3 Simple But Useful Investing Resolutions For 2018
New year financial resolutions are one of the more common goals people make at the start of each year. However, we too often fail to achieve the targets we set. So how can we make 2018 different?
The trick, in my opinion, is to set small and achievable goals rather than big ones that may seem insurmountable and thus demoralise us. With this in mind, I want to share three simple investing resolutions for 2018 that are easy for anyone to achieve.
Read an investing book each quarter
The first step to improving your finances is to educate yourself. Many Singaporeans are aware of the high cost of retirement we have here and have set savings goals. But, too many of us still lack the basic understanding of investing and how we can grow our savings.
Some Singaporeans have an over-reliance on bankers and brokers who may not be providing their clients with the best investment advice. And so, it is vital that we educate ourselves and learn how to invest our money wisely.
Books are a great way to kickstart our investing education. If you do not know what books to start with, you may wish to check out an article I wrote on three of my best books to read on stock market investing.
Save a percentage of your income each month
Rather than setting year-end savings goals, it is probably easier to set monthly savings goals. This keeps you motivated and is much easier to achieve and track.
Personally, I try to save at least 20% of my monthly income. When I receive a paycheck , I will immediately transfer that 20% sum into a separate account which I then use for investments or save for a rainy day. Seeing my investment portfolio grow keeps me motivated and helps me keep sight of my long-term goals.
A good way to achieve this resolution of saving a small percentage of your monthly income is by using a personal-expense app on your smartphone to help you keep track of your expenses and savings.
Start investing monthly
Letting your cash sit in the bank is probably one of the worst investments you can make. With the current low-interest rate environment, and the effects of inflation, cash inevitably loses its purchasing power over time.
Therefore, to maximise our returns, it is vital that we start investing our idle cash. A disciplined approach is to invest part of our savings each month. If our monthly savings is too little to invest in stocks, we can target to invest in stocks every quarter, or even every six months, instead.
However, do note that we should be disciplined enough to look for a good investment each time we invest. It will be counter-productive if we invest in any random asset or stock just because we do not want to hold cash.
The Foolish bottom line
Many people take the opportunity of a new year to improve themselves. Hopefully, by setting small achievable goals, we can take small steps in 2018 to reach a financially steady future.