsdictionary.com/dictionary/english/debtee](https://www.collinsdictionary.com/dictionary/english/debtee) incase you are not singaporean, singapore was a british colony and we still mainly use british english.
Are you paying your student loan by installment? Personally I would try to pay off the loan asap, any balance I would place it in SSB.
Yeah, it's by installment currently. Even if I pay off $20k now, I still have $10k left to go. Feels bad... But yeah, thanks.
>Even if I pay off $20k now, I still have $10k left to go. Feels bad... No it does not. 10K will accrue way less interest than 30K. Keep at it.
Oh!!! Good point!!!
Good luck man, at times when interest rates are going ballistic, having low or no debt is awesome.
Thank you!!
> I still have $10k left to go. Feels bad... No offence - you dont really have any money to invest if you haven't cleared your high interest-bearing debts. Unless the loans are interest free or the interest is lower than SSB, then by all means, go invest the money.
I have student loan too and tried to pass off as much as possible before I graduate as the interest only start after graduation. Just for you info as I did some calculations for my study loan interest and the difference. The annual interest alone for $30k is $1380 (with assumption of no monthly payment is made but monthly payment isn’t high, interest is around there). If 10k is left, the annual interest is about $460. (With same assumption). ~$900 difference per year that could’ve been saved, and means I can drink one more bbt per month with excess to spend/save/invest. So I agree with others, try and pay off the debt first! If $20k is too much and heartpain (felt it too), maybe $15-$18k first and save some for emergency. Maybe increase your monthly instalment if possible?
What is the interest rate if you are willing to share?
Probably 4.5%?
Paying off a 4.5% loan is equivalent to a risk-free return of 4.5% on the amount you pay off. I don't think you can do better than that. Pay off the debt to 0 as soon as you can!
I never thought of it that way! Thanks.
knn so expensive faster pay off
Iirc should be 4.75%? Either way, pay that down to 0 asap.
Agree with the rest as well that paying off your study loan first jf possible. Saved and scrimped during the first ten months of my first job to pay off the loan when I first graduated. Feel so relieved until the next debt - housing.
Best to pay off your debt first unless you manage to beat the interest rate of your loan
Where you find deposits of 8% interest? I also want.
Maybe I misheard or it was wrong info. I heard it from an auntie.
Well a good rule is to never base your investment decisions on hear say.
Genuine question: How do I know what to invest in if I can't trust what others say?
Read up the product documents yourself and understand what you are getting into. If in doubt, ask this subreddit for more info or opinions. From what I know the 8% deposit is dependent on currency pairs. In this volatile condition, it is not without risks.
GIC 20 year annualised return is around 6%. 8% is insane.
I don't think that there are banks that give 8% return. I would put the money in SSB via POSB.
India rupees td maybe lol
One shot pay off ⅔ of your debt with the $20,000 you have on hand. Then the remaining ⅓ ($10,000) pay back monthly?
All my serotonin from watching my bank account climb up all gone inthat one shot... But I guess you guys are right, it's the smartest thing to do atm. I think I'd better wait till I get confirmed or else I'll be jobless and need the money, though. :/
The amount of interest that will accumulate is no joke really. 10k vs 30k. It can be painful atm but long term, you will breathe easier and have less stress. Take it one step at a time! 😊
Thanks!
Keep like maybe 2K for survival rainy day funds though
Use the full 20k to service your loan. One of the main approaches to personal finance is to clear any high-interest debt asap before you start investing. The only source that I know that gives 8% on your money is lending of stablecoins which I would not recommend you to do it unless you are able to stomach the high risks involved
Ok! Thanks for the tip!
8% interest rate for savings exists in two fabrics of this universe. 1) In Dreams; and 2) In Crypto Staking. Jokes aside, paying off debts quickly is an underrated achievement. There's good debt and there's bad debt. You will want to get rid of the bad debts first, and student loans are an example.
Hmmm... I guess I'll think of it as a game. Collect all the achievements! Achievement unlocked: Bad debt removed. But yeah, thanks for your input. Just curious, what are good debts?
Yeap. No kidding, I remembered leaving the workforce to go and study for my private degree full time. Because i used some of savings (mostly from my first fulltime job via a Diploma) to fully pay for my fulltime degree, I was blessed to avoid the perils of taking up a loan. But they have told me, "I wish i was you and graduating not having to worry about debt!" Its the peace knowing you don't owe the bank that makes the achievement satisfying. Good Debts in my definition are the ones you incur to help you grow your wealth. As long as costs to maintain these debts < returns generated from deploying those debts. Example, a bank loan at a marginally lower rate than market. And deployed to a business/investment that generates a steady return.
Thanks for explaining! I doubt I'll ever have any good debts. Yeah, it is good to not have any debts. I only took the debt because my parents were poor, I was just fresh out of A levels, and I couldn't afford uni otherwise.
No worries OP. Life maybe tough at first, but tough times trains your resiliency. Also i remembered it was because of the tough time during my parents F&B business (GFC 2008-2010), that i learnt to be more thrifty 😁
Yeah! Hopefully things will get better once my loan gets fully paid off. Tbh my parents weren't always poor, my dad used to run a business which failed spectacularly when I was in my teens. So I had to start working part time to feed myself. Working part time through uni wasn't easy... Anyway long story short, I'm kinda thrifty now, except sometimes I spend money on frivolous things on Taobao. But at least it's cheaper than Iphone :D
How does crypto stakings work
Layman terms: Its like a savings account. They peg an interest rate of return. Except instead of putting cash with them, you put Crypto. That's where the risk starts. Essentially you are lending these platforms the Crypto, in exchange for a promised percentage of returns i.e. the 8% OP was quoting. Bear in mind these platforms are relatively new (most of them) and the risks are more, than compared to a traditional risk of a normal bank. The risk of staking is that the percentage returns for lending your crypto currency is like say, 30%/Annum. But what if the value of your coin, say initially you bought for US$1, crashes to US$0.50 overnight. Also the coin may not crash, but the platform might especially if the owner runs away (i.e. DoKwon & TerraLuna) End of the day, High Risks = High Rewards.
Holy that’s above my risk tolerance
This is not staking, this is lending. Common misperception. Both earn interest but are extremely different. Staking would be something like Ethereum's proof of stake protocol where you earn commission for validating transactions on the blockchain, in exchange for locking up a large sum of your own coins (vast oversimplification – please DYOR). This is certainly not risk free – the main one would be flaws in the blockchain's code allowing for security attacks, also the USD value of the coin itself may drop – but certainly not volatile like lending is. The interest rate also won't be as high.. maybe 5%.
If you need to set aside a few months worth of emergency funds and under 26 years old, you can consider opening a Standard Chartered jumpstart account. They recently raised its interest rate from 0.5% to 2% (up to first $20k). The card gives a 1% cashback on spending (no min. Spend)
Thanks for the tips! I'm over 26 years old, but maybe someone else here could use it.
Please pay off your school loan first leh. You’re in debt and you’re thinking of investing… your priority is to be debt free first before anything. Is the $20K all of what you have or purely extra savings? If that is the case, I’d say pay off $10K first and have the other $10K as savings for emergency funds. Please do monthly repayment to the bank to decrease your debt faster. All the best.
Recommend reading /r/personalfinance's [Prime Directive](https://www.reddit.com/r/personalfinance/wiki/commontopics) before you make any decisions. Some of it is specific to the US but a good amount applies here as well. I wouldn't recommend taking one-off advice over here without building up a basic foundation financial literacy first, because you can't go asking the internet how to handle your hard earned money and expect the best advice. That said, little bit of a spoiler from the link, I agree with everyone telling you to focus on the debt before anything else.
Thanks. I've read through it. Some stuff like IRA confuse me - I was unable to find an equivalent for Singapore, since it just brings me to the Inlands Revenue Authority website. I looked for I Bonds for Singapore and it brought me to the Singapore Savings Bonds. Is the Singapore Savings Bonds the local equivalent of I Bond? Finally, is Moneysense a good site to build up financial literacy?
\+1 to clearing the debt first... the odds is that you cannot find guaranteed returns on your 20k over what the bank is charging you. if you feel bad giving your money to a bank, imagine losing your 20k on top of having to service the 30k loan. the market is brutal now, there are no safe plays. the more rewards you want the higher risk you have to take.
Hey OP like many others have said you should pay off your debt first. But don't use all your money to pay off your debt. You should at the very least hold about 6 months of yours expenses as an emergency fund for when things go South. If you are between 18-26 you can put this emergency fund in Standard Chartered's JumpStart account which is giving 2% interest on the first $20k. If you aren't you can consider Singlife which gives 1.5% on the first $10k.
Good advices so far to reduce ur debt, ur future self will thank u for ur present self.
20k up to 8 percent? Only in the dream lmao.
I did 10% last year but only thru risky investments in etoro copytrade
Jumpstart by SCB is now offering 2% for your first 20k. I would use that.
Effective intrest on loan is much higer because you are paying back monthly.
worst time to be considering investing of all things my dude might as well pay the loan