Master Your Courage To Start Investing

And now, let’s head to the 203rd week of our #SundayTimesRecap learning series.

From this article published in the most recent Sunday Times Invest Section, “Mastering the courage to start investing”, some of you may relate to the editor’s situation..

Each year when her birthday approaches, she will go through a bit of an existential crisis, sucked into a spiral of uncertainty and worry. This year, on the cusp of turning 30, the biggest fear she has is in the area investing and wealth planning – and the fact that she has not really started on either.

While some people are ultra-savvy and have already started investing from the day they entered the workforce, many are still sitting right on the edge, unsure of how to enter the murky waters of investing and financial planning. The sentiment seems to be: “I’ve finally saved up some money, and it seems like a good time to start investing. But where and how do I even start?”

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There are so many platforms and avenues to learn from today, but when it comes to actually committing her hard-earned money, it’s hard to take the leap.

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It doesn’t help that she is a little bit overwhelmed about all the new options, the various different types of investment to choose from, all with the different platforms, brokerage services, online vs off-line advisers, and is more old school about money and investing than her age would suggest.

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She feels more confident receiving advice from a person rather than consulting a robo-adviser, looking up tips online or even using an app. Not to mention crypto and the likes of it – she doesn’t think her heart can handle that level of stress and uncertainty.

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To figure out how to begin, she spoke to some experts on what she should think about before starting this journey.

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Here are her main takeaways:

1. You do not need a large amount of money to start investing. For a young person, here’s how you start – start small, but start now. The best way to grow your wealth is by investing. Investing helps to mitigate the impact of inflation on your money. Investing early gives your money a chance to grow over the years. While it always carries some risk, young investors have the luxury of time to ride out market volatility better.

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2. Take stock of your financial situation. Know how much you are spending and saving every month, how much excess funds do you have left after paying all your monthly bills – as well as your goals and priorities in life – getting married, owning a home or car, retiring by 50. Then identify where and how to start investing to meet those goals.

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It is also important to ensure that you have at least three to six months of emergency funds saved first. And of course, do not forget about insurance.

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For the editor, buying a home is a priority, and as a single person living in Singapore, she has realised that this means she not only have to be much better about saving money, but she should also be investing in products that will not keep my money locked away for too long.

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In view of this goal of buying something in the next five years, it will mean she can go for products with a shorter-term commitment, such as T-bills or exchange-traded funds, as it might provide more flexibility when she needs to access her money when the time comes.

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3. Use dollar-cost averaging. For new investors, this can be an effective strategy - buying a fixed dollar amount of a particular investment on a regular basis. It takes the emotions out of investing and prevents you from trying to time the market or only ‘buy low’, because it is better to take smaller steps than to do nothing at all. All you need is a bit of discipline to put aside a sum of money every month and invest it – consistently.

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4. Financial planning and investing are both fairly personal. It will depend on the individual’s risk appetite, how much time they have to dedicate to this as well as their short- and long-term goals.

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For example, if you have more time to spend, then options that require more regular monitoring – such as individual stocks and overseas properties – could work; if not, it might be easier to pick more long-term and stable options like savings plans, equity funds and global index funds.

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Regardless of which solution, it is important to regularly review if the selected options are still suitable in meeting your needs as these may change according to life stages and circumstances.

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5. Tune out the noise from peers and the market. We don’t all have the same baseline, income, financial responsibilities or risk appetite. What might work for others may or may not work for you. Therefore, take that leap to get started – when it comes to investing, having a longer runway for your funds is never a bad idea.

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The editor wishes she had started much earlier, but as she is often reminded, she is still relatively young, and now is as good a time as any other. It may seem scary, but as cliched as it may be, nothing good comes easy.

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So now, armed with these tips and a clearer sense of what she is looking for in life, she begins this journey.

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What about you? I hope you are inspired to take the next step too.

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Why not join my next webinar, “The Lifetime Income Streams”, on Tuesday 18th Jun 2024 at 8pm, where my teammates and I will share simple investing tips to help you get started. You will feel more confident in managing your money matters as most of our attendees can testify.

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Register for the zoom link – select “Invited by Victor” - here: https://www.thelifetimeincomestreams.com/tlisvip

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To reach me over my personal Telegram chat, click here: t.me/victorfong

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