By Raymond Sia – Managing Director of Canadia Investment Holding Plc
Where to invest USD10,000 today?
As we start the New Year, many will be making their resolutions for the year and they would include decisions and intent in better managing their health; both physically and financially. Both components are important and we need discipline & consistency to ensure optimal benefits & returns.
On the aspect of financial health, I have often been asked the question “Where do we invest USD10,000 today?”.
The simple answer would be dependent on a number of key factors; which includes an individual’s risk appetite & tolerance and time horizon for the investment.
Having said this, there are a few key points which one needs to be mindful with the USD10,000 in-hand.
- Pay Forward.
Before investing, we ought to ensure we have a contingency / emergency funds; covering at least 3 to 6 months of daily expenses and any other unexpected expenses. These funds can be placed in time/ fixed deposits with licensed financial institutions to optimize the returns.
The need to highlight “placing our funds with licensed financial institutions” may sound oxymoron but it is important to stress on this point and to ensure we protect the interest of the public especially in this day & age where scams are rampant and we still see many people being enticed by quick-to-riches & high-return schemes; which often are illegal and not governed by any laws or regulations.
- Pay-off Debt/Loans.
As a banker, I have often been asked by customers on what would be my top financial advice to them. My answer would be consistent across the different markets I have worked-in; which is to always avoid indebtedness (where possible) and repay the debt soonest possible (if indebtedness is really needed).
Irrespective whether debt is “cheap or expensive”, we always need to be mindful that debts are never free and are meant to be repaid.
In the corporate finance world, we are reminded on how (optimal) leverage; by assuming more debt can improve return on equity / shareholders returns. The key point is “optimal leverage” and often one gets carried away with debt especially when interest rate is low and loans are easily accessible.
Having too much debt is often high risk; more so in a high interest rate environment and where there are uncertainties in business environment (which would affect cashflow and one’s repayment capacity).
What is worse is if one has taken debt from unlicensed private lenders. Borrowing from these unscrupulous parties is “an accident waiting to happen” and it’s unfortunate that we still have many people opting for this source of unlicensed and ungoverned financing.
Financial literacy is important and every borrower ought to fully comprehend & understand their obligations before accepting the loans.
- Pay Yourself.
These days, we are spoilt for investment choices.
Choices are aplenty such as equity, fixed income instruments (bonds or certificate of deposits), cash, foreign currencies, mutual trust funds, real estate (actual physical property or via a Real Estate Investment Trusts (“REITs”)) and alternative investments (commodity / metals such as gold, crypto assets).
Before we decide on where we would invest our hard-earned money; we need to establish our risk tolerance and time horizon. And always have the mindset of caveat emptor – “let the buyer beware”; which would require thorough assessment and review done before a person ventures into these investment(s).
A simple way to assess our risk tolerance is to ask ourselves how much we are willing to lose. If we are not willing to lose any amount of the funds; then the USD10,000 ought to be invested into “capital protected investments” such as cash (time / fixed deposits), Government bonds or money market funds. An astute investor would take into-account (actual) inflation and ensure there is “real return” on the investments after adjusting for inflation. Inflation is very often “enemy number one” for any investments.
Time horizon is equally important as the longer time one has, the more risk can be assumed for potentially higher returns. For those with longer time horizon (say more than 3 years), the funds can be channeled into equity, unit trust funds / exchange-traded funds (“ETFs”) or an outright purchase of a property.
Investments in unit trusts /ETFs/REITs will be levied fees; to be paid to the fund managers but they would offer a wider variety / basket of shares and lesser monitoring while direct investments into equity require more “personal assessment & homework” to be done by the individual investor and the risk is often higher.
Epilogue
Would it be different if the amount was larger say USD100,000 or even USD1 million? The same principle would apply; which is to set aside a contingency fund, de-leverage as much as we can and invest the remaining balance based on our risk appetite.
Happy New Year & Happy Investing (& Saving)!
Raymond Sia currently serves as the Managing Director of Canadia Investment Holding Plc and Board Director for Canadia Bank and Credit Bureau Cambodia. He served as Canadia Bank CEO from March 2018 to September 2025. Raymond is also the author of the “Right Angle – The Collection Volume One” which is now available for sale. He is a strong advocate for Responsible Banking and believes that Financial Literacy should always precede Financial Access. The views expressed above are strictly the author’s personal opinion and do not represent the organisations & institutions he is attached with or represents.
