Allan Wu is no Warren Buffett or Peter Lynch. However, the Singapore-based television star is still comfortable sharing his 2 cents worth on the weekly column of Sunday Times “me & my money”.
The 42-year-old beefcake shares some useful insight and here are the 4 smartest things he said.
1. It easier to save when you are young
“Before I had children, I could save at least 50 per cent of my income, but now I save at most 30 per cent. Sometimes, it’s 10 per cent or negative”
It is always surprising when young people think it is hard to save money when they first start working. More often than not, they blow good money in high-end restaurants, overpriced drinks at clubs, the latest gadgets, branded clothes and accessories to keep up with the Joneses.
What most young people do not realize is that the 20s (and early 30s, if you do not have kids yet) is the easiest time to be saving and building up an investment portfolio. If you cut out the excesses in your life, it is very possible to be saving 50% or more of your monthly salary.
And no, “saving for a holiday” does not count as saving.
2. Credit Card is a key ingredient for overspending
“A couple of hundred dollars in cash hurts more than spending the same on your credit card where you don’t really see it”
Swiping that credit card is easy.
However if you have to pay with cash, you might actually start to reconsider the value of your purchase.
Try this experiment. Leave your credit card at home for a month and bring out your ATM card instead. When you are making purchases, withdraw the money you need from the ATM machine and pay it with cold hard cash. You will be surprised how much less willing you will be to spend it.
3. Avoid investing in penny stocks
“I’ve lost US$15,000 to US$20,000 on penny stocks…”
Retail investors always dream of picking up the next Apple or Google. Nothing beats investing (or gambling) $5,000 on a promising penny stock with a sexy story cooked up by an overexcited analyst who believes it is the next big thing and can provide a 10-fold return.
This unfortunately is not frequently realized. More often than not, you will be hearing the retail investor swearing off such stocks, or even the stock market altogether, after their bad experience.
The truth is that if a retail investor cannot even invest properly into large blue chip companies where information is readily available and the business model much more established, the odds of them picking out the right penny stock to invest in is far less probable.
4. Property in Singapore is always a good bet
“The cluster house here which was sold. I managed to make a decent profit”
It is common to see Singaporeans identifying their properties as their best investment choice that they made.
Property has always been known as an asset class which tracks inflation, are generally more defensive as compared to stocks, and provides a steady stream of income, if you rent it out. They are good long-term investments, which doubles up as a place you can live in while waiting for its value to appreciate.
Do you agree with Allan Wu’s advice? Drop us your comment today.
This article was written for and first appeared on Mothership.sg.
Top Photo from Allan Wu Facebook
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