Investing and Trading

1)Have you ever wondered what the rich do with their money?

The answer is they invest, invest, and invest (apart from buying big houses, islands, and yachts 😀 ). The rich keep investing their money to either fight inflation or grow their wealth, which makes perfect sense because who not want to maintain their living lifestyle forever?

For a normal person like you and me, Investing and trading your money, instead of putting it in a saving account, are even more important. We don’t have the luxury to just fight inflation but we need to beat it and grow our wealth as we are normal and we don’t have millions to buy the house, pay the bill and raise our kids. And if we want to retire early, maybe before 65, investing seems to be the only way to achieve that goal for many reasons.

S&P 500 Historical Price
S&P 500 Historical Price

First, the market(S&P 500) yields on average an annual return of 8.9%, which makes savings-account player envious. The housing market can even yield a lot more, especially in emerging market like VietNam, Myanmar, ThaiLand.

Second, your personal income by “working for someone else” is highly taxed by the government. “Yeah, we both hate the tax guy!”. On the other hand, the income from investment and dividend is taxed much lower. That’s why Warren Buffet’s salary is just 100000$ and he’s still the second richest man on earth. He pays himself dividend and enjoys the capital gain of his shares because he is too smart to know that YOU CAN’T GET RICH WORKING FOR SOMEONE ELSE!
2) Why investing now and don’t wait till we save a significant amount of capital?
The answer is simple, we can only enjoy the compounding effect if we start now and early. We can accumulate more stocks monthly or biyearly to increase our holdings. Overtime, these investment would yield a surprising return that you don’t even realize. To read more about Compounding Effect, click here