Saturday, September 17, 2011


When it comes to investment people always hear what others are saying.

If the circle of friends around you are very successful then they tend to teach you the right way of investing and how you should be allocating your hard earn money.
But what of the people around you are all the novice investors? You will too gets some advice and only this time the advice would be Something similar to "investing is a risky vehicle and that all people invest will loss money in the end".

We heard all sort of people invest in the market. There are of course people who loses money at the same time there are people who makes a lot of money.

Investing is an essential part of our life and without it, we will only stay where we are now and all the dreams you've dreamt of will be after all still a dream at the end.

I like to share some of the knowledge that I've acquired throughout the years of studying and some real life experience. This knowledge will not make you rich like bill gates but it will ensure you don't ended up too poor in your life ahead.

I believe everyone should have a basket of their money being allocated into different asset classes.

For those who are beginners - yes you it it right! You will first find a job and save some money.

The amount of money you save you can put it into the fixed deposit. Don't put in savings and waste those interest. Treat this as a separate set of EPF or pension fund just that this can be utilize whenever you are really in some emergency moment and doesn't need to be in the retirement age.

The amount of money to save must be at least 6 - 8 months of your monthly lifestyle expenses so it varies from different people. We called this first basket - saving basket.

Now, be honest about yourself. If you ever had a day so bad that you got no income. Would you be able to live for another 6 - 8 months without being afraid of running out of food, getting all your phone bills, water bills, car loan, rental, Internet bills, electricity bills, petrol, tolls, insurance, etc paid on time!

If you can. Congratulation and you are in prepare to move yourself to the second basket. But if these money in on it's way to the deposit of your house or car!! Go back to your first basket and refill it back up.

If you can't make your obligation to live another 6 - 8 months without help. Don't worry, you are just like any of the 80% of the people around whether they drive nice car, with nice suits... You will be surprise that they can't live by themselves with the same lifestyle on 6 - 8 months. In order to be out of this group, you need to first start saving. The essential part of your investment road down ahead.

I will be covering second basket soon in my next post so stay tune.
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