“What to invest in Singapore?” is big question to all Singaporean and people who live in Singapore since the inflation rate gradually increases over bank deposit interest rate and salary increment rate. So, even though how hard you work in Singapore, the inflation rate gradually “eats” your hard-earn money in your bank account if you don’t invest your money and generate cash flow in the long term.
Here’re 4 types of investment in Singapore you should keep in your portfolios and generate cash flow for you in the long term:
1.) Singapore REITs
You could invest Singapore REITs since the Singapore government made regulation 90% of annual distribution income to unit-holder / investors annually. The annual average dividend yield is almost 6 to 7 percent per year. Before you start investing in Singapore REITs, here’re 5 things you should take note:
i) Identify types of Singapore REITs. There are 5 types of Singapore REITs, Industrial REIT, Healthcare REIT, Commercial REIT, Retail REIT and Hospitality REIT. Here are list of Singapore REIT companies.
ii) Identify cycle risk of real estate industry, percentage of bank borrowings and Singapore government regulation of Singapore REITs.
iii) Identify REIT managers how they manage the real estates / properties and tenancy agreements.
iv) Identify science of magic numbers of Singapore REITs and valuation
v) Some REIT companies will issue right to unit-holder / investors as long as the REIT companies want to raise fund from investors / unit-holder rather than banks. So, you must keep some percentage of money to do right issue otherwise it will dilute your holding shares.
2.) Stock in Global Market
You can invest market shares via stock exchanges (SGX, Bursa, TWSE, NYSE, NASDAQ, ASX etc). Before you start investing market shares, you must own trading accounts served by local brokers. In stock markets, there are small-cap companies, mid-cap companies, blue-chip companies. What to invest in market share depends on personal – capital appreciation or dividend yield over risk-free rate. Average person in the world can compound average annualised return as 20% per year.
6 things you should take note before start investing in stock in global market :
i) Identify the company business model, management, science of magic numbers, valuation, risk-management
ii) As a business owner after owning ownership shares in the companies.
iii) Identify types of companies: fast growth, slow growth, stalwart, cyclical, turn around, asset play business companies.
iv) Identify widen moats or narrow moats companies
v) Tax charge based on country regulation
vi) Identify SWOT (Strength, Weakness, Opportunities, Threats), Risks.
3.) Option in US Market
You can do option (PUT or CALL) in US market rather than warrant in Singapore market. Option is like a contract / agreement. You own a contract / agreement rather than market shares. For example, in real estate industry, if sellers wants to sell their house, they will issue option to buyers for 14 days. The buyers must make a deposit. So, buyers own the option agreement and sellers own the deposit. The buyers must reply it to sellers whether they continue to buy the property during 14 days otherwise the deposits will be forfeited by sellers. PUT option is right to sell at an agreed price while CALL option is right to buy at an agreed price. Here’s 3 things you should take note before doing option in US market:
i) Own Online trading platform account served by local brokers.
ii) Identify business, management, risks of option, science of simple magic number, simple valuation, technical graphs.
iii) Identify option strategies for SELL PUT, SELL CALL, BUY PUT, BUY CALL.
4.) Properties in Singapore
You could invest properties in Singapore via Direct Developer, Government or Resale Owners. Before buying or selling properties, you could hire certified property agents from certified property agencies in Singapore to ask some recommendation / advices. Before investing in properties, here’re 7 things you should take note:
ii) Identify government regulation and rules for buyers and sellers, such as BSD, ABSD, bank loan borrowing percentage, eligible to buy Singapore properties (For example: Only Singaporean allows to buy landed properties except foreigner etc.
iii) Do bank loan assessment with the bankers.
iv) Identify tenure of properties : 99 leasehold or freehold
v) Identify tracking record of reputable developers and their portfolios. Here’s you will know which developer will deliver the property on time to buyers if buying new properties from direct developer. If buying resale HDB flat, please request the valuation of properties from the sellers.
vi) Identify Singapore master plan by 2030, population growth, smart city development, transport infrastructure.
vii) Identify the science of magic number and the valuation of properties
viii) What numbers of bedrooms of properties you are affordable to invest in.