Starting My Investment Journey
In late May 2024, I made a pivotal decision—to dive into the world of investing. Two key motivations drove this choice: shielding myself from inflation and working toward financial freedom.
Why Inflation Matters
Inflation is an unavoidable economic force: it's the steady rise in prices over time, which gradually reduces the purchasing power of our money. Each year, the same amount of cash buys a little less. Recognizing this, I knew that simply saving wouldn’t be enough—I needed to invest in assets with the potential to outpace inflation, allowing me not only to preserve but also to grow my wealth.
The Quest for Financial Freedom
For me, financial freedom means reaching a point where passive income—returns from investments—covers my living expenses. Achieving this goal would let me support my lifestyle without depending on a paycheck. Here’s a simple formula I keep in mind:
Financial Freedom = Passive Income > Living Expenses
By investing smartly, I hope to create a steady stream of passive income that eventually funds my ideal life.
Setting Up My Investment Foundation
With inflation protection and financial freedom in mind, I committed to investing. I chose a blend of stocks and bonds as my primary vehicles, with mutual funds adding a liquid option for shorter-term needs.
Choosing the Right Platforms
To manage my investments, I selected Stockbit, a trading platform by PT Stockbit Sekuritas Digital, for stocks, and Bibit, a mutual fund app from PT Bibit Tumbuh Bersama. These platforms offer the accessibility, comprehensive data, and diverse products I need as I build my portfolio.
My First Rp100,000
In June 2024, I took my first step with an initial deposit of Rp100,000. I committed to adding at least Rp200,000 monthly from my income, with plans to gradually increase this amount as my finances grow. To stay on track, I review my contributions annually.
Building My Investment Strategy
Before investing, I spent time studying core investment principles and various strategies. After careful consideration, I chose value investing as my focus. This approach prioritizes long-term fundamentals, finding stocks that are undervalued, and aiming to sell them when they reach a fair value, which provides a margin of safety and growth potential.
Setting a Performance Benchmark
Tracking my performance is crucial. I’ve chosen the Jakarta Composite Index (IHSG) and IDX30 as my benchmarks. The IHSG reflects the price performance of all stocks on the Indonesia Stock Exchange (IDX), while IDX30 focuses on 30 high-liquidity, fundamentally strong stocks. By comparing my returns to these benchmarks, I can gauge if I’m on the right path.
Measuring Investment Performance
To track my investment progress, I use a mutual fund performance model that I discovered on Bolasalju’s blog. This model, enriched with clear explanations and Excel formulas, enables me to systematically evaluate my results and maintain consistency in performance tracking. It’s a valuable tool that supports my journey as a disciplined investor and helps me stay aligned with my financial goals.
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With this foundation set—platforms, starting funds, strategy, benchmarks, and tracking tools—I’m ready to embark on this journey. Stay tuned for updates as I work toward my goal of reaching my first billion rupiah in investments.
Attribution
Photo by Burak The Weekender from Pexels
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