2024-07-07
Tan Ooi Boon Invest Editor
The Straits Times
SINGAPORE – If you are looking for fixed-income returns, you should deal with only reputable parties that are financially stable, otherwise you could end up losing all your money.
After all, your funds are only as safe as the companies that offer them. As seasoned investors will tell you, even listed companies and international banks can be in trouble when the global economy tanks.
Never be swayed by claims of high returns alone because this simply means that the risks are equally high – even if the projected yield is 10 per cent, you should ask whether it is worth risking $100 just to earn that $10.
You should also know investment companies are not banks, so you will not enjoy the maximum $100,000 deposit protection if the firm fails.
This is probably why fixed deposits at the banks or bonds and treasury bills offered by the Singapore Government are still the preferred choices of many people.
Before you put money in any investment, it is prudent to follow the tips from the Monetary Authority of Singapore (MAS) that are designed to safeguard your interests.
Never shop at inappropriate places
You have probably seen all kinds of strange ads while internet surfing. Some investment deals even feature famous business gurus or even political leaders who have seemingly lent their support to these products.
Ignore such ads, which are created by scammers, because well-known people would certainly not appear in any private ads put up to attract sales, let alone endorse those products as being beneficial to customers.
In addition, you should be wary of investment ads that appear on platforms that have nothing to do with such topics, such as online dating sites.
The use of inappropriate platforms by some sales people to get leads from potential customers is usually done without the knowledge of the financial institutions because it goes against MAS best practice.
Even if you are keen, visit the official websites to check and compare that the terms of such products are the same.
Don’t be enticed by gifts
Some sales people offer free shopping vouchers to lure you into participating in surveys on general financial matters. The reality is that they are only keen to know your spending or saving habits so that they can try to sell you a product.
As scams are so prevalent these days, you should always be wary of disclosing your personal details to strangers who approach you on the pretext of conducting surveys.
More importantly, never sign up for any investment that comes with the latest smartphone or laptop for free even if you are tempted to own one.
Ask yourself whether it’s worth spending $100,00, for example, to buy a financial product that you may not need just to get a free $1,000 smartphone. If you are keen to own the smartphone, you are better off visiting a telco shop to check out the deals.
But if you are keen on the investment plan because it suits your needs, then make the decision without being swayed by any gift. The last thing you should do is to upgrade your plan just because the costlier one comes with better freebies.
Don’t be rushed into investing
Most investment products benefit you only if you hold them for the long term. So there is no need for you to sign up immediately without doing more checks to see if the product suits your needs and affordability.
Do not fall for any “limited-time offer”, especially if you have not carefully studied the terms and conditions. Many people often commit to a plan without realising that it can strain their cashflow.
MAS says customers must be given adequate time to consider the suitability of the product before a deal can be closed.
So it is prudent to ask for brochures or check the product websites for more information before committing to investment plans. If you are pleased with the service of the sales representatives, ask for their contact details so they can still benefit from your purchase later.
Ultimately you should treat all your investments as seriously as your work since your effort will determine whether you can have a good retirement.
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