Endowus Chief Client Officer on saving and investing

Fifty per cent of her salary goes to necessities

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"I try to have a high-level framework on where my money is going and spend intentionally. Around 50 per cent of my salary goes to my ‘needs’ or monthly expenditures such as mortgage payments, utility and phone bills, transportation, groceries and others. Around 30 per cent goes to my ‘wants’ and that includes dining out, pilates classes, Netflix subscription and travel. The remaining 20 per cent goes to investments and savings. I have found that setting up automated monthly investments keeps me disciplined, and also makes my life easier."

She started investing while in university

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"My parents always taught me the importance of saving money for a rainy day and all the ang pao money I got for Chinese New Year was put straight into my bank account. I started investing small amounts when I was in university, partly because I was fascinated by the stock market. However, in hindsight, my stock-picking then was akin to gambling, where the process is entirely speculative. I chose to invest in companies whose products I used but (wrongly) assumed that I would know better. Any successes that I had were entirely attributed to luck, and unfortunately, my brokerage costs ate up most of those measly gains.

I was fortunate enough to land a stable corporate job at a bank right out of university, which could comfortably cover my expenses and also allow me to start building up my savings. When we started Endowus in 2017, we bootstrapped for about four years before our first external round of fundraising. As founding partners, we paid ourselves minimal salaries because we wanted to invest in our company’s growth and hire the best talent we could to build our dream team, so I had to reevaluate my lifestyle."

To her, getting started is a common challenge

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"I think a challenge that many women face is getting started on their investment journey. Fear stops people from making that first step because they’re afraid they will lose money. But the truth is, for the first years of your investment life, your savings rate is arguably going to make a bigger difference than the actual returns you get. Time is really your best asset when it comes to investing, and the best time is not five or 10 years later when you’ve built up more money. The best time to start is now."

Investing is about financial freedom

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"Investing isn’t about getting rich - it’s about having the financial freedom to make the choices that you want. Similar to investing, saving also involves setting money aside to prepare for the future. However, saving means taking virtually no risk and receiving very small amounts of interest. All investing involves risk, but historically, investing has compensated investors with higher returns over the long-term. How you combine saving and investing can have a huge impact on your life.

The market gyrations we have seen in recent times can make anyone’s heart stop. But if you think about it, your real risk isn’t short-term market volatility. It is not being able to meet your long-term goals of living the life that you want.

A well-known American investor and founder of Vanguard, Jack Bogle, once said that the question isn’t whether your investments will go up or down in value because this will inevitably happen. Rather, he said, the question is whether this volatility will bother you enough to make you react, so invest in a globally diversified, low-cost portfolio that is appropriate for your risk tolerance that will be able to sit through different market cycles."

Want to start? Set some goals

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"Firstly, set your goals as they should be at the centre of your investment portfolio. When you invest with a defined purpose, you can better identify the right strategy, how much you need to invest, and what the appropriate level of risk is to take. A successful investment outcome is how your portfolio tracks against reaching your goals. Next, do your homework and arm yourself with information so that you can make an informed decision on which investment platform can help you reach your goals. Finally, get started, even with a small amount. If your goal has a long-term horizon, you should not be wavering or worried during periods of short-term volatility."

Many women regret not investing their money

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"The number one financial regret for women is not investing more of their money. Women have different life journeys from men - we will statistically outlive men, live with a gender pay gap and are more likely to take a career break when we become mothers, so we need to acknowledge our unique financial challenges. Investing is empowering - taking control of your finances and growing your wealth will give you tremendous opportunities and a positive financial mindset."