For the past decade Malaysians from all walks of life have been faced with unprecedented continuous increase in living expenses. Being upper middle income earners, my wife and I were both caught up with trying to balance our monthly budget while providing the best we could for our three kids.
We knew that unless we found a way to substantially increase our earnings through our careers, or alternate income sources, there was no way we were going to be able to save enough to provide our kids with a quality tertiary education, let alone save enough for a comfortable retirement.
With this in mind, we braved ourselves to venture into various 'opportunities' and businesses with hopes of building a second income source to meet our financial goals. While some of these ventures showed promise, in the end we failed to see them through; primarily due to time commitments to our day jobs, family and church. Not only did we fail to meet our goals, we lost some money in the process.
Last year, in one of my discussions with John (a friend of mine) at a conference, I shared my thoughts on this subject. He shared his own experience in going through a similar journey until he discovered a breakthrough in stock investments. My initial response was once of skepticism as I had always regarded the stock market a place where money was lost. However John convinced me to sign up for a value investment course which he said had changed his life and would mine too.
Prior to attending the Value Investing 101 course I had come across the notion of the power of compounding interest a number of times but had never paid much attention to it. Albert Einstein called compound interest "the greatest mathematical discovery of all time". Well I have come to believe that Einstein has a good point, because unlike much of the maths like trigonometry or calculus you studied back in school, compounding can be applied to everyday life.
We will talk more about compound interest in future posts, however the thought I want to leave by bringing up this subject in this opening post was that for years having not believed in the security of any form of stock or property investment (mainly due to lack of knowledge), I had lost out on the opportunity to see my money grow the way it could have.
Through the investment 101 course, I learnt what value investing meant and how it could be used by simple individuals like you and me in making informed decisions in buying stocks of great companies with fantastic long term growth potentials. This term 'value stock' simply means these companies which we choose to buy are currently considered to be selling at a discounted price on their true value. There are ways which we can identify value stocks which will be covered in future posts.
One thing I want to clarify upfront in this opening post is we must not confuse or interchange the term 'value' for 'cheap'. Take for example a pair of jeans. One can buy a cheap pair of unbranded jeans for RM40, however that may not constitute a value buy. However if someone comes across a sale for a pair of original Levis jeans which costs RM300 but is selling at a discount for RM100, now that can be considered a 'value' buy. We will get more into this subject in future posts.
The past 7 months has truly been a colourful journey of learning and practicing. I've learnt much about the key truths about evaluating businesses from various tenets which include Business, Management and Financial tenets. I've learnt much about the importance of patience when it comes to value investing, something which over 90% of stock market investors do not have. I've learnt much about setting and planning my investment goals and putting them into action.
To help put things into perspective, in the past 7 months since I began this journey, I've taken the bold step of investing all my retirement savings into a closed ended portfolio with a total of about 10 stocks to begin with. During this period The KLCI has been down 2% while my investment portfolio is up 21%. This would mean, based on the last market closure, my current investment portfolio has beaten the market by a good 23%. This was not achieved through random speculative investments common to most investors, but through the purchase of carefully chosen value stocks using the many tools I have learnt over the months.
To end this post, I just want to say to my readers the purpose of this blog is primarily meant to be a platform which I will use to share my learning experiences and investment journey in the months and years ahead. I am by no ways an expert, and like many am still learning. My hope is that my sharing will benefit many of my fellow Malaysians and encourage you to begin your own journey of learning and investing for your future.
I also hope to make many friends through who we can share our experiences along the way. The time to start investing is now, as each day we delay will cost our families and us more than we can imagine. As Zig Ziglar says "You don't have to be great to start, but you have to start to be great!" Happy investing friends!
We knew that unless we found a way to substantially increase our earnings through our careers, or alternate income sources, there was no way we were going to be able to save enough to provide our kids with a quality tertiary education, let alone save enough for a comfortable retirement.
With this in mind, we braved ourselves to venture into various 'opportunities' and businesses with hopes of building a second income source to meet our financial goals. While some of these ventures showed promise, in the end we failed to see them through; primarily due to time commitments to our day jobs, family and church. Not only did we fail to meet our goals, we lost some money in the process.
Last year, in one of my discussions with John (a friend of mine) at a conference, I shared my thoughts on this subject. He shared his own experience in going through a similar journey until he discovered a breakthrough in stock investments. My initial response was once of skepticism as I had always regarded the stock market a place where money was lost. However John convinced me to sign up for a value investment course which he said had changed his life and would mine too.
Prior to attending the Value Investing 101 course I had come across the notion of the power of compounding interest a number of times but had never paid much attention to it. Albert Einstein called compound interest "the greatest mathematical discovery of all time". Well I have come to believe that Einstein has a good point, because unlike much of the maths like trigonometry or calculus you studied back in school, compounding can be applied to everyday life.
We will talk more about compound interest in future posts, however the thought I want to leave by bringing up this subject in this opening post was that for years having not believed in the security of any form of stock or property investment (mainly due to lack of knowledge), I had lost out on the opportunity to see my money grow the way it could have.
Through the investment 101 course, I learnt what value investing meant and how it could be used by simple individuals like you and me in making informed decisions in buying stocks of great companies with fantastic long term growth potentials. This term 'value stock' simply means these companies which we choose to buy are currently considered to be selling at a discounted price on their true value. There are ways which we can identify value stocks which will be covered in future posts.
One thing I want to clarify upfront in this opening post is we must not confuse or interchange the term 'value' for 'cheap'. Take for example a pair of jeans. One can buy a cheap pair of unbranded jeans for RM40, however that may not constitute a value buy. However if someone comes across a sale for a pair of original Levis jeans which costs RM300 but is selling at a discount for RM100, now that can be considered a 'value' buy. We will get more into this subject in future posts.
The past 7 months has truly been a colourful journey of learning and practicing. I've learnt much about the key truths about evaluating businesses from various tenets which include Business, Management and Financial tenets. I've learnt much about the importance of patience when it comes to value investing, something which over 90% of stock market investors do not have. I've learnt much about setting and planning my investment goals and putting them into action.
To help put things into perspective, in the past 7 months since I began this journey, I've taken the bold step of investing all my retirement savings into a closed ended portfolio with a total of about 10 stocks to begin with. During this period The KLCI has been down 2% while my investment portfolio is up 21%. This would mean, based on the last market closure, my current investment portfolio has beaten the market by a good 23%. This was not achieved through random speculative investments common to most investors, but through the purchase of carefully chosen value stocks using the many tools I have learnt over the months.
To end this post, I just want to say to my readers the purpose of this blog is primarily meant to be a platform which I will use to share my learning experiences and investment journey in the months and years ahead. I am by no ways an expert, and like many am still learning. My hope is that my sharing will benefit many of my fellow Malaysians and encourage you to begin your own journey of learning and investing for your future.
I also hope to make many friends through who we can share our experiences along the way. The time to start investing is now, as each day we delay will cost our families and us more than we can imagine. As Zig Ziglar says "You don't have to be great to start, but you have to start to be great!" Happy investing friends!
