Investing bites: The rule of 36

Investing bites is a series of short-one idea post in less than 300 words.

While looking for an investment plan, I stumble upon this rule for someone that is a cash hoarder and investment coward. Hey, that’s me!

The idea is to breakdown the cash that you have to invest into tiny bits so that timing the market no longer matters. It’s like dollar-cost averaging your savings.

$ to Invest a month: [Your monthly savings + current saving / 36]

So, for a monthly saving of RM500 and RM18,000 in cash saving. I have to invest RM1000 monthly for the next 3 years.

I like this because if the average market cycle is 10 years, breaking our savings into 3 years of action is a sure way to reach an average cost in your investment (you either buy up from the bottom or buy down from the peak). What do you think?

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