You will be able to decide on a monthly investing amount that fits once the earlier layers are funded.
Most people who haven't started investing give one of two reasons. The first is that they are waiting for the right moment, when prices look cheap. The second is that they don't know how much they can afford, so they put in a lump sum when they feel flush and then nothing for months. The exercise below settles both. It takes about twenty-five minutes. You need your spending plan from lesson 2.2 and your notes from modules 3, 4 and 6.
Investing sits above three layers: the buffer (your emergency fund), protection (insurance) and debt. Each lower layer should be in place, or clearly under way, before money goes into investing. Mark each of these four checks yes, under way or no.
Emergency fund: is it at target, or is a monthly transfer running with a completion month (lesson 3.4)? Hospital cover: do you have it (lesson 4.1), and does it continue if you leave your job? Other protection: have you mapped your cover (lesson 4.4), and is the top gap on your list being dealt with? Expensive debt: is every card balance and personal loan cleared, or on the repayment order (lesson 6.1)?
A "no" does not mean you give up on investing. It shows where the money should go first. Lesson 6.1 showed that clearing a card balance that charges a high rate gives a better and safer return than any investment, so a "no" on debt means the money goes to the card before it goes into a fund.
Darren, who you met in earlier lessons, ran the checks (all his figures are invented examples). His emergency fund is under way, at S$500 a month towards a target of S$13,150, due to finish in July 2028. His hospital cover is in place. His insurance map is done, and its one gap is booked in with an adviser. His only debt is a study loan, which costs little. Every check comes out yes or under way.
Your surplus for goals is the saving amount in your spending plan minus what is still committed to the lower layers. Those commitments are emergency fund transfers, the cost of closing an insurance gap, and extra debt repayments. What is left is split by time horizon, using the sorting from lesson 6.2. Money for goals more than ten years away can go to long-term investing. Money for goals a few years away, such as a wedding or a down payment, stays in cash.
Base the fixed monthly amount only on income you can count on. Leave irregular income, such as freelance work or a bonus, out of it, and decide separately what to do with that money when it arrives.
Darren's saving amount is S$500 a month. All of it goes to the emergency fund until July 2028, so his surplus for investing today is zero. From August 2028 the whole S$500 is free. He splits it by time. S$150 a month goes to a flat fund about six years away, kept in cash. S$350 a month goes to long-term investing for retirement, which is more than thirty years away. S$350 divided by S$500 is 0.7, so 70% of his surplus is invested.
He also earns from tutoring, which is irregular, so it is not part of the S$350. Until the emergency fund is full, the tutoring money goes into the fund. If it averages S$300 a month, the fund could fill in November 2027, and he would bring his start date forward to December.
Pick a fixed monthly amount and a fixed date, and keep investing whatever prices do. Investing a fixed sum every month on a fixed date like this is often called dollar-cost averaging. Its main advantage is that it removes the timing question altogether. Nobody can reliably say when prices are low, and people who wait for the right moment often wait for years.
A fixed sum also buys more units when prices are low and fewer when they are high. Say you invest S$350 a month for three months. The unit price is S$10 in month 1, S$8 in month 2 and S$12.50 in month 3, so you buy 35 units, then 43.75, then 28. That is 106.75 units for S$1,050. Your average cost per unit is S$1,050 / 106.75, about S$9.84. The simple average of the three prices is S$10.17, so your average cost sits below the average price. The lower cost comes from the arithmetic. It is not a promise of profit, and the fund can still fall.
Write one line with four things in it: the monthly amount, the goal, the date of your first investment, and the date you checked the layers. Set the investing transfer to run just after payday, alongside the transfers you set up in lesson 2.4.
Darren's line reads: S$350 a month, for retirement, first investment 1 August 2028, layers checked on today's date. He sets a reminder for July 2028 to change the transfer. He hasn't yet chosen what to buy, and this course does not choose investments for you. Before his start date he will work through the course "Build and run an ETF portfolio" and check any provider on the MAS directory, as set out in lesson 6.3.
Your version is finished when the four checks are marked, the share of your surplus is decided, and your line is written with a real date in it. Get your spending plan out and start with the first check.
Write down your monthly investing amount, the goal it is for and your start date, and confirm the earlier layers are in place.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).