The famous investor Warren Buffett defined investing as the process of laying out money now to receive more money in the future.
Actually, there are also other intangible benefits when investing that go beyond monetary gains.
Making Investments Forces You To Crystalise Your Worldview
Lots of people have opinions of the world. However, making investments require you to put your money where your mouth is.
Do you believe in the continued growth potential and stability of Singapore? Then you will likely not mind having investments that have more exposure to the Singapore economy.
Do you believe in the institution of that is the CPF? Then you might consider voluntarily top-up your CPF SA account to maximise bonus, guaranteed interest.
What do you think about the geopolitical situation in the region and its ramifications? If you think a market correction is due soon, you might rebalance your portfolio and hold more bonds and gold assets.
Has the time of cryptocurrencies come yet, or should we adopt a more cautions wait-and-see approach?
Where you choose to put your precious dollars is the purest reflection of how you see the world. When investing, you are ‘forced’ to think critically about things, and be sceptical about any claims that companies try to sell you. Such an attitude of not taking things at face value is extremely beneficial for your long-term financial well-being.
The Way You Invest (Or Not) Reflects Your Character
The next time you meet someone new, rather than ask what they like to do in their free time, perhaps a more insightful question would be: “What do you invest in and why?” The conversation that ensues will be infinitely more interesting than hearing about what they did that weekend.
There is a lot that can be understood about how a person invests. Are you the kind who bases your stock purchases on what the crowd says or is always on the lookout for unverified “hot stock tips”? Are you the kind who relies on emotions and takes huge risks in an attempt to make a quick buck? Swipe left.
Rather than having a cavalier attitude towards your personal finances, taking actions to invest and fighting inertia show your ability to take responsibility for your life.
Investing Requires You To Define Your Life Goals
Even when you’re certain about the kind of investments you’ll be comfortable making, some asset classes will be more suited than others, depending on how long you can stay invested and the level of liquidity you require.
In order to optimise your investment mix, you will need to think about and plan out your life goals – what do you want to achieve and work towards, by when. Only by doing so, you will be able to properly allocate money to insurance, investing and other needs.
Why Don’t More People Do It?
Are you investing? If you’re not, perhaps it is worth taking a few moment to ask yourself: why not?
Investing is seen by some as a sophisticated art that requires extensive knowledge of financial markets or economics. It isn’t.
If you want to start but are unsure where to start? DollarsAndSense is here to help! You can check out our step-by-step guide to begin investing, and continue to read up on any kinds of investments you’re interested in. We have written about unit trusts, REITS, stocks, ETFs, cryptocurrencies, and more!
Are you not investing because of procrastination? Maybe we can help. Do you want to know about the Opportunities You Miss Out On When You Only Start Investing In Your 40s? Or maybe you need to hear about the Reasons Why You Should Start Investing Today.
There is a saying that the best time to invest is yesterday, but the second best time to invest is today. You can read all you want, but what counts is the action you take here and now. Go forth and invest for the future that you envision!
Considering Getting A New Credit Card?
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Not sure which card is right for you? Check out the Complete Guide to Choosing Credit Cards in Singapore for a step-by-step walkthrough to help you make the best decision.