Saturday, June 25, 2016

Understand Yourself Before Starting Saving/Investment Journey

Hi Everyone!

Today's topic is about understanding yourself before you start your investment/saving journey. This is important because it can greatly affect your portfolio and the returns that you can generate.

These are some of the questions that you can asked yourself or make sure that you know about yourself before getting started.

1. Is Your Determination Strong Enough To Complete Every Task?

This question is important because financial saving/investment requires determination before you can reach that financial goal of yours. The reason is because in order to reach the financial goal via saving/investment, you would need to give up some of the excessive lifestyle that you are currently enjoying in order to save up some money to build your first pot of gold.

Initially, you might be able to have some determination to work towards that, but maybe few months down the road, you might think otherwise. You will feel that you are tired of saving money, tracking your own expenses and etc, which eventually goes back to your normal lifestyle where you spend or overspend the money that you earn for each month.

So determination is very important so to ensure that you won't give up half way. Personally, I have been through that stage before whereby I was too lazy to keep track of my own expenses for about 2 months, and after which when I resume on tracking my expenses (without any changes in my daily spending), I actually spend more than what I should have. So I quickly set myself a target, goal and expenses tracking website to ensure that such things will not happen. 

2. Risk Appetite

There are tons of investment/saving tools out in the market whereby you can make your money work for you to earn more returns. So you will have to asked yourself, what is your risk appetite. 

For low risk, you can go for banks with high saving interest like OCBC 360, UOB One or BOC, together with SSB, STI ETF, CPF Top Up and probably fixed deposit.

For high risk, you can go for tradings, invest in shares, FX and etc. 

So it really depend on your risk appetite. However, if you are new to investment, do not go all in at the very first time, set some amount that you can lose and try it out first before increasing the limit of your money. If not, you might lose all your money at one shot.

3. Lazy or Hardworking

Depends on whether you are hardworking or lazy. If you are hardworking, it would be best for yourself to manage your own portfolio. However, if you are lazy, then it would be best to get one agent, middleman or fund manager to handle your money for you. 

The reason is because monitoring your portfolio can take up a lot of your time which makes you have lesser time to slack around in the house, even during your weekends. So if you do not have such time for monitoring, it would be best to ask a middle man to manage it for you (by paying them some commission or price - depending on what you buy, could be insurance saving plan, STI EFT and etc.)

So these are the three things I find that it is important to asked yourself before you start your saving/investment journey. So what is your view about this? Do comment below!

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