The Capital Market in layman term is known at the Stock Market. The general public often associate it as being similar to that of a casino, a legalised casino where punters speculate in hope that they would make some quick cash, or maybe an overnight millionaire.
Many people in Asia, Malaysian in particular often associated the Stock Market as a Rich Man's Game. Try striking a conversation with someone who has not traded in the stock market, and ask if he/she would like to invest in the stock market? 9 out of 10 people would answer by saying that I would love to but I don't have the money at the moment. I would start to invest in the Capital Market once I have enough capital.
Then I would ask, how much do you think you would need to start off. Many would answered with figures ranging from RM10k to RM100k. These are the perception people usually have that lead them to think that Investing in the Stock Market is a game meant for the Rich, Wealthy and Famous only.
Some other respondents would tell me that its too risky and I might end up being bankrupt. These people must have had friends, family, relatives or heard of stories that took place during the 1997 Asian Financial Crisis, where thousands of people lost not only their fortune and family but to the extend of committing suicide. These tragedy definitely brought lots of misery and fear to those who was victimised during the crisis. But who is there to blame? the government? your friends who gave you all those juicy tips? or the rich tycoon who own those companies? Well if you ask me, I would say point the finger at yourself, those who were victimise were merely cause by their own greed and misjudgement. Ultimately, nobody force you to buy or invest at gun point right? So don't blame anyone but yourself.
Apart from greed, it is the ignorants of these small time investors that kills them self. Most of those who got burned and lost their fortune, are not properly educated with the art of investment. If you are properly educated and equip with the right knowledge, you could have well turn the 1997 crisis into an opportunity to strike it rich.
What I am trying to say is, the Stock Market is not a Rich Man's Game, but it is a Game that make the Man Rich. People like Bill Gate, Warrant Buffet, Ananda Krishnan, Tony Fernandez, Li Ka Shing, and the late Tan Sri Lim Goh Tong, are famous tycoons that runs their own empire. But do you know that these people wouldn't have become so rich if their company were not listed in the first place and if they did not buy a substantial amount of share in their own company upon listing. Even the Page brothers who founder Google.com made it into the Billionaire Club listed by Forbes because Google went public at the price of USD99 and is now trading well above USD700 per share.
Wait a minute, having say that, I don't mean that anyone that play the game would be rich. You need to be equip with the right knowledge, right attitude, avoid being emotional, and most importantly you have got to be patience (patience is a virtue). Oh ya, before I forgotten, you got to have some capital too, but you don't necessary need to have RM10k to RM100k to start off.
If you have been reading my previous posting, you would know what I would suggest for newbies to start with. For those who are new here, let me save you some time(time is money) by re-telling. Well for starters, I would suggest that you start off with just Rm1000. By now some of you reading would be thinking am I for real?
Yes, and you heard it right, all you need is RM1000 and you are on your way to be a millionaire yourself. How? All you need to to make 100% return for 10 times. Lets me do a simple maths illustration to help you understand;
1.) Starting Capital RM1K x 100% = RM2K
2.) RM2K x 100% = RM4K
3.) RM4K x 100% = RM8K
4.) RM8K x 100% = RM16K
5.) RM16K x 100% = RM32K
6.) RM32K x 100% = RM64K
7.) RM64K x 100% = RM128K
8.) RM128K x 100% = RM256K
9.) RM256K x 100% = RM512K
10.) RM512K x 100% = RM1.24Million
It looks pretty simple right? In anything we say, its always easier say then done, but its not impossible. With more than a thousand stocks listed in the local bourse called the Bursa Malaysia, buying the right stock is as hard as choosing a lifetime partner. But as I've said earlier, if you are equip with the right knowledge, right attitude, avoid being emotional, and be patience you are on you way to join the millionaire.
In fact there has been real life case study where by investors just buy one company and become a millionaire. No I am not taking about overnight millionaire here as I do not encourage people to gamble with their hard earn money. People who invested in companies like Genting and Public Bank since these companies went public became millionaire 10 years later. And how much was their investment cost? Well purchasing 1000 unit of any of the 2 companies mention earlier would cost roughly RM3,000 to RM4,000 only. So how much is it going to cost you to become a millionaire?
I started investing at the tender age of 19y.o and many thought that was ridiculous. But if you were to look at what is happening abroad, student as young as 16yo begun their first investment in stock and are already making it big.
Anyway back to the topic, I would like to strongly stress that the Stock Market isn't a Rich Man's Game but a Game that make a Man Rich. You could well be one of them. All you need is to take the courage and make the very first move, educate yourself and start with RM1000. Remember the most important rule about investment is never invest with borrowed funds. Always invest with spare cash that you have no intention to use over a period of 1 year.
If Warrant Buffet, the second richest man in America can make it big by just investing, I am sure you can too. Buffet 2 most important rule about investing is: Rule 1, Never Lose Money, Rule 2. Never Forget Rule No1.
Well obviously there are a lot of factors to consider in order to make an investment profitable and avoid losing money. All you need to do is read(we are lucky because we live in the Internet age where knowledge is easily available with just a click) and learn from those that are equip with strong investment knowledge.
Just a word of cautious, if possible, try not to learn this from your parents or stock broker, cause I can honestly tell you that sometimes your parents or even the stock broker them self are not well equip with the necessary knowledge. Most older generations in general rely on the newspapers, rumours they heard and believing in tips from people whom they believe to be reliable. Most of these people ended up being a victim of the 1997 crisis.
So what are you waiting for, the knowledge is out there on the WWW and books easily available in your local book stores. Go get all the knowledge you can and began playing the game that is gonna make you a millionaire.