0 Shares

I will have a large sum of money to invest in stock market at once only if I win a lottery or dollars that Nigerian prince promises in his email turns out to be true.

Otherwise, I will be investing in shares from my monthly salary savings, little by little over time. Indeed this is how I built my stock portfolio. It’s small. Yet I am proud of how far I have come.

The beauty of investing in shares is that you don’t need a huge amount of money to get started.

No stock broker in Bhutan has a minimum stock trade value requirement like in the stock markets of other countries.

Sometimes I am able to invest just as little as Nu.500. If you have heard that you’ll need a lot of money to do so, it’s not true.

What is the right amount to Invest in Stock Market

The share price of more than 70% companies traded in RSEBL are below Nu.100.

There is no GST or maintenance fees like in many countries. There is no capital gain tax too.

Investing in Bhutan stock market is appealing even for someone having investable money as low as Nu.100.

The fees is also based on trade value and not per transaction. The 1% fee is cheap. If you invest more, they even discount to 0.75%

Investors like Warren Buffett also encourages investing regularly to even out ups and downs of the market rather than doing it at once risking all your money for a single down.

How You can invest Small in Bhutan Stock Market

It’s less of a chance you will be able to invest in stock market unless you have some savings over and above the solid emergency fund.

If you don’t have both, you have to first build the emergency fund equal to minimum 3 month’s household expense, and then prioritize on savings for investing.

If your income is less than Nu.6,204 per month, which is the poverty line in Bhutan, and live in a city like Thimphu, it may seem unimaginable to even think about saving, let alone investing.

Make emergency fund in Bhutan

You must try to acquire more skillset to improve the earning capacity or seek better earning opportunities.

If you’re in middle income, you can save and then invest with the proper money management practices and mindset.

To kickstart all these, having a proper monthly budget helps. There are many budgeting strategies. But I use 50/30/20 rule.

50% of my salary goes to needs, 30% to wants and 20% savings. I don’t use all 30% for wants sometimes thereby increasing my savings.

Over the time, it’s that 20% savings that would make all the differences while building your investment portfolio.

Every month transfer 20% of your salary to your brokerage account for investing in stock.

Would Your Age Matter while Investing in Shares

We heard a popular Chinese proverb, “The best time to plant a tree was 20 years ago. The second best time is today.”

It’s same with investing. You’ll be enjoying the shade if you have planted a tree 20 years ago. You’ll be getting the investment returns now if you invested 20 years ago.

So it’s not too late or too early to start investing – even if you should have started earlier. Your future self will be grateful for the returns that come with starting it now.

Your age matters especially if you’re into passive investing. Therefore, we get less interest for short-term deposits.

Investing in Bhutan stock market with less money

In above illustration, A earns more than B though both of them invested the same amount of money. A invested 5 years before B.

We also know this from the interest rates of banks in Bhutan for various deposits.

If you invest early on, your money will have a long runaway to compound on its own.

Compound interest is the most powerful thing in investing. When you are young, it’ll be on your side if you know how to use it well.

Which Stock to Choose with Little Money to Invest

I wish we have low cost mutual funds or index fund or ETFs in Bhutan for lower risk passive investing.

But the thing is even our own Bhutan Stock Index (BSI) isn’t an investable fund.

We invest in individual stock in Bhutan. It poses higher risk level. And it’s something no starting investor will love.

One walk around for this can be investing based on our BSI compositions which I have shared in how to build an index fund from BSI.

Though this won’t be as good as a professionally managed ETF or index fund, its objective is also to reduce the risk.

How to Plan for investing in Bhutan Stock Market

People are investing their money for retirement, housing or some do for a car of their dreams.

But I am doing it to build a fund which can earn me returns which is equal to my current salary. I want to make my job optional.

Whatever the end goal is, the first objective of investing is to inculcate the habit of living below means.

In due course, whether that car is worth spending all our money or going for a beach holiday can be realized as we improve our financial knowledge.

So, it’s very important to save 20% of your salary and then let your money work to make more money. You also don’t have to spend 100% of your year end bonus, LTC or leave encashment money.

The main value of money is realized only when you have it when you need it the most. But if you don’t save and invest now, there is no guarantee you’ll have it when you need it the most.

Do you save 20% of your salary for investing? If not, are you planning to do it or have more income sources?