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How To
In 3 Days
by lionel yeo
Table of Contents

1. Why Is Learning Investing So Hard?

2. Why It's So Important To Start Early

3. Day 1: Set Aside $100 To Invest

4. Day 2: Stop Trying To Pick Stocks

5. Day 3: Actually Start Investing

6. Beyond Day 3: Growing Your Wealth

7. Disclaimer
Why Is Learning
Investing So Hard?

Take a second to think about the money sitting in your bank account.

Can you picture it?

Think about it just gathering dust, while the cost of everything around you
marches steadily upward. Remember when a bowl of noodles used to cost just
$1? How much did your lunch cost you today?

And that's just noodles. What about plane tickets? Medical expenses? Your
future HDB flat?

Your money might seem safe sitting in your bank account, but every year, it buys
less and less stuff.

If you don't do anything, inflation will gobble through your money faster than a
fat kid at McDonalds.
You know that your money should be working harder for you. You'd love to sleep
at night knowing that your future is taken care of. You want to check off
"investing", so you can indulge in that nice meal or that weekend in Bali,
completely guilt-fee.

But where do you start?

You've tried talking to your friends. Youve tried reading blogs and articles.
Maybe youve even browsed a couple of investing books.

But it all doesnt seem to work.

It seems like every finance blog out there wants to bore you to death. Theyll
spout words like mean-variance frontier or weighted average lease expiry
that make you want to fall asleep.

Most books will give you the concept, but they dont tell you how to execute it.
Thats like a driving instructor saying, Driving is awesome! Now go do it!

Its so frustrating!

It's no wonder that many beginners remain stuck at the research stage for years.
They tell themselves that theyll figure out investing someday. But of course,
they never do and they leave tens of thousands of dollars on the table.

It's such a waste, because they could've done so much more... with just a simple
Why It's So Important
To Start Early

That action, my friends, is to simply start investing early.

Lets take 3 friends whore the same age: Amanda, Bryan and Charlie

Amanda starts early and invests $5,000 a year from age 25 to 34 (10 years).
And then she stops contributing and leaves her money to grow
Bryan starts 10 years later - he invests $5,000 a year from age 35 to 64 (30
Charlie invests $5,000 a year from age 25 to 64 (40 years)

Heres what happens:

Notice how even though Amanda invested less than Bryan, she still ends up with
$80K more wealth - all because she started investing earlier!
The real winner, of course, was Charlie: By investing early AND throughout his
working life, he ended up with more than double that of Bryans wealth.

The #1 way to get rich isnt to find the perfect investment strategy. Instead,
its all about starting early.

This is great news. It means that we don't have to become the BEST investor in
the world to get rich. Most people spend years trying to become Warren Buffett:
They read all the books, they attend a few courses but THEY NEVER GET

The goal of this book isn't to help you to find the best investing strategy (hint:
there isnt one), but to simply help you to:

1. Find a good-enough strategy

2. Actually get started

That's it. Once you actually get started, you can take your time to optimise later,
but only if you want to. Because once you start investing, you can sleep knowing
that even if you do nothing else, your money will still be growing in the

In this book, Ill walk you through the concrete steps you can take to start

Over the next 3 days, I'll give you one simple Action Step to do per day. Do them,
and you'll officially become an investor.

Okaaaaayyy lets do this!

Day 1: Set Aside $100 To

A few months ago, a reader came up to me after one of my talks and we started
chatting about blogging.

Her: Im thinking of starting a blog myself, but I have a full-time job and Im not
sure if I can find the time."

Me: You dont actually need to blog every single day. Why dont you start by
blogging just twice a month?"

Her (frowning): Hmmm, wont my readers want to read more? Dont I have to
keep them engaged? Dont I have to set up a Facebook and Instagram and
YouTube account and"

Do you see what the problem is here? My reader was so caught up in trying to do
EVERYTHING that she remained stuck at the idea stage. She was trying to run
before she could even crawl.

She would have been better off by starting small and blogging twice a month,
and then slowly ramping up from there.

In the same way, so many investors are scared of investing because they think
that they have to invest their entire life savings into something they dont
completely understand.

Thats far too big of a commitment to take, especially when youre just starting
out. Instead, youll be much better off if you start small - with as little as $100 a

For most working professionals, $100 really isnt that much. If you tracked your
expenses for a month, you'd probably notice that this $100 slipped through your
fingers on small forgettable things like cabs, snacks, and Starbucks.
If you lost this entire $100 (extremely unlikely), it would suck, but it wouldnt kill

Why is this important? Because I want you to FEEL what its really like to be an
investor. Many financial planners will come to you with nice rosy projections and
compound interest tables, but they can never replace the REAL experience of

So were going to use this $100 a month to TEST out investing. That way, once
were comfortable with it, we can ramp up the amount. If not, we can walk away
with minimal losses.

So! Today, I want you to mentally set aside $100 a month for investing.

When your monthly salary comes in, imagine taking $100 out of it and
depositing it into a big safe with a huge lock on it. Behind that safe are your
INVESTMENTS, but the difference is - youre not allowed to touch them for now.

That $100/month is money that you mentally set aside for the long-term,
meaning the next 20-30 years.

There are two reasons why we do this:

1. You give yourself a psychological advantage: This trains you NOT to be

emotionally married to your investments, making you less likely to panic
when the going gets tough.
2. It teaches you to play the long game: If you stayed invested in the US stock
market for 20 years or more, you always beat inflation, no matter when you

So train yourself to see investing as a LONG process - not a magic overnight


Action Step
Mentally set aside $100 a month for your investments. Tomorrow, Ill show you
what youre going to invest it in.
Day 2: Stop Trying To
Pick Stocks

Whats the first thing you think of when someone mentions, investing? Most
people will be like:

Every time someone finds out that I blog about investing, the first question they
ask is, So, which stocks are good to buy now?" Ugh. It makes me want to stab
myself in the face with a porcupine.

No - despite what your friends think, real investing has nothing to do with
figuring out which stocks are good. Why?

Because picking individual stocks is tough. In fact, one study found that over
80% of professional investors - those who pick stocks for a living - routinely fail
to beat the market! And if the pros can't do it, what makes us think that we can
do better?

Bringing this to Singapore: Over 85% of Singaporean investors who used their
CPF funds to pick stocks failed to beat the guaranteed 2.5% interest rate.

Picking stocks is tough. Theres an easier, more effective way to invest:

Buy a stock market index.
Wait Wtheck is an index?

Lets take an example that lots of Singaporeans are familiar with: The Straits
Times Index (STI). The STI is made up of 30 good ol blue chip Singapore
companies like OCBC, CapitaLand, SingTel, and SIA. As a whole, these companies
collectively account for more than 70% of the Singapore stock market.

So if you somehow invested in all 30 of these companies, youre more or less

invested in the Singapore economy. When the Singapore economy improves,
your investments will track along with it over the long-term.

Do you see how simple and fundamental this is?

Were not worrying about individual stocks or whats gonna happen to them in
the next 6 months. Instead, were looking long-term and putting our money
behind the entire economy.

Also, it's a lot more cost-effective to invest in a single index than in all 30 stocks

This strategy is known as index investing.

Index investing is boring but it works

Index investing isnt some fancy strategy that I came up with. It's been cited by
industry practitioners, most academics, and even Warren Buffett as the the most
proven, time-efficient and effective way of investing. Google it yourself.

What kind of returns can you expect? Your returns will vary, but if we look at the
10-year returns of the STI from 2005 to 2015, it was 7.37% with dividends
reinvested. At those returns, investing for 40 years is enough to multiply your
money by six times.
In fact, Warren Buffett once said that index investing is the easiest way to beat
even professional money managers:

Most investors will find that the best way to own common stocks is
through an index fund that charges minimal fees. Those following
this path are sure to beat the net results of the great majority of
investment professionals"

- Warren Buffett

Think about it: Over 80% of professionals can't beat the market. But if you
INVEST in the market, you automatically beat that same 80% - without doing

If index investing is so awesome, why havent you heard about it?

Because its BORING! Nobody ever walked into a club bragging about his low-
cost, diversified and passive portfolio of index investments. I tried doing that
once, and everyone around me just backed away re-e-e-a-ally slowly.

But we know better. Index investing might be boring - but it works.

Tomorrow, Ill show you how you can actually start investing in indexes. For now,
here's your action step for today:

Action Step
Check out the Wikipedia page of the Straits Times Index. Scroll down to the
"Constituents" section and check out the 30 stocks in the STI. Ask yourself:

Which ones do you recognize?

How many industries are represented and how diversified is the STI as a
How are stocks included and excluded from the index?
Day 3: Actually Start

Theres a loooooot more that we could talk about when it comes to index
investing, but lets not worry about that for now.

Remember what we said at the beginning: Instead of spending years researching,

well be better off if we take ACTION. Remember that $100 a month you set
aside on Day 1? Today, Ill show you how you can invest it into the Straits Times

You can invest in the STI by buying something known as an Exchange Traded
Fund (ETF). This is what an ETF looks like:

Just kidding. Think of an ETF as a big basket with all 30 stocks of the STI within it.
Buy the basket, and it's the same as owning all 30 stocks:

When the stocks go up as a whole, your ETF goes up.

When the stocks go down as a whole, your ETF goes down. Simple.

Now, how can you buy these ETFs?

The easiest way to get started is through a Regular Savings Plan (RSP).
This is how they work: Every month, your RSP takes your $100 and uses it to buy
a certain number of ETF units at whatever price its at for that month.

What about the price? Shouldn't we worry about whether it's too high or too low?

Nope! Here's the cool part: Since you're investing every month, it doesn't matter
which price you buy at. You might get a high price in some months, and a low
price in others. Over time, the cost averages out. This is a simple finance
technique known as dollar-cost averaging.

Besides - remember that your goal is to TEST out investing. You'll learn far more
by taking action than wringing your hands and worrying about the price.

With RSPs, you can invest in the STI ETF starting as low as $100 a month.
Currently, we have 4 of such programs available in Singapore:

Maybank Kim Eng Monthly Investment Plan

OCBC Blue Chip Investment Plan
Philip Share Builder Plan
POSB Invest Saver

Im not paid by any of these companies to endorse their products - it wouldn't be fair if I was. Instead, I
genuinely believe that RSPs are one of the best ways for a beginner investor to get started at index investing.

Action Step
Pick an RSP, and sign up.

Dont worry about which one is better. There are some differences between
them, but for our purposes, any one of them will do for now.

Once youve signed up, boom - Youre now officially an investor!

You are now waaaaaaayyy ahead of the 80% of people out there who sit on their
ass and dont start investing until its too late. Think about it - even if you never
do anything else, youve already set in motion a plan to grow your wealth.

Im so proud of you!
Beyond Day 3: Growing
Your Wealth

So youve made your first investment and youre actively contributing to it.
Youve made amazing progress, but now the REAL work begins.

It's like starting a blog: It's easy to set one up, but the real work comes in
building it up. That's where the rewards (and the work) are.

Here are three tips that will help you to grow your wealth even further:

Stick to your guns: Here is something to know right off the bat: At some point,
you will lose money. Investing is not a smooth ride - Dont expect to get nice,
consistent 7% returns every year. The market can zoom up 30% one year,
and crash 30% in the next. But if you sell your investments when the market
is down, that is precisely the WORST time to sell! Instead, stick to your guns.
Remember that if you can stay invested, over the long-run (think 10/20/30
years) youll come out on top.

Turn up your capital: Investing $100 a month is a great start, but if you want
to turbo-charge your investments, youll need to increase your contributions.
Remember: The more you contribute now, the faster your investments will
accelerate. You can do this by saving better or earning more at your job -
which I cover on my blog.

Level up your investments: I love RSPs because theyre a great way for
beginners to get started quickly. However, if youre willing to do some
research, you can do even better by creating a holistic portfolio of indexes
yourself. I didnt have time to cover it in this book, but keep reading my blog
and I'll love to share more with you.
In short, theres so much more that we could cover. If youre subscribed to my
VIP List, keep an eye on your inbox because Im going to be sending you a bunch
of cool stuff.

And if you know someone who would enjoy or benefit from these ideas, feel free
to forward this ebook to them.

One last thing - if this book helped you to get started at investing, drop me a
quick note to let me know. Nothing would make me happier than to hear that
youre one step closer towards awesomeness.

Talk soon,

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