fbpx

How our Millennial and Gen Z Writers approach money and investments

Investments, Opinions, Personal Finance

Written by:

Dr Wealth

Most readers might have the impression that the contributors of this blog are seasoned “financial” people with decades of investing experience. However, this is not the case as both of our contributors here are barely in their 30s. Their passion for investing is mainly fueled by their interest and desire to improve their financial knowledge.

Today, we take a break from stock analysis and sit down with Bryan and Zhi Rong to talk about how they manage their finances.

Both are at different stages of life but I think most of us will be able to relate to the financial challenges they are currently facing.

Let’s hear what they have to say!


Please introduce yourselves – Which life stage are you at right now?

Bryan: Hi everyone! I’m Bryan and I’m 28 this year. After graduating in 2018, I spent the past 3 years working full-time. I’m at the stage in my life where I’m getting married and along with this, I anticipate major expenses such as renovation, BTO etc.

I was able to secure a small four-room BTO in Tampines. Although it’s delayed at present, it should be ready by mid next year. With these major expenses coming up, it is crucial for me to ensure the payments are not due too “close” to each other.

Most people want stability in their careers at this stage. But in my case, I recently changed industries and left the previous industry where I worked, trained and studied in the past 8 years. I’m now transitioning to my new job while preparing for marriage.

Zhi Rong: This year, I turned 21 and I’m currently a student at the National University of Singapore. Yup, I’ll have to wait another four years to graduate and then start working. I may seem too young to be embarking on a financial journey. But to put things in perspective, I was born late and my mother is getting older.

Based on my estimation, she should be retiring shortly after my graduation. This puts me in a precarious position because the year following my graduation will include several crucial financial milestones in life. Housing, marriage, and starting a family are some significant expenses that I need to start thinking about, while I balance my mum’s retirement needs. Because of this, I must plan ahead and I’m doing that now.

What are your general approaches to managing your personal finances?

Bryan: I’ll be pretty upfront about this. I’m not about to draw up a pie chart and show you the breakdown of my monthly income. That’s what we are “supposed” to do, but I never had the discipline to do that.

What has guided me in managing my personal finance is the general understanding that expenses should be kept to a minimum whenever possible. But by no means do I mean living like a miser, which is no fun at all.

Some general guidelines for me to live at my own level of “comfort” include:  

  1. Dine in restaurants only once a week. 
  2. No Grab/taxi unless I’m running late for something URGENT.
  3. No food deliveries because I have legs to get there myself and tbh, it helps food businesses a lot more (I only order Grabfood if I reach home at midnight after work and there’s nothing else to eat).
  4. Pay credit card bills on time – DO NOT INCUR late fees; they are cutthroat.

I personally think that as long as I observe these guidelines and understand the fact that we should always save/invest more than we spend, then generally my expenses will be controlled. 

Here is an insight generated by the POSB app as a reference. In most cases, my monthly expenses add up to less than $1000. This amount includes transport, dining, occasional shopping, bills & entertainment. There was a spike in my expenses in April as I went on a cruise, and in July as my initial deposit for my wedding was due. Apart from that, I have always kept my expenses as reasonable as possible.

Zhi Rong: Unlike Bryan, I keep track of my spending on a monthly basis. I am a frugal person who only spends money on necessities.

To put things in perspective, I’m extremely fortunate to have a scholarship that pays my tuition costs and provides me with a monthly allowance of $500. This undoubtedly takes a significant financial burden off my shoulders. Living on campus also provides me with breakfast and dinner on weekdays. When I’m at home, my mum normally prepares my meals, so I don’t spend much.

I’ve been allocating $250 each month for my personal expenses since the start of university and I’d say it’s more than enough for now. The following is a breakdown of my expenses:

  • Transportation: about $30-$50
  • Food costs: $70-$100
  • Random: $0-$150

Yes, at the moment, my biggest expenses are transportation and food. The rest of it is categorized under “random” because it isn’t a recurring expense. And any money I have leftover from the $250 will go towards this category.

As I mentioned, I’m a frugal person who is always looking for ways to save money. I still want to save more from my spending pile after allocating a certain percentage for savings. As a result, I’ve established a rule that I must spend the whole $250 every month. This can be anything I desire, such as clothing, food, and online shopping. Whatever I purchase, I regard it as a treat to myself.

I use an app called Money Manager to keep track of my everyday expenses. It takes some time for you to get used to it, but I believe it is one of the best apps to track your expenses. By doing so, I’m able to better understand my spending habits, particularly during months when I overspend.

Finally, I also keep track of my total wealth, including my investments, in an excel sheet that I update monthly. While it may appear excessive, this gives me a clear picture of my current financial situation and helps me continuously understand how much farther I have to go until I reach my financial goals.

Bryan, how are you preparing your finances for your wedding?

Bryan: I’ll be doing an article on my wedding soon, where I’ll share roughly how much I paid for respective services. Right off the bat, my wedding dinner for 100pax cost me approximately $30k net and this was divided into 3 payments.

I feel it’s important for me not to take any loans for the wedding; I wanted to rely on my savings to pay for it. At the same time, I also believe that if possible, the wedding should happen before the BTO arrives so that big-ticket payments are somehow spread out to ensure optimum cash flow.

Zhi Rong, how do you deal with Peer Pressure?

Zhi Rong: I consider myself fortunate to have understanding friends. When we go out to eat, we usually go for budget meals, which serves as a kind of ceiling for how much we want to spend. However, sometimes there is definitely peer pressure when my friends want to dine at particular restaurants. Of course, I do go out with them at times but I believe there should be a limit. And when I have hit my spending limit, I would usually inform my friends. I admit there are times when I give in to peer pressure, but most of the time, I stand firm. Worst case, I would do takeaways as I feel companionship is more important.

What got you interested in Investing?

Bryan: To be honest, I really got into investing when Covid happened in March 2020. Prior to that, I had a few SGX stocks that I held on to for dividends but I didn’t really analyse before buying.

It was only when I realised that I had Top Glove Shares at $1.50 (bought in December 2019) pre-split did I truly see the kind of “gains” that I could make in the market. No doubt Top Glove may not be the best example of a “good” investment, but it was the one that sparked my interest in the market.

Ultimately, what got me hooked is the idea that the market is a platform that equalises the playing field for everyone. Some might argue that the market is controlled but I believe that with technical analysis, there is an element of pitting “my skills against yours”.

Although what I’ve mentioned is mainly equities, there is much more to investing than that. I strongly advocate a diversified portfolio and while I’m no expert, I do put some of my funds in other forms of investment such as roboadvisors, cryptocurrencies and most importantly, a WARCHEST because I feel that it will be needed soon.

Zhi Rong: I gained interest in investing at 19 when I was about to enter the army. During this time, there was a lull period where I didn’t have much to do, so I decided to look up ‘How to Invest’ online. That’s when I realised, oh boy, I had dug a deep hole. There is a plethora of information available on investing. One of the first things I discovered was that I needed to have my insurance and rainy day funds in order before I could start investing (Before you look for any upside, protect the downside!).

I went on to learn about various topics, including saving techniques, budgeting, the Singapore Health Care System, CPF, insurance, cashback/miles credit cards, and even housing. The notion of FIRE, where one retires early after achieving financial independence, inspired me even more to start my investment journey. Of course, when I read about investing, I don’t begin with a topic I want to learn. Most of the time, the topic I’m reading online just happened to pop up after I finished a previous material.

I read investment books then financial blogs and I also enrolled in investing courses. I can still recall the joy and excitement I felt when I purchased my first stock, and it is one I won’t forget.

All of this has led me to where I am now, and I’d say that I’m still interested in investing and crunching numbers. These numbers when presented in different ways, can at times paint different pictures to investors. I believe it is up to me to analyse these numbers and think critically to get a more accurate picture.

Do you think others your age should start investing?

Zhi Rong: Without a doubt. While those my age are unlikely to have a large sum of money, starting young allows us to have more room for mistakes. And believe me when I say that we’ll inevitably make mistakes, especially because as humans, we have incompatible emotions with the market. I believe you can learn from your failures if you start early. When the time comes when you start making a lot of money, you will know how to navigate. Furthermore, you cannot learn how to invest by simply snapping your fingers; you must first experience the market first-hand and get a sense of what is going on on the ground. I think when your money is on the line, the situation becomes interesting.

Having said that, as young people, we should also consider two other factors: savings and earning power. Investing is like growing your money on steroids, but you still need money to get started, which you can get by increasing your inflow (earning) and decreasing your outflow (spending).

Learn about your spending patterns and how you might refine them. You can also work part-time or simply improve your skills to make yourself more employable in the future.

Which broker(s) are you using?

Bryan: I use three different brokers which I divided according to time frames. I’ll give some examples of the holdings and brokerage platforms that I use in each category.

  • Short Term (Weekly to Monthly) – With this portfolio, I trade the highs and lows of an identified US stock, mostly based on technical indicators. Such plays include stocks such as DKNG and FB. Usually with 15-20% gains or when overbought, I will take profit. I use Tiger Brokers to execute any of these short terms trades. I like Tiger mainly because of its UI and its reasonable commission rates. The only downside to Tiger is the lack of the Ichimoku Indicator. As much as possible, I try not to keep any positions in here for more than a month.
  • Medium Term (Yearly) – Stocks which I don’t mind holding through volatility or stocks which I keep for dividends belong in this category. Both SG and US stocks fall into this medium-term category. I don’t particularly like POEMS as the UI is ancient, however I started with it so it is really a matter of getting used to it. Examples of holdings in this category for US Stocks include NIO and CRSR. Example of SGX stocks include JYEU and P40U.
  • Long Term (Holding for Next Gen) – This category belongs to stocks that I would never sell and I’m likely to handover to my kids. Currently, this portfolio contains only US stocks and in terms of portfolio allocation, it is the smallest portfolio that I have as compared to the other two above. I use IBKR for this portfolio. No specific reason why, but the $1 commission is indeed attractive. It is also good news that they recently removed the maintenance fee (most likely because they know many people are holding on to bags, myself included lol). Examples of holdings here include BABA, PLTR, ABNB.

Overall, the brokerage is extremely competitive now so most low-cost brokerage will be around $1-$2 per trade. Even older generation brokerages like POEMS are slowly conforming with the POEMS Cash+ account, which allows investors to trade from ~$2 commissions. Other than this, I believe personal preference and UI would matter more than anything else.

Zhi Rong: I primarily use three brokers as well, but I divide mine into different regions. I’m now using DBS Vickers in Singapore. Yes, the commission cost for cash upfront is greater at $10. However, I do not view this as a problem because I primarily invest long-term and prefer my stocks to be held in my CDP account rather than in a custodian. This gives me a sense of security, while also providing me with regular AGM and rights issues information.

I primarily use TD Ameritrade for my US stocks because it has zero commissions, allowing me to reposition my investments as needed. Interactive Brokers is another excellent option, but there was a monthly fee for accounts under $100k when I was opened my account. While they have since removed it, I find it a hassle to move to another, so I’m sticking with TD Ameritrade.

Finally, for China, I primarily utilize Tiger Broker. In fact, if you’re just getting started, Tiger Broker seems to be a fantastic option because it has one of the lowest commission fees.

So, do you all invest in crypto?

Zhi Rong: I have not yet invested in cryptocurrency or any cryptocurrency-related stocks. There is a lot going on with crypto: non-fungible tokens, Defi, and a slew of other ideas that I’m still trying to grasp. As someone who is considerably more conservative, I would only want to invest in my area of expertise, which is stocks, in which I have a few years of experience. That said, I don’t believe cryptocurrencies will go away any time soon. Therefore I recently enrolled in Chris Long’s Cryptocurrency Masterclass to get a better understanding of the hype. So far, I would say it has changed my perspective on cryptocurrency, and I am eager to learn more about it. Nonetheless, it would take some time for me to grasp this asset fully, and only then would I begin investing in crypto (Anyway, I believe the market is overhyped now, and it has reached an all-time high). No FOMO.

Bryan: Yes absolutely. I’m not an expert on cryptocurrencies but at the very least, I daresay that I understand it. At present, crypto makes up approx 5% of my portfolio which in my opinion is considered high as many fund managers advocate crypto to only be about 1-2% of your portfolio. I’m fine with the volatility and above all else, I do believe that crypto will eventually be more common in our day to day lives. Within this 5%, I have BTC and ETH which I would most likely never sell (takes up about 3%) and the balance 2% are in altcoins such as CAKE, USDT, SHIB, ADA and AUDIUS. Best advice I ever received was that you shouldn’t buy when you hear news like BTC reached a new ATH. NEVER do that, instead consider accumulating when the headlines go BTC is now 50% FROM ITS ATH. Much better that way.

Any final tips for our readers?

Zhi Rong: Well, I suppose everyone has a turning point in their lives. You will wake up one day and realise that you need to get your life in order. Realizing that I am part of the sandwich generation was a defining moment for me. I’m my mother’s retirement plan. As I have said, she will retire shortly after my graduation, which is not the best time since I’ll not be earning much and I’d most likely be starting a family by then.

If you’re reading this, you’ve either already reached this stage or are far past it. That’s fantastic, keep doing what you’re doing, but don’t forget to enjoy your life right now!

For those that have yet to come to a turning point in their lives, no worries, take your time to learn. Awareness is the first step. Start slow and learn from those around you. Don’t force yourself too much or you’ll get burnout. Ultimately, that takes the fun away, doesn’t it?

Bryan: Eliminate the noise. I can’t say how many times I’ve fallen prey to what people are saying on forums like InvestingNote and StockTwits. When someone makes a price prediction every day for the rest of their lives, at some point that price prediction will come true so there really isn’t anything great about it. When you do your own due diligence, always trust your instinct more than what the crowd are saying.

Additionally, always know what time horizons you are investing at. Not every stock is meant to be passed on to the next generation. Some are momentum plays, meaning to say that the rally wouldn’t last forever.

Leave a Comment