Journey to financial freedom needs preparation.

Often, I get emails from readers asking for advice and I would remind them that I am not allowed to give advice. I am just thinking aloud here in my blog and if my soliloquies have proven inspiring or even helpful, I guess that is a good thing.

A recurring theme in a number of emails from readers is whether having a smallish capital is good enough to start investing in stocks. So, over the last few years of blogging, I have thought aloud to myself as I looked at bits and pieces of the puzzle and more recently consolidated some of these thoughts into an "e-book" which is found in the right side bar of my blog.

I believe that getting our basics right first is more important in helping ourselves to be financially secure than investing in stocks. Of course, investing has an important part in the grand scheme of things on the journey to financial freedom but the basics will ensure a strong foundation. All in good time, as the saying goes.

To help put this point across, I had a blog post which generated quite a bit of controversy last year when it was published. I believe that the blog post's message was misconstrued by some when I questioned whether investing in stocks was suitable for everybody. For anyone who might be interested to read it or to read it again, please pay special attention to the concluding paragraph of the blog post: Is investing in stocks suitable for you?


My reply to J who wrote to me recently:

Hi J,

Welcome to my blog. :)

Firstly, I have to tell you that I am not allowed to give financial advice. I can share some knowledge and experience but you will have to decide what to do from there.

Before you start, you might want to go to my blog's right sidebar and read my "e-book" which should help lay some groundwork for you. If we do not have a large capital to invest with, just getting the basics right to give us financial security without investing in stocks would be a big step forward.

Once we have gotten the basics right, we could think of putting excess cash to work.

Not all of us are good with financial numbers. So, not all of us are good at picking stocks. Warren Buffett who is probably the most successful investor of all time makes mistakes too. So, if we don't think we are strong in this department, we might want to do some index investing. OCBC and POSB have plans to help people do this. Go to my blog and use the "search" box at the top of the blog and search for "blue chip investing". Read the related posts and comments too.

Of course, we could read up to upgrade our knowledge and skills. When we feel that we are comfortable enough to invest in individual stocks, we might want to give it a go. To this end, there are good books which could help us better ourselves. "Food for thought" in my blog's right sidebar has some recommended books.

 .... don't be discouraged. All of us have to start somewhere. :)

Best wishes,
AK

In the email to me, J said, "I would appreciate if you can give me some advice so I can finally start my journey." I am sure all of us here want to journey towards financial freedom. 

However, we must remember that before every journey, there should be adequate preparation. Embarking on a journey without adequate preparation would be to leave too much to chance.

When we are well prepared, we will be able to embark on the journey with more confidence as we will be in a better position to handle any unforeseen circumstances along the way.

Related posts:
1. Free e-book by AK.
2. The Millionaire Next Door.
3. Take steps towards financial security.
4. Journey to financial freedom is not a race.
5. When to BUY, HOLD or SELL?

25% discount offered by Hock Lian Seng.

I have been receiving quite a number of emails recently offering discounts on asking prices for condominiums in Singapore. It would seem that local developers are feeling the heat and the decline in asking prices could persist for some time to come.

I received another email today and it is for Skywoods condominium which is being jointly developed by Hock Lian Seng, King Wan and TA Corp.

I said in an earlier blog post that the break even price for Skywoods is estimated to be $1,100 psf. So, if you would like to buy a unit in the project, getting a price that is very close to $1,100 psf would be like getting a home built for you at cost with almost no profit for the developer. This is hardly fair to the developer but this is life.

Source: www.stproperty.sg

 

For those who have been waiting to buy a condominium in Singapore, it is probably time to start looking around as it is now a buyers' market and it looks to be increasingly more so.

Related posts:
1. Hock Lian Seng: Won $221.8 million contract.
2. Buying an apartment: Some considerations.
3. Buying a private property as an owner occupier?
4. Buying a property: Affordability and value for money.

Starbucks with Song StoneCold: Assets I believe in.

Some of you might remember Song StoneCold's first guest blog here when he had kopi with you. For this guest blog, it is not just any kopi, it is Starbucks kopi. Hope you enjoy this date with Song StoneCold while sipping your kopi latte, kopi cappuccino, kopi mocha frappe etc.:

Song StoneCold says:
Human wants (and even needs) could be unlimited but too bad the cash in my wallet is rather limited.

Last week, I had one of those days when I felt a need to splurge on everything! Stocks, limited edition Batman watch and even a Rolex. I was brought back to Earth after I checked my Big Sweep tickets at the familiar Singapore Pools website. YES! You guessed it! I contributed to Singapore Pools again.

Well, I am not a spendthrift but I am not a penny pincher either. I believe in getting VALUE, buying at a value price. I am an ardent supporter of AK's blog. 

So, before I make any purchase, I will ask myself two questions (which I picked up from a blog post by AK - see related post #2 at the end of this blog):

1. Is this necessary?

2. Is it value for money?

"Simple questions. Always ask these two questions before we buy anything and, in all likelihood, we will be saving more money in future," AK.

Well, I have an additional question that I will ask myself before I "invest" in big ticket items. I like the word "invest" as it sounds very sophisticated! LOL. Besides asking the two questions that I learned from AK, I will ask myself: "Is it an asset or is it a liability?"

As what Robert Kiyosaki said: "Asset can be anything as long as it has value, produces income or appreciates, and has a ready market. Assets put money IN your pocket. Liabilities are defined as things that decrease in value. Liabilities take money OUT of your pocket."

Well my goal is to buy more assets than liabilities. I do buy liabilities too. My car is a liability but I am glad I bought it at a VALUE price. I bought my trusty Lancer Warrior for $38K with 8 years left. For me, it is "no value, no buy" or, as what AK says, "no discount, no buy".

What I consider to be assets can also be slightly different. Besides income generating assets like dividend stocks, I also consider the following as assets:

1) Courses and seminars. I consider attending courses and seminars an asset and I quote Warren Buffett: "The most important investment you can make is in yourself.…The best asset is your own self. You can become to an enormous degree the person you want to be.

"Generally speaking, investing in yourself is the best thing you can do. Anything that improves your own talents; nobody can tax it or take it away from you. They can run up huge deficits and the dollar can become worth far less. You can have all kinds of things happen. But if you’ve got talent yourself, and you’ve maximized your talent, you’ve got a tremendous asset that can return ten-fold."

Learning a skill will increase your market value and it will eventually "put money into your pocket".

Well, I always look for courses and seminars that are of value. Expensive doesn't guarantee that it is good.

2) Charity. Giving creates a feeling of abundance. It makes you feel good and makes you feel that you have more than enough. The main purpose of charity is not to expect any return of fame or accolade. Giving is from the heart and I believe you do not have to announce to the whole world what you have done.

Well, many say that charity will bring you good karma. So effectively, I believe what goes around comes around. One fine day if we are are down, who knows, our good karma might return and tide us through a difficult time. So it may be a good "asset investment" after all.

I shall end with a Warren Buffett quote:

"If you buy things you don't need, you will soon sell things you need."

So, let's spend wisely and buy more assets and less liabilities and live happily ever after! Cheers!

Another guest blog by Song StoneCold:
Getting value out of everything!

Related posts:
1. Counting our blessings.
2. Two questions that build wealth.
3. Robert Kiyosaki: 2 are better than 1.
4. The millionaire next door.
5. Affordability and value for money.