How to grow your wealth? Is it too late to start when you are 40 years old?
(Guide on how to reach financial freedom)
The answer is yes, but it is better to start late than never! So how do you get started and where should you start?
There are a lot of ways to grow your wealth. Go to the internet and do some searches and you will get tonnes of information. However, you may be overwhelmed by too much information and still confused on how to get started and where should you start.
Not to worry, I will share my experience on how I get started, which is the reason why I started writing this blog. Listed below are the few ways which I did.
1. Savings and Retirement Plan
One of the ways to grow your wealth is to buy savings or retirement plans. I started buying savings plan and retirement plan at around the age of 40 (which is considered late). At that time, my thinking of buying these plans was not to let my retirement life look so worrisome and I also wanted to have a much more carefree life during that age. You can purchase these plans from insurance companies. Be sure to check and read the details in these plans before you commit. Remember to do some diligent check on those plans available in the market for comparison too.
2. Investing in REITs
Another way is to invest in REITs. REITs stand for Real Estate Investment Trusts. REITs are considered more stable and lower risk compared to stocks and it also gave quite a fair bit of dividends.
I had always been curious about REITs and wanted to find out more. One day, I chanced upon an article about investment. In it, it recommended a REITs course from Udemy. Hence, this begins my journey in investing in REITs after I bought this online course (if you are interested to know the title of the course, I can share with you on my next post. I will also provide a link so that it is easier for you to check out the course).
This course teaches you how to select and identify good REITs. I would say that this course is cheap, useful and provide you with in-depth knowledge about REITs compared to other “so-called” gurus which you may not learn much and has to pay a higher price.
After learning the course purchased from Udemy, I started to identify what are the good REITs to buy in the country (Singapore) that I live in. The reason for buying local REITs is that I am more familiar with it and you will get to hear any news about the companies (that you are interested or have already invested) faster as compare to investors living overseas. However, I’m not saying or discouraging you from buying overseas REITs. You should always be on the lookout for the right REITs to purchase at the right price. Just remember, for any investment, you have to be patient. Always wait for the right price to enter.
To know what REITs I have purchased and the price I entered, remember to subscribe to my blog so that you will get to see the updates for my next post. I will also share with you some basic knowledge about REITs.
3. Investing in stocks
You might hear a lot of people saying that buying stocks are risky. Are buying stocks really risky? Yes, to a certain extent. But if you equipped yourself with the right knowledge and the right person to follow and always read news about the stock market, you are likely to make more gains than losses. However, please make your own judgement and do your diligent check before you invest, especially from the news.
I used to make losses from the stock market (about 15 years ago), although it was not a lot of money, it is still a few thousand dollars. I blamed myself for investing in that stock based on feelings and did not do a thorough check. From then onwards, I stopped investing in the stock market. Initially, my thought of buying that stock was because I felt that the stock would rise but it didn’t. The other reason was because it was cheap. I did not realise that cheap stock can get cheaper!
Fast forward to about 5 years later, I decided to pick myself up and started to invest again. You may be puzzled and wondered what had made me changed my decision or why do I have the courage to start investing again?
One of the reasons is that my salary is miserably low compare to my peers. I realised that I had to do something to catch up. I do not want to continue working at the age of 70. The other reason is that I wish to have multiple sources of incomes instead of depending on one source of income. If you want a better and carefree life during your old age, then you ought to start thinking about how to grow your wealth now! The last reason is that I did not equip with the right knowledge before investing previously which resulted in monetary loss, hence, I decided to give it another shot!
I considered myself pretty lucky after I started to invest again. I was able to make gain after doing research on a particular stock. This boosted my confidence in investing again. I began to learn and find out more on how to invest and manage to gain some knowledge from YouTube. Of course, I make some losses along the way but you learn from these mistakes and never repeat the same mistakes again. This will make you a better investor or trader. Then you will grow and become more experience in investing.
As to how much you should invest, you should gauge it yourself. This depends on whether you are a conservative investor, medium risk investor or high risk taker. If you are a conservative investor, I would suggest you use only about 10% – 20% of your capital for investment. For a high risk taker, you may consider using 75% of your savings to invest.
For beginner who has just learnt about investing, I would suggest that you use 10% to 25% of your savings. Then as you grow wiser and more experience, you could use a higher percentage of your savings to invest.
It is always good to have some spare cash on hand for any emergency use so that you won’t be caught in a situation where you have to borrow money from your friends or relatives. This is where I park 25% of my savings in the savings account untouched.
4. Savings
Saving a big portion of your monthly income can contribute to your personal wealth. Without savings, you will not be able to do the things that I mentioned above. Make a wise choice by putting your money in a bank with high interest so that your money can grow faster.
You can separate your savings account from your spending (or related) account. This way, you could monitor your savings better and will not spend more than you should. For me, I have two accounts. One is for savings and the other for investment. The latter account is to transfer the money to the brokerage account where I use it for trading and investing. It is also used for paying bills.
5. Other methods to grow your health
Other than the few things that I have shared to grow your wealth, there are other methods such as setting up an e-commerce store, making YouTube videos, giving personal training (make sure you get yourself certified), etc.
If you like to see more stories on how I grow my wealth towards financial freedom, be sure to subscribe to my blog. I hope that my sharing of experience in growing your wealth has helped you or inspired you in some ways. Thank you for reading.