I have been getting an influx of queries with regards to how to get started with investment since my interview with Money Digest. Check out the article below if you are interested to read the interview.

http://www.moneydigest.sg/singaporean-grew-112k-1-million-7-years/

I have decided to compile a set of Getting Started with Investment Q&A. I hope to regularly update this Q&A moving forward.

I would like to start learning about investment. Where and how should I get started ? 

1. You may want to first set a financial goal for yourself (short term and long term).  Read the book “Rich Dad, Poor Dad”.

2. Analyze your current net worth and your spending habits.

3. Determine your investment risk profile. Start reading a couple of investment books that documents different style of investment (e.g. warren buffett etc). Understand the difference between trading vs investing and the risk/reward tied to them.

http://www.investopedia.com/ask/answers/12/difference-investing-trading.asp

4.  Check out the financial blogs available in Singapore. There are many financial bloggers out there that shares fantastic knowledge and insight.

The Finance.

Singapore Investment Bloggers.

5.  Watch CNBC to get into the vibes of the market jargons but please take it with a pinch of salt when they ask you to buy or sell something. BTW, I love the mobile stock tracking tool by CNBC that tracks the US market.

6. Read the Analyst and Companies Annual Reports to get an understanding of how they report and evaluate businesses. Please also take it with a pinch of salt when the analyst share with you their target price, or ask you to buy or sell something.

7. Find an investment model that resonates with you most before you proceed to set up a trading account.

8. You may want to practice with a simulation trading program first e.g. Trade Hero.

9. Set up a small sum “investment tuition” fund to learn the market. This fund should be money you are prepared to lose to learn the market.

10. PLEASE do not start until you know what you are getting yourself into. Never buy based on other people’s recommendation or what you don’t understand. Do your own due diligence.

Can you recommend a Broker ?

I don’t have any broker to recommend, Personally, I am using DBS Vickers. The only reason I am using them is because I started with them and didn’t have the time to explore new options. I am not too impressed with their tools, I am only using their portfolio management tool that I am showing every month on this blog.

This site has done a comparison of the local brokers, you may be keen to check it out. You should look out for the commission that they charge as well as the markets (e.g. Singapore, HK, US etc) they support, finally whether they have good analytic tools to offer.

https://weinvest.net/blog/comparision-stock-brokerages-singapore/

If you are going for US stocks, you may want to check out some US based broker that offer much cheaper commission but local brokers typically also support US and HK markets. These articles might be useful for you. Note : Don’t just go for cheapest rates, make sure these brokers have a credible background.

http://www.myinvestmentforum.com/category/sgfunds-forum/cheapest-broker-for-us-stocks-monthly-passive-investments-t10392.html

http://help-your-money.blogspot.sg/2011/01/choosing-broker-for-trading-us-stocks.html

What are the sites that provides Stock History ?

To get the history of the stocks, there are two sites that you can bookmark.
1) SGX – Singapore Market
http://www.sgx.com/wps/portal/sgxweb/home/marketinfo/securities/stocks
2) Yahoo Finance – Global Market
https://sg.finance.yahoo.com

Should I start with the US or SG stock market ?

I would typically recommend people to start with the SG market first to learn before venturing into US. This is because it is always good to start learning from the market you are familiar with. What we call the circle of competence. Also, there are a couple of things you need to be aware of when trading in the US market. You are taxed 30% on dividends but you don’t get taxed for capital gain. However, you need to send a tax declaration form that will be provided by the broker every year to declare that you are a non-US citizen. Also, you need to take care of currency fluctuations.

Any books to recommend ?

You may want to check out these books that I have personally read and found useful. You may want to read in the following sequence.

1) Robert Kyosaki – Rich Dad Poor Dad

It’s a must read book. Very insightful. You need to understand why you need an alternative source of income. I will re-read this book every couple of years as I get different insights as years goes by.

http://www.wallstreetoasis.com/blog/rich-dad-poor-dad-what-the-rich-teach-their-kids-about-money-that-the-poor-and-middle-class-do

2) Any book that provides insight into Warren Buffet ways of investing.
There are so many out there. To be honest. I haven’t found the best one so far but I have personally read the following :
– The Warren Buffett Way – Robert G. HagStrom
– Warren Buffett Wealth – Robert P. Miles

3) Adam Khoo – Winning the Game of Stocks

It is a good and simple book for beginners. I particularly liked how he listed down the different options available and how one builds up a portfolio. Please don’t get overly excited or worried over Chapter 3 and 10.

4) Bobby Jayaraman – Building Wealth Through Reits

Reits is all about real estates.  If you want to delve deeper into local Reits, this book has the local relevance.

5) Andrew Hallam – The Millionaire Teacher

This guy is an advocate of index investing. I haven’t dabbled in it but I am getting curious that maybe index investing needs to form part of my portfolio as well. The story goes that Andrew used to invest in stocks and was doing very well. One day, he got cancer and he wondered how he is going to pass his portfolio to his family. That’s where he started index investing.

You can check out these books on the Amazon widget on the right to read some of the reviews. I have also included some of my other favorites.

Since Valentines is near, let’s have a “Book a Valentine Date Special”.  All single boys and girls out there, if you have the book that I am recommending above and don’t mind lending or giving up the book to someone else who needs it. Please leave a comment on this page with your gender, book title, and your contact email. Those interested, just connect with them directly. I will not be doing the match-making. In return, the person borrowing the book or getting the book for free has to buy this person a meal or a drink. Deal ? :-).

For experienced investors out there, please help fine tune the Q&A with your knowledge and experience to help our newbie’s out there ! Thank you so much.

 

  1. To newbies reading here:

    When reading investment bloggers’ posting, always be careful and remember that their account size and financial dependencies may be greatly different from us so we cannot anyhow follow their investing strategies and preferences.

    • Lady, You Can Be Free

      Thanks Richard and Derek,
      I am glad you found it useful.

  2. Pingback: How much money in the bank before this person can quit his job and become full-time investor? - Page 2 - www.hardwarezone.com.sg

    • Lady, You Can Be Free

      Hmmm.. can someone help ask Focus1974 from Hardware Zone who has been making public appearances on my behalf without me knowing? Deeply Concerned…

  3. Hi Lady,

    What an inspirational story! 2.2k starting salary to 59k yearly passive income!
    It’s people like you that inspired my gf and I to start our own blog on money management and investment!

    Keep on blogging! Can’t wait to read more of your articles 🙂

    • Lady, You Can Be Free

      Hi Jerry,
      Glad you have been inspired. Looking forward to you and your gf articles as well :). Welcome to the community.

  4. Hi Lady,

    I just notice your profile from Facebook shared by my friend. Quite inspiring for me. 🙂

    • Lady, You Can Be Free

      Hi Khin,
      Thanks for dropping by, glad that you have been inspired. 🙂

  5. Chris

    Hi Lady

    Your posts are very inspiring to me. I am starting to read up a lot on investment and intend to purchase my first stock by end of this year.

    HOW did you go about starting buying your first stock?

      • Chris

        Was there any attempt to predict stock price of the first stock you purchase? Or was it just say, “I like starhub, I’m gonna buy x lots.”

        • Lady, You Can Be Free

          Hi Chris,
          Hahaha…Na.. I don’t buy stocks like buying clothes. I look at the current price level, the price history (highs and lows), annual reports, the dividend yields, whether it has been increasing dividend YOY, it’s growth potential, the industry itself, the competition (local & global) etc. before I decide how much to invest on a particular stock. Hope this helps.

  6. Hi Lady,

    Thanks for your very helpful tips for beginners! I just read Rich Dad Poor Dad and indeed it fundamentally changes some of my assumptions about work and money and convinced me to start learning to invest. 🙂

    I am now trying to understand how to analyze stocks.I wonder if you have any good apps to recommend for doing fundamental analysis?

    Thanks in advance for sharing!

    Cheers, SR

    • Lady, You Can Be Free

      Hi SR,
      The best app for doing fundamental analysis is Google, by googling about the company that you are buying, you will gain many insights (good & bad about the company and it’s industry). You may want to check out this link to get a better understanding of what fundamental analysis is all about. http://www.investopedia.com/university/fundamentalanalysis/. Hope this helps.

      • Thank you for your prompt reply! I’ve read that series and indeed found it very helpful! 🙂

  7. MauroNZ

    Hi Lady, thanks for this blog, is giving me some ideas. I wonder if you use DCF to select your companies?. Or do you just compare market cap and balance sheet against others?.

    I’m based in New Zealand and I’m interested to learn about SGX market.

    • Lady, You Can Be Free

      Hi MauroNZ,
      Glad you found some ideas :-). No, I don’t use DCF to select companies. I look more at company fundamentals, it’s growth potential and balance sheet to determine whether a business is interesting to invest. I also tend to buy companies that is within my circle of competence. Hope this helps.

    • Lady, You Can Be Free

      Hi Jacky,
      Am glad you found it useful 🙂

  8. Aaron k

    Hi Lady, May I know how initially you started ? As in how much capital you started to build up. After your salary how much you will put aside for investment? What are your suggestion for step by step building wealth?

    • Lady, You Can Be Free

      Hi Aaron,
      Check out my blog. It was purposely created as a timeline so that it illustrates the answers you were looking for.
      Cheers
      Lady, You Can Be Free

  9. kimchigal

    Hello Lady,

    I have downloaded Tradehero on my Iphone 6, everytime I open it, it crashes. Any ideas?

    Thank you for your help.

    • Lady, You Can Be Free

      Hi Kimchigal,
      I don’t have this problem. Maybe you can send a mail to Tradehero helpdesk.
      regards
      Yvonne

  10. Curious

    Hi if you don’t mind sharing what’s the annual amount of money you put aside each year for investing?

    • Lady, You Can Be Free

      Hi Curious,
      I don’t actually set a target amount for investing.

  11. MauroNZ

    Hi Lady,
    Have you read any book in order to learn about how to read/understand the financial statements? Any suggestion.

    In case you haven’t read yet, I recommend you “One up on Wall Street” from Peter Lynch, I think gives great insight.

    • Lady, You Can Be Free

      Hi MauroNZ,

      I don’t really have a good book to recommend for reading and understanding financial statements. Thanks for the Peter Lynch book recommendation. Will check it out.

  12. MauroNZ

    Well, I have found one which is easy to read, it has also practical examples. Is called analysing company accounts from Martin Roth. It has Australian examples but I believe could apply for any market.

    Are you reading something at the moment?.

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