Procrastination kills in investment!

I was one of them... What I could have started 4 years ago at the end of 2017 was hampered by tons and tons of excuses and procrastination. They say "When you are in it, you do not see it", this is exactly true. Dark clouds loomed over my head as I was not thinking clearly. I totally understand the "why" to learn about investing/trading but I just couldn't understand the "why" to start.

In many ways, the reasons to start were never seriously thought of. "I still have time...", "I have no capital...", "Timing is not right" are some of my common excuses. I can practically think of any reasons not to get started and I cannot think of a good reason to put everything into action. 4 years later, Covid-19 gave me the "why" to start.

As most businessmen were hit by tremors of the Covid-19, I was not sparred. Stress were definitely mounting with rental to pay, salaries to cover and not forgetting the miscellaneous costs that added up at the end of every month. With entirely zero income into the bank, the pressure was closed to heart. Every single brain cell was put to work on how to bring the next dollar into the company. We did all the marketing that we could, we took all the measures to save and be prudent but all was futile. Slowly, we had to dig into our savings just to keep the company alive. Every month passing was just about surviving. 

With nothing to lose and with a lot of time at home, the excuses ran out... I knew I had to start doing something somehow.

Like many others, I was a headless chicken trying to learn everything from scratch and I literally mean from scratch. I had zero background about investing/trading and it was an uphill task. I am lucky to have a friend who took me under his mentorship who guided me the lights on how to start. One of the reasons, why I started writing this blog is to share my investment/trading experiences with anyone who was like me and want to pay it forward. Most people whom I have spoken to understand the good about long term investment but mostly do not know how and where to start, so here goes:

1) Understanding Your "why"

Write down the reasons why you want to learn about investment/trading. Thought it through thoroughly and list down as many reasons as you can. Understanding your "why" helps to condition your mind and soon it will follow where the heart goes. 

2) How Committed Are You?

It took me 4 years to start... how long will it take you? Thoughts in your mind will stay as a thought until you put them into action. The commitment to stay true to action requires 2 things: Time and Consistency. Consistent action over a period time and it becomes habitual. Build commitment over time. There is just too much to learn about the financial markets... While it is easy to understand "buy low sell high", beginners tend to fall for the dreams sold by gurus. "Rome was not built in one day" and one should not think that they can strike their first pot of gold with short learning curves. While some became very successful in a shorten period, that is gambling and not learning. Learning takes time and practices. Gambling is easy: Heads or Tails. If you are reading this article and start questioning yourself if you have the time to learn, all you need to do is to spend lesser time on Facebook, watching Netflix, maybe sleep slightly later. Remember this, you would not be who you are if you did not take the time to learn all that you have learnt from when you were young. Having not enough time is not an excuse. Everyone has 24 hours a day and it is how you allocate your time and set your priorities. If you want it hard enough, there is always time for it. Many cyclists who I know woke up very early during the wee hours to practice their riding. This is the time where there are lesser cars on the road thus allowing the cyclists to achieve top speed. Cyclists knew this which is why they are willing to sacrifice sleep in order to cycle safe. What are you willing to sacrifice?

3) No Money

This excuse is the number one killer. This is the same excuse as saying "I don't know" to everything. "I don't know how to trade", "I don't know about money management", "I don't know how to start", "I don't know what to do", you get the idea. After I started my learning journey and saw the importance of investment, I wanted to introduce investing to people around me but to my surprise and dismay, the most common reason I got from people not wanting to start: No Money.

We have all heard of nasty stories (mostly from our elders, uncles or family members) of a close member of the family who probably lost his money through bad investment or failed businesses. These tales often formed the foundation of stopping us from venturing into investing. The truth is, everyone wants to play it safe but playing it safe cannot beat inflation. Instead of absorbing the negative vibes why not focus on the success stories of people who have made it through investing. Why do you choose to be on the failing side? Do you envision yourself as a success story?

Times have changed, information is abundance these days. The Internet has changed the way we find information about anything in the world. Gone are the days where one has to call his broker and retrieve information from teletext. Setting up a trading account can be as easy as logging into your Singpass and verifying your information, all in a day's work. No complicated papers to sign. For starters these days, there are also many Robo advisors which can help one venture into their investment journey with as little as $100! Many will ask, how can I grow my wealth with a $100 investment? No, you can't. Run far away from people who tell you that they can make you rich with $100. The point is not getting rich with an initial $100 investment, the focus is to start somewhere. Once you have started, encompass with time and consistency, results will show.

4) Research

There are many financial jargons. Likewise, learning a new language requires one to learn everything from scratch. If terms such as P/E ratio, returns, credit, debit, P/L and the list goes on... are alien to you, fret not, this is very common for beginner investors. A good way to start is to pick a stock that you like and read all the news surrounding the company. While news are lagging information and manipulative in some ways (not always good for beginners), it is an ideal way to understand financial jargons. Reading user reviews of trading platform, what to invest, how to invest, when to invest are important factors to consider. While there is never a good time to invest, it is also not good to invest in a wrong time for example a bear market (there are other ways to trade on bear market using Options and Futures but that is for another time). Reading up is a perfect way to start if you have NO MONEY! It doesn't hurt to know. Knowledge is power.

5) Plan

Everything requires a plan and investment surely needs one. Plan in general can be as simple as setting goals for yourself. Understanding what you want to make out from this investment decision, drafting the steps that you are going to take to make this happen. Be as specific as possible when penning down your thoughts. How much can you invest monthly? What is your investment horizon? Do you have enough to invest? What sacrifices do you want to make before investing? What stocks to buy? What kind of allocation are you pursuing? How much to profit take? How much can you lose? Do you need the money used for investment? Questions, questions, questions. You need a plan.

When I first started, I had a good look at my monthly expenses. I realized that I was spending too much money on food! I had to cut down on my food expenses. I had to make a decision to eat less fancy weekly, no more restaurants, no more bubble tea, no more snacking... every cent counts. I also had to review my insurance plan, I was paying off my monthly insurance not knowing what I was buying into. This is the irony part because we are supposed to know what we have bought. But trust me, insurance commitment made 20 years ago has a different meaning as you aged. I would strongly recommend everyone to review your insurance policies with your agent. Yes, meeting up needs time, you don't want to be oversold (there are black sheep everywhere that sell you things that you didn't want) but it is essential. You don't want to be paying for insurance for the next 20 years to realize that with the same amount of premium, you could be getting a higher coverage. Insurance policies while offer protection over wealth should you meet with accidents or illnesses comes in many different variations and needs. There are protection policies (term or life) and there are endowment plans with elements of investment, rider plans, retirement plans, savings... do you know what you are buying into? When I had my insurance review, I had to terminate 2 policies which were bought when I was 19 years old during my National Service. The insurance plan no longer serves my needs and it was time to let go and look for plans with better coverage. Some of my plans had overlapped and it wasn't until when I met up with my insurance agent that I knew that I had to let go of a few policies as they were no longer relevant to me... while getting protection, would it be better to use the money for something with higher returns? If you don't manage your finances well, they will come and bite you when you least expected.

Taking action is the first step to everything. Don't let your thoughts turn into imagination.

About The Contributor

Ben is not financially trained. He is not a certified financial planner and he does not sell any insurance or investment plans. He is not financially motivated by any entities to produce this blog. He just want his friends to know more about money management and not have anyone fall between the social cracks. Nope, he is not a millionaire though he aims to be financially free before 50 years old.