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June 16, 2021

Working for money? Let the money work for you!

Philosophy: Invest regularly even if small


So far we have learned what investing, budgeting and savings are, and the concept of risk. Today, we will explain some concepts that can help investors manage risk and achieve their investment and savings goals more effectively.



 


Today's Word: BKBA


An acronym stands for Financially Independent, Early Retirement.


 


Ringgit Cost Averaging or “Ringgit Cost Averaging”


Philosophy is to invest small amounts regularly, even when the market is a downturn, as this can help you deal with volatile markets and is one of the keys to having a better balance in the long run. This principle is known as Ringgit Cost Averaging.


What is the meaning? For example, let's say you have RM1,000 to invest. Instead of investing all at once, you can invest RM100 every month for 10 months, even if there is a change in market value.


With RM100 per month, if the stock is priced at RM10 in the first month, you will buy 10 units. If in the second month the stock is priced at RM5, you will buy 20 units, and so on.


Eventually, you will buy more units of stock when the price is lower and fewer stocks when the price is relatively high.


 


Multiple Benefits - Amazing Countdown


Double interest occurs when you let the return on investment grow until you make a profit on your profits. Given enough time to grow, double benefits have the potential to reach a level where your money works to provide the bulk of your income.