Newbie advice

[CityFarmer]

Most people in their lifetime (including me) are most probably going to earn more from their fixed income jobs, rather than through investing.

It is not only about asset and financial freedom. There are generally more satisfactions with having a good job.
I mean you might feel happy after achieving financial freedom but that happiness will not last for the next 20-30 years.(probably half a year or less..haha)
So, it might not be a good idea to sacrifice a good job/education/opportunity and put more effort into personal investment.

Financial freedom, and satisfaction of a good job, isn't necessary mutually exclusive. You can achieved financial freedom, and yet working on a good job.

A good job should be a job where you are looking forward for Monday mornings, and having blue during weekends. It might not necessary a highly-paid job.

The best part is, you have more freedom in the good job. You will not fight for pay, promotion etc, and chose to enjoy the good job fully.

Certainly, by all means to go multitasking.
But, if a first class honour is within reach by putting more effort into your final year project, I suppose it should rank higher than part time investing unless you already have a few millions of investments.
Or, putting in more effort to be recognized in your job rather than being a faceless worker in a company.

I will put priority for the first class honour, rather on the investing. The reason be the investing is an interesting task, which I can reconfigure it as passive, if required. It is always there, when i decide to go back.

Recognized in your job is nice. A new skill and experience learned are nice. I am sad to said that they are partly illusions, not as real as the "investing".

(sharing personal view, and might be wrong)

[Temperament]

Most people in their lifetime (including me) are most probably going to earn more from their fixed income jobs, rather than through investing.

It is not only about asset and financial freedom. There are generally more satisfactions with having a good job.
I mean you might feel happy after achieving financial freedom but that happiness will not last for the next 20-30 years.(probably half a year or less..haha)
So, it might not be a good idea to sacrifice a good job/education/opportunity and put more effort into personal investment.

Financial freedom, and satisfaction of a good job, isn't necessary mutually exclusive. You can achieved financial freedom, and yet working on a good job.

A good job should be a job where you are looking forward for Monday mornings, and having blue during weekends. It might not necessary a highly-paid job.

The best part is, you have more freedom in the good job. You will not fight for pay, promotion etc, and chose to enjoy the good job fully.

Certainly, by all means to go multitasking.
But, if a first class honour is within reach by putting more effort into your final year project, I suppose it should rank higher than part time investing unless you already have a few millions of investments.
Or, putting in more effort to be recognized in your job rather than being a faceless worker in a company.

I will put priority for the first class honour, rather on the investing. The reason be the investing is an interesting task, which I can reconfigure it as passive, if required. It is always there, when i decided to go back.

Recognized in your job is nice. A new skill and experience learned are nice. I am sad to said that they are partly illusions, not as real as the the "investing".

(sharing personal view, and might be wrong)

For those who are not academic incline we don't have the luxury to choose. It is ITE for us if we don't make it in passive or active investment. And for most of us it's really ITE. This is Life for us.

[opmi]

Most people in their lifetime (including me) are most probably going to earn more from their fixed income jobs, rather than through investing.

It is not only about asset and financial freedom. There are generally more satisfactions with having a good job.
I mean you might feel happy after achieving financial freedom but that happiness will not last for the next 20-30 years.(probably half a year or less..haha)
So, it might not be a good idea to sacrifice a good job/education/opportunity and put more effort into personal investment.

Financial freedom, and satisfaction of a good job, isn't necessary mutually exclusive. You can achieved financial freedom, and yet working on a good job.

A good job should be a job where you are looking forward for Monday mornings, and having blue during weekends. It might not necessary a highly-paid job.

The best part is, you have more freedom in the good job. You will not fight for pay, promotion etc, and chose to enjoy the good job fully.

Certainly, by all means to go multitasking.
But, if a first class honour is within reach by putting more effort into your final year project, I suppose it should rank higher than part time investing unless you already have a few millions of investments.
Or, putting in more effort to be recognized in your job rather than being a faceless worker in a company.

Knew a guy who skipped his honours year to join his mentor in a fund mgr boutique. In the end, the boutique close shop, partly due to AFC. Now he is working in civil service. Lost interest in equities investing. Whole day talk about overseas properties.

Anyway, it is harder to find a job that you like. Few people tap dance to work. To me, if you spent more time on your job thinking about holidays, then you are in the wrong job. OR WORSE, dont know what job you want. Know quite a few 80s babies (Gen Y) AND some 70s babies (Gen X) that are like that.

[specuvestor]

Actually I really mean treating invested money as dead money. If see as spare cash, there is still emotional attachment to it.

My view is that it should be neither. When investing, one should view their capital as being sacred (i.e. prevention of loss is paramount), and therefore strive to ensure downside is minimized and that one has a requisite margin of safety.

Treating is as "spare cash" would mean one may have a flippant or careless attitude towards the money as one has already written it off. Seeing it as "dead money" is also incorrect in the sense that money is fungible, so why should we subject ourselves to mental accounting and compartmentalize the money as "dead" or "well-placed" or put any other label to it? As a rule, money should be protected as it is hard-earned, and everyone should, ideally, view the preservation of capital as being the most important tenet in investing.

The reason to highlight the vested capital should be spared cash, is to ensure a long term perspective in investing. A principle in value investing, which to ensure we wouldn't be hurt by short-term irrational of Mr. Market. In layman term, it means never invest with short-term debt, or fund you might need in near future e.g. emergency fund.

It shouldn't conflict with the statement of "view the preservation of capital as being the most important tenet in investing". IMO, the statement probably the most important principle for value investing, where the compounding relies on.

Actually I think this is very critical: "most important principle for value investing, where the compounding relies on". Value investing is BORING... let's get this straight first. Basically Buffett is just looking at boring 10% compounded return, not your one day move 10% type.

So the other way to look at it is this.... what happens if you lose 3%? That means you have to work harder for a 13% return (approximately). That is why preservation of capital is important (besides the fact that it makes you stay in the game)

IMHO if you are young, you should think of it as paying school fees. In fact if you make money when young is actually bad for your investment journey cause you can easily think you are God's gift to investment And you can easily lose much more when you are older. When you are young your access to "damage" is limited

When one gains experience then one should review whether you have been preserving capital and attaining compounded return. The hard truth is this: Not all are suited for investment, just like not all are suited to be soccer player. One has to decide when to call it quits as well rather than let gambler attitude / ego take over ie "recoup mentality"

[dowz]

Most people in their lifetime (including me) are most probably going to earn more from their fixed income jobs, rather than through investing.

It is not only about asset and financial freedom. There are generally more satisfactions with having a good job.
I mean you might feel happy after achieving financial freedom but that happiness will not last for the next 20-30 years.(probably half a year or less..haha)
So, it might not be a good idea to sacrifice a good job/education/opportunity and put more effort into personal investment.

Financial freedom, and satisfaction of a good job, isn't necessary mutually exclusive. You can achieved financial freedom, and yet working on a good job.

A good job should be a job where you are looking forward for Monday mornings, and having blue during weekends. It might not necessary a highly-paid job.

The best part is, you have more freedom in the good job. You will not fight for pay, promotion etc, and chose to enjoy the good job fully.

Certainly, by all means to go multitasking.
But, if a first class honour is within reach by putting more effort into your final year project, I suppose it should rank higher than part time investing unless you already have a few millions of investments.
Or, putting in more effort to be recognized in your job rather than being a faceless worker in a company.

Knew a guy who skipped his honours year to join his mentor in a fund mgr boutique. In the end, the boutique close shop, partly due to AFC. Now he is working in civil service. Lost interest in equities investing. Whole day talk about overseas properties.

Anyway, it is harder to find a job that you like. Few people tap dance to work. To me, if you spent more time on your job thinking about holidays, then you are in the wrong job. OR WORSE, dont know what job you want. Know quite a few 80s babies (Gen Y) AND some 70s babies (Gen X) that are like that.

I think that the faster way to increase capital in the earlier stages of life would be to increase salary (if employed). By being recognised and promoted, more salary could be earned and diverted to capital investments

[CityFarmer]

I think that the faster way to increase capital in the earlier stages of life would be to increase salary (if employed). By being recognised and promoted, more salary could be earned and diverted to capital investments

There are true in the statement. On top of that, one important edge of value investors, is the circle of competency i.e. the business knowledge, and/or technical knowledge of specific industrial. The more biz experience you gained, the easier for you to understand the business model of targeted companies.

Having said so, starting earlier is a big advantage for value investing. You might not necessary start with qualitative approach, which is pretty demanding. Passive approach with ETFs seems a feasible choice.

In short, we can focus on both with a fine-tuned value investing approach to meet the requirement of your career/education needs.

[shuoyanz]

Hello WBJR

May I add my humble opinion on top of what others have stated here.

It is good that you are starting out so early. Do not waste this by doing nothing with the money that you have saved.

Instead, learn by:
1) Buying into a few stocks that you have evaluated to be of good value. You really need to commit your money to stocks before you will learn more about yourself, and the stock market. Reading a thousand books will not get you the same experience as diving in.

2) At the very least, if you are really really afraid of losing your money due to overvaluation in the market, then just buy some 30 year government bonds and park your money there. It is likely to increase in value during crisis, and on top of that earn you around 2.5% interest. Better than letting your money sit in the bank. And at least you get to know how the bond market works.

3) No matter what you do, start up an excel sheet and record down all the transactions that you have done (which stock, how many lots, at what price), what you were thinking at the point of the transaction (was it undervalued?), and what you have learnt from the transaction (after 1 year, the stock realised its true value). This will make sure you actually learn something.

Good luck on your investing journey!

[Musicwhiz]

Actually I think this is very critical: "most important principle for value investing, where the compounding relies on". Value investing is BORING... let's get this straight first. Basically Buffett is just looking at boring 10% compounded return, not your one day move 10% type.

So the other way to look at it is this.... what happens if you lose 3%? That means you have to work harder for a 13% return (approximately). That is why preservation of capital is important (besides the fact that it makes you stay in the game)

IMHO if you are young, you should think of it as paying school fees. In fact if you make money when young is actually bad for your investment journey cause you can easily think you are God's gift to investment And you can easily lose much more when you are older. When you are young your access to "damage" is limited

When one gains experience then one should review whether you have been preserving capital and attaining compounded return. The hard truth is this: Not all are suited for investment, just like not all are suited to be soccer player. One has to decide when to call it quits as well rather than let gambler attitude / ego take over ie "recoup mentality"

Thanks for this. Yes it is indeed very boring - when I tell people my portfolio it puts them to sleep (literally) because it never moves much. Somehow most people prefer to see volatility and "movement", which makes them feel that the investment is "doing something". I don't quite understand the mentality.

Another problem with investing is that you literally need 10-year time frames to know if you are suitable or not for investing, and even then it's not always instructive. Moreover, most people don't benchmark their performance against indices and also do not use a reliable method for measuring their CAGR, so it becomes really difficult to know if you are competent, or not.

And yes when you are younger you have a higher tolerance for pain, but those who invested in late-2009 have only seen a bull market. So even if one is young and is prudent and worries a lot, there's no way to "test" his reaction to a market plunge and bear market situation. In short, the market doesn't give you many chances to "practice" and hone the skills necessary to be a good investor.

So, learning from others is essential.

[Temperament]

So, learning from others is essential.
Unquote:-

Ha! Ha!
If our MW says so, lesser mortals like us (very little education types) dare to say anything different?
In fact, i don't know whether you will be surprised or not - two of the greatest investors who are partners in the investment world said the same think more or less. In fact in stronger terms. What did they said and who are they? (Still very much alive but preparing to hand over). No prize for your guess, O. K.
i say it again i think i can learn from "The Good, The Bad and The Ugly". i think i can also learn from the fools. More often then i wish too, i am one of them in the Markets.
That's why i am still here and some other sites.
NB:-
If you have an EGO in the world of investing, be very , very careful. You will soon be humbled by the Market. But i still can't get it completely out of it in my investment world leh. That's why i still have very , very long-term holding at a loss.
Shalom.

[orangetea]

The actual act of pitting money on the table is priceless.

It allows us the really know where our limits in volatile times.

E.g. Do we buy oil companies / swiss companies after a big drop / on going drop, when to buy and when to sell or withdraw.

At the same time building knowledge to look for information while all these events are happening.