Everyone should have the opportunity to build their wealth. But despite equal access to quality education and investment opportunities in Singapore, 40% of Singaporean women have not started planning for retirement, as compared to only 29% of men.
Sin Ting So, Chief Client Officer of Endowus, and Anna Haotanto, Founder of The NewSavvy and COO of ABZD Capital, will share their investment journeys, why it’s so important for women to take control of their own personal finances, and strategic investment options that are important to women. They will tackle the following topics:
- Why it is important for women to take charge of their own finances
- Strategic investment options important to women
- Why women make better investment decisions
- Gender differences in investing
01:55 Introductions by Sin Ting and Anna
06:40 Sin Ting and Anna’s investment journeys and lessons learnt
16:30 Statistics that show why Singaporean women need to take charge of their own finances
18:10 Gender gaps in the financial field
21:30 Strategic investment options available to Singaporean women: goals-based investing
25:28 The biggest financial mistake women make
31:58 Why women are better (behaved) investors and make better investment decisions
46:53 When is the best time to start investing?
Excerpts from the session
61% of women would rather talk about their own death than money, 8 in 10 women leave major financial decisions to their spouses, and the #1 financial regret for women is not investing more. How accurate are these statistics? (17:09)
Anna: I think it’s fairly accurate. People have changed. When we first started, the conversation was always about how to get women interested in investing and why women even should look at their finances. Now, it has shifted to ‘What should I be doing?’ As women in Singapore start to earn and save more money, investing is a need that has been overlooked.
Why might it be harder for women to start investing? (18:10)
Anna: Something that saddens me is how financial firms don’t focus on women and use financial language that’s hard to understand. Finance can be boring, so in Singapore's financial industry, we should make it simpler and more relatable for women.
Most women are still penalised for having children. Employers take pregnancy and childbearing in consideration. That perception penalises women and their earning capacity and ability.
Sin Ting: There are also a lot of more strategic considerations that we need to take into account. Unfortunately, there’s still a pay gap in Singapore and the salaries of Singaporean women peak much earlier on than men. Women are more likely to take career breaks and take on the role of caretakers. This affects the CPF contributions of Singaporean women - there is an 11% gap in the CPF balances between women and men.
Why do women not invest? (26:28)
Anna: At this point, many people know that they should invest. What is stopping them? Firstly, it’s that many Singaporean women feel that they don’t have a lot of disposable income. Secondly, they believe that they don’t have time and are not willing to allocate that time to financial planning. Thirdly, they are scared of investing. They do not understand financial jargon and products that can be complicated. Other reasons include women not knowing what their options are, and the common misconception that investing is like gambling.
Besides robo-advisors, how can we start investing by ourselves? (27:40)
Sin Ting: Investing doesn’t have to be complicated. First, get a better picture of what your financial health is like: your assets, liabilities, how much CPF and cash you have. Then, start thinking about what your goals are and what you want to achieve. You can then figure out a plan on how to get there. There are many financial advisors who can help you reach there, just make sure you find someone who’s aligned to your interests. Another way to start is to read up and educate yourself.
Anna: There are a few aspects to financial planning: managing your cash flow, risk management, and investment and retirement planning, and tax and estate planning. It’s important to know your objectives; if you don’t know what you want, you won’t know how to get there. The other thing is always to keep it simple - don’t invest in anything you don’t understand.
Would you recommend investing in a variety of instruments for portfolio diversification? (56:07)
Sin Ting: For Endowus, aside from equity/fixed income split, we also look at global diversification and investing in global markets. We always recommend clients invest in a globally diversified portfolio with exposure to various geographies, regions, and industries. We use unit trusts (or mutual funds) in our portfolios.
Anna: Personally, I classify risk management as insurance and don’t look at ILPs or RSPs. On the other hand, for investment purposes, a platform like Endowus is the perfect choice. I don’t like tying my insurance to my investments.
How do you decide what portfolio you should hold? (1:00:07)
Sin Ting: First, set your goal. Depending on what that goal is, your investment horizon, and your risk tolerance, you can decide what portfolio to invest in. For example, if your goal is for your two-year-old’s education, you have a super long investment horizon before they go to university. For that portfolio, you can afford to take a little more risk.
How should we overcome our fear of investing? (1:05:10)
Anna: Start small. It’s like swimming, you start by dipping your toes in the water and slowly inching forward. I think that education helps a lot too! You can’t beat yourself up for a day’s performance when you’re investing for the long-term.