Financial Freedom SG

Once you have saved enough to buffer yourself in cases of emergencies and have saved at least 3 months worth of expenses, you can look to invest the rest of your money. One of the easiest way is to use your savings to invest to earn a return better than that of the interest rates you get when you just put in a bank account. These are 3 simple steps to start buying and selling stocks in Singapore:

1. Open a Central Depository Account (CDP). You need to open this account as all the shares that you buy on the SGX and secondary boards are parked here. So later when you have different brokerage accounts, you can sell any shares you have bought from different brokerages.
2. Open a brokerage accounts. You will need to have this account so that you can start buying or selling your stocks. This brokerage acts like a middle man or sometimes a market maker where they will submit your trades and match them. This allows you to trade overseas stock exchanges too, depending on which brokerage house you open this account with.
• However, if you buy overseas stocks, you can only sell it later with the same brokerage that you bought with as these overseas stocks are parked with the brokerage.
• Note that when you open another brokerage account, this account needs to be linked to your CDP account.
3. Link Your Account to Your Bank Account. This will enable you to pay for the stock purchases using GIRO or Electronic Payment for Shares (EPS). If you do this, the stock purchases will be automatically debited under GIRO, while for EPS you will have to login to your bank account on the internet or use the ATM to pay for the stock purchases. When you sell, these linkage will automatically credit your bank account without any action from you. Else, you will have to use cheque and deposit this at the local brokerages' cashier counter. Note that it can take about 2 to 3 weeks or more for your bank account to be linked to the brokerage account.
4. Put in Your Buy/Sell Order. Once your accounts are linked up, you can put in your first buy or sell order. This involves checking the prices of the bid/ask spread and putting in your order within this spread or +- 5 bids. In order words, if you place an unrealistic bid, your order may not be fulfilled.
5. Check Your Order. You should check your order to see if it is fulfilled, if you have done it with a broker, you can check with him or her if the order is done. If you do it on the internet, you just need to check there to see if the order is done or still in the wait list. If you think that your price is too unrealistic and want to change it, be sure that you have withdrawn the earlier bid before resubmitting another. Nothing worse than two of your sell bids going through because you didn't withdraw an earlier bid.

Have you started on your journey to attain financial freedom?