Hey everyone,
This week: how I set up long-term investing for my own kids, without needing a financial adviser or anything complicated. I'm also breaking down the small credit card mistakes that add up to real miles lost, and a blind spot I keep seeing in how people plan for retirement in Singapore.
Let's get into it.
🎯 Personal Finance Quick Action
If you're investing for a child, here's exactly how I did it for my kids. Six steps, no financial adviser needed, and no complicated products.
Open an Interactive Brokers Singapore account.
It's the lowest-cost broker in Singapore for UCITS ETFs, and setup takes about 10 minutes with Singpass.Open a linked sub-account for your child.
Inside IBKR, go to Settings and open an additional account tied to your main one. You can give this sub-account a name (their name works and they don't need to be 18). Then you're the legal owner of the funds.Put in $1,000 when they're born.
Buy VWRA.
One ETF, over 3,600 companies across more than 50 countries. It's what I use for my own kids, and the reasoning is simple: over a 20-plus year horizon, I have no idea which country or region wins next. The US had a strong 2010s while emerging markets outperformed in the 2000s.
A global ETF means you don't have to guess, you just own the winners wherever they show up, through the fund's own rebalancing. Don't buy VOO or VT as both are US-listed, and Singapore residents pay 30% dividend withholding tax on those. VWRA cuts that to 15%, since it's domiciled in Ireland instead. There’s also no US Estate Tax exposure for non-US citizens with a UCITS ETF.Automate $200 a month.
Set up a recurring investment plan on IBKR within this sub-account. It runs in the background. You don't think about it again.Leave it alone.
At 8% annualised returns, $1,000 to start plus $200 a month grows to roughly $100,000 by the time they turn 18. That consistency, discipline, and compounding does the actual work.
Do this today: If you don't already have an account to start, that's the real first step because everything else depends on it. Open an IBKR account here.
📷 YouTube Deep Dive
This week's video: 7 credit card mistakes in Singapore quietly capping your KrisFlyer miles.
The first one alone is a bigger gap than most people realise. A general spending card earns roughly 1.1 to 1.4 miles per dollar. The right specialised card earns 4. Same $2,000 a month, routed through the wrong card versus the right one, is the difference between 2,400 miles and 8,000.
Fix all 7 mistakes and that gap compounds fast. 8,000 miles a month is close to 100,000 a year, and that's a business class flight on a redemption to somewhere like Tokyo or Perth.
Most of these fixes take less than 5 minutes each: a calendar reminder, a two-minute app check, or a phone call to your bank.
Watch the video, fix what applies to you, and that seat upgrade is closer than you think (without you having to spend more than is necessary).
📩 From the Inbox
I keep running into the same pattern with people approaching retirement in Singapore. They've built a far more conservative portfolio than they actually need, sitting in cash or bonds, without realising CPF is already quietly doing that job for them.
Think about what CPF actually is. A government-backed, nearly no-risk income stream that's going to cover a real chunk of your retirement spending.
If you don't account for that when deciding how conservative the rest of your money should be, you end up double-counting safety. The result: lower overall returns for your portfolio than you needed, for no good reason.
Say CPF LIFE is on track to pay you $2,000 a month at 65, and you've worked out you'll need around $5,000 a month to live comfortably in retirement. That's 40% of your baseline already covered by something safe, before you've invested a single dollar elsewhere.
It's not just CPF where I see this. A recent Business Times report on Singaporeans' saving and investing habits backed it up with real numbers. The national personal savings rate sits at 39.2% of disposable income (admittedly this does include CPF), against a typical 7 to 15% across OECD countries. Nonetheless, on the whole, the overall savings habit here is excellent. That mentality and discipline to save is second to none.
The problem is where that money ends up (i.e. the investment part). Among 35-to 44-year-olds, around 60% of their invested savings sit in T-bills and Singapore Savings Bonds (SSBs). Among 45-to 54-year-olds, even though people are investing a larger share of their income at that stage, nearly 70% of it is still parked in the same instruments.
Safe assets aren't the wrong decision but they're just being used for the wrong job. T-bills and SSBs are a temporary parking space for money you know you’ll need for outlays in the next one to three years (home downpayment, education expenses, wedding etc.), not a permanent home for long-term savings.
The latest SSB pays 1.52% in year one, averaging 2.25% over 10 years. Six-month T-bills have fallen to around 1.56%. It’s nearly guaranteed that these rates won’t beat inflation over the long run (unless we see deflation), and these instruments are not designed to grow your wealth anyway.
To actually see our wealth expand over 20 or 30 years, you need to be invested in equities. There’s no two ways about it.
My take: know what you already own before you decide what else you need. A lot of "playing it safe" in Singapore is really just not realising how safe you already are, whether that's CPF quietly covering your baseline, or too much of your invested savings sitting in instruments built for the short term.
If there's a topic you'd like me to break down in a future edition, hit reply and let me know. The best ideas in this newsletter come from your replies.
Until next week,
— Tim
When you're ready, here are 3 ways I can help:
1. Investing Made Simple: A self-paced course that walks you through building a proper investment portfolio from scratch. ETFs, allocation, brokers, and the mindset to stay consistent. Everything you need to start and keep going. Join here.
2. Miles Made Simple: A strategy guide for earning and redeeming KrisFlyer miles the right way. If you're flying out of Singapore and not optimising your credit card spend, you're leaving a lot on the table. Get the guide here.
3. Got a question? Submit it here and I might answer it in a future edition.