This is not a sponsored post. I just wanna share a little of my investment experience here.
As my blogger friends know me, I dabber quite a bit in the financial market. It was all for fun, I started from the lowest risk instruments – bank accounts, then I went on, with increasing risk appetite to mutual funds, stocks and shares, CFD, futures, then forex. Except for options and bonds, think I’ve covered most of the instruments! 🙂
Now that I am not making a income, I do not “bet” on futures and forex anymore. Because if I lose a few hundreds at a go, it will be so painful.
After I had Meimei, I began a regular saving plan on fundsupermart for the children. Every month, the fund takes $200 from me to buy an certain amount of Aberdeen Asia Pacific Fund. Becuase I started the plan before Lehmann Brothers happened, I picked up very cheap units in the last two years. It went to S$2 per unit at a certain time, now it’s at $4.40. And it’s in this fund, after two years I totally see the benefit of a regular saving plan. Come rain or shine, every month, no matter what price, I will be forced to buy $200 worth of unit funds. When it’s cheap, I get more units; when it’s expensive, I get less. The return in my statement now is 30%. Over two years, that’s 15% per year. Bank = 1-2%. So it’s very good.
A month ago, seeing that the amount has reached a certain sum, I withdrew some money to buy some shares. My thoughts are that, this being the children’s money, I can buy anything and lose it and nevermind they will have a very long investment horizon. So from funds to shares, they can take more risk. I dream that 20 years down the line, these stocks would have climbed steadily. Nevermind that they do not rocket off, as long as they climb, my kids will have a sizeable sum by age 20.
I drool when I think for Meimei. She’s only two and in investment terms, has a whole lifetime ahead of her. You just take a monthly $100 savings compound at 6% per year. By the time she’s 20, she has about 50k! wah…drool drool drool~~
A regular fixed sum saving is very good because it takes out the uncertainty in the market. The stock market will move up and down. So if you buy religiously every month, you even out. But although the market moves in cycle, and in the long run, as history has shown, they all go up.
My motivation is always those stories where someone’s parents bought some share certificates many years ago, and then pass on to their kids like 20 years later, by which time the shares are worth so much more than before. Or the stories where they bought a house, like my MIL, 20 years ago for $30k and now the house costs $400k.
When I hear these stories, I always think, wow, if I was at the same time as their parents then and can buy the house @$30k! I’ll be so rich now. But then, history is made NOW, in my time. So I’m glad I started doing all these a couple of years ago.
So my friends, the point I want to make with this post is, getting rich, for normal people like us, is totally possible. But it is a slow process over many years. The power of rising markets over time can make one rich in 20 years. Like I said in a previous post. (I cant find my previous post to link!!!!) Start small, and go. At least if I can’t be rich in my lifetime, I’m comforted in the thought that my children will have some basic financial security.
I also want to point out when I was with my previous company, we had a similar scheme where part of out salaries were used to buy the company’s shares and I did not make much on that one. I quit right after Lehman brothers and had to liquidate those units. Which were at an all time low then. So it also depends on when you liquidate. It was the worst timing then, but I had no choice, because I resigned and could not be in the scheme anymore.
However, I was not too flustered. Because I figured I could always buy some other shares at that time, where everything were so cheap then, and then make back when the market rise. I did, and have benefitted.
The stock markets move in rather long cycles, so we do have time to react. Sudden shock like Lehman Brothers did not happen over night. It was Dec 2008 when it happened. But early in May 2008, the market was already showing signs.
If you are interested, (no, of course, accumulating $50k in 20 years is too much work !), get financially educated, and you can benefit from it.