The most important finance topics don’t require details. Most can be, and should be, summarized in a sentence or two.
To date below: enjoy!
Ringgit-cost average during your entire wealth accumulation period and you don’t need to chase high investment return.
You’re twice as gullible as you think you are.
Never invest in things too good to be true which you cannot explain to a six-year old.
Every 5 to 7 years, investors forget that market crash occurs every 5 to 7 years.
It’s so ridiculous that you do medical check up only once a year, but check your investments religiously every day.
Be aware of this! Laughing about how stupid investors can get and not realize you’re reading about yourself.
Your circle of competence is likely 90% smaller than you think it is.
You’re only truly diversified when you can see some part of your portfolio perform worse than others.
High risks with too-good-to-be-true return will always be disregarded; low risks with reasonably consistent return will always be blown out of proportion.
EQ in investing is more important than IQ – don’t fall into over-analysis paralysis.
Start accumulating for university and for your retirement before your first child is born. You’ll feel silly when you start and like a genius when you finish.
The most proven way to wealth accumulation is learning to live with less, it’s not exactly rocket science.
Singer Rihanna nearly went broke and fired her financial advisor, who described her situation well: “Was it really necessary to tell her that if you spend money on things, you will end up with the things and not the money?”.
Adjust your perspectives as often as the facts change.
Disregard people who are too stubborn to change theirs when the facts change.
Review last year’s stock market predictions and you’ll take this year’s predictions with a pinch of salt.
Sleep on every investment decision for a week, then run it by a trusted investor friend before executing.
Just as you should dress appropriately for your age, you should spend, drive and live appropriately for your income.
“To make money they didn’t have and didn’t need, they risked what they did have and did need. And that’s foolish. It is just plain foolish.” Dumb risk taking by Warren Buffett.
You can probably afford not to be a great investor — you probably can’t afford to be a bad one.
Learn more from your bad investments than your good ones.
Teach your kids about the value of money before they’re old enough to earn money.
Visualize how much stuff you’d have to make up if you were forced to talk 24/7. Remember this when watching financial news.
Assume the worst, hope for the best, accept reality.
Insurance savings plans/annuities: A product mixing the complexity of high finance with the sales tactics of used-car salesman has an entirely predictable outcome.
During the last century, there have been more 10% market pullbacks than Lunar New Years. Everyone knows Lunar New Year will come; think of stock market volatility the same way.
Don’t try to keep up with the Joneses without realizing the Joneses aren’t any happier than you are.
“A good rule of thumb for many things in life holds that things take longer to happen than you think they will, and then happen faster than you thought they could.”
Most people’s biggest expense is interest on their bad debts, which comes from living beyond your means, and buying things they think will impress others, which comes from insecurity. Avoid these two like a plague and you’ll do financially better than most of your peers.
Most people need an independent financial adviser, but everyone needs an independent financial counselor, or someone to talk them off the ledge before making a disastrous financial decision.
The richer you truly are, the less you want to flaunt your money.
Investors were probably better informed 30 years ago when there was 90% less financial news.