Asked on 20 Nov 2019
How do i start and what are some ways I can get better?
To summarize, here are some things you should be looking at:
Repay any debt if any. Look at your income and expenses and ensure you will have positive cashflow
Sort out your insurance coverage. You will want to ensure you have, at a minimum, a hospitalization plan, Critical Illness coverage, and death coverage if you have dependents. Work with an independent financial advisor to understand the options available for you.
Save up your emergency fund. At least 6 months, and more if you can help it. The economy can be very unforgiving and hence if you are out of a job, it can easily take longer than 6 months to get a new one
Invest in your human capital. Grow your income so that you will have more capital to invest
Invest in your knowledge. Read more, understand the asset classes, their pros and cons, open a trading account with access to multiple asset classes such as POEMS, and then prepare yourself to start
Formulate a plan to know what you want to invest for. Minimally, people invest/save to prepare for their impending retirement
I would suggest 'pay' and 'protect' yourself first before investing. Have a concrete saving plan by setting aside a ratio of saving / expenses / insurance. Automate your savings monthly and track expenses. Priortise health (eg integrated shield plan) and term/life (death / disability / critical illness) insurance plans. Set a target how long you need to meet certain saving milestones.
Then, bulid up your emergency fund of 4-6 months of expenses. This will take time. Meanwhile, get educated on the investment tools and asset classes. This will help you to prepare your investment journey.
Take some time to sort out insurance first. What your parents have bought for you, what you need now, what you might need in the future.
Start learning about bugeting and expenditure. Work out how much you can save on a regular basis and start saving.
Read up about CPF. As you figure out what your current and future expenses will be, have a plan for your CPF. Specifically, how you want to manage your OA vs your SA.
While doing all that, read up what you can about investments. Start with the easy stuff. Maybe passive index investing through dollar cost averaging. You can start that easy and quickly and while you're doing that, you can learn more about more active investing.
Have fun! You're starting way earlier than many others and you have time on your side!
Start by investing in yourself - gain as much knowledge, skills, and experience. Understand the fundamentals of the market and how it works.
Concurrently, ensure that you have sufficient liquidity (at least 3 to 6 months your monthly expenses). Here is a guide on understanding your cashflow: https://www.blog.pzl.sg/understanding-your-personal-cash-flow/
Once you are ready, decide on the asset class and channel to invest into, e.g. bonds, ETF, shares, unit trust
Learn and make adjustments along the way that fits your risk appetite. Remember, do not over leverage at the start. Ensure that you are comfortable and experienced enough to know what you are doing.
Here is everything about me and what I do best.
Before starting, it would be good to ensure you're debt free and have 6 months emergency funds. Next, read up on different types of investment available (stocks/bonds/unit trusts etc), and understand what type of investor you are (passive/active) to know which investment is most suitable for you