This article was written in partnership with IG, the world’s No.1 CFD provider (by revenue excluding FX, February 2018). All views expressed in the article are the independent opinion of DollarsAndSense.sg
Dawn Cher, also known as SG Budget Babe, is one of Singapore’s most popular financial bloggers. And this comes as no surprise. In a predominantly male-centric space, Dawn stands out for the easily relatable articles that she writes, which resonate with her readers – even the ones that may not identify personal finance as a topic that would typically interest them.
After giving birth to a baby boy last year, Dawn’s tips on financial planning has now extended to parenting as well, and with her house renovations starting shortly, we expect to see even more related tips on her blog soon.
Having met some of her avid readers at previous events, we can safely say that a whole new group of mothers (and fathers) are now reading SG Budget Babe to get tips on how they can save more money on milk powder and diapers, and of course, to also learn more about saving and investing money for their families.
In this edition of #myfirsttrade, we caught up with Dawn to find out how becoming a mother has changed the way she approaches her personal finance matters, and what are some of the lessons that she has learnt.
DollarsAndSense (DNS): We like to start off every interview with this question. Can you still remember your very first trade, and how it ended up performing for you? #myfirsttrade
Dawn Cher (DC): Bad. My first trade was SingPost, which I bought based on the “advice” given to me by my then-broker. He told me it was a good stock and that he has even asked his own parents to buy it. I ended up losing more than half of my capital – which I admittedly deserve – for being naïve, lazy and acting just based on a stock tip given to me by my broker. It was a good lesson learnt.
DNS: Now that you are a mother, do you think that it was an advantage that you started your financial planning journey in your younger days?
DC: Yes! I’m really glad I saved aggressively in my younger years because it allowed me the financial freedom to make decisions for my son and family today, without having to calculate every penny. It gets so much harder to save once you have kids, so my saving habit which has been developed since young really helped. I’ve also saved quite a bit on stuff like formula milk powder and diapers because I no longer fall for marketing fluff. Instead, I choose to spend more for real value that I am able to appreciate.
DNS: Has your writing style evolved since you started your blog?
DC: I feel like my writing style has mellowed out over the years. I used to be very brash and openly criticize, but these days, I always ask myself first if there’s a kinder way to put the message across. I’ve always written on topics and issues that are relevant to me, and which I care or feel strongly about. Hence, it is only natural that I now write on parenting topics too, although they’re mostly from a financial lens.
DNS: How do you think being a mother has changed the way you approach your financial planning?
DC: I’m more careful now because I’m in charge of the finances for three people (my husband, my son, and myself). If I make any mistake, three people will pay the price. There is certainly more pressure today.
DNS: Do you invest differently now that you have a family?
DC: Cashflow is definitely tighter for us now that we have to divide our monthly expenses between so many different needs. My own investment portfolio stays the same, but for my son’s, I go for a more diversified approach because I want to use it as an opportunity to teach him about different investment asset classes in the future when he’s older. In addition, I’ve been looking beyond stocks and may be intending to start my own business in the near future too.
DNS: Which would you choose. Retirement planning for yourself or to provide an enriching education for your son?
DC: Both are equally important, but I would choose retirement planning first so that we don’t end up being a burden to our children in the future. That way, they’ll be free to forge their own path. I’m also of the belief that you don’t need to go to university to do well in life. As long as I raise him to be an avid learner and critical thinker, a paper certificate is secondary.
DNS: If you meet your younger self today before you make your first trades, what advice would you give her today?
DC: Never listen to your broker blindly! And always do your own research before you invest, because there is no one who cares more about your money than you.
DNS: What’s next for Budget Babe?
DC: The fact that our children are going to grow up in a cashless world bothers me a lot. A cashless world means that many of our children will not have the same exposure as us when it comes to managing cash (or coins). So we need to find other ways to impart to them values such as savings and delayed gratification. This is something that I am definitely hoping to work on with my son.
DNS: Do you see more female traders or investors these days and do you think women trade or invest very differently from men?
DC: There are definitely more these days, although still fewer than the men. I can’t say this for all women, but the ones that I know personally tend to do more in-depth research, while some act more emotionally in the stock market.
DNS: Final question. What are the common investing and trading mistakes that you see people making?
DC: Many people don’t do enough homework or may find themselves acting on tips or advice that their friends or “experts” are giving them. This is a huge mistake. Never put your money down if you haven’t done your homework yet!
It’s Always An Advantage To Be Starting Early
At DollarsAndSense, we always advocate the importance of starting your personal finance journey early. Starting early gives you a few advantages, namely 1) allowing you to enjoy the power of compound interest, 2) letting you to ride out market volatility and 3) giving you the leeway to make mistakes since you have a longer time horizon, and to learn and recover from them.
As shared by Dawn, the first ever trade she made was a poor one. This wasn’t just because she happened to pick the wrong stock but because she went into the trade relying on what others were saying, instead of doing her own research and due diligence. Also, she didn’t have an investment strategy then as she was still new to the investing and trading world at that time.
Likewise, whether we are investing in the long-term or intending to capture short-term price volatility, it’s imperative that we enter our positions with a strategy in mind. We should be able to explain the reasons why we enter into each trade that we make, and understand for ourselves the risks that we are exposed to based on the asset classes so that we can manage them well.
If you are intending to trade, it’s important to learn how to trade before you get started. The IG Academy provides extensive resources which you can tap on (for free!) such as webinars, seminars and online courses that you can take. In addition, you can also open a demo account with $200,000 virtual credits, which allows you to try out strategies or get familiar with the platform first before you trade using actual money.
We want to point out, however, that trading platforms such as IG are more suitable for short-term trading, as opposed to long-term investing. So be sure to understand the difference between investing and trading before you get started.