A series of video tutorials to help you get started! (In collaboration with TradeHero & SGX)

Here are 5 Reasons Why Singaporeans May Never Get to Retire Despite working Harder

As the cost of living continues to increase year after year, you probably would have spent some time pondering about your financial security. You probably would have heard stories of or personally experienced a company downsizing, a pay cut, the loss of your job, mounting expenses, or just a sudden realization that the world isn’t such a stable place.

No matter when you discover this truth, it is critical that you come to terms with it. Only by knowing the truth can you deal with the reality of financial troubles ahead. Last year was marked by uncertainty, and it probably is just the tip of the iceberg of what can happen going forward.

1For most people, wages will never be enough to sustain their lifestyle at retirement.
Source: media.cagle.com

Talk to any taxi driver and he will probably complain to you about any of the following:

  • Rising healthcare costs
  • Rising petrol costs
  • Rising food costs
  • Rising housing costs
  • Instability in the economy

These money issues are real. However, before we go into the solutions, we have to understand where these problems come from.

 

1. Low Interest Rate Environment

A low interest rate environment means that you need to go beyond your bank deposits to preserve your wealth.

However, despite having more mobile phones than people in Singapore, we are painfully ignorant in financial matters. We are educated, but not wise; we are connected with each other, but disconnected with reality.

Truth be told, most people have no idea how to even match up to the bank interest rate, much less beat the bank interest rate. The average level of financial literacy in Singapore is still shockingly low. To be a decent investor, it would be necessary to at least understand basic financial instruments, financial asset classes, methods of speculation/investment, and simple risk management.

Financial literacy is the first step to fighting inflation. You don’t necessarily need to know exotic strategies like statistical arbitrage, premium collection on SPY options, futures pairs trading, spread betting, or betting on changes in the yield curve. But a basic understanding of market cycles and trading principles will make a large difference in one’s investment results.

2. CPF Alone May Not Be Sufficient

In years of economic boom, Singapore tends to experience inflation of 4-5%. The CPF ordinary account grows at 2.5%, which means your money’s losing value when the economy grows. Counting on CPF alone may help you get by, but would it really sustain the lifestyle you desire? Even if the inflation rate falls to 1-2% a year, very few Singaporeans can say they are able to retire comfortably.

It is more prudent to have something besides CPF to fall back on.

Some solutions include:

  • being willing to downgrade your apartment
  • holding structured deposits (can yield 4% or more)
  • holding high-dividend stocks

However, these strategies will probably only help in wealth preservation, not wealth creation.

For wealth creation, you need far more investment sophistication and dedication.

Doing a refresher for the setups before we embark on live trading! 💪💰🔥 #tradingarcade #realtraders

A post shared by Spencer Li 🇸🇬 Synapse Trading (@iamrecneps) on

 

3. Zero Inflation Could Be the Norm

A world of zero inflation is good for the average consumer (he thinks he won’t be paying more for his food/car/house/petrol), but it’s bad for wages.

Truth be told, when inflation suffers, it is normally a terrible situation for the economy to be in. Remember the productivity drive a few years ago? The government aimed for 2% productivity growth every year, because inflation was terribly low and the country had to do something about it.

sgInflation has fallen and fallen, and has even turned negative in 2015 and part of 2016.
Source: tradingeconomics.com

Stagnating or falling wages can become the norm. With wages in peril, it is even more essential to generate additional streams of income, or risk falling into financial destitution.

Examples of shrinking professions include:

  • F&B services
  • Marketing professionals (yes! because the supply has caught up with demand in recent times)
  • Insurance Agents
  • Property Agents
  • Logistics professionals (yes! because the supply has caught up with demand due to the euphoric onslaught of e-commerce firms)

If you have children, the best thing you can do is to advise them regarding these trends. Don’t be so concerned about their math scores, science scores, or whatever score; look to give them training in these skills, and to explore their interests in these areas.

 

4. Persistently High Property Prices

This is good news for existing property owners, but bad news for new property buyers. Singapore will continue attracting rich foreign buyers because that’s our value proposition as a nation. This problem keeps worsening as long as our property is affordable to wealthy investors from overseas. The government is likely to step in if property prices start falling.

The issue with high property prices is that most people end up taking 20 to 30-year loans and live with debt for most of their adult life. This keeps the economy stagnant and unable to experience growth like we’ve seen in the 1980s and 1990. A debt-ridden adult is much less likely to splurge. With an entire generation of people living with huge mortgage loans, we won’t see fantastic growth in a very long time.

Opening speaker for SMART Expo SG 2017! Thanks to everyone who came down to support! 😄 #suntec #property #guestspeaker

A post shared by Spencer Li 🇸🇬 Synapse Trading (@iamrecneps) on

 

5. Rising Medical Costs and Falling Government Support

Take note: it’s not the government’s fault; blame it on falling birth rates. With a smaller workforce, tax revenues will fall and Singapore will be less able to provide for its elderly.

Singapore will age, and more and more sick people will depend on a smaller proportion of working adults in this country. It’s inevitable that the government cannot support the large number of elderly who will reside in our hospitals and hospices. It’s the same ‘graying’ problem that Japan is facing.

Falling government support, along with higher demand for doctors and strained infrastructure will cause medical bills to rise. Sure, it’ll be great for healthcare stocks, but healthcare spending on the elderly is not expansionary. Basic health economics would differentiate between healthcare spending that improves economic well-being (vaccinations on children, basic sanitation etc.), and healthcare spending that does not improve economic well-being. We’ll be seeing a lot of spending that does little to boost the economy.

 

So, “What Should I Do?”

The fact that you’re reading this shows that you are concerned for your financial future. Keep learning, reading, and exploring ways to combat this reality. After all, people perish for the lack of knowledge, not the lack of determination. Acquiring the right investment skills, financial management practices, and general knowledge will help protect you and your family from financial destitution.

My greatest hope is that you, the reader, would be motivated to start educating yourself financially, and to get your hands dirty in the investment world.

Cheers, and see you all soon! 😀

P.S. If any of you are keen to start learning about trading, I strongly recommend you join us for our next “Trading Foundation Workshop”, where you will learn 4 easy strategies to tackle any market (stocks, forex, CFDs, etc), and how you can apply them with as little as 15 minutes a day to make 20-40% annual returns consistently.

In our previous workshop, during the live trading segment, one new trader made US$200+ from following our USD/SGD short trade, while Spencer made US$454 on the same trade and over US$1,200 of profits in total during the workshop.

Check availability and register here: http://bit.ly/2nxrly7. Each workshop is limited to 30 pax, so register early to avoid disappointment. See you there! 😀

 

RESEARCH SOURCES & REFERENCES

www.blog.linkedin.com/2016/10/20/top-skills-2016-week-of-learning-linkedin
www.cnbc.com/2016/10/20/the-top-10-skills-that-will-get-you-hired.html

The 10 Financial Milestones that Every Singaporean Needs to Aim For

Many people want to attain financial freedom, but most have little to no idea what it takes to get there. In today’s post, I will be sharing the 10 key financial milestones that every Singaporean should be looking forward to, and it be a good chance for you to see how many you have achieved!

First things first…

Before one goes marching along the road of financial success, he has to get his house in order. Put it another way, he has to have a clean, honest audit of the current state of his financial health.

Also, the road to financial freedom is marked by progress. Overtime, as the person attains more and more milestones, he gets closer to his goal.

Some of these milestones are very critical; they can cause you to lose wealth in the future if they are not dealt with right now. Amassing wealth is great, but another key activity is preservation of wealth, which we are going to discuss in detail.

Here are 10 things that financial milestones that are often missed out in most people’s financial planning:

#1 HAVE A CLEAN CREDIT HISTORY

Paying personal bills on time is a great chore for many. However, the financially-free person has to attain mastery of this.

It’s quite simple really; don’t buy what is beyond you now. I’ve heard of startup founders who slept in basements to save on rent, bunking in with 4 other like-minded nerds who didn’t mind the initial shame for the future glory.

For many of us, truth be told, we are financially far-more secure. Even if we have debts, most middle-class families are able to get by and secure some savings each month.

Easier said than done; don’t spend what you don’t have.

Of course, business loans do not count, because they are much larger than personal loans.

Have you done a thorough audit of your personal debts? Getting a good credit rating is one big green tick on your financial health. Pay all your bills on time, avoid penalty fees, fines, and you can get a higher credit score on the CCRIS.

#2 LEARN THE SKILL OF BUDGETING

Before wealth is massed, one must learn how to manage small amounts of money. If he can be entrusted with little, he will be entrusted with much.

Budgeting is a simple skill, but truth be told, people don’t keep to their budgets. They adjust their budgets like their exercise schedule, their weight-loss plan, their study plan, and whatnot.

Budgeting without keeping to the budget makes budgeting useless.

The ability to keep to your budget is part of the skill of budgeting. No point having a great budgeting plan, but no resolve to get down to it. And you only have yourself to blame is you are unable to abide by your budget.

Parents have to instruct their children in this regard. If budgeting is taught to people when they are young, the attitude remains, and even when the amount of money gets bigger, the discipline keeps the person financially healthy over the long-run.

#3 BE A PROFESSIONAL TIME-INVESTOR

WRONG question to ask: “I have $10,000. What should I invest in?”

Anyone who asks this question is out of his mind. It’s not what you invest in; the correct question to ask should be “What skills should I acquire to become a proficient investor?”

Time is all you need to acquire skills. Many people complain about the lack of solid financially education in schools, but they remain at the complain stage. Being a professional investor of money requires you to first be a professional investor of your own time.

If you spend most of your time watching YouTube, great. If it makes you happy, great. But if that’s not what you want, do something about it.

Even after trading for many years, I make it a point to read good books, and stimulate my thoughts. They can be self-help books, trading-related books, or even fiction. You’ll be surprised how much you can learn from good, beefy fiction books!

#4 BE FINANCIALLY-INDEPENDENT

If you are still living off your parents, it’s ok. It’s nothing to be ashamed of, for all of us start that way. But you have to have a plan to get financially independent, where your livelihood is no longer dependent on who gives you money.

Many young people are truthfully still holding on to the security that their parents will save them if they mess up. That can be true, and no parent would want their child to suffer financial catastrophes. However, we all need to come to a place where we take responsibility for our finances, and keep track of where we are.

#5 ADEQUATE INSURANCE COVERAGE

As a responsible adult, your job is to not just protect yourself financially, but also the lives of those you love. You cannot compromise on insurance, because your life does not revolve around you alone.

Having a solid financial backing when something tragic happens will show your financial responsibility. It demonstrates that you have a clear plan for emergencies and know how to respond.

Investment-linked policies, in my opinion, aren’t really investments. Like I said above, invest your time, not in insurance policies. Take up the necessary protection, and that’s all you need. It gives you a peace of mind. You’ll be surprised by how uninformed most people are about insurance, and this is one key milestone that will set you apart from many others.

#6 HAVE AN ACTIVE PLAN TO KEEP YOURSELF FIT

Many people don’t even consider physical fitness as a key financial milestone. For what use is it to gain all the wealth you want, yet be unable to enjoy it?

Keeping fit is simple, but difficult to do.

Just like budgeting, many people know what to do, but don’t do it. Get yourself in shape if you want your financial health to be in shape.

#7 OWN THE ROOF OVER YOUR HEAD

Although there are stories of young people who’ve made it big, purchased a mansion with the $150 million they got from selling a company, most people don’t have that luxury. 

The majority of young people work their way to owning their first house, before getting anywhere major in life. When it comes to financial freedom, owning the roof over your head is the least you could do, because when an emergency strikes, you won’t be forced on the streets.

#8 MONITOR YOUR ACTIVE AND PASSIVE INCOME

Financial freedom involves having active and passive income. Monitoring them every 3 months or so is a good way to keep yourself up to date with your progress. It also gives a reality check every few months so that you won’t end up skiving.

A simple excel sheet will do the job. It’s just as easy as monitoring your expenses; most simple apps on the Apple Store of Android Store would do fine. It’s the discipline in keeping the routine that needs to be drilled in.

#9 KEEP 6 MONTHS OF EXPENSES IN CASH

Another defensive safety net; if you don’t even have a 6-month warchest, don’t even think about attaining financial freedom. It takes lots of effort and risk to achieve the goals that you want to set out, and the last thing you want to be worried about is whether there is bread on the table or milk in the fridge.

#10 MEET INVESTORS REGULARLY

If you are a pokemon card game fan, you probably spend most of your time around fellow pokemon addicts. That’s fine if you want to be Ash Ketchum, but if you want to be an investor, hang out around real investors.

Go to events, meet like-minded people, network like crazy, and find out what the scene is like. Know what is trending, what is out-dated, what people are interested in, and by spending time with these people, you will be in sync with the world of investments, and this expands your thinking greatly.

For example, when I first heard of options, it blew my mind; you can actually make money when prices do not move. You don’t have to bet on a rise or a fall; you simply collect premium. I won’t go into much detail, but this opened my mind when I was much younger, and kept me hungry to learn and explore.

Many people fall into a comfort zone once they reach their 30s-40s. It’s normal because the trials of life and the painfulness of toil takes a hit on people, but if you really want that fulfilling life you have, you got to step out and behave like you are going to live a fulfilling life.

Here’s a useful quote for those who are just starting out in the investment community:

If you’re 25, behave like you’re 35. Be mature, sensitive, patient, and be kind in your dealings with people.

On the other hand, if you are a seasoned veteran in your are of expertise, here’s a quote for you.

If you’re 55, behave like you’re 35. Be excited, passionate, willing to change, and accept young people for who they are.

In the past, I was criticized for spending too much time on my phone. Guess what? I now spend most of my time on the phone trading and analyzing charts, and I’m not confined to a desk in an office in Raffles Place. The things which society didn’t really accept, can actually become mainstream in a very short time.

stonesHave you got these 10 mile-stones laid out?
Image Source: Dimitri.co.uk

WHAT’S YOUR DECISION?

If you’re going to make any headway in the path to financial freedom, it had better start today. Make a plan. Go to your drawing board. Stop complaining about the past, and live a life of possibilities. Don’t know where to start? Look for help. Ask, learn, and seek.

But first, make sure you’ve got these 10 financial milestones set up. Of course, you could forgo a few initially, but to be really stable, you’ve got to build up your foundation very strong.

When the storm comes, would your financial house stand strong?

Here’s to a great month ahead, cheers! 😀

 

Why Are More & More Singaporeans Switching from Stocks to Forex?

asd

LOW VOLUME MAKES IT CHALLENGING

The volume of stocks traded on the SGX has been falling over the years.

The SGX has been plagued by weak volumes; well-known brands like Tiger Airways, OSIM, and Eu Yan Sang have left the exchange. In one article I read, a stock broker told The Straits Times that “stockbroking is looking like a sunset profession now”.

As for the number of IPOs?

Nov 2016: 1

Aug 2016: 2

Jul 2016: 6

Jun 2016: 1

May 2016: 1

Apr 2016: 1

sgxSince the start of 2016, trading volumes have been lacklustre.
Source: ChannelNewsAsia

Not only has volume been lacklustre; the Singapore Straits Times Index has been hovering sideways for most of 2016. Intra-day trading is an impossibility for many because of the huge amount of funds needed to trade stocks in and out.

SAVE MONEY 7 TIMES BY MOVING TO FOREX TRADING

$ – Save Initial ‘Tuition’ Fees

Trade small, make mistakes with small sums of money.

$$ – Save on commissions

Zero commissions, period.

$$$ – Track your stats and make changes

Use myfxbook to track your statistics, and adjust your strategy accordingly.

$$$$ – Charts are free

Pay nothing for charts, forever.

$$$$$ – Trade only when you are not working

24/7 market allows you to choose to trade only when you are free; won’t have to sacrifice your job.

$$$$$$ – Market volatility known ahead of time

Use the forex calendar to know when your forex pair will encounter volatility; no more rude news shocks.

$$$$$$$ – Accumulate expertise cheaply

No need to wait years or pay market strategists to test if your strategy works; try it out on past charts, execute it ‘live’, and see how it goes.

IT’S CRAZY; I DON’T UNDERSTAND WHY PEOPLE HATE FOREX

Some people quip that the forex market is more difficult to trade than the stock market. I beg to differ, because it is your circle of competence that determines your success, not the actual characteristics of the market.

You get to start with as little as $500.

In the Forex market, you are entitled to ‘get a feel of the game’ by risking a few dollars per trade. Most brokers allow you to trade 0.01 lots, which is $0.10 per pip on average!

The quickest way to rack up trading experience is to make many trades and check out the statistics behind your trades. After all, it’s a numbers’ game: with a properly developed trading edge, your account should have a positive expectation and profits should be the norm over the long-run.

You trade ‘live’ and get skin in the game.

There’s this huge debate about ‘live’ accounts versus demo accounts. Here’s the solution: start with a ‘live’ account right from the beginning. Get yourself into the reality of trading, risking money on a daily basis. Sooner or later you will get used to the risk that is inherent to the game.

By learning to make many decisions and experiencing all the different conditions of the market, you would become seasoned enough to trade a bigger size, and fine-tune your own trading strategy. I like what Tom Sosnoff said about learning to trade: “Trade small, trade often.”

No commission charges!

Forex has no commission charges. This may come as a shocker to the stock trader, but for forex traders it is a constant reality. This reduces the ‘tuition fees’ you need to pay to the market as a result of making trades.

Many new traders make any of the following mistakes:

  • Trading the wrong lot size (1.00 instead of 0.10, causing too big a trade size)
  • Going short instead of long
  • Entering a trade only to realize the market is closed

Yes! These mistakes may sound silly, but every trader who has had skin in the game would understand what I just said.

24/7 market; choose when you want to trade.

The great thing about Forex is that you can decide when to trade based on your schedule. That helps people who have punishing schedules: trading in the middle of the night, or during lunch, on a daily basis, works out to a trading schedule that accommodates your lifestyle needs.

 

THE SIMPLE 3 STEPS TO MITIGATE FOREX TRADING RISKS

Here are three simple steps to mitigate Forex trading risks:

  • Think in Percentages – takes the emotion out of the dollars
  • Find an Edge – only an edge gives you a profit in the long-run
  • Stick to One Style – don’t try to be everything at the start

asdToo many forex traders try to do everything at once. Focus on first becoming profitable; diversifying across trading styles can come later.

If you want to get started on forex trading, what’s stopping you? I’ve shown you 7 ways it can save you money in your trading career.

If not today, then when?

Cheers!

REFERENCES & RESEARCH SOURCES

straitstimes.com/business/companies-markets/sgx-turnover-plunges-27-to-206b-in-august
theindependent.sg/business/the-hollowing-of-the-singapore-stock-exchange-sgx/
channelnewsasia.com/news/business/singapore/sgx-reports-on-year/2406994.html
shareinvestor.com/ipo/index.html

Top 3 Reasons Why You Should Start Investing in 2017

copy-of-copy-of-not-allthose-who-wanderare-lost

Brexit, Trump, Italy, asset bubbles all over the world… you name it, there’s probably some financial market jitters that keeps most people out of the world of investments.

On the flipside, the financial world often quips about some investment that has made xx% over a certain period of time, trying to entice visitors with a glimpse of the profits possible for anyone. In the world of investing, it is easy to find spectacular returns on hindsight, and salesmen go through great lengths to market what has already happened.

As traders, we live in a constant state of uncertainty. Every trade we make has the possibility of going wrong, and this is taken into account when a decision is made. It is the knowledge of this that gives power to a trader; if he can understand the math behind his investment decision, he can have a positive expectation and a positive traders’ equation.

There are three main reasons why trading is even more attractive these days. Indeed, with advanced technology, there has never been a better time to step into the world of finance, and grab a golden egg while you still can.

GOLDEN EGG 1: TRADING GIVES A HIGHER INTEREST RATE THAN BANKS

fdThe best you can get on a fixed deposit is 0.35% a year in Singapore, as at December 2016.
Source: moneysmart.sg

While inflation is a constant enemy for our savings accounts, most people do not know what to do to combat inflation. The most common quick-fix is to work harder and earn more money. While that does feed us and our families for some time, the need to build a war chest for emergencies becomes more and more real.

 

How much can you make from trading? Institutional traders bring in a success rate anywhere from 30%-70%. Why is this so?

The greatest insight into the markets that can make you profitable is this: 90% of the time, the odds are 50-50, while 10% of the time, the odds swing 60-40 (slightly in your favor).

That’s right. While most of the time, markets are 50-50, it is those brief moments when the market gives some opportunity, and prices quickly move to take advantage of this opportunity. That means that if you were to buy or sell randomly, you already have a 50% chance of success!

Another insight to know is that a high success rate (hit-rate) brings a lower profit target, while a low success rate brings a higher profit target.

What do I mean by this? Institutions trade using a combination of low-probability and high-probability trades.

Example: 40% (low) success rate, win = +2%, lose = -1%.”

low

In this case, if you were to make 100 of such low-probability trades, you would make +80% on winning trades and -60% on losing trades, bringing a 20% return on capital.

Example 2: 75% (high) success rate, win = +0.5%, lose = -1%

high

In this case, if you made 100 high-probability trades, you made 37.5% on winning trades and -25% on losing trades, bringing +12.5% return on capital.

It is impossible for the market to give high-probability trades with a high profit potential. This would be quickly detected by institutional traders, who have mathematicians, PhD staff, and computer science experts who can quickly make adjustments and profit from it. With hundreds of millions of dollars at stake, these people would do all they can to bring profits for their firm.

 

That is why if anyone quips that they have a 80-90% success rate, they are probably having many small wins but a few gigantic losses. If you don’t believe me, try trading forex and planting random trades with low profit potential and high loss potential. The numbers indeed prove to be true!

That is also why it is important to understand the traders’ equation. With a reasonable success rate and an appropriate win-loss ratio (or risk-reward ratio, RRR), you would be profitable over the long-run.

I have had days where I ran 7-8 trading losses in a row, but because I trusted in the probabilities, the next 3-4 trades ended up profitable, as long as I stuck to my trade setups and didn’t let the emotions get the better of me.

GOLDEN EGG 2: TRADING DOES NOT REQUIRE LOTS OF CAPITAL

If you have $500 to invest: trade forex.

In the Forex market, you are entitled to ‘get a feel of the game’ by risking a few dollars per trade. By trading the smallest lot size (0.01 lots), you can learn to make a few dollars here, lose a few dollars there, and rack up trading experience and learn to trade ‘live’ without incurring hefty losses.

By learning to make many decisions and experiencing all the different conditions of the market, you would become seasoned enough to trade a bigger size, and fine-tune your own trading strategy.

Many traders discover they have certain characteristics about themselves that hinder success. In trading a ‘live’ account with a small sum of money, they are putting in some skin in the game, and getting used to the ups and downs of their account.

The best part about forex is that there are no commission charges. The broker makes money from the bid-ask spread, which is the difference between the buy/sell price, and most brokers charge reasonable spreads, allowing you to trade with almost negligible transaction cost.

If you have $3000 to invest: explore stock CFDs.

Stock CFDs have low commissions and can be bought in small quantities – a few thousand dollars can allow you to have a portfolio of 5-10 stock positions.

For people with less time and more money, stock CFDs can be a great way to learn to deal with commissions, spreads, fee structures, and the whims and fancies of the stock market.

The stock market is only open during working hours, unlike the forex market. Someone who is interested to take longer-term positions may be open to trading stock CFDs, risking small amounts of money, and yet racking up trading experience.

Some people quip that the forex market is more difficult to trade than the stock market. I beg to differ, because it is your circle of competence that determines your success, not the actual characteristics of the market.

If I were to ask you to drive a Formula 1 race car, you probably would kill yourself within the next few hours or so. However, if you were progressively taught how to drive the race car, it doesn’t become dangerous, and because of the progressive nature of your learning, the high speeds don’t come as a shock to you.

f1Driving this car is dangerous, only if you are not trained.
Source: wallscorner.com

Many people get shocked at the speed by which forex markets move during the Non-Farm Payroll Announcements and FOMC Interest Rate Announcements; prices can move 10-50 times faster than normal during those crazy periods! However, with practice, these sessions can become a profitable time for traders with experience and proper risk management.

If you have $10,000 to invest: trade everything.

People with more money have the luxury of trading a combination of stocks, forex, commodity, bonds, and index trades. These can be accessed through any decent forex broker, and you’ll be surprised to find that most forex brokers let you trade forex, oil, gold, the Dow Jones Index, the S&P, the bond markets, wheat, corn, natural gas, and more. These of course come with higher margin requirements, but exploring all the asset classes makes you a seasoned, well-rounded investor that can take any market condition.

Sideways in the forex market? Maybe there is a trending opportunity in the oil market. There’s always something to trade if you have the experience and know where to look.

However, in my opinion, the greatest investment is Golden Egg 3.

GOLDEN EGG 3: TRADING BOOKS ARE CHEAP AND EASY TO FIND

John Murphy: Technical Analysis of the Financial Markets. One of the great trading classics that builds a strong foundation.

John Murphy’s book on technical analysis reveals the fundamental nature of financial markets. Prices move in patterns and cycles, and understanding history helps you to cope with what is to come.

In my trading journey, I’ve read more than 200 books, and found only about 11 of them that are useful in my trading career. These books were either borrowed from the library, or bought only for $30-$50 a book, which is a very good price (since stock commissions can be $15-$25 already!).

Buying a few good trading books can completely change your destiny.

If you are starting out, why not invest in 3-5 good trading books, before getting your hands wet in the financial markets? These books would build a strong foundation, and you would start off with a better understanding of why things happen.

bookSome of the more famous online bookstores.
Source: Company websites

Amazon.com and bookdepository.com provide great options and they ship almost anywhere in the world. Personally, I found that bookdepository has the more exotic books, but it is a little pricey (yet still worth it since you can’t find the books easily!)

Second-hand books: Carousell if you live in Singapore! If you’re lucky you can find good books at a discounted price. Even though the books may be a little dusty and yellowed, it’s the content that you want to really absorb. You can always find what you want if you search hard enough!

TRADING & INVESTING EDUCATION IS WITHIN OUR GRASP

If you are still thinking about it, here’s why you should pick up investing education:

  • Historical chart data is free (we used to need to pay in the 1990s and 2000s)
  • Free resources are available
  • Books are cheap and easy to find
  • Starting cost is as low as $500
  • Cost of failure is low
  • Experience can be racked up with very little capital
  • There is a market for every type of investor

And most of all, it can bring higher returns in the long-run than placing your capital in the bank account. Sure, you might risk losing a couple of dollars at the start, but the cost of ignorance is a lot higher when compounded over the next 5, 10, or 20 years!

Wishing you all the best in your trading journey, and I do hope this article serves as a pump to start you on your quest for investment expertise!

Cheers!

 

RESEARCH SOURCES & REFERENCES

http://www.moneysmart.sg/fixed-deposit
http://www.lifehack.org/articles/money/15-best-online-bookstores-for-cheap-new-and-used-books.html

Personal Checklist: The Top 5 Habits of Singaporean Self-Made Millionaires

Just last week, I came across this interesting article, talking about some of the prominent millionaires in Singapore, and how they created their wealth.

vulcan-postSource: Vulcan Post

As I read it through, I couldn’t help but think about what they did to make, keep, and grow their wealth. Sure, some of them inherited their wealth, but it takes a different kind of education in order to preserve and grow the inherited wealth.

It is definitely not chance that these people have achieved phenomenal success. There were, in fact, common patterns of behaviour that keep them successful.

The difference lies in just 5 actions they take consistently:

1. THEY CREATE MULTIPLE INCOME STREAMS

The average person lives from paycheck to paycheck, while the average wealthy person receives cash from various sources, so that even if one source were to be temporarily cut off, they can still enjoy the same standard of living they currently have. Here are just some of the commonly known income streams that they have:

Earned Income: working for money

Interest Earned: earning money by lending it

Dividend Income: earning money by share ownership

Profit: Selling something you make or own

Capital Gains: Selling something higher than what you bought it for

Rental Incomes: Money gotten from owning real estate

Royalty Incomes: Money from selling intellectual property or franchise systems

3

Having multiple streams of income is like having many waterfalls flowing into the same ocean. The more streams you have, the more reliable the flow.

Which do you currently have? The average person struggles to survive because he only has one stream. Personally, I like trading and portfolio management. The great thing about portfolio management is that you can enjoy interest earned, dividend income, and capital gains.

2

 

2. THEY TREASURE EVERY SECOND OF THEIR TIME

Let’s be honest with ourselves; how many hours a day do you do things that do not contribute to your financial success? Most people would rather procrastinate or spend time on enjoyment rather than on what really matters.

I found this really interesting image of how most people spend their time in a year:

4Source: The Visual Communication Guy

It’s amazing; out of 365 days a year, 183.7 days are spent on media! If we were honest with ourselves, perhaps what we need is to rethink the way we live. Perhaps if we all take some time away from Media and reallocate it to self-improvement, learning, investing, and growing as a person, we could be living a very different life indeed.

How would your life look if you re-arranged your priorities?

Robert Kiyosaki once made a quip about what he noticed of rich and poor dads; he said that poor dad would sit on the couch and watch TV every night, while rich dad would review his investments and upgrade his skills every night. Poor dad would spend the weekends wasting time, while rich dad would build a business during the weekends.

2

Many of you would know that I read more than 200 books before I embarked on my trading journey. Even now, I make it a point to read at least 3 books a week, because I feel that it is important to never stop learning and upgrading oneself. Here are some key pointers:

  • Don’t waste time. Find out what you need to do, and do it.
  • Re-prioritize. Find out which areas of your life you can do away with, and cut them out quickly.
  • Learn. Just because you have graduated doesn’t mean you should stop learning. Successful people get where they are because they have an attitude of lifelong-learning.


3. HAVING A MENTOR MAKES A BIG DIFFERENCE

Mentors are looking for people who are humble, hungry, and hard-pressed for success. No matter where you are in your career or life, it helps to have successful people to reach out to and learn from. They’ll be able to quickly point you in the right direction if you are going off-track.

When I started my trading career at a professional fund, I had wonderful, experienced mentors to guide me in the right direction. I quickly picked up on what worked and what did not. I learnt their habits, their lifestyle, and the difficulties that they went through to get where they were.

Where can you look for mentors if you have no one at the moment? This is what many people ask me from time to time.

  • Build connections: Networks are not built overnight. As you expand your social circle to include successful people, you will start to find people who could potentially guide you to where you want to go.
  • Be inquisitive: People will only want to mentor someone who has the attitude for success. While at the beginning you might lack aptitude, the right mentality and motivation would attract the right people to you.
  • Keep learning: As you learn more, you discover you will have the vocabulary to connect with people. With greater proficiency, you would be able to speak at the same level as industry practitioners, asking smart questions, being able to understand jargon, and make an impression.


4. THEY VISUALIZE THEIR DREAMS IN DETAIL

Goals without dreams are dead; they become mere tasks rather than the exciting outcome that you hope for. It helps to have an idea of what you want; most people want to be wealthy but don’t know what it would look like.

What does a wealthy life look like for you? For YOU personally?

For some, it could mean having to work only 2-3 days a week. Financial goals differ from person to person, and it’s not just the monetary goal, but also the lifestyle goal. For me, I knew I wanted to have the luxury of making passive income even when I am travelling. This may not be everyone’s goal.

“How much money do you want to make exactly, and what would that lifestyle look like exactly?”

Many people want to lose weight. Losing weight isn’t a definite enough goal; Losing 12 kg by the end of 6 months is a definite goal. Many people fail to achieve their goals because they don’t even define their goals!

It’s also important to visualize yourself doing what you hope to be doing. Having a lot of money is pointless if all you are going to do is sit aroud with the cash; it is accomplishing the goals you have, those bucket lists, that make life worthwhile.

So what is it for you?

Grab a piece of paper and start getting your hands dirty. It doesn’t matter if you are old or young, experienced or inadequate; what matters is a willing heart and dilligent hands, and of course, a big enough dream that will knock you off your sofa and get you started.

  • Be specific about your goals. General goals generally don’t work. Specific goals help you to move toward exactly what you want.
  • Keep track of your progress. You never know if you are on the right path if you don’t take stock regularly. Even better, get a mentor to help you evaluate where you are.
  • Focus on the dream with its details. Keep reminding yourself of where you eventually want to be. Otherwise, you’ll just lose steam and burn out, bum around, and end up not getting where you were heading toward.


5. THEY DO NOT GIVE UP OR QUIT

If you’ve got your foot into the investing arena, you would be familiar with financial losses. It is at this point where your mettle is truly tested; is this what you want? Are you willing to sit through heartache and tough lessons to get where you want? Is the life you left behind really worth going back to? Do you still believe in the dream you have?

When that business fails, would you stand up again and start all over? When you family doubts you and the pressure to provide hits you, will you continue to stand by your dream? People want the glory without the trials and training. Just take a look at the infographic below that I found:

33Source: Anna Vital (Founders & Founders)

I also came across this interesting quote, which I thought was very useful in clarifying what we really value. Millionaires invest their money and make investing a priority, while poor people spend their money first and make spending a priority.

5Source: Gecko and Fly

Always, always seek to make investing your primary objective. Invest your time, invest your money, invest in your team if you are running a business. Invest, invest and invest.

Is investing your primary objective, or is spending your primary objective? Would you be willing to delay gratification, in order to enjoy a lot more in the future, far more than you can ever imagine?

  • Do not quit. Ensure that you have made a commitment. Tell your friends, and engage people to keep you on this path.
  • Invest your money, your time, and in your team. Investing is what multiplies your returns in the long-run. Keep at it!
  • Prioritize learning, rather than earning. It pays to be more proficient at what you want to do. When you are starting out, make learning a priority, and the profits will come eventually.

Don’t give up on your dreams!

555

Feel free to share this with people you know who are working hard toward their dreams, and striving to build their first pot of Gold. And with these 5 actionable steps, you’ll be one step closer to your first million! 😀

Bonus: Download free ebook: The 7 Best-Kept Secrets of Professional Traders

RESEARCH SOURCES & REFERENCES

vulcanpost.com/593788/in-forbes-2016-asias-richest-families-list-we-see-some-prominent-singaporean-names
businessinsider.sg/habits-of-self-made-millionaires-2016-3/#rJDS8hCPPhHm5qpK.97
fastcompany.com/3052770/how-to-be-a-success-at-everything/7-habits-of-self-made-millionaires
allbusiness.com/slideshow/9-smart-habits-of-real-millionaire-entrepreneurs-16769866-1.html
huffingtonpost.com/timothy-sykes/top-30-millionaire-habits_b_8260134.html