What Is The Best Way To Invest RM100,000
I got a lot of e-mail asking about they have RM100,000 cash and not sure what to do with the money or where to invest the money i,e Unit trust, Stocks, Properties, Gold, Silvers, Starting a new small business etc.
Some of them are very excited as they managed to save up or get a big windfall(bonuses). They wish to increase that number by investing but don’t know how to.
Congratulations!
One of the first step to Financial Freedom is by taking control of your financial life. You cannot depend on others i.e Government to take care of your financial well being.
Personally, I feel instead of asking “where” to invest, focus on the "what", "how long", "does it", "can you", and “who”.
You will get a clearer ideas on how deal with your money after answering the 5 questions below
Ask and answer yourself these 5 questions:
1. What is the Objective and Goal of this Investment?
The plan for Retirement planning and Investment Planning are totally different as every one has an unique Investment risk Profile
2. How long is the investment Horizon before I can cash out the money?
The time horizon for properties generally is much longer than compare to stocks due the limited liquidity.(Unless your properties were is in a hot location)
3. Does it effect with my financial resources?
I am sure you don’t want to put all your money into just one basket of investment vehicle,right? The the next question is Do you have time to learn and monitor all the investments? Assuming to chosen to invest stocks futures using technical and fundamental analysis, can emotionally not attached to it and would not effect your current job and financial resources
4. Can I live with the risk involved?
Investment in stock and stocks futures have a high price movement volatility. Can you stomach the risk involved?
5. Who will managed the Investment?
It’s good to let other to managed the Investment. However this may not be the best choice. Do speak to your financial planner to find out more.
Once you are able to answer the above 5 questions, do invest some time to learn about different investment alternatives. This is a journey as it’s not something you can learn from a few days or months.
The doctor takes more than 4 years of studies before able to prescribe a medicine. What makes you think after a month of studies, you can be expert in a particular investment?
It’s impossible to be successful until you understand the behavior, basic fundamental and what you’re investing in.
There are many financial magazines, books and web sites such as Personal Money, Bloomberg etc, that would gave a good start for understanding the basics of personal finance.
In conclusion, the key is always Educate yourself in investing!
I guess most people need to “feel” the return pretty short term, else they will just assume investing is akin to gambling. But what most people don’t realize is the power of compounding returns.
And to ask it the other way round, the question should be – How Much Can I Afford to Lose w/o Losing any sleep at night? 😀
Warren Buffett Trashes Higher Education, Says It’s ‘Not For Everyone’
Warren Buffett offered some dismissive words on higher education in a conversation with MBA students last month (notes provided by Market Folly).
Here’s what he said when asked about the student loan bubble::
The best education you can get is investing in yourself. But this doesn’t always mean college or university. I have two degrees but I don’t have them on my wall, in fact I don’t even know where they are.
I used to be afraid of public speaking, and I realized that I have to do that someday. I do have one diploma I display from Dale Carnegie’s Public Speaking Course and it only cost me $100.
Thus, I don’t think college is for everyone, one benefit is that it gives you a button. In fact none of my three kids graduated from college.
John Mellor did research on group of students for a project. One group was sent to the beach while the other studied at university. Their results are not that different. It’s always about consistent improvement of your abilities.
You should always ask yourself, “does this have any value to me?” I did go to university because of the expectations of my parents.
Buffett himself earned a Bachelor of Science in business administration at the University of Nebraska-Lincoln and a Master of Science in economics from Columbia Business School.
His children have had successful careers despite not graduating from college, with his son Howard making a career in business and politics, his son Peter becoming a composer, and his daughter Susy being active in philanthropy. fr:finance.yahoo.com/news/warren-buffett-trashes-higher-education-153225800.html