Time and again this topic surfaces amongst people around me. Especially when it comes to having coffee chats with friends, sometimes the topic of investing come about. The first thing people tend to ask is for stock tips. Unfortunately, there is no such thing as stock tips. Why? Because one man’s meat is another man’s poison. Today I may tell you that I invest in stock A, however, when you invest in stock A, the price might have risen and thus – the time lapse and price difference. The only way to empower anyone is education.
Money and the world
Growing up in the past 32 years taught me many things. From saving every Chinese new year red packets to spending everything on food and shopping when I was 16 years old.
Growing up with money
When I was young, no one ever taught me how important money was. To begin with, I always remember the allowance I got every week for primary school was a mere 50 cents per day. So every day, I will spend what I can and save whatever I could into a piggy bank. There isn’t much to save as I came from a not so well to do family, both parents have to work to support the family. That was the world to me at a very young age, there wasn’t such a thing call finance education back then either. By age 12, I started to save more, since I have more allowance, I could essentially set aside more money. That was how I began to look into ways to invest – back then I was looking at silver and gold. As I was still not yet the age to qualify for any investment, I would usually spend every penny I got from school allowance on food or save up for things I wish to buy.
Things began to change when I graduated from Secondary School, the world around money began to shine so brightly like the diamond. Not to make it so dramatic, but reality hurts – when you started taking up part-time jobs, you will realise how much it means to put food on the table or even to spend what you earn. Working as a sale assistant at an Australian Fabric and Home Interior store, I did earn a decent school allowance, however, given that I did not master how to save and invest, every penny gone out like rainwater.
Making money work for you
When I was 19, I began to invest – Unit Trust was my first product. The rest is history. I have been through an economic cycle where the trust holdings went south with a net loss of 30%, sold it at a loss. And went into Equities, making a further loss, only to return to Unit Trusts and regaining back the losses within a short 1.5 years. That was when I truly realise the power of investing for long term. And with proper financial education, it goes a long way as it is not a “tikam” game (not a pick and choose at random).
Working as a money slave
While we love to spend and enjoy life, there comes this pitfall of over spending and under budgeting. Just like the saying, treat money like your lover, and they will treat you well. Now, if you treat money like your mistress, then perhaps you become a slave of money. That was so true – during my 20s, I racked up quite a sum of credit card debts. If you read about the article on debt consolidation plans, I was there and done that in my late 20s, when I suddenly woke up from a 5 years slumber and decide to do something about my life.
It is not the end of the road – waking up, realise how much has gone into interest payment and deciding to end it all. It feels like a walkout from the graveyard awake and alive. Ultimately, what is needed is to love ourselves.
Saving up for the rainy day
Saving for the rainy day was a concept I always had in mind, but not something I have always reminded myself of. So there was this session I had with one of my financial advisor on how much would make sense for a rainy day fund. The basic will be to set aside S$1,000 or 10% of your annual income for a start or whichever sum feels comfortable. The ultimate goal will be to have 3-6 months worth of monthly salary aside to tide over for bills, utilities and insurance – anything that you need to pay to get by and spend to survive at the bare minimum. Till the next time.