Inflation eats away at savings! Here's how to invest to combat inflation before your money shrinks

Today, the Bitcast team had the opportunity to speak with Dr. M, a financial and investment expert with extensive experience in teaching and advising on investments. We will discuss questions many people have about starting to invest.

If you want to watch the full live session, you can do so here:

Why don't most people start investing?

Dr. M compares investing to exercising and learning English. Everyone knows they are important, but they often don't act. From his teaching experience, he found that while 100% say investing is important, only 1% actually do it.

Q: So, what prevents people from starting to invest?

• Lack of basic investment knowledge (don't know about debt instruments, don't know how to read financial statements)
• Misprioritization (choosing to do urgent but unimportant tasks)
• Waiting until they are ready to start (which often never happens)

How should you start investing with 50,000 baht?

Dr. M has a very interesting perspective and suggests considering what kind of money this is:

Q: What should you ask yourself before starting to invest?

1. Is this hard-earned savings?
2. How old are you currently? What are your financial goals at different ages?
3. What is your income and ability to save per month?
4. How much money do you want to have at retirement?

Advice from Dr. M:

• If it's your first savings, keep it for now; don't invest it yet.
• Take time to study and understand investing first.
• Start by investing small amounts to learn from real experience.

Examples of the power of long-term investing

Dr. M gave a very interesting example:

Saving 10,000 baht per month from age 20 until retirement:

• Bank deposit (0.5%): 6 million baht at retirement
• Investments yielding 5%: 20 million baht at retirement
• Investing in US stocks (10%): Could reach 100 million baht

But there are caveats:

• It takes 4-5 years of study, like earning a degree.
• If you start 15 years late, you lose 80% of the opportunity.
• You must account for inflation, which will reduce the value of money by 5 times in 45 years.

Interesting perspectives on investing

Dr. M divides investors into three types:

1. Investors: Focus on risk management rather than returns.
2. Speculators: Must have clear entry and exit points.
3. Gamblers: No exit point, wait until significant losses.

Writer's personal opinion:

This classification provides a clear picture of how we should plan our investments and be careful not to turn investing into gambling. Dr. M's emphasis that nothing is wrong but one must accept the consequences reflects a neutral and realistic view of the market.

Key takeaways

1. Investment success begins with self-awareness.
2. Time is the most crucial factor – starting early offers a significant advantage.
3. Education and knowledge are keys to success.
4. You must understand what type of investor you are.
5. Risk management is more important than chasing the highest returns.

Thoughts for listeners

From this discussion, we have seen that investing is not about getting rich quickly but about long-term life planning. Understanding yourself and starting systematically is more important than rushing into investments. Especially for beginners, taking time to study and gradually gaining experience will yield better long-term results. See you in the next interview!