Character & Soul, Deborah Tan, Entrepreneurship, Money, Opinions, Self-Improvement

I’m Sorry! But I WANT TO WORK For My Money! – Deborah Tan

Deborah Tan does not agree with ads that promise you a 5-figure salary while working from home selling “nothing”.

Busy as a bee but happy!

Busy as a bee but happy!

I’m sure you’ve seen the ads on Facebook. Ads that go, and I quote them verbatim: “Ever thought it is possible you can make money online without selling anything?”; “Learn how a struggling Singaporean employee makes $20k/month from home in his spare time”; and, “Thousands of people are quitting their jobs and joining our popular online work program.”

Were you tempted to find out more? At the very least, I’m sure you went, “What?!? For real?” For me, after the curiosity, I just went, “Sorry. Not for me.”

Perhaps, in 10 years’ time, all the people who have signed up to these programs would look at me and laugh at me for being a cynical fool. Perhaps, in 10 years’ time, I will still be slogging my ass off working as a freelance writer. Perhaps, in 10 years’ time, I will be the poorest person in Singapore … but, I will not regret not signing up for these “courses”, “seminars” and “workshops”.

Why?

1. If it sounds too good to be true …
… it probably is.  Out of curiosity, I clicked on one of these Facebook ads just to check out their website to see if I can find more information about these programs. I was brought to a page asking me to enter my email address. No. Just no. You see, if I wanted to sign up for an MBA program, the school’s website will tell me details about the coursework, tell me what I can expect, etc. But this website doesn’t want to tell me anything until I give them my contact detail. Are you selling my email address? Are you just another layer in a massive multilevel marketing scheme in the business of collecting email addresses? WHAT ARE YOU? WHY DON’T YOU WANT TO TELL ME MORE UPFRONT?

2. There is no shame in work
What I hate most about these ads is this picture they paint: that you can just do jack-shit, just click on your mouse all day long … and wait for money to roll in. If you set up a hawker stall and sell prawn mee, you know that $5 you earn comes from something tangible. If you set up an ecommerce website selling headphones, you know what exactly is earning you a living. For me, my product is Material World, a content agency and a website. Every piece of writing I put out for my clients, I know how I’m being paid. I am proud of my work and I really don’t agree with this whole “sell nothing, do very little” way of making money.

3. There is an inherent integrity problem
A few days ago, a friend posted up on Facebook how his picture has been used by one of these work-from-home programs for its Facebook ad. The picture of him standing next to a car is a great image of a young Singaporean who has achieved the trappings of success. Hey! But guess what? He didn’t sign up for this program. They had simply pluck his picture from somewhere and used it without his permission! This incident further cemented my belief that there is more than meets the eye here. If people are really becoming rich beyond their wildest dreams with your program, why don’t you just use their photos and stories instead?

I know that in order to be a successful businessperson, I have to find a business model that’ll eventually allow me to make passive income, something that will keep earning me money even if I go on a holiday or when I’m asleep. But I want to be able to grow my business using a product I have built, that will add ACTUAL VALUE to other people’s lives. Just blindly signing up for a program takes away that pride, that ownership that make up the core of entrepreneurship!

If you have no choice but to work from home, if you have no choice but to really consider one of these programs, I urge you to do your homework. It shouldn’t have to demand for an upfront payment of a large sum of money. It shouldn’t demand a percentage of your earnings to be channeled up towards your “supervisor” or “mentor”. You should be able to see if the business allows you to be different and unique from the 678 other people who have also signed up to do it – and we don’t mean just by changing the name of your company.

Like I’ve said before … call me a fool, call me stubborn, call me stupid … but I really rather become rich by working hard, really hard.

I want to get my hands dirty.

I want to get my hands dirty.

About The Author: Deborah Tan is a founder of Material World. After 10 years of working in magazines Cleo and Cosmopolitan Singapore, she is now a freelance writer/editor who works on this website full-time. She doesn’t respect anyone whose wealth came to them easy. Follow her on Twitter @DebTanTweets.

 

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Money, Self-Improvement

How To Clear Your Debts … Fast! – Vanessa Tai

There’s probably nothing more stressful than knowing you owe somebody money. Whether it’s a bank loan or an overdue credit card bill, being in debt is a source of stress for many. Here are some smart ways to get out of debt quickly. By Vanessa Tai

According to data released by the Credit Bureau Singapore (CBS) in September 2013, more Singaporeans are struggling to pay off their credit card debt. For example, in July 2013, 62,830 people did not make a minimum payment in two months, which is a 12.7 percent jump from the previous year. In addition to consumer debt, Singaporeans are also forking out more to repay bank loans because of the rising cost of living.

Yes, I recognise it may be impossible to be completely debt-free, especially when you have a mortgage or car loan to finance. The debt I’m referring to in this article are consumer debts and debts owed to friends and family members. All these seemingly small amounts add up and can feel overwhelming. However, with smarts and discipline, you can repay these debts quickly.

1. Accept You Need To Make Changes 

Before you roll up your sleeves and get to work, you need to recognise that changes need to be made to your spending habits. It’s important to get into the right mindset so you can make a stand against marketers offering “easy financing schemes” or “zero interest rate credit cards.”

Relevant read: 3 Steps To Fix Your Relationship With Money 

2. Rank Your Debt

Make a list of all your outstanding debts, be it to banks, credit card companies, telcos, and even individual creditors like your friends and family members. Write down the amount owing and the existing monthly payment amount for each one of them, then rank them according to the interest rate. The creditor with the highest interest rate should be ranked at the top.

3. Take Stock Of Your Resources 

Apart from your monthly salary, are there other ways you can supplement your income? Perhaps there’s an extra bedroom in your apartment that you can rent out? Or, perhaps you have a skill that allows you to freelance on the side. It may be tiring, but every dollar counts towards clearing your debts as soon as possible.

4. Create A Strategic Spending Plan

Once you’ve established your monthly income, write down all the expenses you have. These expenses include the minimum payments on all your debts. Take a look at your expenses and rank them in order of importance to you. See if you can get rid of any of the items at the bottom of the list. The objective is to create a spending plan where your expenses are lower than your income.

Of course, you need to be realistic as well. It can be discouraging to live each month just repaying debts, so be sure to allocate a small portion for “Fun” expenses. You should also set aside money for “Emergencies”, for unexpected expenses such as your pet falling ill or your car breaking down. Once you’ve done that, you can set aside funds to make each minimum monthly payment on your list of creditors. Any extra funds should be channelled towards the account with the highest interest rate.

Climbing out of debt is undoubtedly not an easy task, and if you feel in over your head, I encourage you to approach the professionals. Credit Counselling Singapore is a charitable organisation that helps indebted individuals resolve their debt problems and educates the public on financial literacy. CCS offers talks on debt management as well as one-to-one counselling sessions to explore feasible debt repayment solutions such as working out a debt repayment plan with a longer repayment term.

Need help? Contact a CCS counsellor at 1800 2255 227 or visit http://www.ccs.org.sg 

About The Author: Vanessa Tai is a founder of Material World who has previously worked on magazines Simply Her and Cosmopolitan Singapore. Now a freelance writer and a full-time contributor to this website, the 27-year-old dreams of attending every single major music festival before she turns 30. Follow her on Twitter @VannTaiTweets.

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Character & Soul, Entrepreneurship, Money, Self-Improvement

The 4 “Mistakes” I Want To Make As An Entrepreneur – Deborah Tan

Everyone who wants to start a business these days keeps talking about claiming the PIC Bonus. Deborah Tan wants aspiring entrepreneurs to know that there is nothing wrong with good, honest work.

Passive income = the ultimate entrepreneur goal?

Passive income = the ultimate entrepreneur goal?

How would you start a business? Would you bootstrap your business, i.e, fund it out of your own pocket? Borrow money from your relatives? Or, try to get investors to put money into your venture? For many of us small business owners, we often take the first option. We dig deep into our pockets to fund the venture, go without a salary until it starts to turn a profit and, dollar by dollar, we build up the business.

While many “business gurus” may turn their nose up at the idea of “starting small”, as a year-old entrepreneur, I must say, I prefer to grow my business step-by-step. There is a certain pride in seeing your business prosper gradually and you are much more aware of what it means to “take ownership”. For instance, I have been advised by many people on the many different ways one can employ to claim the PIC Bonus: from setting up many versions of one business (because every business is “entitled” to claim up to $15,000 in PIC Bonus) to paying a huge sum for a basic ecommerce website, which is something you can easily set up for FREE. Although the methods are all not illegal, they are certainly what I – after much thought – am uncomfortable with.

Articles abound about the “mistakes” first-time entrepreneurs tend to make, most of them about why we spend too much time working and not enough of it growing our wealth. While some I agree with, often, I find myself questioning why these so-called “mistakes” are bad. People have asked if I hated money but I simply just can’t agree with these:

1. “Mistake 1” – Not Paying Someone To Do Your Nitty-Gritty For You
Yes, all of us who come out to be our own bosses would love nothing more than to lay claim to the fact that we have minions running around doing our shit for us. Who wouldn’t? Who wouldn’t want to say, “Get your people to call my people.” But leaving a job to “become your own boss” also means you are now your own employee. I like to think that by being able to take care of my own taxes, manage my own timetable, chase down my own payments, I’m getting acquainted to the unglamorous side of what it means to be a business owner. When you can finally afford to pay a part-timer to take care of your things, you will also know what is the real work involved so you won’t be held at the mercy of an admin person.

Be careful of hidden traps!

Be careful of hidden traps!

2. “Mistake 2” – Not Willing To Pay Money To Grow Money
I recognize that for a business to grow, investments have to be made. However, I think investments have to be worthwhile and made in an ethical way. I am uncomfortable with paying someone $15,000 for something that is actually worth $3,000, just so I can make a maximum claim on the PIC Bonus. I’ve been told, “Once you see all that money in your bank account, you will look at things differently.” I hope I never will have to.

3. “Mistake 3” – You Can’t Take Care Of Everything
If it’s my business, I want to know everything – from the product I’m selling to the licensing issues it faces to the profile of the customer who consumes my product. Sure, you should have partners who possess skills and traits that make up for what you don’t have but it doesn’t mean you just leave whatever you don’t want to do to them. You can take care of everything, you just don’t have to do it all. It’s called “taking ownership”. “Taking ownership” means whenever someone has a query about your business, you have all the most basic answers at your fingertips.

4. “Mistake 4” – No-Risk Is Good 
There are many business opportunities out there that allow you to take up the basic template and run with it. They call it no-risk because there is a set pattern you can use to build your business. But the only person who is getting rich out of it all is the one who is selling this same business template to hundreds of people out there. Unique ideas are hard to get off the ground and yes, you may fail. However, if you are really serious about your business, you will want to channel your investments into the things that make you DIFFERENT, not Xeroxed ideas that you can tweak only slightly to set you apart from the crowd.

I realize that it may sound idealistic of me to say that making money is less important than doing things right. However, I can’t emphasize how crucial it is to not go into business simply because you hope, eventually, that the passive income will let you live out the rest of your life in comfort. You still need to have a basic respect for WORK – good, honest work. You can’t just think, “I’ll set this up, sit back and watch money roll in.” If you think the first and foremost thing about business is PASSIVE INCOME, you are truly making a very big mistake.

About The Author: Deborah Tan is a founder of Material World. After 10 years of working in magazines Cleo and Cosmopolitan Singapore, she is now a freelance writer/editor who works on this website full-time. She recognizes that she may never be rich but at least she is proud of her business. Follow her on Twitter @DebTanTweets.

 

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Money, Self-Improvement

7 Ways To Save Money Effortlessly – Vanessa Tai

Although she writes about money, Vanessa Tai often finds it a struggle to save. However, through trial and error, she’s discovered several saving tips that are easy to implement.  

material world_save money

Saving money is something all of us know we should be doing, but it just seems so difficult. After clearing my bills at the start of each month, I’m usually left with only a tiny amount to live on. Any form of savings seems unthinkable. However, over time, I realised it’s not about how much you put away, but simply putting away a small sum and ensuring you don’t touch this money. That, and learning how you can cut corners, can go a long way in growing your resources. Read on to find out how.

1. Automate Your Savings

While the interest rates on automated savings accounts aren’t anything to shout about, this is an almost effortless way of saving money. By setting aside a fixed amount of money at the same time each month, you could land yourself a pretty tidy sum by the end of one year. Most banks offer automated bank accounts, so shop around for one with the best interest rates and features before committing. Ideally, you’ll like one that does not include an ATM card and does not allow you to withdraw from the account for at least a year.

2. 52 Week Money Challenge

material world_52 week money challenge

This is something that fellow Material World co-founder Lili introduced me to, and we’ve been contributing to it faithfully since the beginning of 2014. How it works is simple: in week one, you contribute $1; in week two, $2; in week three, $3 … and so on. By the end of 52 weeks, you should have $1,378 of liquid cash in your pot. Perfect for treating yourself to a year-end getaway!

3. Get Rid Of Duplicate Services

Take a few hours to sit down and review the services you’re currently subscribing to. Are there any unnecessary services you can get rid of? For example, do you really need both a mobile phone line and a landline? Or if you’re already subscribing to cable TV, do you still need an Internet streaming service? Make a decision on which service you use more often, and cut the other out.

4. Adjust Your Mobile Plan

Some of us have been on the same mobile plan for years and we pay our bills each month without really considering if we still need the services we signed up for years ago. Work out which features you use the most often, and find out from your telco provider if there is another plan more suited for your needs.

5. Review Your Insurance Policies

Ideally, you should aim to review your insurance policies once a year, when you receive your renewal notice. That’s because your needs may have changed – perhaps you’re planning on having children, or your health has changed and your plan is no longer suitable for your needs. Or perhaps you’re simply looking for better value coverage. Speak to your financial advisor and find out how much savings you’ll be able to make by changing your level of coverage or even switching to a completely different insurance plan.

6. Pay Yourself

Were there services that you used to pay for that you now do yourself? For example, did you forgo that part-time cleaning service in favour of doing your own chores? Or maybe you even decided to skip your monthly facial treatments and DIY instead. Whatever you used to pay for these services, set it aside in a jar as “payment” to yourself. At the end of the month (or year), you’ll be pleasantly surprised at how much you’ve saved. You could even give yourself a pampering treat. After all, you deserve it!

7. Be “Loyal” To Everyone

It may seem “kiasu” (fearful of losing out), but it really doesn’t hurt to sign up for the loyalty card scheme with every retailer you shop at. While most people are in agreement that credit card promotions may not always be worth it, loyalty can still pay off when it comes to shopping. You can use your loyalty card to bag you discounts, rebates, and freebies. Just remember not to get carried away and buy things you don’t need!

Truth is, with a little bit of forward planning, it’s not that difficult to set aside money. It’s just how committed you intend to be. I would love to hear how everyone saves small sums of money. Share with me in the Comments section below!

About The Author: Vanessa Tai is a founder of Material World who has previously worked on magazines Simply Her and Cosmopolitan Singapore. Now a freelance writer and a full-time contributor to this website, the 27-year-old dreams of attending every single major music festival before she turns 30. Follow her on Twitter @VannTaiTweets.

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Money, Self-Improvement

CPF Minimum Sum Has Increased. Now What? – Vanessa Tai

So, the CPF Minimum Sum has been raised once again. While it’s definitely annoying, we shouldn’t be parking all our savings in one source anyway. 

Retirement savings

If you intend to retire in Singapore, you need to practice forward planning. As it is, CPF policies are ever-changing so you’ll need to have a backup plan in order to enjoy your golden years. But first, why does the CPF Minimum Sum increase every year? The short answer: inflation. In order to keep up with the rising cost of living, the CPF Minimum Sum has to increase as well.

However, consider this – the CPF Minimum Sum went up from $148,000 last year to $155,000 by July 2014, which is a 4.7 percent increase. According to a press release by global consulting firm ECA International, employees in Singapore are only expected to receive a pay increase of 4.5 percent in 2014. What this means is, wages in Singapore are not rising fast enough to keep up with the annual CPF Minimum Sum increase. We could whinge about this all day but it probably wouldn’t change a thing. We just need to get smart with how we save our money.

Here are two other avenues of retirement savings you should be looking at:

1. Endowment Plans 

What is it: This is a type of life insurance contract that offers you a payout upon the end of your contract term. Look out for policies that offer annuities, which are a stream of fixed payments paid out over a specified period of time.

Pros: Stable, less risky. Depending on how old you are when you sign up for the policy and the length of your payout, an endowment plan offers you a decent amount of leverage. Remember to always compare the capital guaranteed portion with the projected figures so you know what you’re getting yourself into.

Cons: Longer waiting time, less flexibility. While you usually get to choose when you want to receive your payout (anywhere from 45 years old and above), the amount of premiums and payouts usually vary depending on the length of your policy. Also, such endowment plans are not as flexible as other type of financial products as you’re unable to adjust your savings amount throughout your premium term.

2. Investments with dividends

What is it: When a portion of a company’s profit is paid out to shareholders, the payment is known as a dividend. Many people invest in divident-paying stocks because of the steady stream of payments as well as the opportunity to re-invest these dividends into other shares of stock.

Pros: Higher potential returns. Investments with dividends tend to be pretty stable, even though the value of your capital may still fluctuate. Of course, each stock comes with its own pros and cons, so it’s best to consult with your financial advisor before making an investment.

Cons: Market downturn. At the end of the day, there is no guarantee when it comes to investments. No matter how safe anyone tells you a stock is, it will never be foolproof. These sort of investments are only suitable for people who are willing to take some form of risk.

At the end of the day, it’s always prudent to have a combination of financial tools in your portfolio, above and beyond your CPF savings. Speak to your financial advisor to see how which tools are best suited for your retirement needs.

Disclaimer: This is a general guideline purely for informational purposes only. As everyone has varying attitudes and beliefs towards investments, it’s always a good idea to speak to a professional financial advisor about your financial goals.

About The Author: Vanessa Tai is a founder of Material World who has previously worked on magazines Simply Her and Cosmopolitan Singapore. Now a freelance writer and a full-time contributor to this website, the 26-year-old dreams of attending every single major music festival before she turns 30. Follow her on Twitter @VannTaiTweets.

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Money, Self-Improvement

How To Talk To Your Children About Money – Vanessa Tai

Like education, financial literacy starts at home. But what’s the best way to kickstart the money conversation with your child? 

If your parents were like most parents, the extent of your financial education probably extended to them teaching you about the importance of saving for a rainy day, and that’s it. After that, it was assumed you would pick up other financial skills along the way, whether from school or elsewhere.

Audrey and Min with some of the PlayMoolah users

Audrey and Min with some of the PlayMoolah users

According to Audrey Tan and Lee Min Xuan, co-founders of financial education platform, PlayMoolah, the main reasons parents stop the conversation at just savings are that they’re either not equipped with the financial knowledge or are unsure how to talk to their children about money. As a result, children don’t get to practice making decisions about money or they equate money with just spending, so they end up not understanding the value of money.

Both founders agree that financial education should start as early as possible – after all, it’s easier to form attitudes and habits at a young age. As soon as your child is old enough to grasp certain concepts about money, you can begin educating them.

The two founders share their tips on how to raise a financially literate child:

1. Look For Everyday Teachable Moments

“The next time your child asks, “Can I have a new _____?”, or when you’re out shopping for groceries, you can use this time to explain to him or her about savings and the importance of sticking to a budget. The value of money is best taught when your child understands the concept of “opportunity cost”. When children learn spending on one thing will affect their ability to spend on something else, it forces them to make careful decisions about how they want to spend their money.

For young children, you can start small. Saving is the foundation of financial education, budgeting comes next. When they get a bit older, we’ve found that letting children earn a discretionary allowance by working or helping the community helps them better understand the value of money and work.”

2. Help Your Child Visualise

Let your child have a tangible sense of where every dollar goes.

Let your child have a tangible sense of where every dollar goes.

“We know a parent who withdrew one month of salary in $1 coins to show his child where his monthly salary is channelled to – taxes, bills, groceries, food, and transport. That really helped his young child visualise the flow of money in a household and gave him a better appreciation of reality!

Another parent who comes from a wealthier family was shocked to discover his child’s perception of an “average salary” was much higher than the average. He then made the effort to visit the Ministry of Manpower website with his child to explain why some jobs pay better than others.”

3. Keep It Fun

“By keeping it lighthearted and treating it like an ongoing game, you’ll get your child excited about taking charge of his or her financial management. Playmoolah is an app for children aged 6 and above, and is a fun and engaging way to demonstrate the cycle of money – from earning, spending, saving, investing, and giving. Your child will be able to cultivate their own money management skills in a safe learning environment, learn how to appreciate the value of money, and how to prioritise their needs and wants.

material world_playmoolah

If you sign up for the kids’ and parents’ account, you’ll be able to monitor your child’s progress and get involved in their financial journey through MoolahVerse. You’ll also glean tips on how to use games to start helping your child understand the value of money. Bonus: you’ll get more financially empowered yourself!”

Another great aspect about PlayMoolah is the Donation function, where children have the option to choose which charities they want to support and what kind of support they want to offer – money, time or expertise. The founders believe donating is an important aspect in the cycle of money, and it helps children understand there are people less fortunate than themselves. Being able to see how small amounts of money can assist the less fortunate in fundamental ways is crucial to understanding how powerful money can be.

Material Mom Joan Leong recently tried out the PlayMoolah app with her 7-year-old daughter, Clare, and this is what she has to say:

I like the social aspect for the kids – they can visit each other’s worlds and see what their friends are up to. My daughter is at the age that she enjoys games such as Minecraft. Playmoolah takes the game one step further with the educational function – users have to “earn” money in order to build stuff.

I also like how the savings element help kids calculate the steps they need to achieve their goals. This is a fun and simple way to teach children the concept of earning money to buy stuff, which they can make use of in the real world. The parent portal is also great – you can monitor what your child is up to without being intrusive.”

Get started by registering for an account here.

About The Author: Vanessa Tai is a founder of Material World who has previously worked on magazines Simply Her and Cosmopolitan Singapore. Now a freelance writer and a full-time contributor to this website, the 26-year-old dreams of attending every single major music festival before she turns 30. Follow her on Twitter @VannTaiTweets

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Retirement Mistakes To Avoid – Vanessa Tai

So, Singapore has been ranked as the most expensive city in the world. While that doesn’t come as a surprise, this also means we need to plan our finances carefully in order to have a stress-free retirement. 

material world_saving

If you’re anything like me, your retirement years are probably some hazy vision in the distant future, something you don’t have time to really think about. However, experts say this is one of the biggest (yet most common) mistake to make. By putting off planning for your future, you’re just going to end up with a smaller pool of resources by the time you’re ready to quit work. Here are some of the top few retirement mistakes you can avoid:

1. Starting Too Late

Perhaps you think there are too many other things to spend on right now, for example, buying a car, getting married, travelling, and so on. However, the reality is, you need to start on retirement savings as early as possible. The later you start, the more you have to pump in, and by that time, you may have even more financial obligations (car loans, a mortgage, children to support), which adds to the stress. Bottomline: start planning your finances and brushing up on your financial education NOW.

2. Underestimating How Much You Need To Retire Comfortably

According to a recent Manulife Investor Sentiment Index Survey, Singaporean investors commit three major misjudgments when it comes to planning for retirement. First, they misjudge the actual duration of their retirement, followed by the cost of living during retirement, and their ability to work during retirement. So while most investors expect to retire by the age of 61; in reality, they continue working up to 70 years old.

material world_retirement1Consider this – with so much free time on your hands, you would probably take this opportunity to indulge in hobbies such as travelling or socialising. This already takes up a bulk of your savings. Add that to rising healthcare and insurance costs, as well as other unforeseen situations, and you may find the initial amount you set aside per month to be far too little.

A general rule of thumb is to plan for 50 to 70 percent of your current monthly living expenses during your retirement. That is, if you want to maintain your current comfortable standard of living (which I’m sure you do)! However, pure savings alone is not going to cut it. Why? Say you’ll like to retire at the age of 60 and you expect to live up to about 83 years old. That gives you 23 years of income to save for. If you’ll like to live on about $3,000 a month, you’ll need to accumulate $1.2 million by the time you’re ready to retire!

(To calculate how much you’ll need to live your retirement years comfortably, check out this nifty interactive retirement calculator from CPF.)

A more prudent solution is to diversify your portfolio so that you can have several streams of passive income during your retirement years. This brings me to my next point …

3. Not Diversifying Your Portfolio

In a previous article, I shared four crucial tips on being a savvy investor. In essence, you need a good mix of low-risk and medium-risk investments in your portfolio. The riskier investments provide you with higher returns, while the safer ones help offset any losses.

Another mistake to avoid is, thinking you can sell your house and live off the profits. First, the property market can be capricious – there’s no guarantee you can sell your house off at a good price. And even if you do, you’ll still need somewhere to live. There’s no way to predict how much it will cost to buy a new house at that point in time, even if you opt to downgrade to a smaller one. Hence, it’s wiser to invest in other asset classes apart from your house.

I hope reading this hasn’t made you feel gloomy about your retirement prospects! The point of the article is to demonstrate to you that with careful planning and research, you will be able to live out your golden years comfortably and even happily.

About The Author: Vanessa Tai is a founder of Material World who has previously worked on magazines Simply Her and Cosmopolitan Singapore. Now a freelance writer and a full-time contributor to this website, the 26-year-old dreams of attending every single major music festival before she turns 30. Follow her on Twitter @VannTaiTweets.

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Money, Self-Improvement

Where To Go To Learn About Money – Vanessa Tai

“Why am I always broke?”“Is my salary going to be enough to cover me on rainy days?” If you find yourself struggling with the most basic of financial management, you’re not alone. Plenty of working adults find themselves living from paycheck to paycheck, even years into their working life. Fortunately, there are increasingly plenty of (jargon-free) resources for you to get financially literate. 

Audrey and Min, co-founders of WhyMoolah

Audrey and Min, co-founders of WhyMoolah

Audrey Tan and Lee Min Xuan, both 27, are the co-founders of financial education platform, PlayMoolah. During a recent interview, they shared with me that living from paycheck to paycheck is more common than people think, and few speak about it openly. Many people think this is a problem that affects only those who have just stepped into the workforce and that it will go away with time. The truth is, this affects not only young adults, but people from all walks of life and across different age groups. The duo believe the first step to tackling the problem is acknowledging that it is indeed an issue, and being honest about your need for help.

As someone who’s still on the journey of brushing up my financial knowledge, I understand that financial jargon can get overwhelming and intimidating at times. In fact, you may feel so embarrassed about your lack of financial know-how that you shun away from learning altogether. (How do I know? I’ve been there.) However, this shouldn’t be the case. Over time, I’ve come across several useful resources that are both judgment- and jargon-free, and I’ll like to share them with you today.

1. WhyMoolah App 

From the creators of PlayMoolah, WhyMoolah is a mobile application that takes you through the different life stages – from graduation to retirement – and makes money simple to understand. You start by creating an avatar, and he/she will go through the various milestones in life, where you’ll have to deal with university loans, salaries, credit card applications, CPF, taxes, buying an HDB, a car, and more. So, instead of going to CPF, HDB, IRAS and MOM websites, all practical information is laid out in a fun and playable simulation.

Screenshot of the WhyMoolah app

Screenshot of the WhyMoolah app

Money management is just one part of the app. Players also have to make decisions on how they spend their time, to maintain their career, social, health attributes and manage their stress levels. That’s because founders Audrey and Min believe that money is just a tool and an enabler for the more important things in life. WhyMoolah demonstrates how current lifestyle decisions play out in the future, and introduces you to the financial tools and technical know-how without the jargon.

WhyMoolah is available for free download on the iTunes Store and Google Play

2. Workshops

One of the latest initiatives from WhyMoolah is a meetup group called Honesty Circles. This is a free platform that brings together people who have questions about money and experts who have the relevant answers and insights. Here, you can ask any question you want without fear of looking silly or being judged. Click here to find out more.

3. Books

Ramit Sethi's book is an easy introduction into basic financial management.

An easy introduction into basic financial management.

While there are plenty of financial management books out there, a lot of them are written at a level that’s difficult to understand or may not be as relevant. One book I found helpful and refreshingly easy-to-understand was Ramit Sethi’s “I Will Teach You To Be Rich”. Written in Sethi’s typical irreverent, no-bullshit style, this book is targeted at 20-to-35-year-olds, also known as the generation that’s “materially ambitious yet financially clueless”.

While the book touches on all four pillars of personal finance – banking, saving, budgeting, and investing – a lot of the tips are geared towards saving money and helping you gain basic financial literacy. This book is a good starting point if you often find yourself struggling to stay afloat.

“I Will Teach You To Be Rich” is available on Amazon

Do you know of any other resources for working adults to get financially literate? Share with me in the Comments section below.

About The Author: Vanessa Tai is a founder of Material World who has previously worked on magazines Simply Her and Cosmopolitan Singapore. Now a freelance writer and a full-time contributor to this website, the 26-year-old dreams of attending every single major music festival before she turns 30. Follow her on Twitter @VannTaiTweets

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Money, Self-Improvement

3 Steps To Fix Your Relationship With Money – Vanessa Tai

Even as you start making your resolutions for the new year, it’s worthwhile to take a good, hard look at your finances as well. No matter what your economic background is, it’s undeniable that money plays an integral part in each of our lives. And very often, the state of our finances is directly related to the state of our lives. Take a look at your life – do you feel calm, peaceful, and in control? Or are you easily anxious, frazzled and out of control? Now, take a look at your financial life. Do you see the similarities?

material world_money relationship

Andrea Kennedy, a Certified Financial Planner who’s lived in Asia for over 20 years; consulting couples, families, and professional women in wealth management, says, “Among my clients who feel financially insecure, about 80 percent of them also have some sort of health issue. It may be related to weight or skin problems, or something internal such as anxiety or stomach pains.” Kennedy adds that in examining your state of finances, it’s also worthwhile to reflect on your other lifestyle habits as well – for example; your diet, how much sleep and exercise you’re getting, etc.

A common misconception that gaining control of your finances means having to sacrifice things you enjoy, and restricting yourself. However, the truth is, gaining control over your finances is all about healing your dysfunctional relationship with money, which in turn, gives you greater freedom and peace of mind.

According to financial psychologist Dr Brad Klontz, our financial relationships start very early in our childhood. Even as children, we start to develop what he calls “money scripts”, which are our beliefs about money that drive our financial behaviours. These money scripts are often shaped by the experiences we have growing up, as well as the beliefs passed on from our parents or older family members. The kicker is; most of the time, we aren’t even aware of these money scripts.

Our early experiences with money have a strong influence over our relationship with money as adults.

Our early experiences with money have a strong influence over our relationship with money as adults.

So how do we identify our own money scripts, and better yet, rectify any unhealthy relationship with money?

1. Reflect

Think back about your earliest memories involving money. Perhaps your parents were very frugal, which caused you to over-compensate as an adult by spending on things you may not necessarily need. Or perhaps you grew up with adults telling you “Money is evil,” or “Money is a men’s-only domain,” which is why you avoid talking about money. This won’t be an easy exercise, so give yourself time to carefully examine your past. Kennedy recommends setting aside some time each day for about a month, to go for long walks and reflect on your relationship with money.

2. Forgive

Like any other relationship, the first step toward healing is forgiveness. If you discovered any unhealthy money habits during your time of reflection, write them all down. Give yourself a few moments to breathe, then forgive yourself. You may experience some pain, but take comfort in the fact that what you’re feeling is not permanent. Once you’ve done that, shred that piece of paper. It’s time to move on and start a fresh new relationship with money!

3. Decide

What does financial freedom like like to you?

What does your vision of financial empowerment look like?

Now you can decide on the kind of life you want to live, and how money factors in getting you there. Here are a couple of questions to help you get started – 1. How do you view money – as a form of freedom? security? 2. What does your best life look like?

Once you’ve decided, you can write down specific goals on how you plan to reach a place of financial empowerment.

Of course, the path to financial freedom is never going to be a straightforward one. It’s a journey of trial and error, but if you take the time to educate yourself through books, articles or courses, it will ultimately be a very rewarding journey. As we enter the new year, I sincerely hope you’ll continue to journey with me to navigate the many facets of money management, right here on Material World.

Happy new year!

About The Author: Vanessa Tai is a founder of Material World who has previously worked on magazines Simply Her and Cosmopolitan Singapore. Now a freelance writer and a full-time contributor to this website, the 26-year-old dreams of attending every single major music festival before she turns 30. Follow her on Twitter @VannTaiTweets.

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Bounce Back After Overspending On Christmas – Vanessa Tai

Like many people, December is typically the most expensive month for me. Apart from spending on gifts for friends and family, there are usually more parties and gatherings to attend (i.e additional spending on dining out, cabbing, and party outfits). Plus, all the stores will be having massive sales, which just adds to everybody’s “spend, spend, spend” frenzy.

New Year’s Eve isn’t even here yet, and I’m already beginning to feel the pinch in my bank balance. A financial intervention is definitely in order. It won’t be fun, but at least it’ll ensure we won’t start 2014 with a dark financial cloud hanging over our heads. Here are some tips on how to recover from a season of overspending:

Step 1: Figure out what went wrong

After the hullabaloo of festivities have died down, find a quiet moment where you can sit down to closely examine your expenses for the month. Look through your receipts – did you buy expensive gifts for friends just so you won’t “look cheap”, or perhaps you went a little crazy at the post-season sales? Whatever it is, identifying your weak spots will help you not make the same mistake in future.

Looking through your receipts can be harrowing, but it's a necessary pain.

Looking through your receipts can be harrowing, but it’s a necessary pain.

Drastic times call for drastic measures.

Drastic times call for drastic measures.

Step 2: Implement a spending freeze

A drastic measure would be to lock all your credit cards in a drawer, and hand the key to a trusted friend or family member. That way, you can only work with the cash you have on-hand, and won’t rack up any additional debt. If that’s too difficult, you’ll need to work out what are the non-essential items you can cut out from your expenditure – for example, dining out or taking cabs everywhere you go. Come up with ways on how you can cut back over the next three to six months, and channel these extra cash to paying off Christmas debt. (Bonus: if you stick to this frugal behaviour, it may very well translate to a long-term behaviour pattern!)

Step 3: Find ways to earn some cash, quickly

Do you have barely-worn clothes and shoes lying around the house, simply collecting dust? Dig them out, gather a group of girlfriends, and hold a mini flea market at your place. You probably won’t earn much, but at least it’ll give you some extra liquidity. Alternatively, if it’s feasible, you can also consider taking on a temporary weekend job – just a few hours every weekend can be helpful in easing your financial burden.

Don't put off thinking seriously about your finances any longer.

Don’t put off thinking seriously about your finances any longer.

Step 4: Prevent future overspending

This ties in with the first step. A lot of us over-spenders tend to be in denial when it comes to our spending habits. In fact, this denial exacerbates during the holiday season. According to an ongoing study done by researchers at the University of Sheffield, people tend to put thoughts of losing weight or saving money at the back of their minds during the holiday season. In an interview, the lead researcher on the project, Dr Thomas Webb said, “Avoiding monitoring may allow people to escape from negative feelings associated with an accurate appraisal of progress. For example, people might not want to know how much money they have spent or what their partner thinks of their social skills. We call this motivated inattention.”

However, it’s important that we get real with ourselves, and not remain in this state of denial. Apart from identifying our financial weak spots (and avoiding them), it’s also prudent to work out a simple budget that we can stick to. In upcoming posts, I will be touching on how we can break out of our dysfunctional relationships with money. Do keep a lookout for those!

About The Author: Vanessa Tai is a founder of Material World who has previously worked on magazines Simply Her and Cosmopolitan Singapore. Now a freelance writer and a full-time contributor to this website, the 26-year-old dreams of attending every single major music festival before she turns 30. Follow her on Twitter @VannTaiTweets.

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Are You Making These Money Mistakes? – Vanessa Tai

Andrea Kennedy, independent wealth consultant & financial coach

Andrea Kennedy, independent wealth consultant & financial coach

Whether you’re 25 or 45, money matters are probably one of the top concerns constantly at the back of your mind. But the path to financial freedom doesn’t have to be so complicated. Andrea Kennedy is a Certified Financial Planner who’s lived in Asia for over 20 years, consulting couples, families, and professional women in wealth management. Kennedy recently wrote a book, “Own Your Financial Freedom (Money, Women & Divorce)”, which was published in November 2013.

Here, she shares with us some of the common mistakes women (especially women in Asia) make, and how to rectify them.

Mistake 1: Many young women still tie marriage to financial security.

Andrea says, “It differs with age groups, but I think young women still believe they will be married and taken care of. To them, marriage is a form of financial security. While it’s good that they see money as a means to security, but women need to understand that they very likely will need to be providing that security themselves!

From now into the future, there are massive demographic changes in front of us. For one, there are increasingly more university-educated women than men, and changes in industry that need ‘female’ skills will be the new paradigm of the 21st century. 20 to 30 years from now, marriage may well become a luxury. So put away the credit cards and start taking your career and your investments seriously!”

Marriage is not a surefire route to financial security.

Marriage is not a surefire route to financial security.

Mistake 2: Not diversifying one’s financial portfolio

“Too many women believe that it is enough to hold on to cash and property only, which generate little income (particularly these days), then do not understand when inflation eventually destroys their cash pile. More women need to get accustomed to ‘making money off their money’, which often means dabbling in either investment property or assets like stocks and bonds.  Or possibly, even starting a business with their money. Almost anything is better than just holding cash, because you have to hold an awful lot of it to keep up with inflation.”

Mistake 3: “I need a lot of money to invest.”  

“This is less true today than it’s been in the past.  It is imperative that people start young, even it if means starting small.  Let’s put property aside for a moment, and just focus on financial assets – stocks and bonds.  You can open an account offshore if you want to buy into overseas companies, for example Apple or Shell Gas. 

Alternatively, you can stay onshore and buy into a local fund that holds mostly Temasek-linked companies.  You can also buy a local Singapore Government Security (a type of bond) for $1,000.  I know women who spend S$1000 on eating out and buying clothes so it is not really a question of ‘needing a lot of money to invest’. More often than not, it’s a case of whether you’re willing to sacrifice instant gratification to make a small investment.” 

Mistake 4: “If I don’t buy on credit, I will never have anything.”  

Are you living beyond your means?

Are you living beyond your means?

“If people do not learn to live within their means – i.e. only buying what they can afford with the money they earn – they will have a lot of things … including a lot of debt.  Credit card debt is insidious – it snowballs each time it is not paid off. You need to exercise the practice of saving and investing first. Then you need to learn how to live on what you have left over.  If there’s something you really want, learn how to set aside savings for that item.

I use credit cards, but I pay my bill off every month, and I recommend everyone to do the same. I assure you there are very, very few things that are worth going into long, strangulating debt for.”

To pre-order Andrea Kennedy’s book, click here. If you have any finance-related questions you’ll like Kennedy to address in upcoming articles, drop me a line at vanessa@materialworld.com.sg.

About The Author: Vanessa Tai is a founder of Material World who has previously worked on magazines Simply Her and Cosmopolitan Singapore. Now a freelance writer and a full-time contributor to this website, the 26-year-old dreams of attending every single major music festival before she turns 30. Follow her on Twitter @VannTaiTweets

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