How to start investing?

Hi anon,

The planning process is important prior to starting to invest; without a plan (or at least a skeleton of one), you are planning to fail. Although you are still studying, and your cash flow probably isn't there (unless you are working part time), you can still map out your overall strategy. Stocks are also not the only thing in the market but I'll advise that you keep your mind open about the other asset classes.

Start by setting a goal:

• What do you want to achieve?

• Save for Retirement? Payment for Mortgage? Children’s Education?

• Determine your investment timeframe

• How much do you need for that goal?

Next, assesss your financial situation

• What is your net worth and cash flow?

• List out all resources and expenses that you have

• Find out your budget

Then, plan to execute

• Make sure you have emergency savings

• Make sure you are adequately insured

• Know how much to set aside

• Know what rate of return you need

• Know how much risk you can take

Understand the asset classes you can invest in, their pros and their cons

• Equities (Stocks/Shares)

• Exchange Traded Funds (ETFs)

• Retail Bonds

• Corporate Bonds

• Unit Trusts

• Savings Plan

• Structured Deposits

• Contract for Differences (CFDs)

• Properties

• Commodities

• Derivatives

Lastly, decide which asset class you would like to obtain that fits you and your profile, and you are on your way. Monitor your investments, refine and review your portfolio regularly.​​​

Start with a simple personal finance book like "Rich Dad Poor Dad", and then strengthen and change your mindset with "Secrets of the Millionaire Mind". Once you are ready, read "One Up on Wall Street" and you will be on your express ticket to Financial Freedom.

The most important takeaway personally for me so far is this:

1. Discipline (in terms of saving/investing/controlling emotions)

2. Patience

3. Keep on learning

Don't rush into buying your first stock. It is far worse to buy into a stock without first grasping the fundamental concepts. You can't build a house if you don't know how to read a blueprint or layout a foundation. Investing and personal finance is the same thing too!!

Alternatively, you can read my blog here to read up more :-)

I wish you all the best!!​​​

Hi Anon! I think it is good that you want to start investing in your college days. As they say, the earlier you start, the better.

With that said, I feel that there are some fundamental steps to take before starting to invest. Of course, these are all in addition to the intense amount of research/ due diligence you should be doing at the same time.

Firstly, know the reason why you want to invest. This will allow you to have the correct mindset and not have a 'get rich quick' mindset. This will also allow you to determine your investing time horizon, how long you want to stay invested.

Secondly, know your risk appetite. Know what kind of assets are out there and how to get your hands on such assets. You will find that there are many asset classes out there that may fit your appetite, like ETFs for example instead of single equities.

Thirdly, preparation. Even though it is important to start investing, it is even more important to have a solid base to fall back on should your investing journey not go well in the short-term. Here, you should know what are the certain protections you should use to guard yourself against the uncertainties of investing. As such, I think it is important to create a checklist for yourself to ensure you are prepared.

Lastly, ensure that you have enough savings to invest. Though it might seem simple, if one is not disciplined in saving, it will erode his investment potential away.

If you are interested, I am documenting my personal finance journey here. I am also a beginner in this area. As such, the purpose of my posts is not to teach, but to share my perspectives as a new investor and the processes I undertook.
I hope it helps in providing a new perspective! ​​​

Better do not invest into single stocks, that doesn't work out, better use ETFs.

what also to avoid, here:

https://seedly.sg/questions/what-is-your-genera...