In an increasingly complex financial landscape, the idea of saving alone is no longer sufficient to ensure long-term financial well-being. For many Singaporeans, traditional savings accounts and fixed deposits offer security but barely keep pace with inflation. To truly build wealth and secure a comfortable future—whether for retirement, property ownership, or education—there is a growing necessity to go beyond savings and actively grow one’s wealth through diversified investments and smart financial planning.
This article explores the various avenues available to grow wealth in Singapore, the evolving mindset of local investors, and the practical steps individuals can take to transition from passive savers to active wealth builders.
The Singaporean Financial Mindset: Shifting from Saving to Investing
Historically, Singaporeans have been known for their prudent financial habits. According to the Singapore Department of Statistics, the national savings rate has consistently remained high, fuelled by a strong culture of thrift, CPF contributions, and a cautious approach to debt. However, with rising costs of living, an ageing population, and longer life expectancies, many are beginning to recognise that saving alone may not be enough.
In recent years, there has been a marked shift in mindset. According to a 2023 OCBC Financial Wellness Index, more than 70% of respondents acknowledged the importance of investing to grow their wealth, yet less than half were actively investing. This gap highlights the lingering hesitations many Singaporeans have—often stemming from a lack of financial literacy, risk aversion, or the misconception that investing is only for the wealthy.
Why Growing Wealth is Essential in Today’s Singapore
- Inflation and Cost of Living
Inflation erodes purchasing power over time. Even if you save diligently, the real value of your money may decline if it’s not outpacing inflation. The core inflation rate in Singapore has averaged around 2% in recent years, while savings accounts offer interest rates of only 0.05% to 1.5%. - Property and Retirement Goals
Buying property in Singapore, even with government subsidies, remains one of the largest financial undertakings for individuals and families. Furthermore, CPF LIFE may not be sufficient to fully cover post-retirement needs without additional private income sources. Thus, investing can bridge these financial gaps. - Generational Wealth and Financial Independence
Wealth accumulation enables individuals not just to survive but to thrive. It creates opportunities for early retirement, supporting children’s overseas education, or even establishing a legacy for future generations.
Wealth-Building Instruments in Singapore
Singapore offers a robust and regulated financial ecosystem with diverse wealth-building opportunities. Below are some of the key investment tools and platforms accessible to retail investors:
1. Central Provident Fund (CPF) Investments
The CPF Investment Scheme (CPFIS) allows members to invest their Ordinary Account (OA) and Special Account (SA) funds in a range of investment instruments including unit trusts, exchange-traded funds (ETFs), and bonds. While conservative by design, CPFIS provides an opportunity to earn more than the standard OA interest rate (2.5%).
Tip: Investing CPF savings may be worthwhile if you are confident of returns above CPF’s guaranteed interest rate—but consider the risk and long-term lock-in.
2. Stocks and ETFs
Investing in the Singapore Exchange (SGX) or global stock markets offers potentially higher returns over the long run compared to fixed deposits or savings accounts.
- Blue-Chip Stocks: These include large companies such as DBS, Singtel, and CapitaLand, known for their stable earnings and regular dividends.
- ETFs: These are ideal for beginners looking for diversified exposure. For instance, the STI ETF tracks Singapore’s top 30 listed companies, while US-based ETFs like S&P 500 provide international exposure.
Platform Tip: Consider using brokers such as FSMOne, Tiger Brokers, or moomoo for low-cost trades and access to global markets.
3. Unit Trusts and Mutual Funds
Managed by professional fund managers, unit trusts pool investors’ money to invest in diversified assets. While they may have higher fees than ETFs, they are suitable for those seeking active management without making daily investment decisions.
Risk note: Fund performance varies significantly; always examine fund manager track records and total expense ratios (TER).
4. Robo-Advisors
Robo-advisors like Endowus, Syfe, and StashAway offer algorithm-driven investment portfolios based on risk profiles and goals. These platforms provide accessibility, low fees, and ease of use, making them particularly appealing to younger investors or those starting with modest capital.
Why consider: They often incorporate globally diversified portfolios and automatic rebalancing, which helps investors stay disciplined.
5. Real Estate Investment Trusts (REITs)
REITs allow investors to gain exposure to real estate without buying physical property. They typically offer regular dividend payouts and are traded like stocks on SGX.
Popular choices in Singapore include CapitaLand Integrated Commercial Trust and Mapletree Logistics Trust.
Key Advantage: High dividend yield and inflation hedging—though susceptible to interest rate fluctuations and property market cycles.
6. Supplementary Retirement Scheme (SRS)
SRS is a voluntary scheme that encourages individuals to save for retirement, offering tax relief on contributions. Funds can be used to invest in a wide array of instruments, including stocks, ETFs, and annuities.
Smart move: Maximise annual tax benefits (currently capped at SGD 15,300 for Singaporeans/PRs) while growing your retirement fund.
Steps to Start Growing Wealth in Singapore
Growing wealth requires a structured and informed approach. Here is a step-by-step guide to help you begin:
Step 1: Assess Your Financial Health
Start by understanding your current financial situation—net worth, income, expenses, liabilities, and savings. Tools like MoneyOwl or Seedly provide budgeting calculators to assess your financial standing.
Step 2: Set Clear Financial Goals
Establish short-, medium-, and long-term goals. Examples include:
- Saving for a BTO down payment in 5 years
- Funding a child’s university education in 15 years
- Retiring at 60 with a passive income of SGD 4,000/month
Clear goals guide your investment decisions and risk appetite.
Step 3: Build an Emergency Fund
Before investing, ensure you have an emergency fund of 3–6 months’ worth of expenses. This acts as a safety net, allowing your investments to remain untouched in times of unexpected need.
Step 4: Understand Your Risk Profile
Determine your comfort with volatility and potential losses. Young investors may adopt a more aggressive approach due to a longer time horizon, while retirees may prefer income-generating assets.
Use risk-profiling tools offered by banks or robo-advisors to define your portfolio allocation (e.g., 70% equities, 30% bonds).
Step 5: Diversify Your Investments
“Don’t put all your eggs in one basket” is timeless advice. Diversify across asset classes, industries, and geographical regions. A balanced portfolio reduces risk and improves long-term stability.
Step 6: Invest Regularly and Stay Disciplined
Adopt a dollar-cost averaging strategy by investing fixed amounts regularly (e.g., SGD 200 monthly). This approach smoothens out the impact of market volatility and fosters a habit of disciplined investing.
Platforms like POSB Invest-Saver, OCBC Blue Chip Investment Plan, or FSMOne Regular Savings Plan are ideal for this strategy.
Step 7: Review and Rebalance Periodically
Markets and personal circumstances change. Regularly review your portfolio—ideally annually—to ensure alignment with goals. Rebalancing helps maintain your intended asset allocation and risk profile.
Common Pitfalls to Avoid
- Chasing Hot Tips
Acting on speculative “insider” stock tips or trending social media posts without doing proper research can lead to severe losses. - Overconcentration
Investing too heavily in one sector, stock, or asset class increases risk. Even seemingly “safe” investments can underperform. - Neglecting Fees
High management or transaction fees can erode returns over time. Always compare fee structures when choosing investment platforms or funds. - Emotional Investing
Making impulsive decisions driven by fear or greed—such as panic selling during market dips—can derail long-term strategies.
A Culture of Financial Empowerment
Financial literacy is on the rise in Singapore, with greater awareness and education around money matters. Initiatives such as MoneySense (a national financial education programme) and increased accessibility to online tools and courses are equipping Singaporeans to take charge of their finances.
Moreover, younger investors are becoming more proactive and open to alternative investments like cryptocurrencies, sustainable funds, or fractional property investments—though caution and regulation remain essential.
Conclusion: Cultivating Long-Term Wealth in Singapore
In the journey from financial stability to financial freedom, savings are just the starting point. By going beyond savings and embracing wealth-building strategies tailored to your goals and risk appetite, you set yourself on a path of empowerment, resilience, and opportunity.
Singapore offers one of the most well-regulated and diverse investment ecosystems in the world. Whether you’re a fresh graduate starting your financial journey or a seasoned professional aiming to optimise your portfolio, the tools and knowledge are readily available.
The key lies in starting early, staying informed, and committing to consistent action. In the words of Warren Buffett: “Do not save what is left after spending, but spend what is left after saving.” In today’s context, we might go further and say—invest what is left after saving, and watch your wealth grow.