Updated: Apr 24, 2019
I am sure the first response from you would be a big “Sure boh?" or "Zhun Boh?"
Let’s debunk the myth that you need to have a lot of money to start any form of investments.
The reality is this: unless you are very discipline, love to eat plain white bread and stay somewhere 鸟不生蛋 (like in the middle of the Sahara desert), it will be near impossible for anyone with a salaried job to save that mythical pot of gold.
Besides, when you have your first pot of gold, the thought of using the entire amount for an investment scheme is scary, and no investment is without risk, no matter how safe.
But hey, when was the last time you spend $100 on a meal, or an outing?
If you are young, your biggest asset is time, when time is on your side, you don’t need to rush. Don’t think of making a big windfall when you start, think big start small, (haha sounds like betting on 4D). Learn the ropes along the way, and don’t be greedy. Obviously, setting aside chicken rice equivalent amount is not going to make you own landed property or become a millionaire within a few years.
Now HOW do you start your first investment with just the price of 30 plates of chicken rice and kopi? (works out to be around 100$ and honestly, eating 30 plates of chicken rice is bad for you)
For the folks who simply love reading technical brochures
Financial experts will refer to this investing fixed kachang puteh amount on a regular basis as Dollar-Cost Averaging (DCA) strategy. In my opinion, most frequently it's not something that anyone will intentionally do. To me, it’s more of a situational strategy than a intentional choice. For example, if you already have 100 thousand as your investment sum, you won’t be putting 100 dollars a month into a stock, mutual fund, or other other investment each month until you reach some goal or pre-determined date. Simply put, if you don’t have savings today, and you want to invest, your best option is Dollar-Cost-Averaging.
Putting your eggs into Unit Trust (aka Mutual funds) basket
So what happened when you invest into a unit trust (also known as mutual fund)?
As the word “mutual” in term mutual fund suggests, your money is pooled together with monies from other investors, and then invested in a portfolio of assets according to the fund’s published investment objective and investment approach. Unit trust are suitable to dollar cost average and are the portfolio are routinely changed to balanced the risks according to market condition. It’s a fact that not a lot of unit trust do consistently well over time.
One misconception about investing through unit trusts is that your fund manager “zho bo” (do nothing). This is not necessary true. A responsible fund manager still need to do his own research before deciding which unit trusts they wish to invest in. Besides that, your financial advisor rep bears the moral responsibility of you making a profit or a loss, besides keeping his reputation.