Many people talk about investing at some point in the future; be it in stocks, real estate or other financial instruments.
What is very often overlooked is that people have actually done 7 things before they have the ability to start investing.
As you’re on your way to your broker’s office or the bank to transfer a hefty sum of cash into your brokerage account, I want you to remember that you have accomplished these 7 things.
1) You’ve Started Saving
Saving is the engine of a great investment. Before one can start investing, they would need to start saving a certain amount of cash.
Investing is done with a capital that someone worked hard to save. And that is a great thing! Encourage your family members and friends to cultivate the habit of saving.
2) You’ve Switched On
Going from saving to investing means that you switched on. You’ve consciously realized the benefits of making your money work for you rather than leaving it in the bank.
The sooner you start investing and the longer you remain invested, the more powerful compound interest works in your favor.
3) You’ve Taken Risk
I disagree with the notion that Singaporeans are “kiasu” and “kiasi” because our forefathers took a lot of risk in developing our country. We should be grateful that they did and pick up a similar mentality of taking risk.
“Risk capital” outperforms “mattress capital”. Your true enemy in this war is inflation and your best weapon is the willingness to take risk.
4) You’ve Made Decisions
No investor would consider an investment before weighing the potential returns and risks. You need to first make a choice; “This business, not that one.”
Sometimes, we should be more deliberate about the investment choices we make so that we can make a better decision in the future.
Not every investment will work out the way we want, but every time you make a mistake makes it more likely that your next action will be better; that is, if you are able to learn from it.
5) You’ve Made A Commitment
Observers can discuss and make comments all day long about which companies will do well or which property will give you the best rental yield. They can debate about when to consider buying or selling.
Still, it’s all talk. Investors invest. Enough said.
6) You Potentially Shape The Future
Every dollar of the capital that is being allocated toward something strengthens that thing.
When investors buy a stock in a company that produces drugs to treat diseases, they will not only make a profit (considering that the business succeeds) but they would also shape the future of medicine.
Don’t fool yourself into thinking that the “stock market” is disconnected from the world.
7) You Benefit Financially
Every investment is cyclical in nature. Some more volatile than others. However, with some discipline and patience, we know that we can reap a handsome profit from investing.If you’re reading this and have started investing, kudos to you.
If you have yet to start, I urge you never to give up. This is because investing is an extremely rewarding journey that will not only expose you to the world of business but also enable you to take control of your financial future.