How to jump start your investment journey?
An expert was once before a noob.
Everything that we know now starts from not knowing. If you want to be an engineer, you need to be competent in mathematics, if you want to be a doctor, you need to understand about the human anatomy, if you want to be a pilot, you need to assess the involving risks before flying a plane. These examples are indication of success where one is good at their craft and is able to provide professionalism. Now, let's take a step back where we imagine a scenario where a person can form an opinion or an action without being a professional in his trade. In this case, you don't need to be an engineer to basic math, you don't need to be a doctor to know that someone is having a fever, you don't need to be a pilot to travel to another country. My point is, investing seems like a big puzzle or mystery that many are unwilling to start because it involves taking risks with your money. Investing does involved taking calculated risk for returns but there is more to it. You must have heard of this saying: High risk high return and this is somewhat fairly true. Would you drive a car on a busy expressway if you do not possess a driving licence? Do you dive into the deep ocean if you do not know the know how of scuba diving? Do you fly a plane if you do not put time and effort into learning how to fly one?
The answer is a clear NO! You don't! Because you understand the involving risks in doing things that you do not know. This is the same for investing. You do not invest if you do not know how to do it or at least how to begin.
Here are some of my recommendations. Please take note that I am not financially trained and do not have the proper certification in giving any financial advice but this was how I started my investment journey and I am pretty sure that if you are beginning to invest, these are probably some of the things that you will do in the very beginning of embarking on this journey. Please read cautiously as these recommendations might not be suitable for everyone, depending on their risk profile, age and financial status.
Read Up
All forms of knowledge are written in the form of books. When you were young, you were taught how to read. In reading, you need a book and this was the very beginning for most of us. In books, you will be able to find the golden nuggets of investing. While not all books are suitable for beginners, it is important to understand that information found on books might be your best resource as a beginner.
There are tons of resources that you can find from the library starting from the Dummies Series to the intermediate and advance level such as chart reading, portfolio sizing, macroeconomics, etc. As a newbie, I would strongly recommend for everyone to borrow books with with titles that revolves around "money management". My reason being, reading more of these money books, helps you to re-enforce your beliefs into the "Why?" (read my previous blog to find out your Why). You need to understand and appreciate "why" are you doing all of these. Why are you starting to invest? Why are you reading these books? Why are you excited about investment? Why is investing important to you now than before? Why? Why? Why? You need to understand your "Why". These books usually begins with helping you to craft out your whys but most importantly, you have to appreciate the reasons behind your actions. Training of the mind is more important than your action at this moment because once your mind has been trained, the actions will flow.
If you are one who finds it hard to focus on reading, you might choose to borrow audio books where you can listen the them at your own will while you are on the MRT or driving or walking or cooking. These audio books are there to keep your mind occupied while your body goes into auto mode such as sweeping, dancing, running, etc. If you have time to watch Netflix, play mobile games and listen to Spotify, you will have time to listen to audio books. Sign up for a National Library Board account and start borrowing some audio books! Start training your mind.
Join a "Guru" webinar
I have mentioned this in my previous blog that the fastest way to learn the investing/trading lingo is to attend a "guru" webinar. Let us be upfront, when a investing guru conducts a webinar, he intends to make money from you by selling his investment courses. There are some who will do it for free but usually their end goals are the same. As a beginner, you venture into unchartered waters and might end up buying one of these courses. You might be spending hundreds and if not thousands of dollars to attend these classes. When these classes are conducted as "FREE", you are usually the product. However, if you have trained your mind and you understand your why, you will know that this is an inevitable journey and here are some examples. When you were young and starting school, did your parents pay for your education? When you wanted a licence drive would you register yourself for a driving class? When you were going to college or attending your higher education, did you by any chance happen to pay for these courses? If you are an avid mahjong player, did you pay your way through? By investing your time into these webinars, you are actually investing in yourself, similarly to the above examples. In these webinars, you will "open" your eyes to jargons that are commonly used again and again in the investment world. When I began my investment journey, I attended many of these classes, trust me, it like attending a class using foreign language. I scratched my head wondering what some of these terms actually meant. What assets? What liabilities? What equities? What is return of equity? What is operating cashflow? What is net income? What is... what is... what is... the jargons used were generally alien like a foreign language but as time goes by, this lingo eventually makes sense as you will encounter them again, again and again. To sign up or not, the choice is yours but attend one to see if you are the right fit. The best thing in life are things that come "FREE"...
YouTube
The rise of social media has created millions of video contents on the internet, most of what we need to find out would have already been thought of by someone else and published on YouTube as form of social media content. We used to live in a world where there are trade secrets but in today's world, these trade secrets that one used to hold onto so dearly could be just a 10 minutes video that is freely shared by billions of people from across the world over the Internet. Any information or solutions relating to the questions that you have in your mind can be solved by watching some YouTube videos for example, changing a car battery, repairing a television, making a craft and perhaps making money. While this is my best recommendation to investing, there are equally tons of rubbish that you will find on the internet so you really need to know where to fish the right solutions. Information overload can be disastrous as you go in circles like a headless chicken trying to find the useful resources on the Internet.
At this point, I need to make a disclaimer, reading some books, attending some classes and watching some videos are NOT going to make you a successful investor or trader. If it was that easy, everyone can be an engineer, doctor or pilot. While theoretical comprehension is important, practical execution is just as critical. Reading a book on learning how to drive will never substitute the real driving on the road. One cannot be so naïve to think that through reading and watching they can be successful. It just doesn't work this way.
Register an account
This is a complete no brainer to me. When I first decided to invest, I knew from the beginning that this was a necessary step. It seems pretty logical that if you want to start sending an email, you have to register for an email account. When you want to start saving, you need to create a banking account. When you need to use your Singpass, you need to register an account with the government. Likewise, if you want to start investing, you need to register an investing account. Simple but not so simple... sounds easy but many fail to follow right till the end.
To register for an account, you will need to submit personal information such as a bank statement, photos of NRIC, mailing address, some might even ask you to sit through an online self awareness test before you are eligible to invest. Once done, you will also need to link your investment account to your bank account for fund transfers. All of these takes time, some people just don't have the time... if you cannot even find time to get an account going, forget about investing through any time horizon, you just don't have the time. Opportunities are for action takers.
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.
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