Non conventional personal loans for small businesses who need a boost

By: Hitesh Khan/

When your business is struggling and you need additional funding to tide over a tough patch, then you will find that your access to funding is completely cut off and end up with very expensive funding.

But there are many options available for small business owners searching for non conventional personal loans to give their businesses the much needed boost.

Angel Investors

An angel investor or angel is an affluent individual willing to invest in a company at its earlier stages in exchange for an ownership stake, often in the form of preferred stock or convertible debt. Whether you decide to seek an angel investment depends on your personal management style and the long-term plans for your company. Unlike a bank loan or other types of debt financing, equity capital gives someone else an ownership interest in your company.

Credit Co-operative Societies

Co-operative Societies (Co-ops) are associations of people who voluntarily band together to achieve a common social or economic aim by forming a jointly-owned and democratically controlled business organisation. Co-ops operate on principles of self-help and mutual assistance, and most co-ops have social missions to benefit the society at large. Co-ops in Singapore are regulated by the Registry of Co-operative Societies, under the Co-operative Societies Act (Chapter 62) and Cooperative Societies Rules 2009. Credit co-ops provide financial services to their members who are within a pre-existing common bond of association or community of interest.


Crowdfunding describes the collective effort of individuals who network and pool their money, usually via the internet to support efforts initiated by other people or organizations. Crowdfunding has its origins in the concept of crowdsourcing, which is the broader concept of an individual reaching a goal by receiving and leveraging small contributions from many parties. Crowdfunding is the application of this concept to the collection of funds through small contributions from many parties in order to finance a particular project or venture.

Invoice Financing (factoring)

Factoring is a financial transaction in which a business sells its invoices to a third party at a discount. A business will sometimes sells its invoices to meet its cash needs. Factoring is commonly referred to as accounts receivable factoring, invoice factoring, and sometimes accounts receivable financing. Factoring is not a loan, it is simply selling outstanding invoices for cash.


Micro loans are small business loans typically under $50,000. Micro loans are generally used for start-up cash but are sometimes given to newly launched small businesses for working capital. Micro loans can be used for many purposes including the purchase of equipment, inventory, machinery, fixtures, furniture, supplies, and even to purchase another business. Each lender will have their own requirements for repayment of a micro loan. Interest rates and collateral requirements vary considerably between lenders but almost all require a personal guarantee by at least one of the business’ owners.

Peer to Peer Lending

Peer-to-peer lending is the practice of lending money to unrelated individuals, or “peers”, without going through a traditional financial intermediary such as a bank or other traditional financial institution. This lending takes place online on peer-to-peer lending companies’ websites using various different lending platforms and credit checking tools.

Venture Capital

Venture Capitalists focus on companies developing significant innovations – be it a new piece of software, a life-saving cancer drug, or a new model for consumer sales. Unless the company is poised for significant growth, a VC won’t invest. Making investments at the earliest stages of a company’s development, often before a product or service is more than just an idea, involves significant entrepreneurial risk which severely limits capital sources for such companies. Yet, venture capitalists assume this risk alongside the company founders by providing capital in exchange for an equity stake in the company.

Startup Accelerator

Accelerator works with startups for a short and specific amount of time, usually from 90 days to four months. Accelerators also offer startups a specific amount of capital, usually somewhere around $20,000.

Licensed Moneylenders 

Moneylenders in Singapore have to be registered and licensed with the Registry of Moneylenders. Most moneylenders operate with the goal of offering instant cash loans to Singaporeans, Permanent Residents and foreigners in Singapore. Moneylenders offer fast, hassle-free and efficient services to their clients.

Licensed moneylenders are useful to people who may find it highly challenging to procure a significant amount of money in a short span of time.

Licensed moneylenders being providers of non conventional personal loans will simplify your application process thereby making the cash loan more readily available.

How to Secure Non Conventional Personal Loans Quickly

If you have limited capital and are searching for non conventional personal loans to expand your business, the loan consultants at iCompareLoan can set you up on a path that can get you a it in a quick and seamless manner. Our loan consultants have close links with the best lenders in town and can help you compare various loans and settle for a package that best suits your needs. Find out money saving tips here.

Our Affordability Tools help you make better property buying decisions. iCompareLoan Calculators help you ascertain the fair value of a property and find properties below market value in Singapore.

If you are looking for a new home loan or to refinance, our Mortgage brokers can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the best home loans in Singapore. And the good thing is that all our services are free of charge. So it’s all worth it to secure a loan through us for your business expansion needs.

Contact us for advice on a new home loan.

How Money Plays A Part In Your Life by Jaspreet Singh

Ever wonder why so many people are scared to talk about money?
Like, why is “money” a taboo topic that you should avoid talking about at all costs?
Even though…if more people were open to talking about money, our society wouldn’t have as many financial problems as they do today.
It’s because the majority of people don’t understand how money plays a part in their lives.
So…they avoid talking about money at all costs.
And then, they try to make you feel bad for being money conscious.
I don’t want you to be one of those people. Don’t live in fear, live with understanding.
The goal in life is to be happy…Not rich.
If you want to live a great life, you have to be (in this order):
1. Physically fit
2. Mentally fit
3. Spiritually fit (having a purpose)
4. Financially fit
I call this my Quadrafit Theory…

The very first step is to become physically fit.
If you are not healthy your only dream will be to become healthy. Nothing else matters.
When you’re in pain or on your death bed – the only thing you want is to get better.
You don’t care about how much money you have, what vacation you have coming up, or how many friends you have.
You just want to be physically fit. That’s your one and only dream.
But when you’re healthy, you can have 1000s of dreams.
That’s why the first step is to become physically fit.
The second step to living a great life is to become mentally fit.
This is your mental health.
If you’re depressed & miserable, making lots of money will not fix the way you feel.
Actually..It will make you feel even more miserable.
That’s why mental fitness is the second step to living a great life…
You can’t use money to compensate for your lack of mental fitness.
Third, you have to be spiritually fit.
Don’t confuse being spiritually fit with being religious. These are two separate things.
Being spiritually fit means having a purpose in life.
If you lack a sense of purpose…you will feel empty.
It’s like living your life in black & white – you’re missing the color.
You need to know your purpose for living life.
Ask yourself, what’s your reason for waking up in the morning?
What drives you?
You weren’t born just to go to work, pay bills, and die. You were born to thrive.
Finally, at the top of the Quadrafit Triangle is financial fitness.
You can be super healthy, surround yourself with amazing people, and do something you love…but if you’re drowning in debt and struggling to pay your bills…
Your happiness will dwindle.
Things like…
1. Every time you go out with your friends, you’re worried about the cost of the bill.
2. You get into fights with your spouse because of their spending habits.
3. You dream of taking your family on nice vacations and buying nice cars, but you have no way of affording these things.
This is where being financially fit takes your life to the next level because it’ll let you live your life the way you want…financially.
And this is where money can buy happiness.
If you are fit in the first three parts of the Quadrafit Triangle (you’re physically healthy, mentally happy, and have a purpose), being financially fit means you can afford to do things you love.
Or hire someone to do things you hate…
• You can take your family on nice vacations
• You can hire people clean, cook, & mow the lawn
• You can travel in class, instead of on a budget
• You can buy healthier food & a better gym membership
• You can give to the organizations & charities you care about
• And you don’t have to worry about the price!
Your life is like a cake and money is the icing.
You can have a great cake (the bottom 3-layers of my Quadrafit Theory) but if the icing tastes like poo…suddenly, the cake doesn’t tase so good anymore…
Just like how you can’t use a bunch of delicious icing to fix a nasty cake. You can’t use money to fix a miserable life.
Money is the icing to your life.
You need to be fit in all 4-parts of the Quadrafit Triangle. this way you have a great cake with delicious icing on top.
And when it comes to becoming financially fit, there are three ‘keys’ you have to understand:
1. Living below your means (strategically)
2. Increasing your income (the smart way)
3. Using your money (investing to create passive income)
Tomorrow I’m going to email you with strategic ways to save your money.
Yes, there is a right way and an expensive way to save your money. And tomorrow, I’ll be going over the most efficient ways to save.
Wednesday I’ll be talking about how you can increase your income.
And Thursday I’m going to talk about investing to generate passive income.
It’s going to be a fun week – so be sure to look out for my email tomorrow.
P.S. I’m opening up a beta-test group for our 5-week money management course 1-week from today! The test group will be open for a limited time & then I will close the course down. Those of you that get in early will get a 40% discount. Stay tuned for more details

Keep Hustlin,

Jaspreet Singh


Twitter @M2JaspreetSingh

Legal Disclaimer:
Please note that when I send these newsletters, I’m sharing my experience and opinions. I’m sharing the resources, tools and information that I think can make an impact in your life.
However, I can never be responsible for your success or guarantee anything. The problem is that most won’t take action, hence, most don’t get any results. That’s why results are not guaranteed. And everyone is different so I cannot guarantee that everyone will like or benefit from things that I find beneficial.
I care about your success and that is why I believe in being real and absolutely transparent with you

Chinese authorities will soon allow so-called VIEs to list

Software engineer Zhang Yiming started out producing apps for sharing jokes before focusing on news aggregation. That pivot proved lucrative.

The 35-year-old founder of Bytedance Ltd. is worth about $13 billion, according to the Bloomberg Billionaires Index, making him China’s 9th-richest person and one of the fastest in modern times to amass a mega-fortune. The business, founded in 2012, has more than 1 billion active monthly users across eight mobile apps, including a news aggregator powered by artificial intelligence and a video-sharing platform.

His rapid wealth accumulation is a sign that China hasn’t lost its knack for creating mega-rich company founders despite a slowing economy. It also helps explain why authorities seem to be taking a more tolerant stance toward a corporate structure favored by the country’s technology tycoons, most of whom have chosen to list their businesses overseas.

Zhang’s fortune is harder to calculate than the founders of Baidu Inc. and Tencent Holdings Ltd. in part because his company isn’t yet public. It’s also difficult because Bytedance is structured in the same way as the two tech behemoths — a complicated ownership system known as a variable interest entity.

Of the 44 Chinese tycoons on Bloomberg’s wealth index, eight are tech moguls with VIEs listed outside China. The billionaires’ combined net worth exceeded $150 billion as of March 21, and their stakes weren’t publicly known until the companies filed with regulators ahead of going public in New York or Hong Kong.

VIEs have never been formally endorsed by the Chinese government. But in an acknowledgment of their importance, officials will soon permit VIEs to go public in the country, allowing them to list on a new technology-focused exchange set to launch in coming months.

Complex Structure

Bytedance is, for now, a closely held VIE with a complex structure that involves layers of holding companies.

Its main business, Jinri Toutiao, is ultimately owned by Zhang and Bytedance Senior Vice President Zhang Lidong through a Beijing-registered holding firm, according to China’s National Enterprise Credit Information Publicity System. Zhang pledged his 98.8 percent stake to another Beijing company, which in turn is owned by a Hong Kong-registered firm. That entity, where Zhang is a director, is owned by a company registered in the Cayman Islands. The principals won’t be disclosed unless there’s an IPO prospectus.

The Bloomberg Billionaires Index calculated Zhang’s net worth by pegging his stake at 65 percent and using the company’s valuation of $20 billion, a figure provided in 2017 by people with knowledge of the matter. The analysis assumes his stake has been diluted through funding rounds.

Bytedance is said to have secured a $75 billion valuation in late 2018, making it the world’s most valuable startup — though the figure isn’t used in the net worth calculation because the details haven’t been confirmed.

Yin Ai, a Bytedance spokeswoman, declined to comment on Zhang’s wealth or the ownership structure.

Zhang uses a VIE because Chinese regulations limit foreign investment across more than 30 sectors including the internet, telecommunications and education. The VIE structure — which allows offshore companies to control domestic Chinese businesses through contractual agreements — circumvents the rules and allows, for example, Baidu’s holding company to be based offshore (and list in the U.S.) while still being a dominant force in China.

Internet giant Sina Corp. pioneered the VIE model so that it could transfer income from onshore operating businesses to an offshore holding company, an arrangement that meant the Cayman Islands entity could list on the Nasdaq Stock Market in 2000.

There are risks to the structure for foreign investors, said Donald Clarke, a specialist in Chinese law at George Washington University.

“A contract entered into for an unlawful purpose is invalid under Chinese law,” he said. “Any time the government wants to pull the plug, it can.”

Still, that hasn’t stopped more than 100 companies using VIEs in offshore IPOs, according to research by Zhou Fang, a Beijing-based partner at law firm JunHe LLP, who predicts that more companies will follow.

That growth helps explain why authorities are slowly embracing VIEs. Earlier this month, China enacted a foreign-investment law that allayed investor concerns about the future of such companies, while unicorn VIEs will be able to list on the new exchange in Shanghai, known as the Tech Board.

“To some extent, it shows the government easing concerns over VIEs — but they still care about who’s the ultimate controller of the company,” said Zhang Biwang, a partner at Allbright Law Offices. As long as the controller of the company remains a Chinese citizen, “the government won’t shut their eyes and ignore reality to make the companies give up VIEs.”

— With assistance by Blake Schmidt

Trading Bitcoin in Singapore

Best Bitcoin Exchange for Singapore

Singapore has no plans to regulate crypto currencies like the Bitcoin. If necessary, however, the city-state wants to subject individual entrepreneurial activities related to virtual money to legal regulation. This is the result of an interview with the head of the Singapore Central Bank.

The most important crypto currencies have increased significantly since the beginning of the year. The capitalisation of Bitcoin alone rose by more than five and a half times to currently over 100 billion US dollars. As a result, digital means of payment have come into the focus of regulatory authorities worldwide. For example, China and South Korea have banned the raising of capital by Initial Coin Offerings (ICOs). Communist Vietnam prohibits virtual currencies altogether. Russia goes a little less far. President Putin demands by decree a registration obligation for Miner and the subordination of ICOs under securities law.

Activities, not regulating crypto currencies

Singapore may not follow this trend. In an interview with Bloomberg, Ravi Menon, Managing Director of the Singapore Central Bank, says: “At the moment I don’t see any reason why crypto currencies should be regulated. Menon is aware that crypto money is often used for illegal purposes. But the risk, in his opinion, does not come from the digital currencies themselves, but from the activities surrounding them. For the central banker it is therefore clear that the legislation must deal with the risks of these activities and not with virtual money as such.

Securities law applies to ICOs with dividend promises

Menon points out that trading platforms and other crypto currency intermediaries are already subject to Singapore’s anti-money laundering and anti-terrorist financing rules. In addition, a new law is underway for payment service providers that formalizes these rules. Unlike the Russian president, Menon sees no need to subject ICOs to securities law in general. However, securities law is already being applied in Singapore today if dividend-like advantages are promised within the framework of an ICO.

The head of the central bank is not alone in his open stance towards Bitcoin and its Singapore counterparts. Already at the beginning of October, the Deputy Prime Minister of the island state denied the intention to regulate crypto currencies in his answer to a parliamentary question.

Economic structure

As one of the so-called tiger states, Singapore managed to make the leap from an emerging country to an industrial state or an economy primarily geared to services within just a few decades. The development of the economy began in colonial times. Already in the 19th century, when Singapore became a British colony, it was regarded as a large goods transhipment centre with its very favourable water traffic location between China and Europe. As a result, commercial and industrial areas are located mainly on the coasts. Many products are merely processed or refined in Singapore, e.g. food, oil, rubber, steel and machinery. Singapore’s trading partners are the USA, Great Britain, China, Japan, Hong Kong, Malaysia and Thailand. Despite its small size and small population, Singapore was the eleventh largest exporting nation in the world in 2016 with exports of goods and services worth 511 billion US dollars. Singapore was also one of the few nations in the world in which the value of exports exceeded that of gross domestic product, which demonstrates Singapore’s close links with world trade. In the World Economic Forum’s Global Competitiveness Index, Singapore ranks second behind the USA in 2018.

There are still disputes with Malaysia about the water supply and the billing of the costs incurred. Singapore is urgently dependent on water imports. Water is supplied by Malaysia and treated by Singapore. There are also (border) disputes over Singapore’s land reclamation, bridge construction and maritime borders. Malaysia contractually guarantees water supply until 2061.

Singapore is one of the most deregulated and privatized economies in the world. It ranked second behind Hong Kong in the Economic Freedom Index in 2017. Singapore is one of the most liberal economies in the world. A major exception is the highly regulated housing market. The state also has an influence on economic events through the holding company Temasek, which is owned by the government. Temasek invests strategically in the country’s companies. Singapore is striving to become a biotechnology center in Asia. A*STAR, the Agency for Science, Technology and Research, a government agency, supports research capacities in Singapore. The newly created Biopolis is home to private and state institutes, biotech and pharmaceutical companies. The port of Singapore is one of the most modern and largest transshipment centres in the world. The Straits Times Index is the leading stock index on the Singapore Exchange.

Singapore is particularly important as an international financial centre and in wealth management, i.e. as a tax haven. In 2017, Singapore was ranked 4th on the list of the 17 largest tax havens in the world by the organization “Global Citizens”. Following the financial crisis in 2008/09, the volume of assets managed in Singapore doubled to around 2.5 trillion Singapore dollars by 2015. Some of these funds were invested in huge shopping malls, hotels and other local investments, so that overcapacities in trade are lamented. Since 2014, the banking sector has been in a phase of consolidation. Some European banks closed their subsidiaries. Singapore ranked 4th in a ranking of the world’s most important financial centres (as of 2018).

With 11.8 million foreign visitors in 2015, Singapore was one of the most visited cities in the world. Tourism is promoted by the government through marketing campaigns and generates billions in revenue every year. Singaporeans themselves are allowed to enter 159 countries without a visa, making Singaporeans the most powerful passport in the world, as Paraguay lifted the VISA restrictions on Singapore on 24 October 2017, putting Germany in second place with 158 countries.

According to Transparency International’s Corruption Perceptions Index, Singapore was ranked 6th out of 180 countries together with Sweden in 2017, with 84 out of a maximum of 100 points. Of all Asian countries, Singapore thus had the lowest level of corruption.

According to the Economist Intelligence Unit, Singapore will be the most expensive city in the world in 2014. In a ranking of cities according to their quality of life, Singapore ranked 25th out of 231 cities surveyed worldwide in 2018.

Investing in Exchange Traded Funds (ETFs)

What is an ETF and what does it do?

An exchange traded fund (ETF) is a fund traded on a stock exchange, which seeks to copy a specific market index such as Singapore’s Straits Times Index. And there are ETFs for different asset classes – the most popular being stocks, bonds and commodities.

Because an ETF essentially seeks to copy a particular index, investor returns should be close to that for the chosen market index it follows. But it does not necessarily mean an ETF’s returns will be exactly the same as that of the underlying index. There is something called “tracking error”. To closely replicate the performances of underlying indices, these ETFs have to constantly adjust the number of shares held in specific stocks as stock prices fluctuate. Time lags between market price movements and the adjustments in the ETF’s stock holdings can cause differences between the ETF’s performance vis-à-vis the benchmark index’s performance.

Why do people invest in ETFs?

ETFs are useful investment instruments for new investors who want stock diversification from relatively small outlays. This is because buying into one ETF gives investors access to the performance of a larger portfolio of stocks or bonds. This reduces single stock/single bond concentration risk.

Also, they have lower costs. Management fees are lower because they are passively managed and do not employ fund managers for stock selection. They just buy the stocks to replicate the underlying index.

ETFs suit investors who are not trying to get better returns than the underlying index – that is, people who are happy with matching the index in returns performance.

Where do you start?

You can invest in ETFs through either trading platforms (you’ll need a trading account) or regular savings plans (RSPs). For investments via trading platforms, you can invest in lump sums, whenever you wish. For RSPs such as POSB Invest-Saver, under which a fixed amount is invested every month via GIRO, you can start with as little as S$100 a month.

Advantages of a regular monthly investment in ETFs

For starters, you don’t need substantial capital to start investing.

And it removes the difficult decision-making involved in market timing. Often novice investors delay getting started because they agonise over the timing of their investments. A RSP imposes a commitment to invest a certain amount every month. It works on the idea of averaging out the prices paid over time and relying on the idea that good stocks and bonds generally build value over time.

What ETFs can i buy in singapore?

There is a range of ETFs traded on the Singapore Stock Exchange (SGX) offering investment access to diverse markets, from stocks to bonds to commodities. The range of geographies covered is very extensive, including Singapore, China, Japan, Europe and the United States.

Under the POSB Invest-Saver RSP, two SGX-traded ETFs offered at the time of writing this article are the Nikko AM Singapore STI and the ABF Singapore Bond Index Fund.

The Nikko AM STI ETF invests in companies that make up the Straits Times Index. The STI is an index of Singapore’s top 30 companies, including well-known blue-chip stocks such as the three local banks, Singtel, Keppel Corporation and CapitaLand.

Investors in the ABF Singapore Bond Index ETF are putting money into a range of bonds, mostly issued by the Singapore Government and quasi-Government bodies.

Another ETF offering investment in Singapore stocks is the SPDR Straits Times Index ETF.

Investing beyond singapore via ETFs

If you want to go beyond investing in Singapore, you can also invest in global markets through a range of other ETFs traded on the SGX.

As indicated above, the range is extensive, including (but not limited to) ASEAN, Japan, China, Europe, and US stock index ETFs. One popular example is an ETF which tracks the S&P 500 Index – the SPDR S&P 500. The S&P 500 is an American stock market index of the top 500 companies listed on the New York Stock Exchange or NASDAQ. The companies here include names such as Apple, Microsoft, Amazon, Facebook and Warren Buffett-led Berkshire Hathaway.

There are also commodities and gold ETFs.

And it all starts with as little as a few hundred dollars

As we have outlined above, you can start with S$100 a month under a RSP.

Your CPFIS funds can be used for four of the SGX-traded ETFs (SPDR Gold Shares, SPDR Straits Times Index ETF, Nikko AM Singapore STI ETF and ABF Singapore Bond Index Fund). And the Supplementary Retirement Scheme can be used to invest in all SGX-traded ETFs.

If buying directly on the SGX (rather than through a RSP), you can work out quickly how much you need to start by asking your bank or stockbroker the minimum “board lot” size. These ETFs most commonly trade in board lots of 10 and 100.

For example, the ABS Singapore Bond ETF trades in board lots of 100. At its price at time of writing of S$1.12, you need S$112 to begin. The Nikko AM STI ETF also trades in board lots of 100 units. And at its price of S$3.31 at time of writing, you need S$331 to begin.

Ready to invest?

Start with a Regular Savings Plan – if you’re a DBS/POSB customer, you’re only a few clicks away from your first investment.

Exchange Traded Funds (ETFs) have grown in popularity over recent years. What are their features and benefits? The most distinctive feature is they do not try to beat the market – they do not attempt to outperform their chosen market index. They only seek to track the chosen market index so investors get a return that is close to what the index makes. Bear in mind, there may be small variations against the index’s actual returns – something called “tracking error”.

So, for example, if the ETF invests in Singapore stocks, then their chosen market index is the Straits Times Index (STI). The Singapore market ETF does not try to do better than the STI – they are structured to closely (not perfectly) track the index.

1. Lower management fees than those typical for unit trusts:

ETFs bear significantly lower annual management fees because of this distinctive feature of not attempting to beat the market but to simply follow the market. So, they do not need to hire fund managers to “actively manage” the holdings. All they do is structure their stock holdings to closely mirror the performance of the underlying index. This is called “passive investment” and costs less than “active management.” Management fees will differ in different ETFs. But generally, they are significantly lower than for unit trusts. As an example, the Nikko Asset Management Singapore STI (Straits Times Index) ETF had an annual management fee of 0.2% last year. This was much lower than management fees charged by unit trusts, which are typically around 1% and sometimes more. But to be fair, this means investors are giving up the possibility of putting their money with a unit trust fund manager who may outperform the fund’s benchmark index. So, ETFs make sense where unit trusts available in your chosen market are not outperforming the benchmark index sufficiently to justify their higher fees.

2. Unlike unit trusts, there are neither initial sales charges (subscription fees) nor redemption (realisation) fees for etfs.

Unlike the situation with unit trusts, investors who buy ETFs on the SGX don’t pay initial sales charges. Nor do they pay redemption fees for selling their ETF units. An alternative to buying through a broker is investing via a regular savings plan. But for smaller amounts such as S$100, the sales charge is likely to be much cheaper than buying through a brokerage because it is common for brokerages to charge a minimum fee (often around S$25) for trades.

3. Small initial investment.

ETFs can typically be bought and sold on the Singapore Exchange (SGX) for board lots of 100 units. That translates into smaller initial investments than for unit trusts. For example, the ABF Singapore Bond ETF was trading at $1.117 at the time of writing – which translates to investments from as little as $112. Another example is the Nikko Asset Management Singapore STI ETF, which traded at $3.44, translating to investments as little as $344. Unit trust investments typically start at $1,000 although they can be much lower under a regular savings plan. However, the minimum brokerage fees mentioned above in #2 can be quite substantial in percentage terms for small amounts. So, in this instance, again, where investing in small amounts, it might be more cost efficient to buy ETFs through a regular savings plan.

4. Diversification for a small outlay.

For example, the SPDR Straits Times Index ETF holds 30 stocks to replicate the Singapore market index. That’s available at board lots of 100 units. And at a price of $3.39, that’s giving investors access to a small slice of a 30-stock portfolio for only $339.

5. Reducing single stock risks.

So, it follows that if a retail investor was to start with only a few thousand dollars, the chances are he will only be able to start with one stock. That exposes the investor to “single stock concentration risk” – meaning he has put all his available investment dollars in one stock. And if something averse happens to that stock, the investor’s entire portfolio is affected. By investing in an ETF with 20-30 stocks, the impact of poor performance in any single stock is diluted.

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