Most people know that investing is important for a person to grow his or her wealth. However, similar to cultivating a healthy diet, knowing what you need to do and actually doing it are two entirely different matters with vastly different results. The former would have no positive effect on your personal finance; the latter could be the key difference between a good retirement plan and a bad one.
So how do you start your investing journey? This article will share with you some of the key ingredients that are critical for your success.
Start By Saving
Most people want to invest but forget the first step. Before you even start investing, you must first learn how to save. Otherwise, you have nothing to invest.
The first portion would be your monthly expenses. If you have been keeping track of your finances, you would have an idea of just how much you spend each month and what are the items that your money is going into. You can use a mobile app to help you track your expenses.
The second portion should be your rainy day (or emergency fund) liquidity. This is the portion of your salary that you park in a savings account in case you need the money suddenly. These include but are not limited to, unexpected medical fees, retrenchment or even a sudden need of funds for a family member. Be sure to make use of a savings account that gives you a good interest rate. If you have been reading DollarsAndSense.sg long enough, we are sure you know where to turn to.
The third and final portion will be what you used for your long-term investment.
Start A Brokerage account
Sign up for a brokerage account. A brokerage account is an account through which you can buy and sell stocks from. There are some full-service brokers that provide extensive services and charge a high fee for it. However, most online brokers provide a simple interface for investors to place orders at a much lower fee.
Brokerage accounts can differ in terms of the tools they provide for clients and the fees they charge. For example, some brokerage firms such as Maybank Kim Eng also provide a Monthly Investment Plan, where investors can put in small sum of money each month to effectively use Dollar Cost Averaging.
Hence, it will be good to spend some time to read through some of these details on their website before heading down to one of their branch to open an account.
Read Also: Setting up your first brokerage account in Singapore
Start Doing Your Homework
Never ever invest in something you don’t understand. You should always do your homework before you start investing. In fact, most basic information are readily available online for free. If reading is not your cup of tea, you can easily attend some seminars or talks to learn more.
An investor who has just began his investing journey can attend some of the seminars provided for free by SGX Academy, which provides an extensive list of programmes for investors of all level. You can attend these seminars to gain more insights.
Other online websites that you can browse includes MoneySENSE, BigFatPurse and K.I.S.S Investing, just to name a few.
We all know that the first step is always the hardest. However, the longer you delay, the more good opportunities you might lose. Ultimately, it is your decision when you should take the first step to building a strong personal finance portfolio for yourself.
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