The Cost Of Waiting

So a version of this image above was forwarded to me by Edward, and I was intrigued! I went ahead and generate my own spreadsheet above and the results? Yeah it is pretty accurate. It is a compounded interest of 12% right from year 1!

And obviously being able to access to various quotations, I went ahead and check out the endowment series first to see if anybody could match anything near. The answer is no.

And then 3 days later, Edward told me about these two index funds he saw and the rough idea of it:

(1) SPDR S&P 500 ETF (SPY)

(2) STI (Straits Times Index) He explained that the 1st one tracks the top 500 companies internationally and the 2nd one tracks the top 30 companies in Singapore. He further explained that because Singapore market is relatively small, therefore the top 30 companies in Singapore might not be as diversified as top 500 companies in Singapore.

And he explained that the charges of investing in index fund is relatively low because it is passive and does not take a lot of effort to adjust the fund, mainly just tracking (following) the movement of the top 500 companies internationally.

Therefore, to achieve a 10 to 12% annualised return over 12 to 15 years, it is much more doable in an index fund.

Taken from image link as of 31st May 2019

You may refer to the above image for fund performance of the S&P500 index fund discussed above. Remember, past performance is not an indicator of future results.

So how can we invest into the ETFs listed above or any other ETFs that tracks the index in various international markets? Through brokerage firms like iFast Financial or Philips Poems are examples of firms we can tap into the invest into overseas market. Currency fluctuation might be one concern for overseas counters as FX rates move quite a bit with international trades moving at a much faster pace these days. Other than that, it will give your investment portfolio a good diversification into different geographical regions and asset classes across your individual portfolio be it for retirement, education funding or purely to reduce the risks of income loss and replacement.

If you are interested, do drop us a message so we can plan ahead for your financial goals and this can possibly form part of your financial portfolio to enhance the performance of how our money can work in our favour other than sitting in banks or endowment plans.

This information should not be considered a recommendation to invest in a particular index fund. It is not known whether the fund shown will be profitable in the future.