‘How do I save S$1 million for my baby in Singapore with just S$200/month?' — Singaporean woman cracks the money code for her child's future wealth

Independent Singapore

5 days ago

SINGAPORE: Becoming a new parent comes with an avalanche of decisions — co-sleep (bed-sharing) or crib, breastmilk or formula, and… how to raise a tiny millionaire?
CNA's Money Mind host Cheryl Goh asked a question most Singaporean parents probably dream about: 'I'm about to start my new life as a mother… I'm wondering if I can help my child grow a million-dollar portfolio and how I can go about it.' Photo: YT/@CNAInsider
Spoiler alert: it's possible. And all it takes is S$200 a month, decades of patience (or maybe not), and the magic of compounding. Million-dollar baby? Start with a humble index fund
Sudhan Purushothuman, Associate Adviser at Providend , isn't selling a get-rich-quick scheme. In fact, his advice is refreshingly boring but safe — and that's exactly the point.
'The simplest and most effective way is to actually invest in a low-cost globally diversified index fund,' he said. 'With just S$200 a month, you can actually compound to a huge sum of money over the long term,' he added. Photo: YT/@CNAInsider
Run that math over 50 years with a conservative 7% annual return, and you're looking at S$1.1 million! That's seven figures for your child's golden years, just in time for them to maybe afford a resale flat. Can't wait 50 years? Increase the heat
On the other hand, if you're impatient, Sudhan gets it. So if you could contribute around S$2,000 a month for 20 years, then, he says, you'll end up with around S$1 million with the same conservative 7% expected return.
The key here is staying consistent in your investing. Photo: YT/@CNAInsider
So where does this 7% figure come from?
According to Sudhan, it's based on long-term data from the MSCI All Country World Index (globally diversified index), which typically yields between 8% and 10%, but 7% keeps expectations grounded. Why globally diversified ETFs are the MVPs
Low-cost ETFs (exchange-traded funds) that track global indices are the unsung heroes of long-term investing. Why? They're diversified, don't require you to guess which country or sector will boom, and they save you money on fees. See also Are Fitness Subscriptions Really Worth It? Photo: YT/@CNAInsider
'This strategy gives you the highest probability of success because it's evidence-based,' Sudhan explains. 'You basically own the whole economy… and stick to a disciplined way of investing monthly.'
But if you're someone who's worried your investments may lead to climate change or even animal cruelty, then the Vegan Climate ETF (Ticker: VEGN) offers an opportunity for investors to invest in the stock market through a low-cost index fund or exchange-traded fund as well like the S&P 500, but minus the companies that exploit the environment and animals.
Because you're far more likely to stay committed when your money is backing causes that matter to you.
Moving on, what about the investing fees, you may ask? Fees: The silent millionaire killer
Tim Phillips, Founder of TimTalksMoney , did the math — and it's scary.
'A lot of active unit trusts charge 1.5% [per year],' he said. 'If you get to S$1 million, you're paying S$15,000 in fees every year.' Photo: YT/@CNAInsider
In contrast, low-cost ETFs charge as little as 0.1% or less. So on a S$1 million portfolio, that's just S$1,000 annually — leaving more of your hard-earned cash to keep compounding. Watch for tracking errors and AUM
Before you go on an ETF shopping spree, Sudhan advises keeping an eye on the tracking error — the smaller the error, the better (aim for less than 0.5%). This 'means the ETF is tracking as closely to the index as possible,' he says.
Tim adds that assets under management (AUM) matter too. 'You want an ETF that has an AUM with over US$1 billion,' he advises. Photo: YT/@CNAInsider
Why? Because obscure or poorly performing ETFs risk being shut down — and that can interrupt your compounding party. What about investment risks?
Yes, stocks are volatile. There will be crashes, corrections, and the occasional global crisis.
Tim puts it bluntly: 'There are going to be periods… may be a year, three years, five years… and in some cases… a decade where not much happens.' But over 20, 30, or 50 years, the data consistently shows stocks outperform other assets. Photo: YT/@CNAInsider
Still worried? You're not alone.
Sudhan recommends adding bonds into the mix to cushion volatility. For example, consider a 60% index fund ETF portfolio and then add a 40% bond to achieve a 100% allocation, he suggests for those with lower risk tolerance. CPF: Guaranteed returns, but with strings
For Singaporeans, there's another tool in the baby-millionaire toolkit — the CPF Special Account (SA). Photo: YT/@CNAInsider
It 'gives 4% to 5% per annum, guaranteed by the government,' says Sudhan. Sounds great? It is — but you can't withdraw the money at will. Plus, the lower returns mean you'll need more time to reach your million-dollar goal.
In short: safe, but slow. Bonus tip: Throw in your bonuses!
Tim drops one last gold nugget: boost your child's fund with your year-end bonuses or windfalls.
So instead of blowing it all on a feel-good spending spree or splurging it on impulse buys or even burning it on a shiny new gadget that you'll forget about by next month anyway, don't forget what Tim advised here:
'There's no rule that says you can't contribute when you get a bonus. Allocating 5% or 10% or less of it will accelerate the compounding process over time.' Photo: YT/@CNAInsider
In short, whenever the ang bao is fatter than usual, stash some of it away for your junior's future. Million dollars ≠ Million-dollar life
Let's be real — S$1 million in 50 years won't buy the same things it does today. Inflation will nibble at its value. But leaving that money in a savings account will hurt even more.
'I think the low-cost index fund and CPF are what I would be most comfortable with as someone who is risk-averse,' Cheryl concludes. 'But that means I'll have to start early so I can give my child the best possible head start.' Photo: YT/@CNAInsider
And that's really the point: it's not about chasing market highs or stock-picking wizardry. It's about playing the long game, staying consistent, and giving your child something far more valuable than cash — a strong, secure foundation. See also What Mums-To-Be Should Know About Pregnancy Insurance
As investment analyst Kenneth Fisher once said: 'Time in the market beats timing the market.' Want to see how it all adds up?
From compounding magic to investment pitfalls, Cheryl Goh's journey into financial planning for her child is both relatable and eye-opening — especially if you're a parent wondering where to begin.
Watch the full Money Mind episode on CNA Insider below to hear directly from the experts, see the charts in action, and get practical tips on building a million-dollar portfolio for your child — even if you're only setting aside S$200 a month.
Because in the end, it's not just about the money — it's about giving your child a future that grows with them.
This article is for educational purposes only. It should not be considered Financial or Legal Advice. Investors should conduct their own due diligence before making major financial decisions
In other news, a Singaporean couple has transformed their home into a multi-stream income engine, generating over S$3,000 to S$5,000 a month through practical, proven side hustles that are perfect for 2025.
Now, imagine how much they can save by earning and investing more for their future child if they planned to have one.
In a video that has been making waves among aspiring entrepreneurs, Darien (the hubby) breaks down 10 legitimate side hustles that Singaporeans can start right now. Some require skills, others need hustle, but all are achievable. Photo: YT screengrab/@darienandjoanna
You can read more about them and find out how you too could turn your home into a money-making machine while you bake sourdough, play with dogs, or teach a workshop — all without stepping out of your front door over here: 'We make S$5000/month!' — Singaporean couple turns their S$1M condo into a passive income machine with 10 side hustle recommendations, working from home