Sometimes,
I wish governments worldwide would mandate a “Personal Financial Education”
module in school curricula.
I
started to really understand the importance of being financially educated only
at the age of 23, when I received my first paycheck and mind you, after graduating with a university
degree. Before that, I thought getting a
regular income alone was enough to assure a bright future financially. My savings was however not growing as quickly
as I envisioned. Whatever I invested in
at that time were on unit trusts which I didn’t really understand.
Fortunately,
I began to devour book after book on personal finance in the years after. I began to learn how to manage debt, income
and expenses. I realized that I needed
to build passive income (money that you earn even if you’re not working), and
to do that I had to understand the mechanics, charges involved, risks and
trends of the financial instruments I want to invest in. Reading was one thing;
taking action was another. My husband and
I started actively planning for our financial future only when I was expecting
our first child six years after that.
There
really is no excuse to stay financially “ignorant”. Singapore is probably one of the best places
to learn about personal finance without having to fork out a lot of money. Here are some sources of readily-available
and mostly free information:
1)
Library books – the shelf for catalogue number “322” is my favourite
haunt. This is the shelf where you can
get your hands on a whole array of Personal Financial books. The majority are books from the States and I
used to think they don’t work here. When
you do pore through, you’ll find that quite a number of the principles behind financial
planning are universal, just that the systems mentioned may differ, like the
States has their 401(k) and we our CPF for retirement savings. The best thing is, if a certain book doesn’t
appeal to you, just return and borrow another one. There’s bound to be at least one you can
learn something from.
Some of the recommended must-reads are “The Real
Cost of Living” by Carmen Wong Ulrich, “The Millionaire Next Door” by Stanley
& Danko, “The Family CFO” by Alvin & Larson, as well as local books
such as “A Singapore Guide to Personal Financial Planning” by
Andy Ong.
2）Seminars
& talks
– if reading puts you to sleep, seminars may be your thing. I may love to read but to hear someone more
experienced sharing their tried-and-tested methods makes the learning a lot
more palatable. Recently, I attended a
seminar by well-known trader Elder Alexander and was pleasantly surprised by
his down-to-earth delivery. A few years
back, I also attended a workshop “Money and You” which really helped to
straighten out my archaic perspectives on money. Since returning to Singapore from our China
assignment, I am pleasantly surprised by the number of free seminars that the
general public can attend. These range from seminars on the basics to
intermediate, and can be found at the SGX’s (Singapore Stock Exchange)
newly-launched My Gateway, Moneysense and Singapore Investors Association
websites and even free video seminars available on I M Savvy. If you have signed up with a shares brokerage
house, you can also check out the seminars or workshops they have lined up for
their clients.
3)
Websites & blogs – If you believe
everything the web says, don’t try this.
However, it is possibly the most accessible form of resource you can
find. I tend to go for the company-run or more “official” websites when I am
looking for more technical knowledge.
These would be SGX My Gateway, Moneysense, Bloomberg, Business
Times. For some inspiration on how
others started on their financial journeys, I love to read personal blogs. Just googling would get you some pretty good
ones. As the full-time CEO of the
household, aka cook, maid, tutor all rolled in one, I am also constantly on the
look-out for useful tips on how to save on groceries, utilities etc. For this, I subscribe to e-newsletters such
as “Dollar Stretcher” and “Frugal Living” which are sent automatically to me
everyday.
4)
Mentors – know of someone you
admire who is into stock investment or is a multiple property owner? Why not ask them out for a coffee and have a
good chit-chat on how they started? You
never know what you could learn from them.
Most of the people who have passed this way are very eager to share with
you their lessons learnt.
Finally,
let’s clear the air about some myths surrounding financial education for laymen
like you and me:
1)
You
don’t have to be a Math whiz to plan your finances. You just have to have the patience to look at
numbers. Of course, if you really
dislike it, you could always look for a good financial planner. I choose to do it myself because I always
believe that no one else will help me look after my finances better than well,
myself. Do your research though before
settling on whom to be your financial planner though. And never trust him or her with all your
money.
2)
Women
are not money-dumb. Women tend to be
perceived as more “switched off” when it comes to anything linked to money, but
I beg to differ. I know because I have girlfriends who seem to think that
anything to do with money has to be their husband’s domain. However, I sincerely feel that women, being
the ones closer to the home front and the children, are in the prime position
of making a difference in everyday money decisions and do play a critical role
in imparting the right values to the children on money matters.
3)
Don’t need to feel that “I must do
something now!” Hold it…learn
first. If it takes 14 years of education
before one can graduate from university, I think patience is justified if we
want to invest our hard-earned money in anything. Never plunge head-long in an investment
without understanding how it works and the risks involved. Sometimes, it’s amazing how much more time we
spend agonizing over which bag to buy than over what unit trusts to invest in!
If
you’ve nothing planned for the weekend, make a date with yourself to get a dose
of financial education, be it at the library, seminar or to just catch up with
a friend who is financially-savvy. Trust
me, this form of education does pay dividends in the long run.
(This article first appeared in CPF's IM$avvy website)