Be real about investing, but keep things simple. Simplicity is life’s greatest sophistication.
- The lower the risk, the higher the returns.
Learn about building in a margin of safety into investments.
- Investing is not about making lots of money in the short period.
That would be gambling. Investments, like businesses, take time to grow.
- You don’t have to be an accountant or math wiz to invest (no offense to accountants ;)).
You only need knowledge to interpret & make sense of a company’s financial data (or get someone you trust willing to do it for you).
- You don’t need to keep track of share price movements on a daily basis.
Stock prices (despite what the efficient theorists) say do not truly reflect the business it represents. Mr Market will show up everyday with a new offer. Avoid the herd mentality. Be patient when others are greedy. Take opportunity when people become fearful.
- You don’t need a lot of money to start investing.
Aim for 10% & above of your take-home pay with these choices:-
– Endowment investment with largely guaranteed returns are available from 200/mth with IRR of above 7%
– PRS is available with incentives for youths below age 30 for investing 1,000 (<100/mth)
– EPF 10% incentive for self-employed folks (no regular EPF deduction) below age 50 to put in 1200/yr (100/mth) into EPF