MooMooCoo Investment Guides
How to Build a
Do you want a passive income generator which requires minimal time? Self generates cash and grows wealth for your family wealth. Releases time to spend with your kids.
Is this for me?
A 6-Figure Stocks Investment Portfolio Requires A Lifestyle Change. this is a financial mind re-program to help you build wealth around what you currently have just now.
The first step is to extract your monthly outgoings and understand what areas can be reduced to help you boost additional savings. If you have any debts, then you would need to reduce it further to reduce any interest incurred.
Second step is to start two savings pot. Emergency Funds Savings pot A and Investment Savings pot B.
Pot A is basically money set aside for the rainy day. Car breakdown, emergency flights, Xmas overspending, sick days expenses, etc. These are monies which needs to cover at least 12 months outgoing expenses if you ever lose your main job.
Pot B are investable money which you are willing to risk to grow wealth on the Stocks Market. You want to learn how to invest in the stock market to allow automatic passive income to grow from the power of compounding. These are monies which you can afford to set aside long term to grow into your millionaire portfolio one day!
Finding the right Investment broker is the key to success in your journey to building that six figure portfolio. Today’s gold standard Investment brokers requirement includes a reliable phone app and reputable long term longevity.
Easy to use website and phone app is crucial to your daily, weekly and monthly stocks executions. Security features are important to ensure you do not lose monies through cyber hacking or poor handling of customer service. If my grandma can use the app to buy Apple shares, then that is a good broker.
The second important key point is reputable company which would be around the next 50 years when we collect our final pension payment. Try to avoid new startups which provides freebies. Would you trust your million dollar portfolio in that company.
The selected broker needs to have a list of products which covers the minimum (ETF, Index, Funds, US Stocks, EU Stocks, Chinese Stocks, Emerging Market Stocks).
Other areas to consider are cost, customer service, technical analysis and benchmarking tool.
Now you need to deposit your initial capital into the platform and execute your first investment. If you do not have investable savings, perhaps consider a small starter monthly payment (e.g. $50 next month). Time is the key ingredient to boost the probability of success, thus start early!
The first $10,000 -$20,000 should be invested into Index funds only. S&P500 is an ideal one to invest in. Others to consider are FTSE 100, Stoxx 600 and Global Index Fund. Three key reasons to invest in index funds first. Firstly, Index funds provides an instant diversifications of all the industry. Secondly, Index Funds are low cost (under 0.15%) which you can invest at low minimal amount without commission loss. Finally Index funds can be automatically invested on a monthly basis for investors of all ages.
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Give yourself a pat on the back once you achieved your first 5 figures ($10,000) investment. You can continue investing in the existing index funds or perhaps buy into other index funds. If you feel more adventurous, perhaps consider investing in emerging market index funds or industry specific (i.e technology ,bio tech, financial technology, commodities funds).
At this point you should consider investing in good non-cyclical companies who pays good dividends from their healthy cash flow. All the dividends paid should be automatically re-invested for the growth compounding effect. Please make sure to invest at least $1500 per transaction/trade; this is ensure you do not make too much loss via the commission fees.
More adventurous investors may want to consider growth stocks. In the last decades, stocks like Google, Amazon, Facebook and Netflix have proven an amazing record runs of multiple folds. At the same time, companies like GoPro, Snap, Kraft Heinz have seen their downfall. Please ensure research are conducted before owning of any companies.
High Risk Shares are companies which could soar to five times its value or go bankrupt in the next 3-5 years. To reduce the probability of failure, please ensure you do not invest more than 10% of your total portfolio holdings.
Stock Picking is not for everyone. As a matter of fact, Warren Buffet made a $1million dollar bet that no fund manager can beat the SNP500 for ten years (between 2008 to 2018). Yes, Warren Buffet was right and won the bet and then donated it to charity.
Always benchmark your portfolio at least once a year against the SNP500 as a basic ongoing maintenance. The two most common mistake are; too much risk and poor portfolio diversification.
A successful investor is one who saves faster than he/she invest. Never expect to get rich from a lump sum investment. You need the regular top-up on a monthly basis at least to ensure your money grows and compounds.
A rich person saves to invest and spend when necessary. A poor person spends before savings and nothing left to invest later.
Read, Study & Learn
Stocks & Shares Investment are classed as passive form of investment. You should only spend not more than 2 hours a week on monitoring your portfolio.
Any high form of activity on a regular basis is in fact trading. Any more regularity would be intra-day trading. This is almost a full time job and distracting to your 9-5 job.
I would always recommend reading and topping up your knowledge with various books and articles. My top 3 sites are Financial Times, Morning Star and Seeking Alpha.
My top three books for for starting investors are as follows (Clickable Link):-
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Building that million dollar shares portfolio takes time and disipline.
Yes, Its achievable