Becoming a millionaire isn’t as hard as most people think. 

You have to control your spending, save intelligently, and ensure that your money gets invested as early as possible.

Warren Buffett, the world’s greatest investor, started investing when he was 11 years old.   Compound interest (which Einstein called the 8th wonder of the world) unleashes its wealth-building power over time.  The earlier an investor begins, the more wealth he or she will accumulate.

If you’re a Singaporean looking to give your children a head-start, don’t just talk about it. 

Get something started today.  I spoke with Roger Leng, of Fundsupermart, and learned that a young person (whose age would normally deem them ineligible for an investment account) could open a Beneficiary Account with their parent’s help. 

Parents can print and fill out the appropriate paperwork before mailing the completed hard copy to Fundsupermart.  Once started, Leng suggests that the application will take roughly one week to process.

So, what should you buy for your son or daughter?

Studies show that seeking funds based on their past performance is a poor strategy.  The most reliable measurement of future return is the expense ratio of the funds selected.  The lower the costs, the higher the probability of future returns.  I explained this thoroughly in my international bestseller, Millionaire Teacher:  The Nine Rules of Wealth You Should Have Learned in School.


Rather than looking for a fund in the next hot sector (you really think you have a crystal ball?) it’s better to diversify your assets across many sectors and geographic regions.  This way, if there’s an investment bonanza taking place anywhere, you’ll guarantee to have some exposure to it.

For a diversified, global stock market portfolio, you could simply buy two funds:  a global fund, and a Singapore fund.  I’ve described them as “Investment 1” and “Investment 2” below:

Investment #1

The Infinity Global Stock Index gives investors exposure to the world’s stock markets.  Its annual expense ratio is 0.97 percent.  With this index, you’ll own U.S. stocks, European stocks, Asian stocks, Australian stocks…and more.

Fundsupermart provides access to actively managed unit trusts that have both underperformed and outperformed this index.  But they all cost more than 0.97 percent each year.  As such, academics would suggest that the lowest cost fund has the highest odds of performing in the top quartile, going forward.  Past results themselves, are not good indicators of future success.  And this is the lowest cost (non ETF) global equity fund available in Singapore.

Why Don’t Your Children Need Bonds?

While your children are young, they won’t necessarily need bond market exposure.  Bonds pay low levels of interest; as a result, they don’t perform as well (long term) as stocks.  However, it would be prudent to have exposure to Singaporean stocks, as well as the global market. 

Investment #2

Because a Singaporean stock index doesn’t exist–unless you’re buying an exchange traded fund through a broker—the next best thing for your child would be a low cost, actively managed unit trust. 

Again, relying more on the underlying cost of the fund is a better predictor of future profits than relying on their respective, historical returns.  You could choose one of the three low cost Singapore stock market funds listed below:


Annual Expense Ratios

Five Year Average Returns

DWS Singapore Equity



Nikko AM Shenton HIF Singapore Dividend Equity



United Singapore Growth Fund



Keep in mind that most investors buy the funds with the highest historical results.  This generally turns out to be a mistake.  As previously mentioned, past returns aren’t necessarily indicative of strong future results, and the single most reliable indicator is the expense ratio:  the lower the ratio, the higher the probability of future returns.

You may wish to split your child’s money evenly between the global index and one of the actively managed trusts above.  Or you may be more comfortable emphasizing the Singapore market, putting ¾ of the money with the local fund, and ¼ of the proceeds in the world index.  You will need to initially invest at least $1000 into each fund, to get them started.  After that, subsequent investments as low as $100 can be made.

Regardless of what you choose, stick to your original allocation. 

Most people are poor investors because they put fresh money into funds or geographic regions that are rising.  Their tendency, unfortunately, is to buy high, rather than buying low.  If you stick to your goal allocation, you won’t have to worry about making this mistake. 

For example, if you split your money evenly between Singaporean and global stocks, and the Singapore market plunges, add fresh money to that market the next time you invest.  If the world market plunges and the Singapore market rises, add money to the world market.  Don’t chase past winners.  And maintain your goal allocation over time.  Doing so will ensure (as Warren Buffett says) that you’ll be greedy when others are fearful and fearful when others are greedy.

When your children turn twenty-one, they can be eligible to open a brokerage account and purchase exchange traded funds instead.  These are cheaper options still, giving them even higher odds of investment profits.

By investing early, your children won’t have to save as much as their friends (over their lifetime) but they’ll still likely end up with much more money.

There’s a reason Einstein called compound interest the most powerful force on earth.

Open your child’s account today.