If there’s one thing you can do today to improve your financial health for the rest of your life, it’s to start putting aside money to invest NOW.
Why now and not tomorrow, next year… or when you strike the lottery? That’s because the whole idea of investing is to give your money the time to grow. The earlier you start, the more potential your money has to grow. It’s like compound interest.
Dollar cost averaging
There’s no need to wait for the market to be in your favour if you use a dollar cost averaging method, or DCA, to invest.
DCA means you set aside a fixed sum of money at regular intervals, regardless of market conditions. When the price is high, you buy fewer units; when the price is lower, you buy more units.
Since asset prices usually rise over the long term, your money should ride out the short term fluctuations and grow overall in the long run.
While it does not seem as immediately impactful as timing the market, dollar cost averaging has one huge advantage — because you don’t need a big lump sum, it lets you start investing right off the bat to reap the benefits of a longer time horizon.
Use a regular savings plan to help you DCA
A regular savings plan can be a very helpful tool when you need to set aside money on a regular basis. By deploying a regular savings plan to save money and a dollar cost averaging method to channel this money into investments, you’re putting yourself in a much better position to stay resilient against inflation.
Most Regular Savings Plans require you to put aside a minimum of $100 a month.
If that still sounds like a lot to you, fear not!
There’s now a way to start saving with just US$5^, which enables you to do dollar cost averaging at your own comfortable pace, without having to worry about rigid fixed or monthly payments.
Webull’s Regular Savings Plan
Webull’s new Regular Savings Plan auto invests your money in US stocks, ETFs and mutual funds. You can choose to transfer money to your Webull account whenever you feel you are able to, which is great if you don’t always know when you’ll have spare cash. The cash or buying power will then be used to invest in the US stocks, ETFs and mutual funds you’ve selected in your plan.
Alternatively, you can choose to automate your contributions using electronic Direct Debit Authorisation (eDDA) — this works like Giro and ensures that you consistently set aside money no matter what.
You can start investing for as little as US$5^, or SG$10^ for eDDA deposit.
Thanks to the flexibility of this plan, you can truly dollar cost average at your own pace and within your comfort level. You can set the frequency of your contributions to every trading day, weekly, bi-weekly or monthly. It’s really up to you!
How Webull’s new Regular Savings Plan can help investors
One of the biggest advantages of WeBull’s Regular Savings Plan is that it lets you build your portfolio at your own time and pace from just US$5^.
The barrier to entry is deliberately kept low, so even the newest of investors can immediately start building a diversified portfolio of favourite US stocks, ETFs and mutual funds.
Webull charges $0* fees. So you can start investing without worrying about getting slapped with hidden charges.
Using the plan is easy. Simply tap on the Regular Savings Plan banner on your account page and you can swiftly add the US stocks, ETFs and mutual funds you would like to invest in.
Screenshots courtesy of Webull
To decide what to invest in, one tip is to check the in-app market page, which gives you a glimpse of current market trends and lets you filter assets by most active, top gainers, market sectors and more.
So, how is your money going to grow? As mentioned earlier, if you use a dollar cost averaging strategy, you could potentially reap the benefits of appreciating asset prices over the long term. The longer your original sum of money stays invested, the faster it grows thanks to compound interest.
That’s because you enjoy growth not only on the initial sum you’ve invested, but also any interest that you’ve accumulated up to that point.
Suppose the annual return rate is 7% for the next 5 years, and you make a monthly contribution of US$100. At the end of 5 years, your compounded return will be US$1,159.29.
Source: The Calculator Site
Get higher yield with recurring deposits
Afraid you’ll forget to save your cash? Webull makes sure you’re always on time with their recurring deposits feature.
Recurring deposits let you auto transfer cash into your account on a regular basis. If you have a margin account activated with Moneybull, a wealth management tool owned by Webull, the idle or uninvested cash will be automatically channelled into the underlying fund so you can earn a higher yield on it.
What we like about Moneybull is that the wealth management tool by itself already helps you earn a yield on idle cash without sacrificing liquidity or taking on high risk. By combining the power of Moneybull with recurring deposits, you can boost your overall yield.
Moneybull lets you earn a 7-day yield of up to 4.52% with your idle cash without missing out on any investment opportunities, with no fees or minimum balance required. It’s definitely worth checking out if you have any cash that you’re keeping on hand for future investments. (These figures are based on 7-day yield (p.a.) as of 13 March 2023 and are not an indication of future performance.)
Do note that automatic subscriptions and redemptions will be processed between 9.30am to 9.40am Singapore time on business days.
Stretch your US$5 further with Webull’s 1st anniversary promotion
Webull is celebrating their first anniversary with a special promotion!
Take part in Webull’s anniversary lucky draw, to stand a chance to win the following:
Weekly prize of 10 x US$888 worth of TSLA shares*.
Grand prize of a Tesla Model 3*
To maximise your chances in the lucky draw, simply do the following (it’s stackable!):
Fund any amount in your WeBull account and get 1 lucky draw ticket
Refer a friend to fund any amount and get 1 lucky draw ticket, up to a maximum of 20 tickets
Lucky draw tickets are valid till 30 June 2023, 15:59 SGT.
Ready to start investing and beating inflation? Sign up for a Webull account to get started from just US$5.
^For US stocks & ETFs. The minimum investment amount required for mutual funds is subjected to each fund.
*Terms & conditions apply. For detailed terms and conditions and full disclaimer, please refer to their website at https://www.webull.com.sg/. This advertisement has not been reviewed by the Monetary Authority of Singapore. Tesla is not a sponsor or involved in the activity in any manner.
This post was written in collaboration with Webull. While we are financially compensated by them, we nonetheless strive to maintain our editorial integrity and review products with the same objective lens. We are committed to providing the best information in order for you to make personal financial decisions with confidence. You can view our Editorial Guidelines here.
The post How to Start Saving & Investing From Just US$5, Plus Get Higher Yield With Webull appeared first on the MoneySmart blog.
The post How to Start Saving & Investing From Just US$5, Plus Get Higher Yield With Webull appeared first on MoneySmart Blog.
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