If you read our previous articles, we talked a little bit of the power of compounding, and how to use it effectively. Almost all finance blogs that people visit tend to glorify and exaggerate compounding (and because the internet is full of scammy information) e.g: invest monthly and WITH THE POWER OF COMPOUNDING it'll become a million dollars within a year!

However, this isn't true. Compounding basically accelerates the amount of money you invest due to the capacity of the interest generated to generate more interest after some time. It might sound confusing but it actually isn't.

For example, you invest $1000 this year, and it grows at 10% annually to $1100 the next year.

So you would've gained a $100 from interest. That $100 has the potential to earn 10% for a total of $1100 * 110% = $1210.00. As you can see the $10 is interest generated by the interest. It is this which makes compounding so powerful, and after sometime, it would become quite a sizable amount.

So don't go round the internet believing scams of how someone made $1123 in a day. It's equivalent to ads that go round saying " 1 life changing tip that help nerds get jacked" it probably doesn't work because it's too good to be true.

If you're interested to start investing, here is an article from money smart talking about picking brokers. http://blog.moneysmart.sg/invest/how-to-decide-which-investment-brokerage-in-singapore-is-best-for-you/

My Recommendations

Since I've only used 2 of the 11 in the list I feel that I can talk about the pros and cons of those.

Phillip Securities:
Pros: Branches all over Singapore, online platform to trade ( includes mobile app). Share builder Plan, invest as low as $100 a month. Utilises a method called dollar cost averaging (we'll cover this in another article :D) Cons: Minimum $25 brokerage fee for both buying and selling, it'll eat a lot into your potential profits.

Standard Chartered:
Pros: Static 0.2% brokerage fee which is more attractive for youth investors like us Branches all over Singapore Cons: They don't have a mobile platform to do trading Would incur a monthly charge without a minimum of $1000 value in the account You have to be 21 years old.

Currently, I am using Standard Chartered as my broker, because I feel that for youths like us, every single dollar counts when it comes to investing for our future. A $25 fee is a large portion of the investment amount and since we don't trade in large amounts, % based fees are ideal!

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