We live in trying times. It is no surprise how the recent coronavirus has affected millions of people all across the world and in more ways than one, life will never quite be the same again. Perhaps one of the biggest issues that is likely to surface from the impending economic fallout is the inability to sustain ourselves financially. Life as we know it will be different and so we too have to think differently.
For the average person out there trying to make their money work for them, investing is a passive way of ensuring long term growth in wealth for the long term. In fact, so many people have realized this, that big brokerages have experienced increases in their client activity over the last few months.
Opportunities lie out there for us we just have to take advantage of them. However, I will say this. Investing is not a “get rich quick” scheme. It is not for those who are living hand to mouth and struggling to make ends meet and it certainly is not for those who can’t take the daily fluctuations of the tumultuous market. However, if you have some extra cash lying around, you might want to consider jumping into investing your money.
With the vast amounts of information out there, new investors can experience a form of paralysis by analysis. It is difficult to weed out the misleading information and zero in on the helpful ones.
Along my own personal investing journey, I’ve learned so many lessons in investing. Some of these lessons were no doubt painful ones but I most certainly took things in my stride to hone in on my investing strategy. Here are 3 of the lessons I wish I knew when I started:
1. There is no right or wrong time to start investing
Time in the market will always beat timing the market. For the vast majority of unsuccessful investors out there, most believe that they can time the market. Spoiler alert: No one can. Nobody can predict the way the market moves or when it is at its top or bottom. Trying to buy at the lowest and sell at the highest is easier said than done and nobody can do this successfully. However, most people have time on their side and with time, most things average out.Welcome to the world of dollar-cost averaging. In simple terms, putting in a set amount of money every month or so guarantees that your price averages out over the long term. This is not a new concept and yet so many fail to keep to it. Imagine that you put in a $100 into a broad index fund every month. In some months when the index fund goes up, you buy less with that $100. In other months when the index fund goes down, you get to buy more with a $100 at a discounted price. In the long term, your average price is kept relatively low especially considering how markets grow in the long term. It is that simple!Hence, there simply is not a right or wrong time to start. Just make sure that you are consistent and in time, your returns will show for themselves.
2. Investing your money does not guarantee returns
Yes, you heard me right. Like anything in life, nothing is guaranteed and the same goes for the stock market. No doubt, investing is a great way to grow your wealth. However, there will be down days and if you make a bad investment, your returns will be diminished regardless.
I often preach about buying into big index funds tracking various sectors or just the entire market in general. With time, the market grows in value and your index funds do as well especially because they track an entire industry. As long as that industry grows, so does your index fund. Index funds also track an entire basket of stocks so your company-specific risk is hedged out as well.
For the more adventurous looking to pick their own stocks, I often recommend putting money into innovative companies with the potential to grow in the long term. This is important especially for long term investors because you most certainly need your companies to grow in order for your investment to grow. Of course, determining the right stocks to buy boils down to extensive analysis, but that is a story for another time.
3. You do not need a lot of money to start investing
When we mention the word “Investing”, most people think that they need a lot of money. All too often I hear people telling me that they do not have enough money to start investing. With the exception of those living from paycheck to paycheck, most people can spare a small portion of their income to invest. This means you can start with $50 a month and still make decent returns in the long term. Most individuals have subscriptions of more than $50 a month so setting aside some money for your future is not a big ask.In order to bypass the huge commissions that many big brokerages put out, I usually suggest using a robo-advisor for consistent investing in the long term. Robo-advisors are also great for beginners who have no clue what they are doing. Most robo-advisors offer relatively low management fees and usually have low account minimums to boot. They also allow investors to put in small amounts of money every month which is perfect for someone just starting out. Robo-advisors such as Syfe and Stashaway have largely positive reviews from investors.
Wealth management is a personal responsibility that most have yet to master. However, we live in an era where it is more accessible now to everybody than ever before. Information is aplenty and the opportunities for investments are growing every single day. Doing your due diligence to stay informed and be consistent is all any investor can ask for. Investing may sometimes seem like a daunting task, but taking the first step is essential to making our lives better. I have chosen to do so, will you?

For the many of us out there struggling to make ends meet, I get it. I was there once. Back in high school, I used to get $20 a week for all my meals. I would save a third of it because I knew that every little bit mattered especially when I came from a family who struggled financially much through my teenage years. When you choose to eat from the dollar menu while your friends are having ramen in a restaurant, you know you need the money.
Good things in life, do not come easy, at least not for the majority of us. From a young age, I realized how important it was to save. Thankfully, growing up in a Singaporean household truly meant that saving was a value that was preached time and time again. In 2018, the savings rate in Singapore was the highest in the world, a whopping 46% of our GDP (Worldbank, 2018). While this is by no means a competition, it would be fallacious to assume that the country has come so far no part to its high savings rates.
“Why save? Money is for spending”
“You never know when you might go, just spend while you can”
Indeed, I couldn’t agree more. We never know when we might go, but statistically speaking most of us are likely to live till our silver years and perhaps having some due diligence in preparing for our journey there might just be prudent in this day and age. Wealth does not appear overnight, not unless you strike the lottery. Wealth is also created by being consistent. Even the smallest sum of money can become a large amount if used correctly. So what exactly does saving do for you?
If I told you that $22 a day could make you a $100,000 in 10 years, would you believe me? Most people would not, but here’s how the math works out:
Imagine saving $22 a day, that would amount to $8030 a year. Place that $8030 into investments yielding you 5% annually and keep being consistent over the course of 10 years. The end result? A whopping $106,086.34 at the end of 10 years. In fact, 5% a year is a pretty conservative target. The S&P500 returns an annualised 9-10% per year! It sounds crazy, but that’s exactly how compounding works. In fact, most of us can actually save $22 a day. Sometimes it just means cutting down on a few nights out with friends or spending less on that lavish vacation. It just takes effort and sacrifice, both of which are free, yet incredibly difficult to give.
Having no money is often not the problem, financial literacy usually is. It took me years of consistency and toiling hard to get my investments and savings up to healthy levels and I started as a broke 15-year old, struggling to make ends meet. The greatest wealth comes from knowing what to do with it.
Many of us dream about having a financially liberated life, but few of us actually live that dream. If I told myself 10 years back that I would be where I am today, I would have gawked at myself. Trusting the process and letting simple compounding do the work for you truly is what it takes to end up better than you are right now, 10 years on. It’s not going to be easy and it certainly is not going to be fun, but I promise you that it most definitely will be worth it.