There are various financial vehicles on the market which are available to the masses, that means to all of us small time investors. I’ll elaborate on those which I have experience in, but leave the others to the future when I start my cafe in 1 year time, and when I write my own book, I’ll update on these vehicles.
Regardless of the type of investment, there are certain fixed rules that you should follow. While you can make money from other than the basic rules, this is probably the way to achieve the lowest risk for your investment.
In any form of investment, there are 2 main transactions, buying and selling. Hence, the most basic rule being “buy low, sell high” should never be broken. While this appears elementary and common sense, it is surprising that many people do not follow this basic rule and allow themselves to chase a stock to its peak and lose money from there.
Properties – This is my favorite form of investment…..as it gives very good capital appreciation as well as a source of passive income for your financial freedom.
Stock – I use this as a form of capital generation, so that I can make other forms of investment over the short term. I’m currently looking at making sufficient capital to start my cafe in 1 years time.
Unit Trusts – I’ve stopped using this form of investment for my cash investment, and had also taken back my initial investments in CPF to fund my purchase of my rental property last September. I’m looking to put my special account into 2 very interesting funds, which I don’t plan to buy at current prices.
You might want to know that I am a long term investor, mainly because my investment philosophy is generate cash flow. You could call me a cash flow investor, but I would show you the way a cash flow investor plays the various vehicles, from properties to stocks. To me, cash flow is everything. By my definition, only income derived from passive income can contribute to cash flow. Hence, I place extra emphasis on this, and make use of all tools I could to generate cash flow to meet my daily expenses.