I have been on the Philip Capital Sharebuilder program for more than 3 years and recently encouraged both my siblings and readers to start a Regular Savings Plan with our friendly banker next door. 

I don’t know if it’s too good to be true but apparently (at least in theory), if we channel $500 into this Regular Savings Plan (RSP) every month, we could enjoy ~10% returns (if history repeats) and then after 30 years, the savings would accrue to become $1,000,000! And all this from a capital/savings of less than $200,000.

The above is generally categorised as passive investing. In this country, it mainly involves buying an ETF that tracks the Straits Times Index (STI). Because the whole thing is advertised as effortless and the whole process is automatic after the initial set-up, there is a danger that participants of these ETFs don’t bother to know or do ...