‘How Should I Invest My Money?’ 

This, I believe, is one of the most commonly asked questions on investing. 

The question is one that has revealed a general awareness of the need to invest but at the same time, has shown that most people may lack the knowledge and tools needed to invest savvily. As such, this has led to a search for answers as to how best to make more money quickly and conveniently without much physical effort. Sadly, most of these pursuits ended up disastrously, leaving many people disappointed, confused, and less confident about their financial future. 

Perhaps, as you read, you could be a: 


a. Fresh graduate who started to earn your first real dollar. 

b. A working adult who had just received a bonus or a pay raise. 

c. A businessman or a trader with spare cash to invest. 

d. A retiree who is wondering how best to stretch your retirement dollars. 


And here is the thing. You want to invest but you don’t know how or where you should be investing your money. If that is you, how should you begin? Hence, in this article, I’ll share 5 things that you can do today to learn about investing and they are as follow: 


#1: Don’t Ask for Tips

The fastest way of screwing up your money in ‘investing’ is to ask for tips. 

Let’s look at stocks. How often do people lose money in stocks after investing in them as a result of receiving tips, rumours, comments and advice from ‘trusted friends and family members’? So, if these tips don’t work, why ask for them? As a matter of fact, most people who ask for tips are not really investing but rather they are gambling with their money with a belief that they are ‘investing’. Thus, with that, let’s move onto: 


#2: Buying an Investment doesn’t make You an Investor

Many people may adopt a belief that investing is about diversifying money into multiple investments in hope that profits from several of these investments will outweigh losses incurred from other investments in the future. For instance, an individual with this belief may spread his capital evenly into: 


a. Stocks. 

b. Unit trust funds. 

c. P2P lending platforms. 

d. Cryptocurrencies. 


He then hopes that the profits made from some of these investments would be more than losses from his other investments. 

This is commonly known as ‘diversification’. 

Here, I’m not against this method of capital allocation. But instead, I’ll touch on the reasoning behind the person’s purchases of these investments because it is the person’s reasoning that defines whether or not, he is an investor or merely a gambler. It is about why he did what he did and what he intends to achieve in the future. Let me explain: 

If the person above is one who invested into his stocks after studying them and he possesses clear objectives as to what he wishes to achieve from his stocks, it is clear that this person is an investor. 

But, if the person above is one who buys his stocks ad-hocly without putting his effort in studying them, then, chances are great that he is a gambler. 

It is the same for any other asset classes, be it unit trust, cryptocurrencies, debt or equity crowdfunding platforms, gold, silver, real estates, … etc. Investing into them does not make you into an ‘investor’, especially if you are operating in the mind frame of a gambler. 


#3: Real Investors Focus on Cash Flow Productivity, not capital gains.

I believe many investment decisions had been made based on the investments’ ability to achieve capital gains quickly. As such, there are always excitements on investments that have doubled or tripled one’s capital in a short span of time. A lot of people had lost money as they had fallen prey to such ‘investments’.

True investors, ironically, are not focused on capital gains. 

Instead, they focused on the investments’ ability to generate cash flow over the long-term. It does not matter what the investment is. What truly matters is, the cash flow of the investment. To put it simply, true investors would invest in: 


a. Stocks to earn dividend income. (Dividend Investors).

b. Stocks that reinvest their cash flows for more cash flows (Growth Investors).

c. Real Estate to earn rental income. (Real Estate Investors).

d. Oil Palm Estates to earn harvesting income (Oil Palm Plantation Owners). 


The thing is this: 

‘An investor could make 1 single transaction to buy an investment, be it 1 stock, 1 property, or 1 palm oil estate to derive recurring passive income over the long term.’ 


1 Transaction = Recurring Income 


If you can just keep the above equation when you invest, you would most likely do very well in your investments. With that, let’s move onto: 


#4: Different People Invest Differently

Here is a question: ‘How should I invest if I have RM 100,000 to Invest?’ 

As you can see, there is no one size fits all type of answer to the above. It really depends on an individual’s age, financial status, skills, goals, preferences and so on and so forth. For instance, if let’s say, the person above is 30 years old, then, it is likely for him to consider the option of buying a piece of property with debt to earn rental income. But, if he is 60+ years old, this may be a less likely option for him as he may not get a mortgage which has the same terms and conditions like a 30-year old. Thus, the 60-year old will eventually invest differently from a 30-year old person. 

So, the best thing to do before investing your hard-earned money is to craft out an investment game plan that is suitable for yourself. 

But, how do we start to craft our own investment game plan? 

Thus, this brings us to my final point, which is: 


#5: It is the Investor that Determines His Level of Investment Returns. 

The better skilled an investor is, the higher his returns.

So, instead of chasing for tips, an investor will focus on continuous learning and strive to improve his skills and systems as an investor. This is because ultimately speaking, it is the mindset, skills, principles, experiences and systems that could determine the returns of an investor. 

It is having the Midas Touch where whatever you touch or ‘invest’ will prosper. 


You can be investing in stocks and you prosper. 

You can be investing in real estate and you prosper. 


Thus, it is not about what you invest but rather who you are as an investor that matters. 


Conclusion: How to Invest if I Don’t Know Much about Investing? 

First, I believe it is helpful that you admit that you have no idea about investing. Often, wisdom begins when you acknowledge your shortcomings. 

Second, identify successful investors that you respect and learn from them. You can start by reading their books or books written on them. Find out and explore what makes them successful and how they can achieve extraordinary successes that most people don’t. You may want to copy them. 

Third, acknowledge that successful investing is not about buying an investment, hoping that it somehow will magically go up. If investing is that easy, everybody would have become a millionaire by now. 

For more information, you may check out some of my lighter articles: 

a. How to Start Investing in Stocks?

b. 5 Powerful Investment Habits I’d Picked Up from My Reader’s Email

c. What’s Your Purpose of Investing?


Ian Tai
Ian Tai

Financial Content Machine. Dividend Investor. Produced 450+ Financial Articles featured in KCLau.com in Malaysia and the Fifth Person, Value Invest Asia, and Small Cap Asia in Singapore. Regular Host and Presenter of a Weekly Financial Webinar with KCLau.com. Co-Founded DividendVault.com, an online membership site that empowers retail investors to build a stock portfolio that pays rising dividends year after year in Malaysia and Singapore.

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