3 Reasons To Start Investing... NOW!

 Jasvind Singh, Assistant Manager

Published On: 17 February 2017 | 4:00 PM

Ever heard the words of Albert Einstein, “Compound interest is the 8th wonder of the world. He who understands it, earns it… He who doesn’t… pays it.”?

Phillip CFD Blog | Albert Einstein Quote

Many of us wake up in the morning, wondering when we will be rich, how we will be rich and if we can retire tomorrow, sit by a beach and sip some sangria. We then go to school or work, spend the whole day, jump back in bed and repeat the cycle the next morning. Well, guess what, nothing changes until we take some action! I’m not saying investing will make you rich, but read on, you’ll find out.

Over the past year I have spent a great deal of time speaking to my parents, friends and colleagues on why they do not invest their money in the stock market and almost 90% of the time I get the same answer; “Investing is risky!”, “Investing is only for those who are good at it!”, “I’m scared to lose my money!”, and best of all, “I’ll give you some money and you help me invest?”

It brings me back to a time when I was in my early 20s, when I too had the same thinking. My fears were aroused by all the “Don’t get fool by Get Rich Schemes” shown on TV. I remember while growing up, my parents kept saying, “there is no easy way to earn money besides hard work.” Reality is we fail to educate ourselves on the importance of investing.

Here’s why…

Reason No. 1: It is about the future, not present.

Investing, if viewed as a tool to get rich quickly, will always result in you losing money and walking out the room saying, “this is not for me!” Investing is about gaining financial freedom, a second or passive income. Let us face it that one-day, we’ll all have to retire. Question is will we be financially prepared to do it?

Besides savings in our CPF account, the money we’ve saved is all what we have to survive the rest of our lives and do what we want. So we better get serious about building that wealth, and if you’re wondering when the right time to do it is, the answer is NOW! There is a Chinese proverb that goes, “the best time to plant a tree was 20 years ago, the second best time is now.”

Reason No. 2: Stop thinking investment is risky, its not!

Saying investment is risky is just an excuse, the same reason as why you could not go to the gym today. Yes, you will need knowledge before you start investing but in the 21st century, almost all your brokers are there to help you. At least I know at PhillipCapital, we are Your Partner in Finance. Not sure how to start? We will guide you. But end of the day, the onus is on you to take the first step. Right from stocks trading to share builder’s plan where you invest little amounts in the stock of your preference every month, we have it all.

Reason No. 3: Remember Albert Einstein… Compound Interest

Yes, he was a genius. He saw things ordinary men like you and me could not see. He knew about compound interest in the early 1900s. It is 2017 now, and most of us are still struggling to understand it. Let us understand this once and for all.

Say you invest $5,000 today in a stock or commodity and that commodity gives you 5% annual return. At the end of year 1, you would have made $250 and have a total of $5250. If you do not withdraw the money and reinvest $5250 back, at the end of Year 2, you will have made $262.5. How sad, very little money right? Well, repeat that for the 25 years we will be working, and that $5,000 would have grown to $16,931.77. Shocked?!?!

Here’s when the naysayers come in. 5%? You sure I can make 5% return every year? Yes, I am sure and it is because the 5% is an average over the 25 years. Some years you lose some years you make. Take the Dow Jones Industrial Average for example, it was at 3810 points in 1995, today it’s at 20,500 points. That’s a 425% increase in 22 years.

More naysayers would now say how many stocks are like Dow Jones? I say many, many more. The DOW has 30 constituents. S&P 500 has 500 of it. Apple was $1.35 in 1995, $0.82 in 1996 and $128 today. You know, that’s about 9381% increase in 22years! You did lose money at the start but the future is what matters. If you invested $5,000 in Apple in 1995, that would be worth $468,984.95 today. And that’s just a rough calculation. If we include all the corporate actions and stock splits the figure is much higher.

REST IN PEACE MR. EINSTEIN. YOU’RE TRULY A GENIUS!

Phillip CFD Blog | Albert Einstein

GIF Source: GIPHY

That’s all for now folks. I will leave you all with the following video by Jay Shetty, “Why We Should Never Stop Learning”

Do let me know your thoughts via Facebook. Follow us to be the first to get more of such articles.

Open an Investment Account Now!

Simply chat with us (9:00am to 6:00pm, Monday to Friday), drop us a call at +65 63364564 or email us via cfd@phillip.com.sg.

Follow Phillip CFD on Facebook

Related Articles

Australia CFDs

Phillip CFD Product| Australia CFD

We are pleased to announce that with our latest addition of 196 Australia CFDs, you can now trade more than 3,500 Equities CFD and 13 World Indices CFD! Go Long or Short with Leverage facilities today.

Launch of Japan CFDs

Japan CFDs | CFD Trading Singapore

We are pleased to announce that we have launched Japan Equities CFDs. This will provide you with the opportunity to explore other overseas contracts. Although the Japanese equities surged in the first two quarters of 2015…

Additional US ETF & ETN

Phillip CFD Products | 80 New ETFs

We are pleased to announce that we have added a total of 80 new United States ETF and ETN contracts. The increase in number of CFD contracts available should provide you with more trading opportunities in the United States.

Disclaimer

This material is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to buy or sell the investment product mentioned. It does not have any regard to your specific investment objectives, financial situation or any of your particular needs. Accordingly, no warranty whatsoever is given and not liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of your acting based on this information.

Investments are subject to investment risks. The risk of loss in leveraged trading can be substantial. You may sustain losses in excess of your initial funds and may be called upon to deposit additional margin funds at short notice. If the required funds are not provided within the prescribed time, your positions may be liquidated. The resulting deficits in your account are subject to penalty charges. The value of investments denominated in foreign currencies may diminish or increase due to changes in the rates of exchange. You should also be aware of the commissions and finance costs involved in trading leveraged products. This product may not be suitable for clients whose investment objective is preservation of capital and/or whose risk tolerance is low. Clients are advised to understand the nature and risks involved in margin trading.

You may wish to obtain advice from a qualified financial adviser, pursuant to a separate engagement, before making a commitment to purchase any of the investment products mentioned herein. In the event that you choose not to obtain advice from a qualifies financial adviser, you should assess and consider whether the investment product is suitable for you before proceeding to invest and we do not offer any advice in this regard unless mandated to do so by way of a separate engagement. You are advised to read the trading account Terms & Conditions and Risk Disclosure Statement (available online at www.poems.com.sg) before trading in this product.

Any CFD offered is not approved or endorsed by the issuer or originator of the underlying securities and the issuer or originator is not privy to the CFD contract. This advertisement has not been reviewed by the Monetary Authority of Singapore.