We all know the importance of financial planning and investing to help grow our wealth and attain financial security. Yet, women seem to struggle with these issues more so than men. Statistics from a report by Merrill Lynch show that 61% of women would rather talk about their own deaths than money, while a UBS Global Wealth Management Report found that 8 in 10 Singaporean women prefer to leave major financial decisions to their spouses.
However, with women statistically outliving men and the rising costs of living, ensuring financial security for our retirement and beyond becomes even more critical. But with a lot of financial jargon and technical terms to unpack along the way, how can we get started?
YWLC partnered with Endowus, a Singapore-based fee-only wealth and robo-advisor investment platform, for an exclusive members-only webinar on 10 April on managing personal finances, investing, and wealth planning.
YWLC members at the webinar
Here are some useful tips from Endowus’s Chief Investment Officer, Samuel Rhee, and Chief Client Officer, Sing Ting So to help you get started on your personal finance journey.
1) Take the first step and ‘Marie Kondo’ your finances
Decluttering the Marie Kondo way does not just apply to your wardrobes or homes! The much-talked about KonMari method also applies to your personal finances and it all starts with taking control of your own balance sheet - getting started is the most important first step.
Take a look at your assets, insurance policies, and liabilities, including any loans or debts that you are still paying off or owe. As a general rule of thumb, try to set aside between three to six months of your income to build your emergency fund.
2) Invest with intention
Remember that investing is not about becoming rich, but ultimately about attaining financial freedom. Investing might seem risky, but the real risk lies in not being able to reach your financial goals at the end of day such as buying a house, or being able to retire and sustain your desired lifestyle.
It is therefore important to invest with intention - having a defined purpose for why you are investing will help you better identify the right investment strategy, how much you would actually need to invest, and the appropriate level of risk to take in doing so.
3) Diversify, diversify, diversify!
We all know that we should never put all our eggs in one basket, and this saying applies especially when it comes to investing as it helps you lower your overall portfolio risk. So, how can you diversify your portfolio?
Start by investing in a portfolio that is appropriate for your level of risk and within each asset allocation bucket, select a diversified investment. This helps reduce the risk of any blow-ups due to any one single investment.
4) Don’t try to time the market - you can’t outsmart it
You don’t have to outsmart the market to be a successful investor - the market is much smarter than any one of us can be! According to Samuel and Sing Ting, what is important to remember instead is that the markets have historically rewarded long-term investors.
5) Make investing a habit
Cultivating good habits requires three key things - start early, put in the time to build the habit, and have lots of discipline - think of investing as just the same! Try to pay yourself first each month when you receive your pay by putting aside some cash for your investments before you do anything else.
By making investing a habit, you can rid yourself of engaging in any potentially risky guesswork and give yourself the opportunity to grow your net worth steadily, over time.
According to Samuel and Sing Ting, the majority of your investment portfolio should be “boring” - in other words, investing should be like watching paint dry, so stick to tried and tested portfolios. If you want to invest in something new and exciting like cryptocurrency, allocate only a small portion of your overall portfolio to do so.
6) Fight for fair fees
While there is no such thing as ‘free’ in the world of investing, it is nevertheless important to keep your costs low. Make sure that you understand the fees that you are paying and look out for any hidden costs. For example, the law of compound interests would also apply to your fees.
Headquartered in Singapore, Endowus is the first and only digital advisor for CPF, SRS, and cash savings, helping everyone invest holistically, conveniently, and with expert advice at the lowest cost possible.
Organising Subcommittee: Membership Subcommittee
Graphic: Joey Ong
Author: Nisha Rajoo
Content Notes: Rachel Kuo