It’s generally said that it’s better to enter the market early but if the amount of money I have is small should I built a larger amount first or enter the market? - Seedly
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Anonymous

Asked on 01 May 2020

It’s generally said that it’s better to enter the market early but if the amount of money I have is small should I built a larger amount first or enter the market?

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Wilson Nid A Break
Wilson Nid A Break
Level 9. God of Wisdom
Answered on 03 May 2020

It depends on how small your actual starting capital to your trading costs.

If trading cost per trade is $10, your investment amount is $100/$1000/$10000, your cost % basis will be 10%/1%/0.1% respectively

Try to increase your monthly cashflow for investment purposes in meantime

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Yong Kah Hwee
Yong Kah Hwee
Level 8. Wizard
Answered on 03 May 2020

I would say that it is better to have at least 6 to 12 months of expenses saved up as emergency funds first, before considering investing.

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Gavin Tan
Gavin Tan
Level 5. Genius
Answered on 02 May 2020

It really depends how small is small. I'd say just get started now and invest ! Especially if you are in it for the long term, just ignore the commission fees. You can earn them back from dividends distributed from your investments !

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Depending on the asset that you are investing into, time in the market is usually better than timing the market. Moreover, we can make use of compound interest to accumulate our wealth at a faster pace.

More Details:

What is Compound Interest

With this in mind, start early and let the small amount that you are willing and able to set aside do its work now.

I share quality content on estate planning and financial planning here.

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Yang Teng
Yang Teng
Level 9. God of Wisdom
Answered on 01 May 2020

It would depend on whether you are doing a lump sum investment or a regular shares plan. If it is the latter, it does not matter if your capital is small since you a investing a small sum (at least $100 usually) monthly.

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