5 Lessons I’ve learnt about investing from Singapore Financial Bloggers

Investing Your First $20K - Free eBook

This book is compiled by famous Singapore finance bloggers, giving advice to young investors like us on how to invest our first $20k. This is particularly apt as I, too, am trying to figure out how to put my first $20k to good use. How I can make it work harder for me so that I can achieve my financial goals. Here is a summary of what I’ve learnt and some of my thoughts…

1. Goals.

Many bloggers have started out by setting financial GOALS that they wish to achieve. Some wish to beat inflation, some to save for retirement, some wish to have a passive income that will eventually be large enough to cover their daily expenses. So first and foremost, before we start our investing journey, we should sit down and set our own goals. This way, we can keep ourselves in check, keep ourselves focused. For me, I know that lack of discipline is definitely one of my flaws. So I decided to list down my financial goals, in order to make myself accountable.

Without setting a goal to achieve, how do we know we have gotten what we want?

2. Finding out your investing style.

Are you a value Investor? Are you a dividend investor? Are you a passive investor? Or are you a trader? Different styles have their own advantages. For example, I would like to see dividend investing as planting many seeds in the garden. At different times, these seeds will start to bear fruit, and provide different streams of income along the way.

Passive investing, such as investing in STI ETF, however, suits people with less time to learn more in depth about company valuation, stock picking, yet wishes to reap some returns that is higher than inflation.

For me, I love the idea of having streams of income coming in every now and then. It makes investing more “real” to me. Even though this requires more effort than passive investing, it is fun!

Find your unique style that suits you like.

3. Educate yourself. 

A lot of us always think about how to get rich fast, or how to grow my money at abnormal speeds to get super high returns. Well, I’ve learnt that, there are actually no shortcuts in investing.

You wouldn’t want to base your investment decisions on luck. You would want to know how you did it when your portfolio is performing well or what you did wrong when it is going south. Educating yourself and reading more is the way to continuously improve yourself.

I didn’t like to read. I didn’t enjoy watching news. But wanting to improve myself got me to start reading about finance-related content. Blogs. News. Websites. I’ve been building up my financial knowledge bit by bit over time and I’m actually enjoying it. I realise that the more you know, the more you will be able to find joy in doing what you do!

Equip yourself with the knowledge in this complex world of finance.

4. Taking appropriate risk

Reading wasn’t enough. You have to start putting paper knowledge into practice. However, you do not dump everything you have straight away. You can always use a portion of your money to “test water” before putting in more. Ultimately, we are still learning. Use money you can afford to lose.

For me, I would consider myself as an investor with moderate risk. I choose to put bulk of my money in safer, dividend paying stocks, and choose to put some money into forex trading in order to increase my gains. A portfolio of dividend paying stocks will eventually allow me to have a cash flow that is able to cover my expenses and allow me to take more risk in the future too knowing that my livelihood is secured. One of such goals I have is to eventually become an entrepreneur.

Explore in your own boundaries that you are comfortable with.

5. Be patient. 

Investing is a long journey. Investing takes time. You cannot expect your money to multiply a few times overnight. That is not what investing is.

Investing helps you to grow your money slowly. Investing will make sure that your $20,000 today won’t remain as $20,000 10 year later. But don’t expect it to grow to $200,000 tomorrow. If you want to get rich fast through investing, think again. As long as you push the right buttons, you will be rewarded.

Start planting the seeds today and you will reap the fruits of financial freedom one day.

Cheers!

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