One of the common questions I get from my readers is how they can start investing in Singapore.
A quick search on Google and I found out that there are some typical questions which include: How do I start investing as a student or when I am still in national service? How to invest in Singapore with little money?
During these challenging times, many Millennials have started to express interest in learning how to invest.
To support my peers, I decided to organize a free online tutorial to equip Millennials with some basic fundamentals to help them start investing.
I have been investing for a few years and have gotten good returns but am certainly not the best.
Thus, for this webinar, I chose to work with Jonathan Ang, Founder of 10X Capital. He is 25 years old this year and a full-time investor who runs his own investing school. He began investing ever since he was in National Service.
I knew his background would make him not only relatable but also inspiring to many of my peers. Thus, I decided to work with him on this webinar titled “How Millennials can begin our investing journey.”
We wanted to make this as practical as possible – no fluff, just useful information, yet easy to understand engaging.
A few weeks before the webinar, I conducted some surveys with my audience on Instagram stories to find out what burning questions my audience had before creating the content.
Many of the readers submitted their questions. The questions centered around three specific themes: How can Millennials who are absolute beginners get started? How would we know how much to allocate to investments? What are the different investment vehicles out there? Which one is the most suitable one for me?
You can watch the full session here to learn how you can get started on investing:
If you do not wish to watch the video, here is a summary of the key points we covered.
1. Before investing, understand how much you need to set aside first
Before you even invest, the first thing you need to do is to make sure you have sufficient emergency funds.
In a typical scenario, many feel that it is best practice to have a minimum of 6 months worth of expenses. For instance, if your monthly expenses is $1,000. 6 Months of emergency funds will be $6,000.
However, in times like now, when our economy is clearly not doing great, I would recommend at least 12 months worth of expenses.
How did I arrive at this number? I did a survey recently on Seedly Personal Finance Group just to understand how people were feeling about the current job market. After all, Maybank analysts did estimate that there would be 150,0000 retrenchments. It seems that many people feel that they will take at least 12 months to look for a new job again.
Your emergency funds also make you a better investor. When you have emergency funds set aside, you feel safe even when the stock market goes down in the short term.
You are less likely to make irrational decisions and sell your investments at a loss. This is because you know you have enough on hand to tide you through one year.
It is also recommended not to use the money you’ve set aside for short term goals. While the stock market will almost certainly rise over the long-term, there’s simply too much uncertainty in stocks in the short-term.
In fact, a drop of 10% or more in any given year would be considered to be the norm. To help ensure we do not get emotional when our stocks turn negative, we should only invest cash that we don’t need for at least the next five years.
2. Understand the types of investment options available
There are three main types of investment vehicles which we covered during the tutorial.
- ETFs: This is a basket of stocks. For instance, F&P500 is a basket of the top 500 companies in the USA. Other examples include the MSCI World. This is The Woke Salaryman way of investing
- Bonds: We discussed the Singapore Savings Bonds (SSB) is one of the more common options for Singaporeans to invest their money in as it usually offers a higher return as compared to bank fixed deposits. Both Jonathan and I do not invest in bonds given that the current interest rates are not favourable.
- Stocks: We cvoered three types of stocks. You can click on the inks to learn more about them – REITS & Dividend Companies, Blue Chip Stocks and Growth Stocks
3. Understand your financial goals
You will be able to download the financial freedom calculator here.
During the webinar, Jonathan and I walked through the Financial Freedom Calculator to help you work out exactly how much you will need to retire; how much you would need to save each month and which vehicle you should use to achieve your goals.
The webinar definitely took longer than expected. We thought it would end at 930PM but this dragged on till 1020PM. We were really grateful for the participants for bearing with us and staying until the end.
Jonathan Ang and I would definitely continue to collaborate on future webinars. We would be brainstorming to figure out what topics to choose and how to package them in a way that is digestible, engaging, and practical for you.
Should you feel that you have learnt a lot during our webinar and would like to know more, Jonathan has kindly shared a free pre-recorded online web class. During which, he shares:
1. How To Understand A Business
2. How To Arrive At A Stock Buying Price (So, You Will Never Overpay For A Company)
3. How To Be Confident Of Your Decisions & Not Lose Money In The Stock Market
You can sign up for the free web class here.