You are looking to make some money by investing in stock market? Forget it. Here is why you should look for alternative.
Investment Rule
The general rule is for you to invest maximum of 10% of your net asset with high risk investment. High risk investment is anything that have value where it can be fluctuated. For many, stock is the easiest, legit tool to play with.
Your asset
Assuming you did have RM 100,000 net asset (All of your asset – All of your liabilities, including financing to banks, relatives, parent, etc). That means, your maximum investment allocation will be RM 10,000.
Investment timeframe
You just thinking about to earn extra money. It couldn’t be long. This maybe due to immediate need such as your phone or laptop break, or you just simply want to reward yourself with something expensive.
This means, your investment timeframe is ultra-short. You cannot afford to wait except 1 month.
Target return
Assuming you want to buy a tablet, which priced at RM 1,499. In your mind, you should get return at least RM 500 so that you don’t feel the pain so much buying an Android-powered tablet.
How to achieve?
With RM 10,000 capital to deploy, you bought a company share that priced at 25 cent per share. That’s equivalent to 40,000 unit of share or 400 lot.
You wait for the share price to increase by 1.5 cent to 26.5 cent, you get 6% return from your investment which translate to RM 600.
Sounds simple. RM 10,000 now becomes RM 10,600.
The ugly truth
You might be lucky sometimes. Just like random guy buying toto numbers. Getting a jackpot once doesn’t means you everybody should buy a number and gamble.
But, most of the time, it does not happened.
Things that happened is the otherwise. Your initial capital of RM 10,000 decreased by 4% which equivalent to 24 cent. Now, your capital becomes RM 9,600.
Here’s the alternatives
Start a side hustle.
If you a programmer, you may consider to take side job. This pays you better.
You may also consider doing part time such as being a Foodpanda Rider, Grab Rider or etc. From my experience, you can earn as much as RM 20 per hour (if you are lucky) by doing part time as Foodpanda Rider.
There is no shortcut in life. Face the reality and start a side hustle
My head – Wan Zulkarnain
Conclusion
You need to have a correct mindset. Having an ambition to be rich is good. But, setting a goal to be rich is bad.
Bye-bye.
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