Author: Create Wealth Through Long-Term Investing and Short-Term Trading

The Buy and Hold Investors’ Nightmare

Being a Buy and Hold investor is like living through a nightmare where you find yourself the main character of the Greek “Myth of Sisyphus.” Futile and Hopeless Labor: In this myth, Sisyphus is condemned by the god Zeus to an eternity of futile and hopeless labor. He must roll a heavy stone to the top of a mountain. But then the stone rolls all the way back down … and Sisyphus has to push the stone back up again to the top. A sentence of “futile and hopeless labor” is similar to the situation that Buy and Hold...

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Active and Passive Investing

There are 2 types of Investing. Passive Investing and Active Investing. One requires frequent time and effort in seeking opportunity, while the other requires less frequent time and effort. Passive Investing could be thought of as a stock account that pays high interest (dividends). You add the stock, and passively it grows. Hopefully, You can look back in 10 years and find that constant addition made you a nice growing wealth. However, it can be very disheartening, instead of growing wealth, you are staring at diminishing wealth and made you feel poorer. Passive investor can be thought as a...

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Active Income and Passive Income

1) What is Passive Income? Passive income is money received on a regular basis, with little effort required to maintain it. Some examples of passive income are: Repeated regular income, earned by a sales person, generated from the payment of a product or service that must be renewed on a regular basis, in order to continue receiving its benefits – also called residual income. Rental from property; Royalties from publishing a book or from licensing a patent or other form of intellectual property; Earnings from internet advertisement on your websites; Earnings from a business that does not require direct...

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The power of compounding in investing

Time could help regular-savings-plan investors chalk up a considerable sum of returns. Clearly, the initial investment sum plays an important role in the sum of returns. Let’s say you invest $100,000, assuming an investment return of 20%, you would get $120,000 in total. The sum would diminish to $12,000 if you had invested only $10,000 at the same rate of return. So some people may have an illusion that investment only work well for people who invest large sums of money. Well, not exactly. Even if you invest a relatively smaller amount, you could make a very good return...

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investment property: What You’re Getting Yourself into?

As the prizes of goods swing and the stock market fluctuates, more and more people are finding investment property as a good business venture. This means that more and more people are buying land not to occupy it but for the purpose of securing capital gains or renting it out to others. Why go this route? As any book will tell you, land is an asset that does not depreciate. And as foreign markets are putting up more businesses in Asia, it is not a wonder that land has become a very precious commodity. In Singapore alone, appreciation rose...

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When it comes to Money Management – irrational behaviour?

A 45-year-old widow – believed to have lost HK$5 million of her late husband’s insurance money in Lehman minibonds – was discovered on Thursday night trying to kill herself, local media reported. Irrational behaviour – dump all eggs to buy one Golden Goose to lay golden eggs and hopefully to grow into a Golden Cow. Having lunch with a colleague, she has about $200K saving and thinking of dumping into property next year. Wise investing or irrational behaviour like dumping all eggs to buy one Golden Goose to lay golden eggs and hopefully to grow into a Golden Cow....

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What is Wealth? I am not Rich nor a Millionaire

Wealth has also been defined as “the amount of time an individual can maintain his current lifestyle for, without any new income.” For example if a person has $1000, and their lifestyle dictates $1000 per week of expenses, then their wealth is measured as 1 week. Under this definition, a person with $10,000 of savings and expenses of $1000 per week (10 weeks of wealth) would be considered wealthier than a person with $20,000 of savings and expenses of $5000 per week (4 weeks of wealth). The difference between income and wealth Wealth is a stock that can be...

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Thinking of Risks before Profit

It is very important when investing to think of risks before profit, whether in stock or property investing. Do we need to learn through the painful way of losing huge sum of money before we learn how to think of risks before profit. Also there is such no investment that is low risk, and moderate return; otherwise, this investment will definitely be overbought by the Market and return will be significantly reduced or out of stocks. In another word, for better return, higher risk is expected, and chance of losing your invested capital is real, and can happen unexpectedly....

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