How passive investing can help you achieve your financial dreams

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.


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.

photo_by_ National_Day_Parade_2018.jpg
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.

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