They say it is SG50 and all, so I thought I did a tiny list of 50 ideas for personal finance and/or investing. (Wanted to do a 50 Days of SG like the 12 Days of Xmas song, but that was too hard ^^")
So here goes.
On Personal Finance
1. Save 20% of your money, and more if possible.
2. Have at least 3-6 months of expenditure stashed away for times of hardship. More if you have dependents/loans to service/unstable wages.
3. Pay your credit card bill in full each month, those interest rates are crazy!
4. Live below your means, but seek to expand your means by creating more cashflow/streams of income
5. Don't just park all the money in the bank! Bank interest rates (and at times, SSB as well) erodes with inflation (~3%)
6. A high salary is not needed nor representative of how ready are you for retirement, however it do helps.
7. Capital allocation of income are as important in a company as well as for your salary
8. Li Ka-shing or T. Harv Eker methods of allocation are a nice guide to improve yourself both financially and personally
9. Remember your reserves and other money set aside for near future purchases before investing. (This is because you do not wish to liquidate your positions, which may incur losses at that time and affect the math of compounding interest)
On Insurance
10. Be adequately insured for the unforeseeable future (Life and Hospitalisation insurance at least)
On Taxation
11. Avoid paying tax legally by doing what the government wants you to do. CPF SA cash topups, SRS accounts, donations, etc.
12. Plan your tax to leverage on reducing amount of tax paid by dropping a tier or two on your tax brackets.
On Donation
13. Donate to those who are in need, but do remember your own needs (as well as your own dependents). Before you save someone, remember to save yourself/keep yourself safe.
On Job/Work
14. Many times, it takes the same effort to get a little money or a lot of money. But why are you making a little money?
On Retirement
15. Plan your retirement or finances early as possible. Some leeway is nice.
On Investing
16. Education and research are important before investing
17. If possible, start investing early to take advantage of compounding interest.
18. It is important to realise that higher returns are generally equates to a higher amount of risk taken.
19. Be greedy when everyone is terrified and be terrified when everyone is greedy (it applies to all investments as well, be it real estate, stocks, gold, etc)
20. Opportunities are like street cars, when one runs off, you will see another one coming around the corner.
21. Many times in investing or trading, it is better to sit on your two hands instead of trying to make something for nothing.
22. Staring too close and hard at something creates a tunneled vision, just like looking thru a telescope, you forget the big picture and things around you.
23. The market in the short term is a voting machine, but in the long term, it is a weighing machine
24. When investing, do pay attention to the fees involved! (Compounding costs!)
25. If you don't really know what to invest and don't really want to read into it, the CPF SA and dollar cost averaging low-cost stock index ETFs are good bets. (STI ETF and maybe S&P500 ETF)
26. There are times when it might be more cost effective to buy in a lump sum than by dollar cost averaging due to costs, might yield more too!
27. Sure, Index ETFs may not outperform Unit Trusts, but what you want is predictability, makes planning easier
28. It is interesting to note that the best performing fund this year is usually not the same fund as last year nor the years before
29. Persistent savings in regular amounts, no matter how small, pays off
30. Reinvesting your dividends is a way to grow your nest egg faster too
31. Determine your investment objectives and time horizon
32. A specific need must be funded with specific asset that meets that need (i.e. Buy house in 1 year, get a fixed deposit, for you cannot afford to lose money)
33. Adjust your portfolio according to your risk appetite so you can sleep comfortably at night
34. You want capital gain when you are younger (if possible), you want income when you're older (dividend stocks and bonds)
35. Inflation pegged assets (i.e. stocks/real estate) would outperform bonds in the long run
36. A lost of $500 in a total principal of $1000 feels different from losing $500 in a total principal of $500,000
37. Real estate investments are NOT sure win, and neither are any investments. Each have their pros and cons.
38. Gold/Silver could be a nice inflation hedge, at the right price.
39. Be wary of quick get rich schemes, if it was that good, we have no beggars on the street
On Owning Homes
40. Use the Rule of 15 to determine you should rent or buy a house.
41. Delay a house purchase if needed, like GSS, property prices are in cycles.
On Yourself
42. Money is a means or a tool not an end
43. Being rich is psychology with a mindset and habits, 80% Psychology, 20% Action
44. It generally feels better to cry in a Mercedes than on a bicycle
45. Money is not the root of all evil, having no money would probably be it (trust me on that one)
46. Your health is an asset as well. It would not do to be unable to enjoy the fruits of your masterpiece.
47. Do not envy the rich, instead see the thorny path they have taken to get there.
48. If everyone is poor and you want to be rich, why are you following in their footsteps? Repeating the same steps and expecting a different result is suicide.
49. Do not think and grow rich, take action and DO IT.
50. Freedom to do the things you love and independence is one of the possible ends/goals.
Hope it is not too long and maybe you learnt something new! :)
EDIT (09/08/2015): Straits Times also had one!
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