How does one start planning for Investment?

I get these kind of questions a lot. “How do I start investing?” or “What should I do first?” or “Should I buy stock first?”

These are very valid questions for anyone starting in their investment journey. But I often find it very hard to provide a simple comprehensive answer. That is because Investment is a process and it involves many considerations. For example, before even putting any money in Stock market, you need to make sure you are covered by appropriate insurance policies. Or even before investing in a property, you need to make sure you have enough reserves to “tahan” 6 months of no rental.

So that is why I decided to put together all my considerations and my money management process into a single page. I called that the “MWI’s Investment and Money Management Framework”. It is a one pager that gives the readers a good idea of where to start and how to manage the flow of investment funds.

MWI’s Investment and Money Management Framework

One page summary of how to manage your investment and money.

The framework consist of 8+1 sections and flows on how section sections interact with each other. The sections includes:

1. Pay Yourself – Concept of putting aside a percentage of your monthly income for investment at the start.
2. Protection- Making sure you are well covered before embarking on any investment.
3. Reduce Expenses- Part of the strategy to channel more funds into your investment fund.
4. Investment fund- Includes funds in banks, CPF and SRS. Will also include “opportunity fund”.
5. Knowledge and Tools- A must before any attempt to start investment.
6. Investment Engine- The heart of your money generation. Focus will be on Stocks, Property and Alternate Business.
7. Celebrate Fund- All work and no play makes Jack a dull boy. So go ahead and celebrate small investment wins!
8. Giving Fund- I believe the more you give the more you get in return.
9. Mindset and Goals- this is the “+1” section. I would say this is the most important of all 9. Without the correct mind set, motivation and goals, you will loose sight of what you are doing very fast. Small set backs will pull you back from plan every so often. So you need a very clear aim and mind to make sure you can overcome those.

Ready, set, GO!

Actually I have been sort of using this framework subconsciously to categorize my posts. But now that I have put down on paper, it is much clearer to me (I hope to you too!). No longer will I need to crack my brains and think which group of category I should use.

I will continue to use this framework in future posts so you will have a better idea of  how the different articles fit into the overall picture. Do you find the Framework useful?