Do you love travelling? Ok, it’s stupid question. Who doesn’t? If you are reading this post, you are a travel lover for sure! But have you ever thought about investing? I guess many of you have a fear towards investing, as it’s a RISKY word. To be frank, I used to think the same way, until I went to attend a Value Investing course and equip myself with the right investment skills. Since then, I’ve been using Value Investing to fund my travel. So, if you are wondering whether to travel or invest, I will say Travel Invest Together!
Travel or Invest – Investment is Risky?
Two years ago, I was equally disturbed to hear the word “investing”. After all, I saw my relatives lost a lot of money in the stock market. So when my boyfriend Calvin told me to start investing, my answer was a “NO” right away. He spent around half a year to persuade me, until he gave up eventually. Instead, he handed me a book “Secrets Of Self-Made Millionaires” written by Adam Khoo This book totally opened my mind and made me see financial planning in a different light. I realised how I was wasting my money by putting it in the bank, as the interest rate was so pathetic and couldn’t even beat inflation!
If you haven’t read this book, I highly recommend you go get a copy. Inside the investment chapter, it shows the following chart of S&P 500 index. The Standard & Poor’s 500 (S&P 500) is an American stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ. It is often used as a leading economic indicator of how well the U.S. economy is doing. So its historical trend pretty represents the movement of overall stock prices.
As you can see, stock markets have up and down. Very often, people get so caught up by the market’s short term movement and react immediately and emotionally. As the result, they sell in panic and make a loss. But if you look at the historical graph for S&P 500 below, you’ll realise that the stock prices just keep rising.
Although there are major downturns during the economic crisis, the market will pick up within 1-2 years and resume back to its steady growth, and eventually surpassing the last high. Seeing this evidence in front of my eyes, I was suddenly enlightened. I was thinking to myself: “If I go into the market at the right time, I will bound to make money over the long run!”
With this knowledge in mind, Calvin and I started looking around and attending different investment seminars. Somehow fate brought us to attend an event organised by National Achiever Congress back in 2015. It was then we were introduced to the concept of Value Investing by Sean Seah, who is known as the “Asia’s Buffetologist”. We signed up for the course taught by him on the spot. The decision was life changing for us. With the right skills, we are now able to make consistent passive income every month. Most importantly, we can use this extra stream of income to fund our travel.
Sean Seah (right) and Marry Buffett
Travel or Invest – I Have No Money to Invest?
Some of you may be thinking: “I want to invest, but I don’t have money.” Or “I’m saving for my travel, I have no more money to invest.” I used to have the same exact thinking too. But as I learn more about financial planning, I realised “no money” can be solved by proper planning. If every month, you’re earning consistent income from your job, you can allocate your money into 6 different jars, according to T. Harv Eker, the world famous motivational speaker.
The idea of this system is simple: separate your income into 6 different accounts for specific purposes. Below is the proportion suggested.
- Put 55% of your income into NECor Necessities: rent, food, gas, bills, etc. This amount should be able to cover your day to day expenses.
- 10% for Play. This is for leisurely expenses including sports, movies, general activity and entertainment. Make to sure to spend ALL your play money each month spoiling yourself! And travel is inside this category too!
- 10% for FFA or Financial Freedom Account. This is for investing or anything that is going to make this portion of your money work for you toward passive income streams. Don’t look down at this 10%. Let say you save $300 every month, at the end of 1 year, you’ll have $3600 for investment. And the best thing is, investment returns compounds at an exponential rate. The earlier you start, the faster you will achieve financial freedom.
- 10% for Education. Books, courses, mentoring, coaching, etc. Always educate yourself. As Warrant Buffett said, the best investment you can do is to invest in yourself!
- 10% in Long-Term Savings for Spending, otherwise known as therainy-day fund. Or maybe there’s a car or some other big-ticket item you want to buy. This fund is your most flexible in terms of what you can do with it, but the intention is to do something with it, or that it be there for that just-in-case scenario.
- 5% for Giving. Giving gives you a sense of joy as you are helping others. In the long run, it’s not only about financial freedom, but also financial joy.
Of course there’s no fixed rule in terms of how you want to manage the money. The 6 jars defined by T. Harv Eker’s is just a guide. You can modify the proportion that suits your needs. Most importantly, you need to stick to the habit of managing your wealth. The earlier you start, the earlier you will get out of the rat race.
Harv Eker, summarizes it with these wise words:“The habit of managing your money is more important than the amount.”
Travel or Invest – How to get started?
- Know your percentages.You can’t manage your money without knowing how much you are earning and spending. You can start by calculating your current monthly income and the amount to be put into each of the 6 jars. Then, track how much money you spend daily. Just by becoming aware of your spending patterns is already a first step in the right direction.
- Shift your mindset. Understand that money management isn’t about restricting your freedom; it is to create eventual financial freedom. Several years from now, you’ll thank yourself for the decision you made today. Constantly remind yourself out loud “I am an excellent money manager!”
- Don’t entertain any excuses. It’s easy to say “I’ll do it tomorrow”, or “I don’t have time for it”. The big question to ask yourself is – how badly do you want to be rich and financially free? If you are serious about your financial goals, then no excuses should be permitted. Start NOW and stick to your plan.
Travel or Invest – Where to learn investing?
I hope the 6 money jars open your mind and let you see the possibility of being able to travel invest together. But to make sure you are investing your money wisely, you need to level up your knowledge and equip yourself with the right investment skills. Remember, investing is not gambling. Just like you need to learn how to drive, before you can fully control the car and drive safely on the road, you’ll need to be financially educated before venturing into the stock market.
If you are serious about learning to invest correctly and safely, come and join the FREE investment workshop organised by Value Investing College. During this Financial Joy Weekend happening on 13 May 2017 (Sat), Sean Seah, the founder of VIC will share with you the following:
- Learn about the 4G financial skills required to be wealthy.
- How to enter the stock market for income and for growth.
- Ways to craft strategies to enter and exit the market.
- Inbuilding your investment into a financial freedom portfolio
What’s more, you’ll get to get a free investment ebook Gone Fishing With Buffett written by Sean Seah! If you are the first 30 people who turn up, you’ll also receive another bonus investment book from VIC. So if you are in Singapore during that week, grab your seat NOW!