Where to find the capital for stock investment

By Andrew Chia


I've got to be honest with you. You can't have much leverage with stock investment.

If you want to buy a 100k piece of property the bank can lend you 90k. In some cases you can even do a "nothing down", meaning you can borrow the whole cost from the bank.

If you want to start a business, you can do OPM (other people's money), meaning you can go to your friend or relative with a viable business proposal and they may want to fund it.

It's difficult to get funding from your friends and family simply because stock investment = gambling to them. Imagine telling your friend you want to borrow money so that you can go to the casino.

And I don't recommend you get a personal loan from the bank to invest in the stock market.

Of course, you can buy shares on margin but that is also not advisable. Furthermore, the margin is usually less than 50%.

So, where does that leave us?

I believe the answer simply lies in SAVINGS. Let us examine this very important word, because its impact reaches much further than stock investment alone. It could be the foundation of success (and continual success) in our money world. Because saving requires discipline, and financial discipline is essential for success in our money world.

English is not an easy language, I'm sure you would agree. A word can have different meanings. You can save a man from drowning. You can get a 20% discount and save money if you buy now.

That is not the saving we are talking about.

Save means put away in another place. I always recommend to people who wish to start the journey to financial freedom to open a separate account dedicated to savings. And I usually advise them not to have an ATM card for that account.

Once you have opened a savings account, you start practising the Golden Rule of Personal Finance, that is, pay yourself first. Especially if you are a salaried worker, you should set aside 10% of your salary and put this into your "Saving" account. And I mean you do that before you do anything else, like paying your bills and instalments.

I know this may sound like a tall order to some of you. Your salary may not even be enough for you to survive, especially if you are living in a big city like KL or Singapore. But once you start putting aside 10% each month, you will be surprised. You will discover one thing - you won't be really missing that 10%!

Think about it. Despite us earning so little, a sizeable percentage of that unwittingly goes to unnecessary spending like eating out, fancy dresses and gadgets, and sight-seeing trips. We just need to trim down a little bit on those. I don't mean stinge. I just mean we will appreciate it more the next time we spend money on those items. We will have a better sense of the value of money.

You can only put your money house in order if you start practising the Golden Rule, pay yourself first.

In no time you would have accumulated your capital for stock investment. And you're on your way to financial freedom. Think about it, although saving is important, it is extremely difficult to become rich just by saving alone. Making money and investing will do that for you. That is why after you save, you must learn how to invest.

Furthermore, a little secret which I omitted in Money Secrets (come to think of it now), is that most people's hard earned savings disappear after some time, don't you agree? (I'm not even talking about the EPF/CPF.) Do you know why? It's a bit long for me to explain here, so I will tell you that when you come to my workshop,
andrewchia.com/workshop.

This little secret is easily worth $1,000. People have blown hundreds of thousands of dollars simply by not knowing it.


Investing is made much easier today compared to a decade ago. 1 lot of shares is only 100 shares, compared to 1,000 shares earlier. The average price of a share on the Malaysian stock market is about RM2 or RM3. Therefore, you can become a stock investor with only RM300 or less!

Don't worry about brokerage. It is only about 0.42%, less than a cuppa at Old Town Kopitiam. You are investing, not trading, remember? Brokerage doesn't affect you.

Opening an account is usually free. You should open a stock investment account today. You do not need to put any money into the account, but you can start making use of all their tools like historical charts and company information and statistics. You can fund the account only when you decide you want to buy shares.

There you are, you don't need to worry about capital to invest in stocks. Imagine this, if you bought just a RM1,000 of Public Bank shares when it was RM0.80, you would be receiving RM500 in dividends and passive income when the share was selling at RM12.00. That is a 50% return, compared to 2% if you put it in FD!

So, come learn stock investing. It's on 10th January 2010. The next workshop would only be available after Chinese New Year, or end of February.

andrewchia.com/workshop


To your success,
Andrew