If you are salaryman who is looking for a long term investment for your life, this article will tell you exactly the secret of investment from THE GENIUS that many people call Warren Buffett in Thailand and you can apply the guidelines for your investment plan.
The 3 Crystals Tip
Many people in Thailand believe that the Thai Investors Dr. Nivet Hemvachiravarakorn is “the next Warren Buffett in Thailand”, he is a motivational speaker and suggest that, “If you want to investment for your life the best way to do is by long-term investment, you must think about the future and the time of retirement”. In a way this will help you during the time of retirement. Dr. Nivet has “The 3 Crystals Tip that he want to share with you, namely
The first crystal is your asset, it can be your salary, property from your parent or your other income, this will be base of your investment. You may think it is impossible to invest if your parents are not rich but it not true. Although some people have some help from their parent, if they cannot manage their investment they will not succeed in investing also. The best way to manage investment and make your first crystal clear is purely by saving, you can save your money for investment.
The next crystal is your return on investment (ROI). Managing return on investment is very much important as it depends on the ability to analyze and invest properly. According to the theory and history of investment, the statistics has been there for a long time. Say that stocks offer the greatest return on all major investments over long term so the crystal is bright, so you need to accordingly invest in stocks while the deposit has the lowest return and if most funds are in deposits then it’s going to be dull.
Bonds and debenture are still rewarding. The point to consider is the risk of investment if you focus on buying it individually. It may make your crystal the brightest but there is a chance that crystal will “break” and the light will disappear into the “dark” it means high returns, can lead to high loss.
Fortunately, you can invest in shares through mutual funds in order to have reasonably return. The risk of loss is less in the long term, so for those who do not specialize in stock selection, investing in index-based mutual funds is a very good choice.
The last crystal is investment period the longer you invest, your crystal will be clear and pure. If you are a young person and uncompromising to investment and hustle in any situation then you have the one of crystal in hand.
When you already have the 3 crystal tip for investment then opportunities will be very high. People who have those crystals in their hand but do not know how to use it will result in loss of opportunities. The people who do not have any crystals, they may not be rich from the investment.
Make a stable plan
However, people who are earning and are still young if there is a good investment plan and with little “sacrifice” to the current consumption. This will be very beneficial in the long run as with a little sacrifice now you will have a comfortable retirement.
If you are 30 years old with a stable job have a reasonable salary for ex. on an average 50,000 baht a month and have never invested in anything then my suggestion will be start saving money by deducting 15% of income every time when you get. That is, 7,500 baht a month, then invested in mutual funds like The SET50 index on the largest stock investment 50 without stock selection.
If you do this every month and if you salary is higher than 50K, your investment of 15% is going to shoot up easily. Or when you get extra money, such as bonuses, we still have to deduct 15% to invest in stocks. Investing in all stocks may seem “risky,” but as it goes down for 30 years, the risk is lower because you buy the stock at the price range fluctuation. This way you will make your savings stable but there is a high probability that we will get a compound annual return of about 10% per year, according to historical statistics. And if it like this way you may expect the result after 60 years of retirement right?
The answer is after you retirement as you can spend the same amount of money each month. Equal to the amount of money you were earning the only difference is now you are retired, for example, if the first salary at the age of 30 years is 50,000 baht on the first day of retirement, you can also spend 50,000 baht a month as well.
Always calculate the long-terms
After taking inflation into account which today is 120,000 baht a month, which is 50,000 today. And if the age of 40 years is 100,000 baht per month and 15% money, which is 15,000 baht invested in the age of 70. You can also spend 100,000 baht a month on inflation.
When you look at the other side is 15% of your invested money in stocks today will grow to 100% after the inflation rate within 30 years, so only 15% of the money invested in 30 years will return to you more than you pay. If you invest when you still young, the chances of a comfortable retirement will be high.
If you invest when you on middle ages such as start investing at the age of 40 if you want to spend the same amount after retirement. It may be more than 15% of your salary to invest. Your burden is heavier or if you still maintain the 15% level on retirement, you have time for 20 years of investment, which will make our money less than 100%, which means that on retirement, you may have to reduce the level of your lifestyle.
Mostly when people who start earning 15% of their salaries they focused on the wrong investing like bond funds, mixed funds or saving on bank. This return on investment is low. It may cause them to lose the same amount of money after retirement. It’s a short-term offensive investment although it can make you feels stable and “risk free” from investing on them. It’s not worth to get good returns in the long term investment from investing in stocks.
In the long term, after 30 years of age, the overall stock is safety. The chance that stocks will yield a lower return than bond funds, mixed funds or saving on bank. It would be in the first 5-10 years. After that, stocks will give you higher returns, so do not be afraid to invest in stocks if you are going down the long term.
Lastly, the other way to invest for people who have higher income tax is investment in LTF and RMF funds. At a high rate of up to 15% of the revenue. It seems to be a fit in with all the strategies that are mentioned in this article. Moreover, LTF and RMF funds can help your personal tax deduction too, so this is the right and the best that every income earner.