Singaporeans today are an ambitious bunch

Equipped with an enterprising mind and a determined drive, many have embarked on the roads less travelled, chasing dreams and doing the things they love. From being an entrepreneur to travelling around the globe with their loved ones, many Singaporeans have taken the courage to pursue their dreams.

While there are some who take baby steps forward, there are also those who take risks and make reckless gambles. Yet no matter how achievable these goals and dreams can be, the process is undoubtedly going to be an arduous one. Questions, such as “How long would it take for me to reach my goal?” or “Would I have the energy and resources to commit to my game plan 30 years from now?”, are bound to surface.

In many ways the root of the problem lies in the availability of resources—in this case, the common culprit is cash.

Assuming an individual dream of opening his own cafe, the total estimated set-up cost is expected to be S$220k, inclusive of S$44k worth of monthly expenses. Considering how the average Singaporean brings home a salary of $3,600 per month (after CPF deduction) and saves 30-49 per cent of his salary, this aspiring man can only open his cafe after 13 years of consistent saving.

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Of course, one could bridge the gap and consider taking up bank loans (and incur a seemingly endless cycle of debts), shamelessly borrowing from family members and friends, or succumb to the endless working cycle while praying for the drive and determination to remain. But there are also some who participate in active or passive investing.

If you are planning to pursue your dreams in the next few years, why not invest your money for the time being and leverage on the benefits of compound interest.

What is active and passive investing?

For active investing, you might probably have a fund manager to manage your investments. Simply put, these managers would scour the market and use your money to invest in companies that are expected to do well.

It is an investment strategy that requires extensive research— think reading up on companies’ financial statements, understanding the latest market news — and a lot of buying and selling to exploit profitable conditions. Furthermore, active investing is more expensive as more trading is required and there is a need to pay research analysts and fund managers for commissions.

For passive investing, your money is used to purchase shares in a group of companies, known as an Index, and if this group of companies (or index) prospers, your money grows. Essentially passive investing aims to build wealth gradually and maximise profits by minimising buying and selling via the use of market-weighted portfolio or robo-advisors, like Smartly.

A lonely roller-coaster ride

The path one takes to chase his or her dreams in Singapore may be a lonely roller-coaster ride, one where many have struggled with cash flow issues. Unless you are born with a silver spoon, it can be somewhat taxing trying to overcome this obstacle.

Understanding the struggles of financing the Singaporean Dream, Smartly genuinely believes in working hand-in-hand with users to attain their financial growth. Leveraging models and algorithms to invest in Exchange-Traded Funds (ETFs), Smartly aims to provide Singaporeans with an easier alternative to invest with lower fees, greater transparency, and greater flexibility.

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National Day Parade 2018

As Singapore proceeds to celebrate its 53 years of independence, testaments of individuals who succeeded in pursuing their dreams become aplenty. This has shown that dreams, given time and adequate resources, are never insurmountable.

So take a leap of faith and do what YOU think is best and Smartly will be there in every step of the way.


Here is some information which might help you to understand the financial terms used earlier.

Fund managers

An employee of a large financial institution (such as Prudential or GIC) who manages investment of money on its behalf. For example, when you invest through endowment insurance, fund managers would take your money and invest in a portfolio of assets that best suits your needs

The key difference between robo advisors and fund managers is that the majority of our services are automated. This allows us to reduce any additional costs incurred by the commission of the financial advisors, fund managers and companies – which translates to lower fees for our users.



Market news

Stock prices fluctuate due to supply and demand – if more people want to sell a stock, the lower the price would go. This relationship is correlated to the type of news reports that are shown.

Negative news will usually cause individuals to sell stocks. This includes poor financial reports, economic and political uncertainty and unexpected occurrences.

For example, if an earthquake destroyed all the factories which produce iPhones. Apple stock price may decrease as individuals might sell away their stocks – believing that Apple would not be able to create any iPhones for the time being, therefore reducing the company’s revenues. (In reality, there are much more complications – from loss of assets such as factories and equipment, the cash required to rebuild factories, the list goes on.)

Positive news will usually increase the stock price. Positive economic and political environment, new products and positive earnings would translate to increase in demand for the stocks – therefore an increase in stock price.

For example, if Apple announced a revolutionary iPhone that has features which are not available in the market. This might increase the stock price as individuals may believe that consumers are more willing to purchase this iPhone, therefore increasing the company’s revenues.

Regardless if it is positive or negative news, it would have a different impact on different companies and industries. In the case of an earthquake, the stock price of a construction company may increase because they are likely to have more projects to rebuild buildings that were destroyed – therefore increasing their revenues.



Financial statements

The three major financial statement reports are the income statement, balance sheet and statement of cash flows.

Income statement – The business revenue, expenses and profits.

Revenue – How much the company earned from selling their products and services.

Expenses – How much the company spent. This includes operational expenses, marketing efforts, etc.

Profits – How much did the company made after deducting the expenses from the revenue.



Balance sheet –
The business assets, liabilities and equity

Assets – There are two types of assets, current assets and non-current assets. To keep things simple, assets are cash, inventory, equipment, etc. – Items which the company owns.

Liabilities – Similarly, there are also two types of liabilities, current liabilities and non-current liabilities. These are items which the company needs to pay. This includes account payable, bank loans, income taxes, etc.

Equity – The value of the company less the amount of all liabilities. For example, if you own a car that is worth $100,000, however, you have an outstanding debt of $40,000 which you have not paid. After selling away your car and paying off your debt, you are left with $60,000. This refers to your equity – the value which you have.



Cash flow statement
– The cash earned or used by a company in a given period. There are three categories, operating activities, investing activities and financing activities.

Operating activities – Refers to the net income and cash provided (used) for operational expenses. In short, it is what the company spends and generate over the time period.

The difference between cash flow from operating activities versus income statement is that the former shows the revenue received whereas the latter highlights the revenue earned, which includes accrued income – income which has been earned but not yet received.

For example, you have completed a project for your client, and you have earned $1,000 from this project. Your client has not paid you yet, but you have already recorded $1,000 as your income. The $1,000 is an accrued income.

Investing activities – Refers to the cash used (provided) on investments in capital assets, such as plant and equipment. It is an important aspect as it helps the company to grow and expand. (E.g. Purchase of new machines which would help to increase the production).

Financing activities – Refers to external activities that allow the company to raise capital so that they can expand or purchase additional machinery / new technologies. They can either raise capital by getting bank loans or issue more stocks on the stock exchange.


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Posted by:Joel Seetoh

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