So next, introducing his Secret Millionaires Club. Yes, a tutor of mine introduced me to this cartoon series featuring the man himself as the host of ‘Secret Millionaires Club’. These 3-5 minute episodes . . . → Read More: Warren Buffett Secret Millionaires Club]]>

Introducing Warren Buffett, the most successful investor in the world. Well, we all know who is Warren Buffett, don’t we.

So next, introducing his Secret Millionaires Club. Yes, a tutor of mine introduced me to this cartoon series featuring the man himself as the host of ‘Secret Millionaires Club’. These 3-5 minute episodes are available on http://www.smckids.com/ and they will teach your kids about financial literacy, the animated way.

We all know that it is not easy to teach and explain financial concepts to kids mainly because it is ‘boring’ stuff to them but Mr. Buffett had found a way to make it fun, short and easy to learn.

Do check out the first episode of the Secret Millionaires Club here.

www.youtube.com/watch?v=y3gBNBtJMJw

Basically, most . . . → Read More: How To Plan For Retirement]]>

Here’s something I learned at AKLTG’s Value Investing workshop which I attended last Friday. I did not sign up for his Wealth Academy workshop as I will be attending Dennis Ng’s Secrets To Making Money In Stocks seminar soon. Nevertheless, I did learn important things from Adam at the preview workshop.

Basically, most of us know that we want money and as the saying goes “The more, the merrier.” However, why is it that since most of us want money, it does not come to us easily? Besides having limiting beliefs about money, there are some things that we lack that prevents us from having the money we want. This was my take back from this workshop, which is summarized in this simple diagram.

To have the money we want, we must first have a Goal. A goal can be to buy something, to retire, or to donate to charity. Regardless of the reason, the goal must be associated with money. For example, my goal is to retire by age 50. And while most people will have a retirement age in mind, they may not realize that having a retirement age is not enough. You need money to retire.

So a realistic retirement goal should be something like: I would like to retire at age 50 with a lifestyle of $15,000 expenses monthly. I know that this works out to $180,000 a year and I will factor in another $30,000 as additional expenses to a total of $210,000. I am expected to live for another 25 years and hence, I need to achieve $4.5 million in 15 years time.

With this goal of $4.5 million in 15 years time, next comes the Investment Plan. If we work backwords, we need about $2,500 monthly with an average rate of return of 24% to reach our goals. While this seems challenging, it provides a starting point for us to start looking at how to get this return and this monthly investment amount. If we are able to adjust the rate of return to 30%, then the monthly investment will reduce to about $1,100. I believe that with proper learning, it is possible to achieve such return rates. However, it will come with experience too. The point is, how fast you want your money to grow depends on how you put your money to work for you. If you are satisfied with earning just 1% in Fixed Deposits, then be prepared to work hard for money.

The graph shows how the money will grow in 15 years time if you have an average return of 30%. It’s exponential and does not end at $4.5 million.

With the Investment Plan in place, you will need to find the right Strategy. Strategy here refers to the investment instruments you can use to achieve the desired returns. For example, a 5% rate of return will require a simple investment like unit trust, or whole life insurance policies. A 15% rate of return will require blue chip stocks and a 30% rate of return will require penny stocks carefully selected and some form of leverage. Again, the investment strategy that you choose will have to depend on your financial knowledge and experience. It will be unwise to use leverage until you know what you are doing.

The last step is Execution. Execution simply means to take action. Everything is knowledge until they are used. Take action by analyzing the best strategy to take for your plan, and take action by utilizing the required tools.

I hope that I have shared something useful today, which I have learned from AKLTG. Comments are welcome for this post. Have a Happy Lunar New Year!

It shares the world’s most successful and famous investor Warren Buffett’s strategies for investing in the stock market. It has a very important concept called Value investing.

. . . → Read More: Buffettology]]>

Finally finished reading Buffettology. This book was published in 1999 and written by Mary Buffett and David Clark.

It shares the world’s most successful and famous investor Warren Buffett’s strategies for investing in the stock market. It has a very important concept called Value investing.

Personally, the first part of the book is very interesting. It highlights why Warren Buffett is successful in his investments while many others are not. It also tells you how he selects companies for investment and how his perception of buying stock differs from most people.

The second part of the book is more technical. It goes into details of how to value the company, at what price should you be buying, and how much to project your returns. I got a bit lost in this part of the book.

Nevertheless, I am glad I have completed the book as it gives me very good insights on what strategies I should use to invest. Of course, this is only the beginning. I shall continue to learn more from up-to-date investment books and formulate my own strategy before investing in the stock market.

Lastly, I learned something very valuable from this book. It tells me that the concept “High risk equals high returns” is not true.

However, I understand from many of my friends that the stock market is going up and now is the best time to go with the trend.

On hearing thisI begin to worry. Why?

I . . . → Read More: Investing]]>

Is the economy in a recovering stage? I am not an economics expert so I cannot comment on this.

However, I understand from many of my friends that the stock market is going up and now is the best time to go with the trend.

On hearing thisI begin to worry. Why?

I am not an investor. I currently do not invest in shares because I think it is a risky business. Nevertheless, I believe that the stock market has huge potential for gains. But it is meant for the prepared.

And this is why I worry for my friends. You see, I questioned their investment strategy and their answers are like ‘watch the news’, ‘check the charts’, ‘predict the future of the company’.

To me, these are techniques that are useful, but very risky. The reason is if you are investing in shares based on gutfeel or news a.k.a rumours, chances are the chance of success is as good as going to a casino. There are no fundamentals involved. Fundamentals like analyzing the company’s reports, knowing its intrinsic value and understanding its potential for growth, are crucial to buying a share.

To me, a share is not just a number that you see on the screen. It represents an interest in the business of the company and its future.

The stock market is going up now and it’s easy to make a killing. But what happens when the next market crash comes? I cannot bring myself to imagine how many will fall prey again to the cruel economy.

That is why I am not taking the ride now, for I am not prepared. But I am preparing, learning the fundamentals, and will apply when I have gained enough knowledge and confidence. And I will invest based on fundamentals and not on greed.

I believe that being prepared is the secret of success.

What about you? Do you have a strategy for investment that you would like to share? Has it been working for you? If you do, please leave a comment for us all to learn.