Money and Finance
All in all, it boils down to ONE word that people do not know enough about.
RISK.
I think when people invest, they usually do not calculate the risk they take. With NO knowledge or LITTLE knowledge of the chance they are taking, it does not matter what they can afford to lose because it is as good as gambling.
When a person sets aside a sum of money for something, he should think of
1. What is the potential return at this cost?
2. What is the likelihood of success?
These 2 questions are what constitutes wise decision making.
Successful people are willing to put money into things because they can see the success in it. If there is a high enough chance of success, most people are willing to put more then they can afford to lose because the likelihood for success is high enough for them.
Without thinking of the % success rate, we would all be gambling.
- Investments, Money + Teenage Investor's Q & A
Hello, recently I received emails from new readers of my blog after my post was shared on Facebook. Honestly, I was quite shocked and a little gratified that readers found my blog post interesting and relatable enough to share on their Facebook page....
- Life Goes On In The World's Most Expensive Country
Hello everyone, it's been quite some time since my last post. Have been catching up with my studies, going for army check-ups and everything else that goes on in a life of a polytechnic student. I recently received an email from Hady, who found...
- How To Invest In Shares [part 2]
Hi, welcome to Part 2 of How to Invest In Shares :) Hopefully, Part 1 was relatively beneficial with around 200+ views so far. Well, today I would be touching more on the returns of Investing! Why do we want to invest in shares? Because historically,...
- Essential Investing Advice You Cannot Afford To Overlook
The following advices come front Alan Haft on an e-book that I obtained titled, You can Never be too Rich. I strongly believe that gaining knowledge is crucial to any journey. Anyway, Top 10 Lessons Hollywood teaches us about Investing. LESSONS Lesson...
- 80% Of Young Singaporeans Have Little To No Savings At All ; Are You One Of Them?
According to this link (http://sbr.com.sg/financial-services/news/disaster-in-making-4-out-5-young-singaporeans-have-no-savings) 4 out of 5 Singaporeans have little to no savings at all! True? Source: Singapore Business Review Now, firstly I would not...
Money and Finance
Be prepared to lose all your money in the stock market.
(You can read my post here if you haven't already @ Standard Chartered is closing its' equity business. What a way to start 2015!)
Continuing from the events of yesterday, a sudden thought occurred to me. While I was wondering what would happen to my money that was already invested, a more serious thought came to mind.
Am I Prepared To Lose All My Investments?
This is a thought that should have occurred to everyone some time or the other. As a teenager, I receive emails mainly from teens around my age. They are all interested in investments, but I do wonder if they have thought about the risks that will ultimately be involved.
When Standard Chartered made their announcement yesterday, I was concerned with my investments of course who wouldn't? But it also made me realise something that I thought I was already prepared for. If I had lost all my investments *touch wood* in the event that Standard Chartered did close down because of major reasons, would it cripple me financially?
When I begun my journey, I read through a lot of websites and financial blogs. Perhaps the one most important thing I read was this,
' Invest only with money you can afford to lose. '
I hope that those that are planning to invest or have already invested will take this into consideration. When you invest your money, you're NOT saving. You should never invest your savings or emergency fund. In short, don't invest any money you're not prepared to lose.
I'm not saying I won't feel devastated or heartbroken if my investments failed, in fact it's impossible not to. It is my hard-earned money after all. I'm saying that if I had lost my investments today, it wouldn't cripple me financially. Because the money I have invested did not come from my savings nor emergency fund.
It's human to want to invest as much money as possible, hoping for a huge payout. But what if the market crashes the very next day?
Some people view investing as a 'Jackpot' if you will. They hope that in the short term, they can get a lot of cash and make their problems go away. But does it really work that way?
If you do invest your money, there's a chance you may get a huge payout in one way or another. But is it worth the stress? Can you sleep peacefully at night if you're worrying about the market day in day out because your entire savings are tied up in stocks?
RISK.
I think when people invest, they usually do not calculate the risk they take. With NO knowledge or LITTLE knowledge of the chance they are taking, it does not matter what they can afford to lose because it is as good as gambling.
When a person sets aside a sum of money for something, he should think of
1. What is the potential return at this cost?
2. What is the likelihood of success?
These 2 questions are what constitutes wise decision making.
Successful people are willing to put money into things because they can see the success in it. If there is a high enough chance of success, most people are willing to put more then they can afford to lose because the likelihood for success is high enough for them.
Without thinking of the % success rate, we would all be gambling.
Till next time,
Teenage Investor
- Investments, Money + Teenage Investor's Q & A
Hello, recently I received emails from new readers of my blog after my post was shared on Facebook. Honestly, I was quite shocked and a little gratified that readers found my blog post interesting and relatable enough to share on their Facebook page....
- Life Goes On In The World's Most Expensive Country
Hello everyone, it's been quite some time since my last post. Have been catching up with my studies, going for army check-ups and everything else that goes on in a life of a polytechnic student. I recently received an email from Hady, who found...
- How To Invest In Shares [part 2]
Hi, welcome to Part 2 of How to Invest In Shares :) Hopefully, Part 1 was relatively beneficial with around 200+ views so far. Well, today I would be touching more on the returns of Investing! Why do we want to invest in shares? Because historically,...
- Essential Investing Advice You Cannot Afford To Overlook
The following advices come front Alan Haft on an e-book that I obtained titled, You can Never be too Rich. I strongly believe that gaining knowledge is crucial to any journey. Anyway, Top 10 Lessons Hollywood teaches us about Investing. LESSONS Lesson...
- 80% Of Young Singaporeans Have Little To No Savings At All ; Are You One Of Them?
According to this link (http://sbr.com.sg/financial-services/news/disaster-in-making-4-out-5-young-singaporeans-have-no-savings) 4 out of 5 Singaporeans have little to no savings at all! True? Source: Singapore Business Review Now, firstly I would not...