Are you among the ones who conjure up an image of men walking up and down the Wall Street in their fitted suits and pretty little briefcases whenever you hear someone talk about investing?
You automatically pull yourself out of the picture, because what do you have to do with this problematic term, right?
We’re here to change your picture slightly!
Now, you don’t have to be the wolf of Wall Street. You can be, let’s say a rabbit?
And there doesn’t need to be a Wall Street, everything is automated today, why can’t the investments be?
We are going to help you with this guide and walk you through the basic knowledge and steps to start investing.
Don’t very. It’s not bookish and dreary.
When you finish reading, you will be aware of:
How Much Do You Need to Invest?
The very first question your mind might stumble upon is, ‘’Do I have enough to even think of Investing?’’
Contrary to famous belief, you don’t need hefty amounts to start thinking around your best investment options.
If you are a regular job person and a beginner in investment, you can start small investments that make money and still do well.
What makes it practical is your habit of saving some amount weekly, bi-monthly, or monthly through automatic transfers or whatever way of savings you prefer.
A recent study has shown that most millennials believe that they need at least $1000 or $10,000 to start investing and lack of it, therefore, prevents them from starting early.
This is entirely false.
You can begin with as low as $10.
The key is to start as early as you can to build your momentum, and both learn and benefit along the way.
It is not going to turn you into a millionaire overnight. Still, even if you can contribute much right now, the compound interest on your savings or investment account will ensure that the small amount of money invested today enables large sums of money invested tomorrow.
One way to get started with as low as $100 a month is with the Regular Shares Savings (RSS) Plan.
RSS plans allow the investors to begin investing in the Singapore Exchange (SGX) and beyond, even with little money, knowledge, and experience.
Your next-best option is to start with a Robo-advisor that makes customized algorithm-driven portfolios by determining your financial goals and risk appetite and can charge as low as 0.2% per year to manage your investments.
There are now several Robo-advisors in Singapore using various methodologies to access and invest your money.
The point is courage, as opposed to vast sums of money, is required more to start investing in 2020.
When Should You Start?
My recommendation would be; as early as you can! But let’s see it more logically.
Here are the things that are going to tell you that you are ready to invest:
Again, forget about hefty amounts to start with.
Remember, if you are starting young, you have the advantage of starting small, taking a few risks and, learning, and paving your way into the investment world.
Make your investment goal, work out your risk appetite, and find a suitable investment strategy to follow.
Don’t be afraid of market setbacks and financial crisis along the way to deviate you from your strategy.
In the long run, stock markets generally go up.
What’s Your Risk Tolerance and Financial Goal?
Before jumping into investment options, it is quite important to set your financial goal.
What are you saving for? Is it for your retirement or you want to leave behind something for your family?
It could also be for your kid’s college.
Are you planning on short-term goals or long term?
When will you need the money?
All of these are going to determine your financial goal.
Saving for the short-term will entail different strategies than investing for the long term.
Stocks, ETFs, Mutual funds, and Real Estate, are better options if you are planning for long term investment, say 10-15 years or even more.
It is also called buy-and-hold investing and is beneficial for retirement planning mostly. This way, you can also dodge the dips in the stock market.
However, if you are planning on saving for your kid’s college or down payment of a house, always consider the liquidity of assets.
Less liquid assets are likely to result in a substantial loss if considered for a short-term goal. In this regard, High yielding savings account could be your best friend.
You can also consider peer-to-peer lending or buying stocks that you are sure will outweigh the market soon. But, still, you can never be certain of what can hit the market, take an example from this Covid19 Pandemic.
Another very vital thing to consider is your risk tolerance.
How much risk are you willing to take?
This can determine the type of assets you should invest in as well.
In addition to this, it can also guide you towards the investment platforms best suited to you.
It is generally recommended for your younger people to go on with high-risk investments since they have a long time-horizon to see their returns multiply.
Similarly, people with a handsome net worth and a stable flow of income can generally afford to take more risk with their investments.
Remember, greater the risk, greater the returns!
What Platforms Are Available to You?
Investing has never been easier
Thanks to the digitalized age, investing money for beginners is now easier with versatile options and especially for those who don’t want to take all matters in their hands.
I am talking about the fantastic platforms now available to rely on:
Which one you pick depends on your investment personality. You can now begin with even minimal investing experience and knowledge.
These platforms are more than a financial manager for you; a tutor, a mentor, a safeguard, and the best consultant and advisor you can have.
Let’s individually see them according to the services they provide and the pros and cons for you to decide better.
Online Investment Brokers
An online investment broker is a financial manager and advisor that deals with the interest of clients over the internet.
Rather than the physical office, their brokerage firm is available online for anyone to visit, and due to this, they have a considerable advantage of lower fees and commissions.
They also provide a variety of educational resources and access to quality market research for investing money online yourself.
We have jotted down the best online investment brokerages in Singapore for you, with all the necessary information you will need.
Robo-advisors are digital platforms that provide financial management services that are automated, algorithm-driven to give you the most competitive results.
There is little to no human supervision. A client signs up by making an account and fills up a survey to provide all financial information.
The Robo-advisor uses this information and the financial goals and risk appetite set by the client to recommend and automatically invest the client’s assets.
We have made a comprehensive guide of best Robo-advisors in Singapore for you to find your best match.
For more sophisticated and real-life experience, a Financial advisor may be your best pick.
Based on their profound knowledge and expertise, a financial advisor constructs a personalized portfolio for their clients based on the client’s financial objectives and goals.
The financial plan is not only limited to investing but also includes a strategy for savings, budget, tax, and insurance.
Financial advisors are like your investment calculator. They schedule regular meetings with their clients to track the progress and re-plan accordingly.
Investing as early as possible in your financial career is a wise strategy, and one should not wait to make considerable savings and substantial income to begin investing.
There are plenty of platforms that can help you set your financial goals and reach them as soon as possible.
Significant progress in your financial life is just one smart decision away!