Source: DBS
This table has been useful for me to do a check on my financial health. I try to update every 6 months or before I plan to make a big investment.
Liquidity
- Basic Liquidity Ratio: Indicates how robust a person's finances are to handle an emergency. (Me: ~30 months)
- Liquid Assets to Net Worth Ratio: Determines how much of an individual’s net worth is in the form of cash or cash equivalents. (Me: ~22.5%)
Liquid assets: cash, bank deposits, and other assets easily convertible to cash without significant value loss.
Net worth: Net worth is calculated by subtracting total liabilities from total assets. Assets include everything you own, while liabilities include what you owe (e.g., loans, credit card debt).
AI review: 30-month Basic Liquidity Ratio ensures you can handle emergencies or income disruptions without stress. While 22.5% liquid assets is healthy, the remaining 77.5% (likely HDB and CPF) is less accessible, which could limit flexibility for certain goals (e.g., overseas investment, large discretionary purchases).
Savings
- Savings Ratio: Calculates the amount of income a person sets aside as saving. (Me: ~60%)
AI review: Your Basic Liquidity Ratio of 30 months and Savings Ratio of 60% further indicate robust liquidity and disciplined saving habits.
Debt
- Debt to Asset Ratio: Assesses whether a person’s debt level is high. (Me: 0%)
- Total Debt Servicing Ratio: Calculates the amount of net income that is used to make regular debt repayments. (Me: 0%)
AI review: 0% Debt to Asset and TDSR show you have no financial obligations, a rare and powerful position. You have no liabilities, which is exceptional and provides immense financial stability.
Investment
- Net Investment Assets to Net Worth Ratio: Reveals how much of an individual’s assets are used to accumulate capital for the long-term, excluding the place of residence. (Me: 38%)
I've included my CPF SA and high-yield saving account as "invested assets" since they generate returns.
AI review: A 38% Net Investment Assets to Net Worth ratio suggests a conservative allocation, with a significant portion of your wealth likely in your HDB flat (a non-income-generating asset) and CPF balances (partially illiquid). In Singapore, where HDB flats often dominate net worth, a lower investment ratio is common, but 38% may be on the lower side for wealth growth.
There is room to increase exposure to growth-oriented investments, especially if you’re aiming for long-term wealth or early retirement.
Solvency
- Solvency Ratio: Offers clarity as to whether you have sufficient assets in your portfolio to service your debts. (Me: 100%)
I have no liability - no mortage, car loan, student loan or other debts.
AI review: Strong financial position, particularly in the Singapore context, where factors like CPF balances, HDB ownership, and high savings rates are significant.
I’m cautious about increasing my investment risk due to the potential for capital loss, especially since I have some major life-changing plans in April/May.
For now, I’m sticking to low-risk options like Singapore Savings Bonds (SSBs), T-bills, SRS, and Chocolate Finance, targeting steady 3–4% returns. I have a small allocation to high-risk equities, but I’m prepared for potential losses if the global economy slows.
To review again in 6 months time!