Let’s say you earn below RM 5k a month and have below RM 50k in savings today.
Is stock investing for you?
Well, here is my take.
Personally, I was in that financial position. I knew the importance of investing, but yet don’t seem to have much capital to start. At this stage, I had two options when it comes to investing.
First, I could use “not earning or having much” as a reason to not invest. That is easy. I believe it is an option that most take as there is nothing much to think about or do afterwards. Investing, in this case, can be KIV-ed sometime in the future.
Second, I can choose to not use “not earning or having much” as a valid reason to not invest. To me, this seems a little nutsy. This is particularly so if you feel that you need capital to invest. But, early on, although money is important, I’d learnt that money isn’t the only form of “capital”, which I need to succeed as an investor. I discovered that capital can come in the form of:
1. Skills
2. Experience
3. Emotional Intelligence
4. Network
5. Creditworthiness
In stock investing, skills, experience, and emotional intelligence are more important than money. So, when I had little income or savings, what I did was to focus on acquiring skills, experience & the emotional intelligence needed to be a good investor. I find such to be more empowering as it is more proactive.
It is definitely better than feeling helpless and hopeless due to little income or savings.
But, you may ask – “What is the use of investing skills and experience if I have no money?”
Well, here is another question:
Will you continue to earn
below RM 5k per month for
the next 3-5 years from now?
Do you see yourself earning RM 6k, 8k, 10k and above in the next 3-5 years time?
Now, unless you are the type that “matches” your lifestyle expenses with your monthly income, it is possible for you to be increasing your savings to RM 1k, RM 3k, RM 5k and above per month. This would work out to be RM 12k, RM 36k, RM 60k and above in capital raised a year. By then, wouldn’t your investing skills and experience come in handy?
Hence, when I was earning or having little, I spent a little money and time on education. If I can’t afford investing workshops that cost thousands, no worries, I read books. Some of these books I read had continued to impact me and how I invest till today. To name a few, they include:
1. Buffettology
2. Rich Dad’s Guide to Investing
3. 100 Baggers: Stocks That Return 100 to 1 And How To Find Them
From these books, I’d learnt stock investing is about accumulating shares of good businesses in the long-term. As such, what I did is to practice identifying good businesses (avoiding bad ones) and build a watch list of them. Sure, all of these take time. The whole process could take maybe 1-2 years, depending on how fast you could pick up investing skills.
In the meantime, it is not like I’m not working. I’m still earning an income. But since I have a goal to invest, I would take this 1-2 years time to not just learn, but also, to raise income and savings. Upon which, I would have a better idea on what investing is, a watch list of the good businesses that could be invested, and more capital.
At this stage, what I did was to build a small portfolio (below RM 30k) to gain experience. Once I surpassed this goal, I kind of graduated. For me, I started off as a dividend investor. By the time, I had RM 30k in my portfolio, dividend investing is almost like second nature to me.
I was still far from rich. But nevertheless, I have the mindset, skills and experience to expand my portfolio.
It is easier to go from RM 30k to RM 50k.
Then, at RM 50k, it is easier to go to RM 70k, RM 80k, and eventually hitting RM 100k.
The price I paid to get to my first RM 100k was “time and money” to go through the process. It is probably the route most taken by many investors who have 6, 7, and 8-figure portfolios today.
So, are you willing to pay this price?
Many won’t because they believe that investing is supposed to be “easy”. If you think that what’s needed is a few tips to get rich, that’s not what we believe and do here at KCLau.com.
I’m not going to sugarcoat this. It takes years of learning and practicing to be good at investing. I believe the few years (2-3 years) of learning is worth it as they would serve me for my entire life. I invested the “2-3 years” in my 20s and now reaping these rewards in my 30s. I’m confident this would continue on when I’m in my 40s, 50s, 60s, 70s, 80s … etc.
Here, if your income or savings are low, my challenge to you is to not turn “such” as a reason for not investing. Take a proactive stance. If you aren’t educated, get educated. If you are educated but lack experience, you may start investing to gain experience. In the meantime, you could also raise income to boost your savings. Proactiveness is key.
To give you a headstart, here are the links to free webinars so that you can check us out and assess if we’re the right fit for you personally.
Dividend Investing:
Free Webinar: How to Build a Stock Portfolio that Pay Increasing Dividends?
Growth Investing:
Online Training: Case Study of 1 Actual Stock that I had Invested in and Why It Doesn’t Take High Risk to Generate High Returns in the Stock Market?
