Asked on 27 Oct 2019
I'm a believer in starting early. I have a current budget of about 5-10k of savings.
Hello Aaron! It's wonderful that you believe in starting to invest early.
I'm assuming that you don't have any background knowledge in investing when answering this, so please correct me if the assumption is wrong.
I think it's important to first have a good understanding of accounting principles, and a wonderful book (deep, but easy-to-read) for that purpose is "How To Read Financial Reports" by John Tracy. After you've squared that away, then it's down to understanding what stock market investing is about. For that, Peter Lynch's "One Up On Wall Street" is a great place to start. When you're done with Lynch's book, you may also realise that stock-picking is not your thing. That's perfectly fine too! Then you can start by reading any of John Bogle's books, a good but simple one will be "The Little Book of Common Sense Investing." It's great that you already have a decent investing budget even at a young age. But I think it's crucial that you understand what investing is before you commit any capital - and even then, there will be plenty of lessons that can be learnt and appreciated only after you've committed capital.
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There are plenty of safe ways to invest your money. You can go for REITs, other ETFs and bonds, but before you do that, I'd suggest you read up as much to understand what a Robo-advisor really does. Robo-advisory platforms assess your current financial position and recommend a portfolio strategy after reviewing your risk profile. These bionic advisors are still not very different from your ordinary financial advisors as both options will still have a management fee incurred for users. The difference lies with the amount, as Robo-advisors have lower management fees. And the best part is that they give you the most unbiased advice.
You can read here for a better understanding.
I work at Kristal.AI, and my mojo is to help people make the right financial decisions. If you think I helped you, do give me "Thumbs up". If you think my response was biased let me know, I will work on it.
I hope this helps you make the right decision.
You want to invest to buy stocks or you want to invest for your retirement?
If the latter then try to pick up not only investment knowledge but also personal finance as a way of life.
Once you’ve answered the question you should know what to invest in or do with your money next.
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It's good that you have started investing so early and based on the responses below, it seems like you have already done something with your budgeted savings. Great work!
It's time to move on. You are entering NS next year. NS pay is low. The higher paying command vocations suck up all of your free time. The lower paying vocations give you a lot of free time. Try to utilise your NS time to build your active income. Think about the course you are going to study after NS, what job you want to work in, what business you want to start, etc. Essentially, focus your time, energy and effort on how to increase your active income first. Don't be so hung up on how to invest. You don't have much savings to work with anyway. Increase it first!
Hey there! Since you're 19, I'm guessing you're in post-secondary education/NS. I think you should read up extensively about investing:
What are the different investment vehicles
What are their risk and returns
How do these different vehicles help you profit
How to read a company's factsheet/annual report
It really is a chore and tedious work to pick up books (once again) and start studying.
You can try, again, reading up on Regular Savings Plan and/or robo-advisors where you make a monthly investment from as little as $100. But then again who value your own money more than yourself?
Also, 5-10k isn't really a significant sum to begin with. Assuming a gain of 5% in a year would translate to only about $250-500.
There are a few alternatives:
Start a business! (I have friends that sell online gaming accounts/import banana cakes from M'sia/sell handmade knitted products/etc)
Apply for a scholarship (think of this as earning 5-10k from just 5 hours of writing work)
Sign up for (free) courses (make yourself more marketable!)
Try out platforms like fiverr (if you're good with your languages for instance, you can provide translation/writing services)
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31 Oct 2019
Invest in yourself. The learning should never stop once you step out of school. There are many things in life not taught in school. You are your biggest financial asset. Take time to explore your interests and passion. Increasing your human capital takes time, as with all other types of financial investments.
Whilst you're still earning a basic income as a fresh graduate, perhaps it's also good to look at your financial health and start on the right note. Build your emergency fund, keep expenses in check, and thereafter systematically save and then invest on a regular basis to reach your future goals.
There are many ways to invest. MoneyOwl offers one way which works for most people. It is relatively easy to get started with just $50/month, and no lock-in period (as in the case of endowment insurances). This should give you a good feel of investing in the markets
https://advice.moneyowl.com.sg/the-right-way-to-invest would be a good read for someone just starting out, with a myriad of choices available on the market.
I wish you well in your career and investing journey!