Saturday, July 29, 2006

Introduction about Investment

I am going to talk about investing in a series of lectures/lessons. I think a lot of youngsters are wondering why should they start investing when they are young. I am going to talk about investment and money management in 12 lessons in my blog. If you have any suggestion, kindly email me at

Lesson 1: Why should I invest?

Why should I invest? I am getting a comfortable income every month and I am happy with the way I am spending my money every month, why should I bother to invest? Some people may say that they are having problems meeting both ends at the end of every month, why should they invest when they do not even have extra penny after they pay all their bills.

I think the reason for investment is simple. You WANT to prepare for your future.
Future is not predictable but manageable. You should have long term planning for your future and retirement. Some readers may say that " OK, but I am quite old now, it will be too late for me to invest now!" I must tell you that it would be never too old to invest! However, the earlier you invest, the better and easier for you to build your nest egg.

Some people may argue that I am keeping my money in the bank, they are paying me good interest, why should I bother to find other vehicles for investment? You may not notice that inflation is eating away your money. Inflation rate is always slightly lower that your fixed interest rate. You may be happy because the bank is paying you 4% interest rate per year, but do not forget that inflation rate in your country may as high as 3.5% or even up to 3.99%. So what you get in return is just 0.5%!

You may notice that years back, your ten pounds or dollars can buy you a lot of household things, but now, you spend almost twice as before to get the same stuffs!
Your pocket money is getting smaller and smaller, if you do not do something, you are going to face huge problems 20 years down the road when your children are going to college or when you retire. You must anticipate your future, you can do something now so that you would not get the headache later in life. People are living longer now, you may have another 20 years after your retirement to enjoy or "suffer" merely depending on what you are doing now!

There are a lot of short, intermediate or long term plans for you to keep in mind when you start investing. You must always remind yourself about your aims so that this can keep you focused, disciplined and consistent in your investment.These plan can be as follow,

a) Short tem plans
-renovate your house in 3 months time,
-buy a new plasma TV etc

b) Intermediate plans
- buy a new house
- get a new car etc

c) Long term plans
-children education fund
-retirement plan etc

Always plan you life! I would talk more about investment in my future posts!

1 comment:

akmal said...

Hi. I am an 18 years old UiTM Foundation student(2012). i would love to start investing. but as a young inexperienced student, im not sure how i should invest or even if i should invest now. could u giv me some advice, whether i shoud learn/start now, or i should focus on study first. & if i should invest now, hw do i do it? should i start with ASB?... & how to?