Investing Made Fun: How You Can Grow Your Wealth With SNACK’s Lifestyle Features

Your first foray into financial planning and investing can be extremely daunting. With a multitude of strategies and platforms to use, it can feel overwhelming and confusing as to where you should start. You might even be wondering whether you’ll need to make some lifestyle changes to accommodate your new financial goals.

Here, we will break down the fundamentals and provide a step-by-step guide on how to get started on investing.

How To Get Started In Investing

1. Set Up An Emergency Fund

The very first step of everyone’s personal finance journey should be setting up an emergency fund. An emergency fund is a cash reserve that is set up specifically for any unplanned expenses or financial emergencies. These include unexpected medical bills, car repairs and even loss of income.

Saving S$1,000 is a good amount for a starter emergency fund. Once you are in a more comfortable financial position, you should aim to increase your emergency fund to at least three to six months’ worth of expenses.

This would give you a comfortable buffer in the event that you need cash quickly and prevent you from going into debt to finance an emergency.

Read Also: 5 Reasons You Must Have an Emergency Fund

2. Pay Off Your Debt

Most of us in our adult lives are in varying degrees of debt. We could have student loans, credit card loans or even a mortgage. While this is normal, debt accrues interest over time, which means that the longer you take to pay off your debt, the more money you will owe on top of the principal borrowed amount.

Your priority should be to pay off your debt as quickly as possible, especially for high-interest debts like credit card debts that charge an average interest rate of 27%, compounded on a daily basis.

It is very unlikely that an investment you make will garner this level of returns. Hence, the best action you can take if you have any spare cash is to put it towards paying off your debt, starting with the ones with the highest interest rate.

Read Also: 3 Tips on How to Get Rid of Your Piling Personal Debt and Credit Card Balance

3. Create An Investment Strategy

Once you have tackled your debt, it is now time to think about making your money work better for you in the long run. You are now in a position to invest your extra money.

There are two major investment strategies — lump-sum investing and dollar-cost averaging (DCA). Lump-sum investing is when you take a large sum of money, such as a few thousand dollars, and use it to buy a stock or asset at one go. DCA is when you invest equal amounts of money into a stock or asset at set intervals, regardless of market fluctuations.

There are a few things to consider when deciding which approach works best for you. Firstly, consider your current financial situation. What are your current monthly expenses and how much cash can you put aside, both initially and on an ongoing basis? What financial goals are you working towards?

Having a clear understanding of your current financial situation will enable you to make a plan that is both achievable and generates good returns on your investment.

There are pros and cons to each approach. Lump-sum investing historically has had greater returns in the long run as compared to DCA, regardless of asset allocation.

However, a major drawback to lump-sum investing is that you require a large amount of capital. If you are just starting out on your investment journey, you may not have a few thousand dollars to place into the market.

If that is the case, DCA may be a more appropriate strategy for you. DCA creates a more disciplined approach to investing as you create the habit of putting aside money every month towards your financial goals. It is also less risky than lump-sum investing as you do not have to consider timing your entrance into the market to make the best returns.

Read Also: Investing Is Easier Now More Than Ever. Here’s How You Can Get Started

4. Pick An Investment Platform

Now that you have decided what your investing approach will be, it’s important to figure out what type of investment platform will best suit your needs.

If you have decided to take a lump-sum investing approach, a regular brokerage with low transaction fees could be a good option for you.

However, if you do not have the capital, or the amount of money you’re left with changes every month, a more flexible investment approach might be more suitable for you.

How SNACK by Income Can Help You Get Started

SNACK by Income is a lifestyle app that allows you to buy micro-insurance and micro-investment policies without having to compromise on your lifestyle activities. With SNACK, you are able to buy insurance coverage (personal accident, critical illness and term life) from as little as 30 cents and invest from as little as $1.

SNACK Investment is a single-premium micro investment-linked plan (ILP) that combines investment and protection with a protection benefit of up to a sum of $200,000.

How It Works

The concept behind SNACK is that you are able to stack up your investments or insurance coverage by linking your lifestyle activities to trigger a purchase of a micro-premium.

There are currently eight types of lifestyle triggers. Each time you complete a predetermined lifestyle activity such as exercising or taking public transport, a small payment would be triggered to purchase your chosen policy.

For example, one of SNACK’s current industry partners is EZ-Link. If you opt for the investment plan and choose transport as a lifestyle trigger, you can link your EZ-Link card to your SNACK account.

Now, every time you use your EZ-link card when you take public transport, a S$1, S$2 or more (up to S$500) premium would be automatically charged and put towards a micro investment-linked plan that invests in a fund on your behalf.

With the amount of rides you take per month, the small (and painless) injections of money will roll to a significant amount in time.

You will also receive accidental death coverage before the age of 75, be entitled to 105% of the net premium, up to S$200,000 or the cash-in value at the time of claim and will be covered for 360 days.

SNACK uses an approach that is in line with DCA. You are able to purchase small amounts of premiums multiple times a day. These premiums would be used to buy units of a pre-selected sub-fund at the start of every week, allowing your investment portfolio to grow over time.

You are even able to earn a non-guaranteed distribution from the sub-fund which can be reinvested back into your investment portfolio.

By automating your investing, you eliminate the brain power that is otherwise required to pick investments and allow your investments to grow in the background without you even realising it.

Furthermore, as SNACK is triggered by lifestyle activities, you would not have to give up your current lifestyle in order to invest or even build up your insurance coverage.

Instead, the more lifestyle activities you engage in, the greater your coverage and investment will grow.

In other words, it is extremely well suited for individuals looking to start their investment journey but who do not want to compromise on their current lifestyle choices.

Read Also: How To Invest & Buy Insurance Without Sacrificing Your Starbucks Coffee Or Mala Hotpot

Challenges

SNACK is more than just a standard investment or insurance platform. They have successfully made investing fun by integrating different monthly challenges that give you bonus investment credits.

For example, if you issue S$50 worth of SNACK policies, you will be rewarded with a bonus of S$5 investment credits.

This gamification of investing makes striving towards stacking your policies even more gratifying. Not only will you turn your day-to-day lifestyle activities into investment activities, you are also able to maximise your returns through a slew of challenges to be completed.

Micro-investing is a great way to get started if you are someone with minimal funds. But, if micro-investing is not your style, check out our investing resources including in-depth information on all the best online brokerages and trading platforms in Singapore.

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