SINGAPORE: A fresh graduate earning a relatively high salary in tech has asked Singaporeans online whether he should first repay his parents for his education or put his income to work through investing.
In his post on r/singaporefi, he explained that he owes his parents close to S$100,000, which they lent him to cover both his undergraduate and postgraduate studies.
His parents, both over 65 and not well-off, had withdrawn the sum from their CPF savings — money they had set aside for retirement — to pay for his schooling.
While his parents told him there was no rush to repay them, they did ask that he help fund his younger brother’s university education as they are about to retire. His brother, who will be starting university shortly, plans to take up an interest-free tuition fee loan from a bank during his studies.
The graduate then admitted he is somewhat conflicted. On one side, he is eager to settle the debt.
On the other, he is aware that using his salary to repay the loan in full each month could mean “losing out on potential investment gains in the longer term.”
“It does not necessarily need to be in the stock market; I am also considering just throwing it into T-bills or FD. Just so long as I generate positive growth on that money.”
Unsure which path to take, he invited others to share their perspectives.
“I am curious about what I should do. I would very much want to clear off this debt and give my parents some interest so that it is a load off my mind. Plus I don’t have to worry about paying for my brother’s education in the future. Just curious on what y'all think. Thank you.”
‘Repay them first’
The idea of investing before repaying his parents did not go down particularly well with many commenters.
One user wrote, “Pay your parents first. It’s their money; let them enjoy their old age with it.”
Another commented, “You already said they are above 65; the money repaid to them will allow them to finally pay for the experiences they wanted, like going on a round-the-world cruise or a nice long holiday trip to Europe etc,” the user added.
“You drag on, sure you reap the benefits of your investment, but by the time you earn enough from investing the money, can you be very confident your parents are 1) still alive, 2) still alive and have the energy/vitality to go do what they really want?”
A third said, “To be honest, I think you should repay your parents first, if that is their retirement funds they should be earning interest on it ah.”
Meanwhile, a fourth user offered a compromise that would allow the graduate to have his cake and eat it too, at least financially: repay his parents first, then suggest that they put the money into T-bills or fixed deposits if they want to earn interest.
“This solves 2 problems: you repay back to them and that money is exactly where you want it to be, just that it is not in your name yet (at the very end, you will still get it).”/TISG
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