Please note that you may not see chart or stock prices when the URL starts with "https://..." you should use "" and do not use Chrome in incognito mode or Firefox in private mode. Please use a regular mode so that browser doesn't automatically switch you to https connection

The road to financial freedom

So you have made one of the important decision is to learn more about investing to improve your wealth. Congratulations! We will try as best as we can to help you to be a better investor. Please note that investing is not a get-rich-quick scheme. It will take a learning curve and we try to create this article to make it easier for readers, early investors, to follow. We welcome your feedback and we will try to make this section more valuable to readers. Please note that this is just a general guideline from our own opinion. It’s NOT a legal financial advice. Please always consult with your financial advisor, tax advisor for your financial decision.

Steps to financial freedom:

(Sorry, it’s not as easy as just going out and buy a lottery tickets as the chance for you to lose money is very high and chance to win is extremely low!).

  1. Earn as much as you can: This simple and obvious rule is sometimes overlooked! In order for you to invest, you need to have some capital for investing. You could borrow someone’s money or win a lottery to get start with. But it’s much harder that way then study hard and working hard to make as much money as possible.
  2. Save as much as you can: There are lots of people who make great amount of money (more than 6, 7 figures per year), but if they spend as much as they earn or even more, there is no money left for investing to build wealth. Remember, investing is putting your money to work and make more money for you!
  3. Pay off all debt/credit lines: Please do not spend on anything extra (fancy car, amazing vacation, high scale restaurants, etc.) when you still have debt with high interest associated with it. The only good debt that you should have is mortgage as it could be tax deductible and your real estate value will likely go up over the years so it's more of investment than spending. If you look at the average return on the stock market over the long run you may get to about 8%-10% return. But there is a risk associated with investing and there is tax that reduce your net return. On the other side, money you put toward paying off debt is something in your control (once you put money out, the debt and interest is gone). So why risk investing when the safest investment is to pay of debt.
  4. Learn the power of compound interest/income: If annual interest is put back to investing, the total after the long run could be substantial. E.g. you put $100,000 to investment, assuming that you gain average 5% per years over 30 years. If there is no compound interest, the final number = principle ($100,000) + non-compound interest ($100,000 x 5% x 30 (years) = $150,000) = $250,000. But with compound interest, the final number is $432,194. You can see the extra gain of $182,194, more than double of the regular interest only ($150,000).
  5. Start saving and investing as early as you can: With the knowledge of compound interest above, you can tell that the early you put your money to work, the more money you will generate at the end. You can start with putting aside 10% - 15% after tax income to saving every year, then try to challenge yourself to increase it
  6. Maximize contribution to tax sheltered/deferred accounts like 401K, IRA, Roth IRA, etc. The general rule is you want to keep money for investing as much as possible so using earning before tax towards investing is a good idea. Also, these plans also allow you to grow your money without paying tax when you don’t withdraw them out which is also called tax deferred plans. With the power of compound interest/income that you learn above, this is a great investment vehicle. In general you are in higher tax brackets when you are younger and working. So deferring paying tax until when your tax bracket is low will help you to pay less tax and keep more money for yourself.
  7. Have emergency fund available: Before putting money into investing, you should have set up an emergency fund in saving account. Ensure that you are able to live your normal life at least 6 months when you lose your job.
  8. Minimize the cost of investing: Pay attention to the cost of investing like fee for professionals who manage your investing, trading fees, transaction fees, etc. These fees will reduce your ROI (return of investment). There are lots of investing products out there and it’s very confusing for consumer with little knowledge of investing to choose from. Most of them have lots of fees! You have to ensure that you only pay for what makes sense as you don’t want to give out money and get nothing or very little in return!
  9. Why should I invest? The idea of investing is to have your money work for you, use money to make more money. With the compound interest mentioned earlier, with a very low rate for safe and easy investment like saving or CD and with inflation, it's hard to grow your wealth without a sound investment.
  10. How do I start investing? Please wait for our next guideline .... Investing 101
Disclaimer: does not warrant or guarantee the information contained herein or assume any liability or responsibility for any reliance placed on the information or for the risks of the stock market. This information is intended for personal use only and is not intended for trading purposes. disclaim any and all liability resulting from failure of performance or destruction of the stock quotes system.