Wednesday, December 7, 2016

How Much Can You Make From Investment? - Sharing Of My Personal Journey

Investing is a favourite topic among those who wish to achieve financial freedom. It is also a favourite topic for those who want to have more money in their lives. We invest for a purpose don't we?

Many people ask how to start investing? I even have readers as young as 14 or 15 who ask how they can start investing. It is encouraging to know that there are many young people who want to invest. No matter what the purpose is, investing is still important to build up a nest egg for retirement.

Many people start investing because of a reason. For me, I read books and thought investing could give me a better life. It could give me more money. Money seems to be a great motivation for many people to start investing when things are getting more expensive in the world we live in.

How Much Can You Make From Investment? 

Reality starts to kick in when we lose money in investments. When we realise investing is not as easy as it seems. I too struggle for a few years before finding my right style of investing. Yes profits start to come in when you get the hang of it but honestly if we do not have a large capital to begin with, the money we make from investment is slow and little. How much can you really make from investing just $10,000? It is really quite little.

Setting financial goals for more investment capital

Realising that capital is important in investing, I set my financial goals to save up more. You can read more about my goals here. It was a painful journey. I saved up painstakingly throughout the years just to achieve a larger investment capital. Saving money became a habit after a few years because of this one goal "to achieve a larger investment capital".

However, this brought about it problems too which I've been working it out through the past 1 year. As I grow older and start preparing for my future life with my partner, I realised I cannot just keep saving through cutting expenses. There is really a limit on how much you can save. This is the beginning of another journey.

The journey to increase income

A few months back, I wrote a few posts on how I ditched my budgeting of tracking my daily expenses. This was written on April 6 2016. I also set myself out to increase my income in any way which is possible. In this way, I can still having savings while being able to have a higher expense. It is simple maths, if I earn $3000 and save $2000, I can only spend $1000 but if I earn $5000 and still save $2000, I can spend $3000. My savings is still intact while my quality of life increases.

You may have realised I write lesser on myself the past few months. I have been busy revamping my resume, finding new opportunities and going for interviews as I realise my income would rise painfully slow if I continue to stay in the same job. This was also sparked off from the encouragement of my girlfriend who encourage me to strive for a better career. The efforts paid off, I will be starting in a new job from January 2017 onwards. A new year, a new beginning.

Back to investment

Before financial freedom, there exist a stage of life where we find our direction and figure out what works and what does not work. We try investing, fail and try again. We try cutting our expenses, save up more, increase our income and then do it all over again. All these while, if we do not give up and keep on going, I believe life will work out better in itself.

The formula for better financial life is actually very simple. It is to earn more, save adequately and invest wisely. Financial freedom is not just about investing. As mentioned earlier, how much can you make from investment if you only have $10,000? Investment and financial planning must go hand in hand. It is the same as a couple in relationship, without one, the relationship will fail.

With a $100,000 capital, we can definitely make more money from investment as compared to a $10,000 capital. This is assuming we know how to invest and do it wisely. This is another problem on its own which I shall not expand in this post. Also, it is important not to lose too much money. Many people fall into scams thinking they can make more money investing in some "special" projects. Nevertheless, we do not just want to keep saving up for an investment capital and forget to enjoy life now. Lost time can never be re-winded back.

Meeting other like minded bloggers inspires me to keep on going too. The recent meet up with Uncle CW who blogs at inspired me again. He shared on how he manage to retire and even paid for his 3 children education through investing. Learning from someone who has already achieved it is a great blessing.

What have you done on your journey to financial freedom? Share with us here so we can all learn together.

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  1. Great to hear that you have secured a new job and increase your earned income. Congratulations!

    1. Hi Uncle CW,

      Thanks! It was great meeting up with you that day back in office. That time still saying going to change job. Now confirm leaving already. Thanks for your sharing :)

  2. I can't agree more with you that increasing our income has a much bigger impact in expanding our saving compared to being thrifty. We are in a society with inflation and the monies we can save is just this much. I'm glad that you grabbed a job with higher income. Do be wary about lifestyle inflation though after your income increase.

    1. Hi Cath,

      Yup sometimes there's only so much we can save. My bigger problem is being too tight on money as oppose to spending more. I think lifestyle inflation won't have much impact for me but yes still be wary :)

  3. A few years ago, a cousin doing NS ask me about investing. My response then was he shd study hard in University, get good grades to get good job, so that he can earn more n build up his capital first. Investing know-how can come later.
    Hmm.. maybe I shd add then that he should focus on personal finance first before investing.

    1. Hi ThinkNotLeft,

      Yes should concentrate to get good grades and good job so can build up capital faster. With higher income it is much easier to save. Yes you should add focus on personal finance too. There are people who earn a lot but not able to save also.

  4. Congrats on your new job and I'm sure you are looking forward to starting in Jan 2017. Good to know it comes with a higher salary and the additional income will be useful for savings and investing.

    Lifestyle inflation is almost always going to creep in as your salary increases. It usually comes with additional responsibilities and stress, which results in less control over your expenses. Give yourself time to manage it and don't be too hard on yourself when you make mistakes!


    1. Hi TFS,

      Yes looking forward to Jan 2017 and preparing to work hard too. It is a big change for me as I've been in my previous work for the past 6 years.

  5. if u can earn more from your salary n built a strong base. no need to take risk to invest because u may lose your strong base due to more volatile market/world, high frquency trade , etc. things are not the same as twenty years ago...

    1. Investing can be negative return and destroy our wealth too.

    2. Hi tong,

      Yes rich people most of them don't invest in stocks. They invest in properties or business more. Like what uncle CW say, investing can be negative too. We have to manage risk properly.

  6. Hi SGYI,

    Congratulations on your new job! Indeed, I shared the same philosophy with you that to be a wealth builder, we must strive to increase our income and invest wisely. No matter how much you save, it is not possible to build up our wealth.