Thursday, 1 February 2018

ALL IN!!! At shares investment


"ALL IN !"

 Sometimes when we watch movie about casino,
during the critical part,
the hero pushed all his chips out and said:"ALL IN !"
then miracle happened and he received the best card to turn his losing position into winning position,
and won the game~
Didn't it make us feel exciting?

 So today I would like to talk about ALL IN,
but of course not about gambling,
is about ALL IN at shares investment~

 Personally,
I think there are 3 types of ALL IN:

 1)
A has RM110K.
A decided to do capital allocation,
so RM50K for FD, RM10K for normal saving account, the remaining RM50K for investment capital.
For A, it can be considered as ALL IN when all the RM50K was used to buy shares.

 This situation is same like you go to swim at a swimming pool which the depth of pool is only half of your height,
no danger of drowning.
2)
B has RM110K.
B put RM10K into bank account, the rest RM100K was used to buy shares.
This is another type of ALL IN.

 This situation is same like you go to swim at a swimming pool which the depth of the pool is right below your nose,
not very dangerous.
3)
C has RM110K.
C put RM10K into bank account, the remaining RM100K all used to buy shares.
Then C applied SMF account with bank,
borrowed another RM150K and buy shares,
totally RM250K worth of shares,
this is ALL IN for C.

 This situation is same like you go to swim at a swimming pool which the depth is more than your height,
it will be dangerous if you don't know how to swim.
As a conclusion,
same swimming activity, but different depth of swimming pool.
Same ALL IN, but different level of ALL IN.
For me,
the ALL IN by C is too "exciting" for me, will make me can't fall sleep at night,
and looking at the shares market now........... @_@
So C type of ALL IN is not suitable for me.

 As for A type of ALL IN,
I personally think that if your portfolio is not large enough,
then not much meaning for doing capital allocation,
instead of wasting time and energy to think how to allocate your capital,
is better to focus on increase your capital first~

 For B........
When I first started shares investment, I already ALL IN.
So yeah I started with B type of ALL IN.

 "What the..............! You ALL IN? What if you lost all your money?"
The reaction by A.

 Frankly speaking,
if you invest properly instead of gambling at shares market,
to lose all your money is harder than making a guy pregnant.

 Same like what I mentioned above,
if you swim at the swimming pool which the depth is below your nose,
is hard to have anything happened.

 There were two reasons why I ALL IN when first started shares investment:

 First,
in order to faster accumulate investment  experiences,
I think ALL IN my capitals to go through the UP and DOWN of shares market is the best shortcut.

 Same like to learn how to swim, is better to put ourselves at a swimming pool with certain depth right.
Second,
I didn't become employee, I become S (Self-employed),
so my monthly income is at least double than those who graduated same time as me.

 For me,
income is same like height,
for example swimming at the pool with depth of 200cm,
is totally different for someone with 150cm height and someone with 220cm height.

 Even though we can't increase our height, (Damn.......T_T)
but luckily,
we can increase our income~

 If the income is high enough to quickly cover the loss at shares market,
I had less worries when ALL IN.

 Moreover,
if your income is doubled,
it doesn't mean that you can just double your investment capital, it will be more than that!

 If the monthly expense is RM2000,
for someone with income of RM3000,
only has extra RM1000 to invest.

 But if income is RM6000,
then will have extra RM4000 to invest,
RM1000 vs RM4000!

 With high enough income,
it enabled me to ALL IN at shares market without a lot of worries and pressures.

 Of course,
that was my ALL IN at 5-6years ago.

 After that,
I faced a question:
"After ALL IN, what if suddenly I need to spend a large sum of money?"

 This happened to a lot of people who started to invest same time as me,
they had to sell the shares of good companies in order to pay for down payment of car or house.
As a result, they reversed a few steps back at the road of accumulating wealth.

 This is not a problem for A,
but is a problem for B who almost ALL IN all the money,
which was me.

 "How can I ALL IN at shares market,
by keeping all the shares of good companies without selling it,
but I still can spend a large sum of money when sudden needs occour?"

 Facing this question,
I found my solution later, which is SMF.

 According to the article I wrote at 28th December year 2017,
I mentioned that SMF can help me to increase my investment return.

 Apart from this benefit,
SMF actually allow us to withdraw money to use.

 Of course,
it is not free money,
the money withdrew will become debt and interests will be charged at us.

 Anyway,
by having SMF account,
I am able to keep all the shares of good companies,
and still able to spend large sum of money whenever I needed to,
it fulfilled my thinking of "I WANT BOTH!".

 After having SMF account,
instead of having 100% of my capital ALL IN at shares market,
it became 110%, 120% and even 130%~

 So, my ALL IN level is between B and C now.

 Of course,
this is my choice, my ALL IN.

 The most important thing is.........
think about your current situation and plan carefully,
then only consider to ALL IN or not.

 Investment is all about doing own thinking, making own decision.

 Thanks for reading.


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