Financial Lessons Every Woman Should Know For Each Stage In Their Lives
Chief Client Officer at Endowus, So Sin Ting talks about the lessons she wants women, and her own daughter, to learn.
By Dee Lim -
Share this article
Even with a career in wealth management, So Sin Ting, Chief Client Officer at Endowus, says she still found it a challenge to manage her own personal wealth in a holistic manner. She also found it difficult to research and compare what products would be best for her at an affordable cost because of a lack of alignment in the traditional wealth management industry. “There’s a lot of information out there and it’s easy to be swayed by different opinions, or face choice overload and decision paralysis. That’s why I really wanted to make the best of investing accessible to everyone, to achieve financial freedom,” she says.
In her role, Sin Ting wants to build financial literacy for women and arm them with the right knowledge – a big part of encouraging the confidence needed to start their investment journeys. Research from Endowus found that the number one financial regret from female clients is not investing more of their money or not starting earlier on their investing journey. Women had a tendency to focus more on saving, rather than investing especially when they were supporting parents or children, coupled with a preconceived notion that you need large amounts to begin an investment journey.
From her own experience as mum to a young baby, Sin Ting understands that women have to juggle many hats and responsibilities and often leave investment and financial planning to other people, "but our life and wealth journeys will look different from our partners," she says. Mothers, in particular, need to consider how their financial needs will shift through the different stages of their lives. Often they’ll also need to look after parents or children, so they also need to think about how they want to use their money for themselves or how much they’re building to provide for their children.
Now, Sin Ting feels she needs to think more carefully about how her money is allocated to give her daughter the best in life, and to be emotionally and physically present for her in these important years. “I can’t afford to stay heavily invested in just cash, because high inflation is eating away at it. This means my money really needs to work harder for me in the background, and my investment mindset needed to shift towards much longer term goals and my child’s future,” she says.
SIn Ting and her daughter Alexandra
Sin Ting also feels financial literacy should start at a young age, and it starts with modelling behaviours around money that our children can adopt, which includes instilling the habit of saving, and how to then grow their money through compounding. “Saving is a great habit, but my daughter also needs to learn how to truly build wealth, so she’ll need to learn about investing. At the same time, I feel it’s important for her to learn about the value of giving too.”
She plans on introducing her to the concept of money and how it’s used when they’re out running errands, and will give her daughter a piggy bank of her own to save pocket money and angpows which she can use to buy her own things later on. “There’s also the teaching opportunity in explaining to her that if she ends up wanting to spend money on a certain toy, then I have to make it clear that she can’t spend it on something else. She’ll have the freedom to make choices but also experience the consequences.”
To keep your money growing, here are Sin Ting’s tips for finances at every stage in life.
Those early career years usually means there’s not much money to do much with, but one of the most important things to start thinking about is insurance, planning for retirement and investing, in that order. With less liabilities at this stage of life, it’s the best time to start thinking about long-term investments because there’s also more time for money to compound interest. Consider investment portfolios for both long- and short-term goals because even investing a small amount is a great first step.
Recommended actions
For short-term: Your investments should have a larger portion of lower-risk assets such as bonds and money market funds, which will be useful if you need money in the next few years for something like a downpayment for a home
For longer-term: With a comfortable retirement in mind, your portfolio should hold more globally diversified equities with a history of higher returns over a long-term.
Financial goals at this age can be more complex - while it’s likely that they’ll have more capital than before, it’s also likely that there are more liabilities and may be looking to start a family. This stage of life can be known as the ‘sandwich generation’ who are balancing the financial demands from their parents, and their (future) children. Add to that, women should also be investing in their retirement at this time.
Recommended actions
Take care of yourself: Once money is set aside for the family’s needs, you could start looking at a portfolio with slightly higher-risk assets to potentially get higher returns over the long-term
Make it easy: Set up an automated monthly recurring investment as a quick way to remain disciplined in investing.
Take stock of what you have: There’s still time for you to build your portfolio, so review and adjust as your needs and circumstances change.
Women in this age group are often preparing for retirement, and may have less need to support dependents by this point. Right now is a good time to check and review any portfolios to ensure there are sufficient assets to retire on. If you’re able to, now is also a good time to top up your CPF for higher retirement payouts.
Recommended actions
Start switching things around: Women approaching retirement may want to consider reducing their risk in investment portfolios, and shifting the funds into something more low-risk such as high quality bond funds.
Giving yourself a retirement income: This is also a good time to consider looking at income-focused portfolios to generate a stable source of passive income post-retirement.
Our life spans are getting longer and longer, so it’s worthwhile to make sure that your retirement funds can last as long as possible. A good practice during this time to preserve your wealth by focusing on low-risk assets such as CPF, government bonds and fixed deposit.
Recommended actions
Keep a close eye on your spending and review your investments regularly - this is the time to decide which expenses are essential, spend wisely and withdraw your funds that will allow you to enjoy life in these years. Start legacy planning, especially if you want your assets to be managed and distributed in a certain manner after death.