Being a Singaporean can be tough due to the high cost of living.
Some of you are getting married and are in the midst of buying a house; others might already have to a child to call their own
With all of these things happening in your life, your time will flash past you faster than you even know. By the time you learn about these things about investments when you’re older, you would wish someone had told you earlier when you were busy rushing through your life.
1) Start early
The biggest misconception people often have about investing is that it’s one of those things that would make you “strike it rich”. Investing is more like a pregnancy than a lottery – it takes time to grow no matter how brilliant an investor you are.
“You can’t produce a baby in one month by getting nine women pregnant.”
― Warren Buffett
What most people know is that you can become wealthy by investing, but what most people don’t know is that many wealth investors started investing very young. They harness the power of compounding returns to its fullest potential.
Remember: Our great asset is not our money; it is our time.
2) You either pay to learn how to invest or you invest and then learn to pay
No one starts off as an investing pro. The earlier you recognize this, the better it is for you and the people around you. So there’s no need for you to pretend to understand the latest market development so that you can be part of the “grown-up” conversation circle.
However, what is important is that none of you stay ignorant on the topics of investments. Go and buy finance books to read or sign yourself for introductory investment courses to learn how to invest.
Never attempt to learn investing via trial and error for that is a surest way to lose your hard earned money quickly.
It is much cheaper to pay to learn how to invest than do it vice versa – I hope you never have to put this statement to the test personally.
3) Everyone talks about it, but not many know what they are talking about
Ever wondered why everyone seems to be investing, but so few people seem to make making money consistently? This is because very few people are properly trained in the art of investing (#2). How many people you know actually paid money to learn how to invest? I bet you could probably count the number within 1 hand!
Would you trust a taxi driver who does not have a driver license to drive you to your destination safely? No? Then why would you trust your friend’s investment advice?
4) It’s not optional, it’s essential
The generations before us have already gotten used to the idea of depending on government pensions and savings for their retirement. For these people, they see investing as a way of getting extra income to make things slightly more comfortable for them. As a result, these are the values that they have passed on to their children.
However, if you were to re-evaluate the current financial landscape, you would realize that such values are no longer applicable for our generation.
Pension schemes are a thing of the past. And with the current pace of inflation we are experiencing, investing is not longer an optional strategy for our future but an essential key if you even want to have a fighting chance at retirement.
5) Delayed gratification reaps much more than instant and temporal satisfaction
When you are twenty-something, there are many things you are tempted to spend on to try to fit in. However, many of these things are depreciating assets or unnecessary liabilities which will come back to haunt you in future.
If you are willing to hold back on your purchases and use the money instead to invest wisely, don’t be too surprise if you end up becoming richer than all your peers.
“We buy things we don’t need, with money we don’t have, to impress people we don’t like.”
― Dave Ramsey
6) Only a minority will became rich eventually so if you are doing what everyone else is doing, you will probably end up like everyone else
If you want to be richer than your peers, you got to be prepared to do things that your peers aren’t doing. Spending recklessly on branded items, racking up debt on your credit cards and taking out loans like your peers won’t get you ahead in life.
You definitely don’t want to do what normal people are doing, because people don’t normally get wealthy by doing those things.
7) Know the difference between investing and gambling
Many people approach investing as though it’s a form of gambling – It’s not. Unlike gambling, investing has nothing to do with luck. To make 20% consistently over a period of 40 years like Warren Buffett isn’t a matter of chance.
It requires you to be humble enough to learn how, disciplined enough to practice regularly and patient enough to wait for your compounding returns.
Investing profitably is simple, but don’t confuse it with being easy!