"Inflation is rising sharply, outpacing income growth. If you don't start investing now, you won't be able to keep up with inflation." Many people hear this often, but more important than just starting to invest is understanding how to plan your life and investments. Otherwise, instead of growing, the money you intend to save could disappear without you realizing it.
But where should we start taking action? At the "Thairath Money Campus Tour 2026" event, two professional financial advisors from Bangkok Bank Public Company Limited summarize all the essential knowledge through the theme "SMART START: Building a Good Financial Life by Understanding the Basics."
Let's start with Jutarat Kaewjaeng, Financial Advisor at Bangkok Bank Public Company Limited, who explains that everyone desires financial freedom to do what they want, but the money saved today may lose value in the future due to inflation. This may lead people to speculate or seek ways to maximize returns.
Many might think that if they can identify the lowest price point, buy then, and sell at the highest price, they could succeed. However, statistics and the Key Success Factor (factors that lead to long-term investor success) show that timing the market has only a 1.8% chance of success, while asset selection accounts for 4.6%.
The main factor contributing to investor success is portfolio allocation, accounting for 91.5%. Therefore, starting with sound investment planning significantly increases the chance of growing your portfolio over the long term.
Saowaros Thaveebanjongsin, Financial Advisor at Bangkok Bank Public Company Limited, says investing is crucial because it helps us avoid working solely for money indefinitely. But before investing, one must build and protect a strong foundation for oneself.
Building focuses on maintaining liquidity and steady cash flow. Nowadays, having an emergency fund of 3-6 times your monthly expenses is essential. Creating multiple income streams, especially passive income, is also very necessary today.
Protecting means safeguarding your earnings and savings against risks, such as through insurance—health, accident, or travel insurance. A single unexpected major event could result in enormous expenses that might wipe out a lifetime of savings.
Once these two areas are "solid," it's time to consider what type of investment portfolio suits your style, whether you prefer to "plan your own trip" or "go with a tour group."
Planning your own trip is suitable for those with time to study each asset class in depth, such as stocks, bonds, and alternative assets. This approach can be a good solution.
Going with a tour group fits those with limited time. They might invest through mutual funds managed by professional managers, which generally fall into two management policies:
- Active Funds carry relatively higher risk. Returns may outperform or underperform the market. The goal is to beat or exceed market returns, and fees tend to be higher.
- Passive Funds risk levels depend on the benchmark index the fund tracks. The main goal is to closely match the benchmark's returns. These funds usually have lower fees and suit those wanting to invest long-term in the stock market while reducing the risk of selecting individual stocks themselves.
Meanwhile, the core of investing is diversification or Asset Allocation, which should match your risk tolerance. If the market experiences short-term volatility and you panic-sell at a loss, it can harm your portfolio's long-term performance. Additionally, you can employ the Dollar-Cost Averaging (DCA) strategy, which involves investing fixed amounts regularly to improve long-term returns.
In conclusion, investing should start as early as possible but must be accompanied by understanding and comprehensive planning.
Read personal finance news and financial planning with Thairath Money to help you achieve "Good Finances, Good Life" athttps://www.thairath.co.th/money/personal_finance
Follow the Facebook page: Thairath Money at this linkhttps://www.facebook.com/ThairathMoney