How do I start investing?
This is a very general question but its also a question that makes me ponder a lot on it. I ask myself back:
How did i even start this investing journey?
You can read my About Me page by clicking on the tab above to read how i started my journey.
In this blog post, i hope to answer this question in a simple and clear way so that readers can understand.
1) To start investing, you must have savings. If you do not have the habit of saving, start by putting aside a monthly amount to save. Savings will be more important than investing at the start. I wrote an article on it here: Why extreme savings is more powerful than investing?
2) Sign up for a brokerage account. I realised many people do not know where or how to sign up for a trading account. A trading account allows you to buy shares of companies in the stock market.
A few brokerage that you can open an account with:
http://www.citibank.com.sg/gcb/investments/citi_brokerage.htm?eOfferCode=SGIVBRPWAL
http://www.limtan.com.sg/
http://www.phillip.com.sg/
http://www.dbsvonline.com/English/index.asp
I personally use citibank brokerage and limtan securities. You can click on the link to check out the commission charges of each one. Opening an account is free. You can sign up for it anytime.
3) Attend seminars or read books on investment.
There are free investment seminars out there which you can attend. One good provider is Singapore Exchange(SGX). Yes, in Singapore, the stock exchange actually organises free beginner investing lessons for the public.
You can visit their website here: http://www.sgxacademy.com/index.php?option=com_sgx&task=listing&Itemid=4 (Note: Some courses are free while some requires a fee)
You can also read up websites that the singapore government links with to improve the financial literacy of Singapore.
Some websites recommended are:
http://www.moneysense.gov.sg/
http://www.cpf.gov.sg/imsavvy/default.asp
Many people also ask what is the stock market? The stock market is actually a financial intermediary. In laymen terms, it is the middle man. This middle man connects the buyer( who want to buy a share of the company) and links it with the seller (which is the company itself). When you buy the stock of a company through the stock market, you are effectively one of the owners of the company. They are called shareholders although most of us are small ones.
These are the basic steps to get you started. Some of the websites recommended above not only teach you about investment but also on personal finance, ie things to take note when taking up a housing loan.
*Update: I've written a series of blog post to help you in your investing journey. Topics like "how to pick stocks?", "Understanding financial statements", "bonds investment","index fund investing" and the special series on "buying the company on the streets" are free for you to read at your own leisure time. Check it out here
Thanks and wishing you all the best in your journey towards financial freedom.
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Related Post:
1. Investing Basics - Low Cost Index Fund investing (Passive Investing)
2. How to pick stocks (Part 1) - Economic Moats
3. Understanding financial statements (Part 1) - The income statement
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