Why having an investment portfolio is a must even for the most risk averse?

We shall remember 2020 as the year when everything went to hell due to the COVID-19 pandemic. Our supply chains were heavily impacted, commercial air travel mostly came to a halt as countries closed their borders. It forced us into isolations and businesses had to adjust and adapt to a new world where working from home became a thing.

And there are businesses that couldn’t adapt fast enough and are forced to lay off workers because of financial issue. At the worse, they have to declare bankrupt. With that, people found themselves out of job and couldn’t find a new one, forcing them to rely on their savings. However, there are a lot of people who had to live from pay check to pay check due to various circumstances that were out of their control.

I’m grateful that I didn’t fall into that category. I have a career with an employer that pays me well and provided me with meaningful work despite the pandemic. In fact, it is because of the pandemic that I got to work on something that impact the lives of millions.

Privately, the pandemic also got me thinking about my future.

You see, throughout my working life, I have managed to save up a decent amount of money. People who are financially savvy enough would have started investing their money to grow their wealth. However, I feared losing my hard earned money. Risk aversion was a powerful check on my action. So, I kept my money in my saving accounts for a decade without doing anything much to it.

Towards the end of 2020, I decided to start investing. And, It had also taken a lot of convincing by my friends for me to go down this path.

Savings in a higher interest rate account

The pandemic has created an ultra-low interest rate environment. With this, there’s no way I can fight inflation with the current savings accounts. I’m basically losing money with each passing year because of inflation and may not be able to live off my savings in the event I do lose my job in the future.

The first step to combat low interest rate was to setup a deposit account that offer a higher interest rate. Once that is done, I moved most of my money there. A key guiding principle for me was: This money shall not be used for general spending.

Singapore banks like DBS, OCBC and UOB offers their customers the option of setting up a deposit account that provides a higher interest rate with some terms and conditions such as spending a certain amount monthly and/or crediting your salary into the account.

After evaluating my options, I went with setting up a DBS multiplier account since it was less of an hassle for me. I could easily meet all the conditions set out by the bank. Once that account is up, I started moving some of my existing savings into it and signed up for a new credit card with the bank in order to take advantage of that higher interest.

One good thing about the multiplier account was seeing the interest you earned credited every month. The more money you have in the account, and if you meet even more conditions set out by the bank, you see more interests rolling your way.

Low risk investment products

Based on the conditions I’m meeting with the multiplier account, the highest interest rate I’m getting was just 0.40% per annum even though it was better than 0.05% offered by the bank in the standard savings account. That is not quite enough. To get even higher interest, one of the condition was that I had to invest through the bank. The good thing was the bank offers a product call Regular Saving Plan.

Through Regular Saving Plan (RSP), you can start investing in ETF or Unit Trust with just $100 per month. This plan relies on a technique called Dollar-cost averaging, which is basically for the same amount of money, you buy a certain amount of assets depending on the price on the day of purchase. If the price is low, you get more units and vice versa. This will allow you to build up your investment portfolio gradually while still allowing you to have a little bit more freedom with your finances.

As someone who is still very risk averse, I went ahead with setting up a RSP account and put in just $100 in my first month. Since it was a small amount, the fear of losing it wasn’t that overwhelming. And I chose the ABF SG Bond ETF, a low risk product that tracks the price of bonds and it pays dividend on an annual basis.

The thing about taking your first step is, the subsequent steps becomes easier. Once I got over the initial fear, I ultimately increased my amount to $200. I could do that after I took into account my monthly expenses and income and find that l have extra liquidity.

But that’s not all I did.

I bought a few treasury bills, which are short-term securities backed by the Singapore government. Unlike bonds, these do not pay out any coupons and are sold for a discount. At maturity, the issuer pays you the face value.

For example, you buy a bill with a face value of $100 and matures in 6 months for $99.50. On maturity, you will get $100 back, a 0.50% return.

Although the returns for treasury bills are not as good as buying equities, this is still a good way not to let your cash sit idly and not worry too much about losing your capital.

Other than bills, I also bought the Singapore Saving Bonds. This is a special type of 10-year bonds that is very suitable for those who are risk averse. Since this is backed by the Singapore government, this is one of the safest investment one can make. Unlike the traditional bonds, these saving bonds can be redeemed anytime, which can give you the flexibility of recovering your investment capital for emergencies. And if you hold it to maturity, you will also get an interest payout once every six month.


With all these investments, it help me mitigate the risk of my money losing value over time and also help me learn about the different products. As time go by, it could build up your confidence in investing in products that are of higher-risk but give good returns that could possibly help you grow your wealth. And that was what I did six months in my investment journey. I went with a robo-adviser like Endowus. I started investing more of my savings into products that offer even higher returns. With patience, I could grow my wealth to a point where I can stop worrying about not being able to retire comfortably.

In the event that you are still feeling unsure, I want you to think about the next scenario for a moment.

With inflation, your purchasing power is actually falling every year. For the same $100, you could find yourself losing anywhere between a few cents to $1 in terms of worth every year. By the tenth year, that $100 could easily become $90 in worth despite the face value being the same. Inversely, goods and services that originally cost $100 could have risen to $110. As time goes on, your savings are basically shrinking in worth that will prevent you from being able to retire properly.

So, if you do not want to invest your money because you fear losing money due to the volatility, are you not putting your future at risk by doing absolutely nothing with your hard earn money? Should you not be risk averse as well when it comes to your ability to retire?

And investment is no different from buying life and health insurances for yourself and/or your love ones. It is all about mitigating the risk of dealing with medical emergencies and having no money to pay for them. In the event of your untimely death, insurance can provide some funds for your love ones so that they can get on with life.

More personal development

Since my last update, I have found a new hobby that took up vast majority of my free time.

This new hobby came about by accident when I started working on an IoT pet project using Lego. I wrote an article that documented what I have done.

From there, I expanded out to build another IoT system, which is a Smart Gardening system to water my plants. The Smart Gardening system turned out to be the largest pet project that I have ever endeavoured. I had to break the project into multiple phases and parts, which allow me to write a series of article documenting everything. They can be found here:

  1. Phase 1 (Start of the project)
  2. Phase 2 Part 1 (WiFi Exploration)
  3. Phase 3 Part 1 (Water Pump Control Exploration)
  4. Phase 3 Part 2 (Water Pump Control Implementation)

And the best part about the Smart Gardening system is that I’m not done with it yet.

Now, this is not without any underlying reason. I saw that there is a gap in terms of IoT skills and I wanted to fill that gap to make my contribution for my current employer. At the same time, I also wanted to demonstrate and prove to myself that my creativity is beyond just writing.

It also got me down another path of exploring building my own electronic circuit. It became a project on its own that I document it here. The end goal that I want out of the project was to expand on the Smart Gardening project.

The good thing that came out of all this is that I have a better understanding of IoT and electronics in general. Combine that with my writing and software engineering skills, I think I can contribute in many ways to make people’s life easier and better than before.

With that, I’m signing off here.

I’ve been busy

Several months has since passed since my last update. The pandemic has pretty much upended most of the things we know but life has to go on. Many of us are doing the best we can.

As for me, I’ve spent most of my time working away and I am happy most of the time.

And if you are wondering whether I still write… well… wonder no more. Lately, I’ve been more focus on writing technical stuff and I have just put up a new article describing an IoT project that I’ve been working on for the past month or so. You can read that here.

I have also gone deeper into playing with LEGO. I just got myself a Mindstorms Robot Inventor set recently for SG$500 and I would love to get started building my own robots or machines to make my life simpler.

No…I’m not dead yet

You may be wondering where did I go as this blog hasn’t seen any major update for months.

Well, as the title stated, I’m not dead yet. For the past few months, I’ve been busy with my day job as a software engineer. Whatever free time that I managed to get have been spent on watching YouTube, reading books and Netflix. And I have recently added Prime Video.

What about my writing?

I’m still doing it but not with the same intensity or enjoyment as before. And instead of original contents, I have been doing curations in the form rewriting news that I’m interested in for my other blogs.

Now I wonder… is rewriting news even considered as writing?

It is time for a reboot

I have not been actively writing content for this particular blog.

Over the past few days, I came to the realisation that my perspective related to writing and approach to my personal brand in general have changed. Now, I believe I should probably have multiple specialised blogs instead of having one blog for everything.

Yes, it will take more effort for me to maintain and write content for multiple blogs. But, the advantage is that I can focus better on crafting contents that are more suitable for a particular blog and better serve the needs of my readers.

Therefore, I shall spend the next few days cleaning up this blog. My intention for this blog going forward is that it shall contain only contents related to writing, fiction and poems. Mental health related stories will go to their respective blog, one that I will launch soon. The same thing happened to articles related to environment and technology. I have created blogs for those topics.