Category: SG Budget Babe

Get $288 Cash from SingSaver this CNY

SingSaver is giving out $288 cash tomorrow for the first 58 credit card applicants this Chinese New Year. Both new and existing cardholders are eligible.You can click here to start camping.The promotion runs 15 January 2020 at 9am sharp, and ends …

6 Ways to Ace Your Financial Resolutions in 2020

Aiming to save more money in 2020? Here are some tips on how you can start.The trick to really reaching your financial goals this year is to start with actionable steps, and I’ll share with you several tips to start on right away if you want to succeed…

Seedly Personal Finance Festival 2020

Make 2020 the year you’re going to succeed in your personal finance, by building the foundation for your financial freedom in the years to come.I’ll be teaching at the upcoming Seedly Personal Finance Festival – yes, the same event that sold out within…

We spent $25,000 to raise our child in the first year

How much does it cost to raise a baby in Singapore?Nate turned one recently and in total, we calculated that we’ve spent $25,000 on key essentials for his first 12 months of life. Here’s how our breakdown looks like:I’ve excluded stuff like birthday pa…

Ask and you shall receive

If you’ve not joined our personal finance tribe for all matters regarding money, cashback and parenting, remember to head on over HERE to follow and learn!There’s a wealth of information and tips there including which credit card to use,hacks on how to…

Having a personal finance tribe

Have you ever felt down because your friends, colleagues or peers are judging you for trying to save money?Or perhaps you previously were labelled with some really hurtful remarks like “cheapo” when you’re really just being frugal, and moreover NOT at …

DBS digiPortfolio – one of the best and the safest robo-advisors thus far?

If you’ve no time to do your own investment research or monitor your portfolio, then this might just be the solution for you.
Always wanted to tap on the same investment expertise provided to high net worth investors?

Well, now you can.

This means retail investors like you and me can finally tap on the knowledge and expertise given to the bank’s high net worth clients (those with more than S$500,000 in investment capital). The same discipline and methodology to constructing and managing a portfolio for these HNW clients is now being applied to the DBS digiPortfolio.

Their robo-investment platform uses human insights and investment strategies from the bank’s wealth management team, while leveraging robo technology to automate and scale the investment offering to more investors.

The experts curate, monitor and rebalance the portfolios on your behalf. Great for those who struggle to find time to DIY their own investments, especially when the fee charged is among the lowest in the market when paying for this level of convenience.

The perks:

       Low management fee of 0.75%

       A starting sum of S$1,000 or US$1,000

       No lock-in period

       No rebalancing fees

       Saves time on research and rebalancing

There are no fees for account opening or withdrawal, and neither is there any sales charges, platform fees or switching fees that is typical of the mutual fund industry.

Instead, you pay only a 0.75% fee of your total portfolio value per year. This means that for a $10,000 portfolio, that’s $6.25 each month ($75 yearly) to cover portfolio management, investment insights, all buy/sell transactions and rebalancing.

A small price to pay for all the time and effort you get to save, and well worth getting started.

But here’s the big question on everyone’s minds:

How does it stack up against the competition?

Given the human involvement, the closest equivalent might just be the mutual funds instead of the pure digital robo-advisors.

And the charges in mutual funds do not come cheap. Typically, you can expect to pay 1.5% – 2.5% total expense ratio, which covers annual management fees, rebalancing and switching fees. That’s not even including sales charges and platform fees, which works out to be another 1% – 5%.

So from this standpoint, DBS digiPortfolio is a no-brainer.

Now, if you truly believe in taking the human element out entirely, then you’ll be comparing it against the other robo-advisors here:

Provider

Rates

Fees per
$10,000 portfolio

Minimum investment

DBS digiPortfolio

0.75%

$75

S$1,000

AutoWealth

0.50% + USD 18

$75

S$3,000

EndowUs

0.60%

$60

S$10,000

StashAway

0.80%

$80

None
(US$10,000)

OCBC RoboInvest

0.88%

$88

US$2,500

UOB uTrade Robo

0.88%

$88

S$5,000

Smartly

1%

$100

S$50

The choice is obvious to me, especially since I’d never put too much into the ETFs portion of my portfolio.

How to start investing

Investors can choose from between two ETF portfolios:


Select from one (of three) risk levels:

       Slow & Steady

       Comfy Cruisin’

       Fast & Furious

The asset mix and ETF selection in the Asia portfolio is something that no other provider in the market can offer right now, but what’s even more interesting is that DBS has chosen to go for UK-listed ETFs in their global portfolio, thus avoiding the tax problems of the US market that have plagued some of the other robo-advisors.


Which portfolio to choose will ultimately depend on your personal preference and which market you wish to gain exposure to, but personally, I’m leaning more towards the global portfolio, because there’s little to stop any Singapore investor from replicating the Asia portfolio themselves (other than the fact that the DIY approach will definitely require a larger capital than $1,000).

If you’ve never invested in the markets beyond high-yield bank savings accounts, fixed deposits, short-term endowment plans or the Singapore Savings Bonds, then the DBS digiPortfolio is a good place to start.

What’s stopping me from DIY?

Nothing.

The DBS digiPortfolio was never meant to compete against DIY investors – from a cost perspective, DIY almost always wins hands down.

You could buy the locally-listed ETFs via a low-cost brokerage and pay as little as $10 per transaction. To replicate the 4 ETFs in the Fast & Furious Asia Portfolio, that’ll cost you just $40 (although the trade-off is that you’ll need more than $1,000 for such a portfolio). Moreover, if you simply buy and hold without doing anything else. But if you were to rebalance your portfolio, you’ll have to pay another $10 each time you buy/sell any units. Depending on how many actions you make, that may or may not exceed the amount you would otherwise pay for DBS digiPortfolio.

And if you invest in the global ETFs, you’ll have to factor in recurring custodian fees and tax deductions.


We’ve not even calculated the cost of your time yet. How many hours would the market research and buy/sell transactions take you?

If you feel your time is better spent elsewhere, then this becomes a no-brainer.

As a DIY investor myself, I prefer to focus my limited time and energy to research the other portions of my portfolio that I cannot outsource, namely the stocks and property investments. When it comes to ETF investing, I’m more than happy to pay someone else to manage it for me as long as the fees are competitively low.

TDLR Conclusion

The DBS digiPortfolio is a welcome addition to the robo-advisory space, moreover when it gives us access to investment expertise that was limited to higher net worth clients only.

It also makes a lot of sense for investors who don’t have time to actively research and manage their portfolios, as well as those have always wanted to invest but stayed out of the markets because they’ve no clue on how to construct their own well-diversified and balanced portfolio.


Even for DIY investors, for those looking to diversify and add to the index component of your portfolio, this might just be a more cost-effective and productive way to do so. It certainly saves you from all the time and extra fees incurred each time you manually rebalance your portfolio.

I definitely prefer to pay a small fee for good service, so I don’t have to worry about this portion.

And at the end of the day, investing is both a science and an art, so I’ve never once believed that technology can ever replace the human touch and judgement.

Which is why the latest launch of the DBS digiPortfolio sounds like a bank has finally gotten this part right.

This post is brought to you by DBS. All opinions are that of my own.

Struggling with debt? Here’s 5 tips to becoming debt-free.

No one wants to be crippled by debt. But when your debts pile high and clearing them seems like an insurmountable challenge, don’t be afraid to seek out help. Here are 5 tips on what to do to reduce your liabilities and become debt-free.


1. Make clearing your debts your first priority.

Take a moment to sit down and draw out how much debt you have, and what you need to do to clear it. Downloading your credit report (here) is a good place to start and get an overview of where your finances currently stand.

Once you’ve acknowledged the extent of the problem, you’ll be better equipped to start dealing with it.



2. Plan out your income and expenses.

Clearing your debt should take priority, but in the meantime, you still have daily expenses to pay for. Draw up a monthly budget and see what areas you can cut down on your spending eg. making your own coffee and meals instead of buying out, switching to a cheaper electricity retailer, reducing your telco bills, etc.

Of course, cutting expenses alone isn’t enough. The next step will be to look at how you can increase your income, such as through side gigs like setting up a small e-commerce business, teaching tuition, driving Grab, etc.



3. Use savings and discounts.

To make every dollar stretch further, I like to buy groceries and toiletries when they’re on sale, or go for the house brands (eg. NTUC or Watsons) which usually retail for much lesser.



While credit cards and cashback apps can help maximise your savings, if you feel you lack discipline, then perhaps leaving your credit cards at home instead might be a better idea so that you prevent any further debt accumulation.



Look out for discounts and coupons that you can use in order to save and pay less. There are also group buys for groceries which you can take advantage of, and buy secondhand from places like Carousell or Facebook MarketPlace whenever you can.



4. Recognise the signs when your debt gets out of hand.

Are you using almost your entire income to pay off your debts?

Do you have to resort to borrowing or living on credit to survive the month?

Are you working overtime to clear your debts that your health is beginning to suffer?



If you’ve answered yes to any of the above questions, then it could be time to seek professional help.



5. Seek out professional help.

For eligible households, there are various assistance schemes offered at the national and community level that you can apply for and consider, such as via Credit Counselling Singapore (CCS). As long as you’re working hard to improve your financial circumstances, there should be no shame in asking for help. There are also various support systems available for families, children and the elderly that can help ensure that their well-being, education and health are not compromised.



However, if you’re uncomfortable with being seen on public platforms at the information sessions organised by CCS and prefer a 1-to-1 consultation, CCS offers this at $30, whereas Debtpedia does it for free and in the comfort of your own home.



Conclusion


Many people are afraid about the stigma involved in debt assistance, but you shouldn’t be. Ultimately, do remember that there’s nothing more important than clearing your debts and avoiding financial ruin.



Did you know that there is a scheme to save you from bankruptcy and clear your debts within 5 years (or sooner)? Book a confidential appointment today with Debtpedia to find out more!



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