If you were to head to the library and look for books on Personal Finance 101, you will find thousands upon thousands of pages of information. It is no wonder then that many people try to avoid financial planning.
A few years ago, a professor by the name of Harold Pollack tried to change that. He condensed what he considered was the most essential financial advice for the average American into a single index card. His index card advice went viral, testament to the desire of people to have advice that is easy to understand and apply.
We asked five entrepreneurs who founded businesses directly dealing with the finance planning space to distil all their years of accumulated knowledge, hard-won wisdom and priceless insights into their very own index card. Here is what they have to share!
Alvin Chow, Founder, Dr Wealth
Alvin is a value investor who also regularly reaches out to regular investors through his Factor-Based Investing Introductory Course. Alvin believes that the financial industry can treat their customers better. Here is his index card financial advice:
Alvin Chow’s Index Card of Investment and Financial Advice
1) Be skeptical when it comes to anything related to finance.
2) Don’t predict the future when risking your money.
3) Invest with meaningful stakes, but not enough to bankrupt you.
4) Don’t be afraid to sell earlier than others because you cannot sell at the top.
5) Long-term investing doesn’t mean you need to stick to the same investment after you were proven wrong.
6) Don’t hog wealth. Spend meaningfully by buying more experiences instead of things.
Anna Haotanto, Founder and CEO, The New Savvy
Anna is the founder and CEO of The New Savvy, Asia’s leading financial, investments and career platform focusing on women. In addition to giving talks on the importance of financial knowledge for women, Anna writes regularly on The New Savvy as well.
Anna Haotanto’s Financial Advice on an Index Card
1. Know Your Objectives
What are your financial goals? What do you want? What is your time horizon and risk appetite?
2. Pick your investing style
Know the difference between value, growth and income investing… Then choose the ones that suit you!
3. Don’t invest in anything you don’t understand
4. Read financial websites!
Jackie Tan, Co-Founder, fundMyLife
fundMyLife is a platform that intelligently connects users with the right financial advisers, based on their financial planning questions.
As a scientist by training, Jackie found transferable skills that are usable in his startup life, as both science and personal finance require the same intellectual rigour and the ability to conduct iterative testing of hypotheses and ideas.
Jackie is also the editor and contributor at the fundMyLife article section where you can find thoughtful articles on insurance and financial planning. Here is his advice:
Jackie Tan’s Index Card Financial Advice
1) Never, ever have long-term credit card debts. Clear them as soon as possible!!!
2) Keep track of your expenses, whether manually or electronically. Just track it. You’ll be surprised by how things can stack up.
3) Invest not just money, but in yourself as well. The more you improve, the more options (and money) you will see in your life.
4) Don’t rush into a relationship for a BTO – a house is a home, not an investment.
5) As you progress into different life stages, your financial needs will drastically change. Always review your finances with your financial adviser.
Kenneth Lou, Co-Founder and CEO at Seedly
Seedly is a Singapore fintech startup with a mission of simplifying personal finance across our millennial generation today. Kenneth also runs the fantastic Seedly Personal Finance Community (SG) Facebook group, and has first-hand insights into the misconceptions and questions Singaporeans new to finance have.
Kenneth Lou’s Index Card of Financial Advice
Step 1: Understand your cashflow (Ins and Outs)
Step 2: Segment savings and spending accounts
Step 3: Automate it by setting up GIRO
Step 4: From your spending account, set aside X% to investments, and let it grow from there.
– Invest only what you can afford to lose
– Try to manage your debt well, otherwise you will suffocate under the pressure.
Timothy Ho, Co-Founder and Managing Editor, DollarsAndSense
Timothy is one of the co-founders of DollarsandSense, which he began as a student in university because he saw how little accurate and reliable information was freely out there to help Singaporeans make better financial decisions.
Since then, Timothy has written hundreds of articles on a wide range of topics ranging from insurance to investing.
This is what he wrote on his index card:
Timothy Ho’s Advice for Singaporeans on an Index Card
If you live in Singapore, keep things simple.
– Use CPF to build your retirement safety net: 4 – 5% per annum!
– Top-up your CPF if you do not know how to invest, or are too lazy to do so
– Emergency savings funds: About 9 to 12 months of your monthly expenditure. Be kiasu.
– Get a BTO. Maximise government grants. You can always upgrade if you have more money in the future.
– A home is not an investment. An investment is not a home.
– Use a good savings account. Ditch your student account ASAP.
– Invest in STI ETF. Individual stocks, and REITs can come in the future. Say no to ILPs.
– Find a trusted insurance agent and property agent. It is worth it!
– Invest in your health. Don’t neglect your family. Buy insurance.
– Money is an enabler, not a life goal – Remember that!
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