What you need to do before you start to investment ?

This pages will be related with investment topic. Before i start blogging on this topic, let me summary what kind of question we getting daily from person surrounding us. Perhaps you will be interested to know those question it is one of the question appear in your mind before you start invest :-

1. How to start for investment ? 
2. Which and what kind of investment we focus on?
3. It is investment will bring affirmative return ?
4. Do you making loss before when doing investment ?
5. How to sharpen investment skill ?

Above is the question we get it a lots from our surrounding. Before we answer to this question, let us go through what is investment mean to you. In simple "Investment" is define as the action or process of investing money for profit. This mean we want our money work more effective to us so the money can generate more money in future. In layman term, making our money WORK FOR US.

Back to the first question, how to start investment. For us first thing first, let identify your personal finance status. To do this you will need to take out paper or notepad in your mobile or computer which letting you to record below question and answer. This data collection is quick confidential please do it when you are alone or at your personal space :-

1. Write down all your income source and amount that you are getting monthly and sum it up (Income)
2. Write down the debt you have in hand (Regardless long term or short term) and sum it up (Liability)
3. Now take the total sum at 1(Income) - 2 (Liability) = Get a left over figure (saving)
4. Start to analysis as follow.

After getting answer from above question, Neither you getting Positive or Negative figure bring any meaning to you i until you start the analysis. 

=> If you getting positive figure (Congratulation you can start your next step to understand what kind of investment market suitable for you, i will be explain more detail in next blog). 

=> If you getting negative figure. Not to worry as you are not to late to make a change. But you will need to work very hard in next 3 to 6 month to make this figure become positive. For sure you will feel the joy of fruit after that.

Actually, getting a positive or negative figure now does not matter, most important is you willing to make the change and keeping positive figure on your financial status will be the upmost thing you will be doing for rest of your life. 

Let focus on those people that getting negative figure in their financial status. As i feel this group of people is more crucial then those having positive figure now. You must be admitting getting the seeing the negative figure in your financial status is not accidentally. This is related to part of you spending behavior had make a wrong move. Look at bright side, luckily you had notice at this stage, if this situation continue i can sure your financial will be getting bad to worst. 

To make yourself exit from this situation, you will need to identify what is the top 3 spending you have make in your currently lifestyle. Let quote few example below that commonly look like :-

• House loan or rental : Solution proposal by us. Can this housing loan be refinance ? If yes, please go a head to bank to do the house evaluation. Because at this low OPR "overnight policy rate"period  now is beside to do cash out to settle some more crucial loan. We should feel luckily as we are now at historical low situation. This will be the best time to get good deal from banker. House rental ? Do you able to move to small unit to lower down your rental ? I believe if you put some effort , you will get good deal during this low house rental yield. (Good news for tenants)
• Car loan or transportation? : Car loan was a bit tricky as the interest already price and fixed in your loan.  If selling off the car is not wise move (Unless you had no choice) as most of us already know car value is depreciate by 15% to 25% every year base on normal condition. Perhaps you can consider to folks out your time to join the e-hailing services to bring in another income source. This is what we call turning "Liability to become Assets" (Some said can make a boom, this one we will need you to find out). For Transportation, possible to get alternative travel method ? or the best part will be make a move to the places nearer to your school or work places which help save a huge and maximize your cash flow.
• Other form of loan like credit card, education, personal loan repayment ? : For this kind of loan i will recommend you to use "snowball repayment method"  (Will write a blog how to repayment your debt with this technique in future) In short, payout the loan with higher interest will be the first thing you need to do. Therefore, you will have more cash on hand to pay others loan and eventually fund your investment in future.

To manage personal finance effectively, we will need to manage this matter like managing a company. You will need to know where every dollar & cents come and go. If after you reading this, you still not clear how to track you financial flow. No worry, from today onward spend additional 5 to 10 minute to do a tracking record. The tracking record will need to do it even your are spending a dollar, this will push you to adapt this habit even better when you see the situation clearly. 

After many year dear and me start our tracking, we found out that the most effective way to do recording was do it almost immediate or within 2 hour from the last earning or spending activity. Else you will losing your momentum for this good good habit. This data collection is very useful for future when you ready for budget planning.

Please remember, if you had already in progress on the financial freedom journey please continue do so ! If until now you still yet to start, please act as soon as possible. After all, there will be no second people on this earth will be paying so much attention then yourself.

In next blog i will be blogging about how we prepare for the first RM 1,000/ $1,000 based on the tight situation. Stay tune.

Quote of the day :-

"It's not how much money you make, But how much you keep, how hard it works for you, and how many generation you keep it for. - BY ROBERT KIYOSAKI"