Securing your net worth
On this week of International Women’s Day, we are proud to have brought to life the Endowus Leadership Forum 2023. The inaugural event gathered top minds from various industries to share their leadership philosophies, career-building tips, and advice on investing in ourselves holistically, so we can be empowered to be free to pursue what we want in life.
We are recapping the sessions through Endowus Insights, and begin by first featuring the personal finance panel titled “Our Net Worth”.
We were joined by these panellists (pictured above, from left):
- So Sin Ting, Chief Client Officer, Endowus
- Rachel Lim, co-founder, Love, Bonito
- Tan Suyin, Managing Director, Financial Intermediaries, Singapore & SEA, Capital Group
- Evy Wee, Managing Director, Head of Financial Planning and Personal Investing, DBS
Your concept of money
Our views of money are often shaped by how our family and friends define the meaning of money, and circumstances in life.
For Evy, her passion for teaching people how to manage money was borne out of grit. Working in Singapore while stepping up to become the breadwinner of her family at a young age, she recalls how she began as someone completely risk averse when it came to money and her career. But it came to a point where she realised it would be untenable to continue living a life in fear. “Now my concept of money … is really around having the freedom to make choices I want.”
Rachel took a different route. After starting off as an online seller of pre-loved clothes, she dropped out of school to start Love, Bonito in 2010. She was aware of risks: her family had been hit by the Asian Financial Crisis. She was also bonded to the government, and had to pay off a five-figure sum as a consequence of quitting university.
Rachel worked hard and lived simply in those times — but while she was raised to be frugal and to save, investing was something she only picked up recently. “I definitely wish that they had taught financial literacy in school, especially to women,” she says.
“(Investing) used to be a very scary topic that I used to be very afraid to approach. I (once) felt like, ‘Oh, I’ll just leave it to my husband’, but that’s just such wrong thinking. I think women should take control of our finances… Don’t be afraid to get to know investing.”
Having started her career in wealth management, Sin Ting was always concerned about how she should be investing for her clients. But she had a good female mentor who would remind her to invest for herself too, so that she can grow her wealth over the long term as well.
“Having a good sense of my personal finances and building a small nest egg also gave me the confidence and courage to leave a job in banking to start Endowus,” she says.
As for Suyin, she recalls that she had bought her first investment in a technology fund, which unfortunately capitulated when the dotcom bubble burst. She also recalls stories from other investors who were heavily invested in technology funds at the time. The key lesson behind that was the importance of diversification and holding on to a core portfolio, rather than sticking only to tactical investments, such as in the tech sector.
“When you think about diversification, it's actually thinking about equities, fixed income…and asset classes that are less correlated with each other,” she adds.
“At the end of the day, depending on your risk-return appetite and your long-term goal, you want to set parameters for yourself in terms of what you're trying to aim for through the investment portfolio, to derive a return that best matches your needs.”
From Evy’s perspective, what’s also important is to get the right kind of insurance to cover health and other unforeseen risks. To plan your finances holistically, both investments and insurance should be taken care of — otherwise, the money needed to support a family member who is unwell can set an individual back financially by several years, she says.
Getting started on your investing journey
Sin Ting will advise investors to consider investing based on goals and their purpose of investing. “That's how I like to look at my own money too…I have my rainy-day fund bucket, I have my daughter's education fund bucket, and my retirement fund bucket,” she says.
For example, popular Treasury bills (T-bills) may be appropriate for the rainy-day bucket, but less so for the retirement fund bucket. “Anything below 4% is not really appropriate for my retirement bucket… Is that even enough to cover inflation? So what's the real risk here? Is it more volatility in the short term? Or is it not having enough money to retire on, not being able to live the life that I want? I think that's a good way to think about risk.”
Another way for investors to think about how to start is to try to build an investment portfolio for the longer term that may outperform 2.5% (the legislated minimum earned on savings held in the CPF Ordinary Account), Suyin says.
Rachel says: “I used to think that I didn’t have time to watch the stock market all the time. It was really through Endowus that I learned it's not so much about timing the market, but time in the market. That's something that is very comforting for me to know.”
Adds Sin Ting: “You're not going to buy the lows and sell the highs but it's really important to be invested over the long term and let your returns compound. There's never going to be a perfect time to start — start today.”
Endowus hopes to empower more women to take care of their own finances, in whichever life stage they may be at. As part of our community impact initiative, Endowus Empower, we have established a Women & Investing community to empower women with the choice, confidence, and community to kickstart their investment journey and work towards their life goals — with exciting partnerships and engagements to come in the following months.
To explore our curated section of investing articles dedicated to women, follow this link. To get started with Endowus, click here.
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