Financial Education Series

I often face great difficulty in explaining to people the concept of financial independence (in the context of Singapore). If you ask me how do you grow & preserve your money in Singapore, what is the simplest, most direct and understandable manner I can convey this?

They are not familiar with stocks and investments. They are super fearful of losing their money. Perhaps totally financially illiterate. The only things they know may be putting their money in the banks, buying traditional insurance, etc... Their perception from financial markets are from dramas and the sensationalized media where you have people jumping off buildings.

I can go on and on about inspirational stories around the world (Mr Money Mustache, Millennial Revolution, AK), but how exactly does one achieve them in Singapore? How can I break down and summarize all of this information? How can I convince them that they need to invest, and that investing is not gambling?

And hence the reason for this series of posts.

Note: These posts are not:
- Saving money, budgeting, expenses tracking
- Delay gratification, self control
- Motivational talk
- Emergency funds
- Getting out of debt

Don't get me wrong, the above are VERY IMPORTANT. In fact, those are the foundation - but those are not the intention of these posts.

Before you start on the journey below, you should ALREADY:
- Be debt free
- Have positive cashflow every month (meaning you earn more than you spend)
- Have an emergency fund and proper insurance coverage.
- Be motivated to make proper changes to your financial life.

It is also a reference for myself on how I would convince and educate someone about financials. I will attempt to break down and explain basic financial concepts and instruments in the simplest way I can, on how a commoner can grow his wealth in Singapore.

Note: Take into account that the general population in the past, especially the older generation, do not have the financial means or medium to access these in the past (i.e no internet, global access, freely available information)


1. No One Care About Your Money More Than You

1. Assets VS Liability

The rich buy assets, the poor buy liabilities

2. Different Asset Class

To start off

Rental (Real Estate), Dividends (Stocks), Coupon (Bonds), Risk Free Rates, Cash

3. Individual Stocks Can Go To Zero, But The Entire Economy Will Never Go To Nothing

ETF,

4. Stocks will always trend higher over the long term (20 years)

Inflation, Population Growth



5. Basic Stock Evaluation

misconception that higher price = more expensive