4 Psychological Hurdles That Prevent Singaporeans From Investing

4 Psychological Hurdles That Prevent Singaporeans From Investing

The huge gap between wages and cost of living in Singapore means Singaporeans need to make the most of the money they have. If you are content to let your money sit peacefully in a savings account, when you’re 70 years old you might be sitting peacefully by the side of the road trying to sell tissues.

However, despite general angst throughout the land about money issues, not enough Singaporeans are investing. And the upshot of this is that the majority of Singaporeans are woefully unprepared for retirement. While there are many reasons Singaporeans aren’t investing as much as they should, a key barrier lies in the mind. Here are 4 psychological factors preventing people here from doing the necessary.



When it comes to being careful with money, many Singaporeans tend to fall into one of two camps. The first camp can be seen spending thousands at the casinos, opening bottles at clubs and declaring that shopping is their favourite sport. The second group refuses to have a social life because making friends means spending money and hoards every cent they save in a low interest savings account because it’s less risky than buying stocks. Fear is what keeps people in the second group from investing, but this kiasee attitude will eventually cost them more than they think.

If there’s one way to get Singaporeans to do something, it’s to make them afraid. And in order to get over this fear of investing, people need to face an even bigger fear—that the value of their money will get eroded by inflation and the rising cost of living.



Singaporeans work very hard for their money, clocking long hours at the office and enduring sometimes brutal workplaces. But when it comes to finding out how to make their money work for them, they can be surprisingly passive and just plain lazy. No longer able to rely on their teachers and private tutors to spoonfeed them with information, many Singaporeans simply don’t now how to invest their money other than by waiting till they can afford to buy property.

The sad thing is that this attitude towards investing is actually going to make you work harder in the long run. If you don’t make the most of your money, it means you’re going to have to slave away a lot harder in order to retire. Even the laziest Singaporean would agree that it’s better to spend a few weeks learning about investing than to delay your retirement by a few years.



While learning basic investment techniques isn’t rocket science, most Singaporeans have poor knowledge of how to invest. In fact, a recent survey revealed that Singaporeans posted the largest decline in financial literacy in the entire Asia Pacific—we’re actually getting dumber! The sad thing is that if Singaporeans really knew to what extent investing could grow their money, they might sit up and take notice, because everyone likes free money.

Learning about investing can seem like a gargantuan task that will take a lifetime, but it’s really not. If you break down the learning process into bite sized pieces, you’ll find that it’s really not that hard after all, and you’ll be more motivated to get started. First commit to learning about the various investment options open to you (the government’s MoneySense website is a very basic esource), and then learn more about each individual option, whether by attending seminars or reading. Seriously guys, it doesn’t take that long.


Feelings of inadequacy

I’ve met many friends who’ve been in the workforce for 5-10 years in relatively high paying jobs, but who still haven’t started investing simply because they think they don’t have enough. In general, young people in their 20s seem to have the impression that property is so expensive it’s not something they can even consider at this point unless they’re about to get married. And this feeling that they don’t have enough to put their money into an investment vehicle applies to other types of investments, too.

In fact, many people here have no idea that SGX has reduced the minimum lot size for stock market purchase to 100 shares (previously it was 1,000), which means you now need 10 times less money than before the enter the stock market. As always, the way out of this jam is education. It doesn’t cost that much to invest in exchange traded funds and shares, as well as lower risk investments like bonds and unit trusts, and the sooner you realise that the better.

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What psychological hurdles to your face when it comes to investing? Tell us in the comments!