Investing is easy to learn, easy to enjoy, difficult to choose, you will always want to get more satisfaction as you go along and you can never master it. (Sounding pretty much like masturbation now). I'm not claiming to be an expert, I am not even a novice, I will not provide you formulas, ratios and financials to read. This is just what I have learn when I started investing.
Here are a few things investment is NOT:
- Ways to get rich quick: this is the game of day traders who work very very hard and spend a lot of money to achieve by merit. Anything less than that are just speculators no different than those queuing up to buy 4D/Toto (Singapore's lottery)
- Trying to yield better than the economy: For the people who truly invest properly or for a career, getting better yieldthan the economy is only natural. But for regular investors, remember your end goal in life is not to beat the economy, it is just to enjoy comfortably.
- To beat Inflation: When I started out, all I could think about is how scary inflation is, mongering it like the sky is going to fall. Leave the 3.5% deductions to your yield aside. Inflation or no inflation, your $5 is still going to be printed as $5, no one will re-issue your $5 to a $2.
Now that we have swept aside some fog, let's get to it.
The common things people say when asked to start investing:
- Risky
- No money
- Don't know how
Lets address them, tear them down and face them, when you are reaping the outcomes of your investments, pat yourself on the shoulder.
Risky
Honestly, if you actually calculate out the risk of everything you do, you will find that investing your money is really just a small speck compared to falling down on a slippery toilet floor, where it involves risks of injury, risks of touching someone else's pee/
Obviously, I am not talking about investing away your coffin money and buy high return stuff. Those are more often than not making other people rich first. Invest in only small money you confirm won't need in the next 3 years or more.
No Money
Linking to the previous, what kind of money we are talking about? Obviously it depends on how rich you are. Do not say you no money when you have $1000 rotting away in a bank and you always never touch it for the next 3 years or more. Of course if it is all you have then I think it is better not to invest at all.
But if you have a stable income, where you can afford to buy $8 lunches, ride the taxi, watch movies every Fri/Sat/Sun, I don't see why you cannot eat $4 lunches, take public transport, watch movies on weekday and download animated movies. For instance, if you do the lunch thing, every month, you will have $120 extra. For $100 a month, you can invest in POSB Regular Savings Plan/OCBC blue chip investment plan. These little money that goes away will come back in shocking amounts. Compounding will work in your favor no matter what so long you have an interest rate on your money.
Don't Know How
Here's two ways to invest that is relatively low risk, requires little to no knowledge about finance. I draw similarities to these investments towards our daily lives common occurrences and you'll see how easy it is:
1) Buy the economy
2) Be a lazy landlord
That's it, simple and the yields for these forms of investments tend to draw about 4-8% yield annually. Pretty good money for really doing nothing.
1) Buy the economy
POSB Regular Savings Plan/OCBC Blue Chip Investment Plan provides low cost dollar cost averaging (DCA) investment methods on the STI. The gist is that you just buy with $100 (or which ever you set) every month regardless of price of one share. The general principal is regardless of price, on the assumption that the market fluctuates several times a year, you just buy them, for buying low will help mitigate the high prices and vice versa, you won't buy at the best price but its better than nothing. Signing up can be done at ATM machines in less than 5 minutes.
Why STI? STI is a good indication of our economy, as mentioned earlier, no need to beat the market. So long don't under perform the market too badly or make a loss, you are already doing better than most people who doesn't invest at all. STI has been proven to always go up time and again, it is the nature of our country, it is what keeps us rich as a whole, so instead of complaining about rising prices, why not be part of the grand scheme of it all?
2) Be a lazy landlord
This requires some work to protect yourself in any case a crisis hits and the company becomes financially troubled of if business is temporarily bad, but you should read up yourself, its quite simple, you will find many of the factors similar to your own housing/coffee shops. You could buy into REIT, although right now the market is bad and seems like the general consensus is that interest rates are going up and all that, it is not wrong, but if you buy some now with some money, and when the price of the REIT drops, you could buy more right? Essentially REIT gives you money as form of Distribution (similar to dividends, since the S-REIT is traded in SGX) from the rent collected or sort of. But doesn't matter, you go read up on where that money come from yourself. Most important thing here is price and DPU, although other financials matter too, but I am not even a novice, so for now, these should suffice.
Starhill Global owns Ngee Ann City and Wistma Atria, nuff said. Of course it owns more, but what can be bigger than two of the main shopping malls in Singapore with many years of history and extremely high retail value?
Capital Mall Trust owns 11 shopping malls including: Tampines mall, Junction 8, Jcube, Bugis+, Raffles City Shopping Centre, Lot 1, Bukit Panjang Plaza and many malls next to MRT. The human traffic in these place is amazing and has extremely high retail value.
So there you have it, two simple instruments to invest in. But as simple as it may be, always approach it as you would with any other investment: Save, Research, Invest, Sleep, Repeat
One of the best advise any one can tell you about investment: You are responsible for your own investments!!!
