I'm a 19-year-old student now looking to start investing with no prior experience, how should I start? - Seedly
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Aaron Niew

Asked on 27 Oct 2019

I'm a 19-year-old student now looking to start investing with no prior experience, how should I start?

I'm a believer in starting early. I have a current budget of about 5-10k of savings.

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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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Aaron Niew
Aaron Niew

31 Oct 2019

Appreciate that alot. At the moment I'm just holding about 5k in StashAway for about 2 weeks now. Definitely better than putting in my bank. The rest of the money probably save it up for any emergency use first till I gather more capital.
Chong Ser Jing
Chong Ser Jing

05 Nov 2019

Great to know, Aaron. All the best in your investing!
Thank You!
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Arpita Mukherjee
Arpita Mukherjee, Community Evangelist at Kristal.AI
Level 6. Master
Answered on 05 Nov 2019

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.

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Alvin Teo
Alvin Teo
Level 6. Master
Answered on 27 Oct 2019

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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Aaron Niew
Aaron Niew

28 Oct 2019

Personal finance knowledge I'm probably still lacking for that since I still am not quite what to do with my money.
Alvin Teo
Alvin Teo

08 Nov 2019

Am I right to say that you invest into stocks to retire? Because some people invest into stocks to speculate. As for personal finance, it’s a mindset, it is beyond investments, the fact that you want to grow your money Rather than spend it on yolo means you on right path.
Thank You!
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John Smiths
John Smiths
Level 5. Genius
Answered on 31 Oct 2019

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!

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Aaron Niew
Aaron Niew

05 Nov 2019

Thanks for the pointers too! At the moment I have just parked 5k in stashaway, it grew to around 5.1k. Of course, I'll continue working part time :) Probably will continue work when entering NS next year, just dont contribute cpf.
Thank You!
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Yang Teng
Yang Teng
Top Contributor

Top Contributor (Aug)

Level 9. God of Wisdom
Updated on 27 Oct 2019

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

  • etc

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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Yang Teng
Yang Teng

28 Oct 2019

If you can tolerate more risk, you can look at penny stocks where it is significantly more risky but also higher chance of greater returns.
Aaron Niew
Aaron Niew

31 Oct 2019

Noted! At the moment I'm planning to save up about 3 months worth of expenses since I think 6 mths at my age is not really necessary since I have basic insurance coverages and will be heading to NS next year. And when I save up more than that, the excess I'll use it to start little investments, meanwhile still continuing with just my stashaway. Will be reading up more on those you recommended! As well as those books too :)
Thank You!
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Albert Tan
Albert Tan, Fin Lit Trainer at MoneyOwl
Level 4. Prodigy
Answered on 01 Nov 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!

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